The Year of the Horse is ushering in a fierce competition among China’s artificial intelligence titans, a battle being dubbed the “Lunar New Year AI War.” Companies are deploying significant capital and creative marketing strategies to capture user attention and market share during the country’s most significant holiday period.
ByteDance, the parent company of TikTok, is making a substantial play for its Doubao AI model. It’s distributing 100,000 prizes through the nation’s premier holiday television gala, an offering that includes luxury vehicles and substantial cash prizes, with some “lucky money” packets containing an auspicious CNY 8,888 (approximately $1,280).
This aggressive promotional strategy is mirrored by other major Chinese tech players. Baidu, Tencent, and Alibaba are also offering generous digital red envelopes, some reaching as high as CNY 10,000 (around $1,450), alongside vouchers and electronic gadgets. These campaigns represent significant financial commitments: Baidu has earmarked CNY 500 million (about $72 million) to promote its Ernie chatbot, Tencent has doubled that to CNY 1 billion (approximately $145 million) for its Yuanbao model, and Alibaba is investing a considerable CNY 3 billion (around $434 million) to drive adoption of its Qwen AI. The intense demand generated by these giveaways has even led Alibaba to acknowledge it had to “urgently add resources” to address outages on its Qwen application.
Industry analysts view this period as a critical juncture for AI companies to secure a user base and establish their developer ecosystems before rivals solidify market dominance. As Charlie Dai, principal analyst at Forrester, noted, “They are in a high-stakes race to capture users and build developer ecosystems before rivals lock in market dominance. The issue is that profitability and sustainable business models remain unclear, for every major player in the global market.”
Beyond aggressive marketing, there’s a concurrent push for technological advancement. ByteDance recently unveiled Seedance 2.0, a new video generation model designed for professional film production. An AI-generated clip featuring virtual renditions of Tom Cruise and Brad Pitt engaged in a cinematic duel, created on this platform, rapidly gained traction and attracted attention from Hollywood. This development even prompted a succinct observation from Elon Musk on his social media platform X: “It’s happening fast.”
The competitive landscape is heating up with new model releases. Startup Zhipu AI, known as Z.ai internationally, has launched its GLM-5 model, positioning it as a competitor to advanced models like Anthropic’s Claude Opus 4.5 for tasks including coding. Meanwhile, Shanghai-based MiniMax is offering its M2.5 model for public testing. Anticipation is also building for next-generation model announcements from DeepSeek and Alibaba around the holiday period.
This period of heightened consumer spending and product promotion is a traditional hallmark of Lunar New Year. A year prior, the industry was significantly impacted by DeepSeek’s release of a cost-effective AI model, an event that became known as the “DeepSeek moment.”
The current wave of substantial cash incentives and intense competition draws parallels to Beijing’s strategic push in other sectors, such as steel, solar panels, and electric vehicles, where initial market flooding eventually led to international trade friction. A notable precedent for leveraging Lunar New Year for user acquisition was Tencent’s successful promotion of its messaging app WeChat in 2015, which contributed to its explosive growth.
In parallel with these corporate efforts, the Chinese government is also signaling its commitment to AI development. Premier Li Qiang recently chaired a government study session on artificial intelligence, emphasizing the need for enhanced coordination across data, computing power, and internet infrastructure. He called for accelerating the “large-scale commercial application” of AI, underscoring its strategic importance for the nation’s economic future.
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