In the bustling tech hubs of Beijing and Shanghai, China’s artificial intelligence sector is undergoing a profound transformation in 2025, pivoting from the resource-intensive race to build foundational models toward practical, revenue-generating applications. This shift comes as companies grapple with escalating costs and regulatory scrutiny, yet it signals a maturing industry poised for sustainable growth. Drawing from recent insights, firms like SenseTime and Zhipu AI are leading the charge, with market shares reflecting their dominance in a field where innovation meets commercial viability.

According to a Wikipedia overview of the AI industry in China, SenseTime captured 16% of the market in 2024, trailing only behind a top player with $1.2 billion in revenue. This momentum carries into 2025, bolstered by government approvals for over 117 generative AI models, enabling tools that rival global counterparts like OpenAI’s Sora.

Monetization Strategies Take Center Stage

Chinese AI enterprises are increasingly focusing on business-to-business models, embedding AI into sectors such as manufacturing, healthcare, and customer service to drive immediate revenue. For instance, startups are leveraging large language models not just for novelty but for optimizing supply chains and automating queries, as highlighted in recent posts on X where industry observers note a surge in real-world applications.

A CNBC newsletter details how companies like Tencent are resolving 80% of customer inquiries for automotive giants like Toyota-FAW through AI, marking a departure from cash-burning pursuits. This application-driven approach is yielding tangible returns, with AI-related revenue comprising about 70% of the total industry scale among over 300 listed firms, per Xinhua reports.

Government Support Fuels Expansion

Beijing’s industrial policy is injecting billions into the sector, aiming to close the gap with U.S. leaders, as reported in a New York Times article. Initiatives like the New AI Industry Development Action Plan, which pledges 1 trillion yuan ($137 billion) over five years, are catalyzing this growth, according to posts on X from analysts like Ray Wang.

Emerging “AI Tigers” such as Baichuan, Zhipu AI, Moonshot AI, and MiniMax are praised for their innovative business models, blending subscription services with customized enterprise solutions. These firms are not only competing domestically but eyeing global markets, with projections from Grand View Research forecasting the Chinese AI market to hit $206.6 billion by 2030 at a 42.6% CAGR.

Challenges Amid Revenue Growth

Despite these advances, hurdles remain, including U.S. export restrictions on chips and domestic pressures on advertising revenue for giants like Baidu. An Investing.com analysis notes Baidu’s P/E ratio at 8.52 amid Q2 2025 declines, yet underscores undervaluation potential.

On X, sentiments from users like Andrew Curran highlight Jefferies’ upgraded forecasts, predicting $108 billion in China AI capex for 2025, rising to $806 billion by 2030, driven by compute demands. This underscores a resilient ecosystem with over 5,100 AI companies and 71 unicorns, representing 15% and 26% of global totals, respectively, as per Gulf Times.

Innovation in Key Sectors

Looking ahead, the focus is on high-impact areas like autonomous driving and intelligent robots, where Chinese unicorns excel, according to McKinsey insights projecting $600 billion in economic value by 2030. Firms like DeepSeek and emerging players are pushing boundaries, with MIT Technology Review spotlighting four startups poised for international competition.

This revenue-centric evolution is reshaping China’s AI narrative, from state-backed ambition—echoing CCP leader Xi Jinping’s vision for global power—to profitable enterprises. As the sector integrates with industries, from small factories aided by Black Lake to humanoid robots from Unitree, the emphasis on monetization ensures longevity beyond hype.