Only four Chinese developers are included in the world's top 100 AI apps from private firms by annual recurring revenue. — SCMP
China’s startup developers of artificial intelligence applications significantly lag behind their US counterparts in global recurring revenue, making overseas expansion the default strategy for these mainland firms, according to a new report.
As of August, only four of the world’s top 100 AI apps from private companies by annual recurring revenue (ARR) were Chinese, according to a report jointly released last week by domestic research firm Unique Research and San Francisco-based consultancy Tech Buzz China.
The four Chinese players – Glority, Plaud, ByteDance and Zuoyebang – generated an estimated US$447mil in total ARR from their AI apps, which accounted for 1.23% of the top 100 list’s US$36.4bil total. This group excluded apps from publicly listed tech giants such as Alibaba Group Holding and Tencent Holdings. Alibaba owns the Post.
The disparity between Chinese and US app developers had to do with structural factors in the world’s second-largest economy, where startups prioritised short-term sources of revenue such as public-sector projects, according to Rui Ma, founder of Tech Buzz China.
“It’s much more capital intensive to go after these global consumers and enterprises,” she said, adding that it was more difficult for Chinese startups to raise funds at home than those in the US.
While the report defined Chinese startups as those based on the mainland, note-taking AI app developer Plaud was categorised as Chinese even though it was registered in the US.
The highest ranked Chinese AI app on the list was Hangzhou-based Glority, the developer behind the popular plant-identification app PictureThis. It had an estimated ARR of US$173mil, which placed it at number 20 on the list.
Leading the list were US foundational model developers OpenAI and Anthropic, with an estimated ARR of around US$17bil and US$7bil, respectively.
Delta Wu, head of Unique Research, said the ARR estimates were based on in-house modelling, which included the tracking of traffic redirected from each AI product’s official website to third-party payment platforms such as Stripe.
Meanwhile, 19 of the 23 top-earning Chinese AI apps generated most of their revenue overseas, showing the potential growth from these markets, according to Ma of Tech Buzz.
Several high-profile Chinese AI startups have relocated abroad in recent years amid growing US scrutiny of these developers, including generative AI company HeyGen and AI agent developer Manus.
While the domestic market continues to offer a sizeable arena for AI startups to initially build their user base, overseas markets present more opportunities for massive growth, particularly in the enterprise software segment.
“Frankly, a lot of investors in China don’t even consider investing in AI software startups any more,” Ma said, highlighting the rise of other AI-related investment areas in China, such as robotics. – South China Morning Post
