China’s AI Giveaway War

U.S. AI firms such as OpenAI and Anthropic haven’t yet turned a profit but they’re trying to get on the path to doing so. In China, the big tech firms behind AI chatbots are fighting a different battle.

Chinese tech firms are competing so intensely to draw people to use their AI chatbots that they’re spending this week’s Lunar New Year holidays giving away free stuff, or cash, as an incentive. On Monday, the eve of China’s Lunar New Year, for instance, ByteDance ran a sweepstakes for the users of its Doubao AI chatbot app in China, offering a prize pool of 100,000 tech gifts including humanoid robots, drones, electric cars and 3D printers. Doubao also gave away digital New Year red envelopes containing cash prizes of up to 8,888 yuan ($1,288)—in line with the holiday tradition in China’s tech sector.  

Meanwhile, Alibaba Group’s Qwen chatbot, which helps people buy things online, gave each user a free shopping voucher worth 25 yuan ($3.60), which could buy a bowl of noodles or a cup of coffee. Tencent’s Yuanbao AI chatbot app also launched a campaign to give away red envelopes worth 1 billion yuan in total.

Over the past year, Chinese companies have impressed the world with their increasingly sophisticated AI models, proving they can innovate and challenge Silicon Valley. ByteDance’s latest AI video model, Seedance 2.0, went viral on U.S. social media last week, while Alibaba, a major global competitor in open-source models, just released its new model, Qwen3.5, to positive reviews this week. But despite those achievements, the Chinese tech giants haven’t yet figured out how to get people to pay for AI services.