According to Rhodium Group, seven leading Chinese AI companies generated a combined annual recurring revenue (ARR) of approximately $10.7 billion between March and August 2026. In contrast, OpenAI and Anthropic reached a combined ARR exceeding $100 billion during the same period.
ByteDance leads the Chinese market with an ARR of $4 billion as of July, followed by Alibaba with $2.4 billion in August. Among US firms, OpenAI reached $40 billion by August, while Anthropic hit $65 billion in July. Other Chinese players include Z.ai ($1.8 billion), Moonshot AI ($1 billion), MiniMax ($800 million), DeepSeek ($500 million), and Kuaishou ($500 million).
Despite lower revenue, Chinese AI startups command high valuations. Moonshot AI is valued at approximately $50 billion and has filed for an IPO in Hong Kong, while DeepSeek is estimated at $74 billion. US giants are targeting even higher valuations: Anthropic aims for $2 trillion, and OpenAI targets $1.2 trillion.
The valuation-to-ARR ratios for Chinese firms, such as 163 for DeepSeek and 50 for Moonshot, significantly exceed those of US counterparts like Anthropic (21) and OpenAI (34). Analysts at Macquarie Group suggest that companies like Z.ai and MiniMax may remain unprofitable until 2030 due to heavy infrastructure spending.
To improve monetization, Chinese firms are adopting new business models. Moonshot and Alibaba have introduced agreements where they collect up to 30% of their clients' revenue under specific conditions. Despite current profitability challenges, investors continue to back these startups, anticipating long-term financial returns.
