Tencent's Yuanbao AI chatbot has surpassed DeepSeek to lead as the top downloaded iPhone app in China this week.
With the Chinese AI market seeing unprecedented levels of expansion, three of the top five most downloaded free applications are AI chatbots. Tencent's Yuanbao, ByteDance's Doubao, and DeepSeek are at the forefront.
Yuanbao AI Gains Popularity Amid Fierce Competition
According to Bloomberg, Tencent's new AI chatbot incorporates its own Hunyuan artificial intelligence technology with DeepSeek's R1 model of reasoning.
DeepSeek's dramatic ascension has already sent shockwaves throughout China's technology world, prompting firms to speed up AI investments and product launches. However, it has experienced some challenges.
It can be recalled that DeepSeek was banned in Australia in early February.
Alibaba Group Holding Ltd., in turn, has begun to benchmark its own AI with DeepSeek and pledged a whopping $53 billion to AI research.
Tencent, not to lose its competitive advantage, has integrated DeepSeek R1 into several products, such as WeChat's search function and a virtual friend for its popular game Peacekeeper Elite.
Tencent's Strategic AI Steps to Conquer the Market
Shenzhen-based Tencent is the world's largest distributor of games and a major player in China's digital economy. Its WeChat platform has more than 1.4 billion users, giving the company a huge market to push its AI breakthroughs.
Using its enormous ecosystem, Tencent recently rolled out Hunyuan Turbo, a quicker and more efficient AI system that is capable of beating DeepSeek in response times.
Earlier this year, the US blacklisted Tencent over its potential links to the Chinese military. The Pentagon saw that this possibility was a threat to national security.
AI Monetization Issues and Open-Source Trends
As much as the popularity of AI chatbots continues to rise, monetization has proven to be a long-term challenge. Presently, AI services are predominantly free and mostly offered in open-source modes, as DeepSeek's AI models are being made available. Tencent, Alibaba, and Baidu are among companies competing to acquire users ahead of focusing on viable revenue models.
For the time being, the war is focused on user acquisition. Tencent's dominance of its competitors in downloads is testimony to its strength in AI adoption. Nonetheless, Alibaba and Baidu are still strong competitors, each aggressively moving in the AI market.
Making Money With AI Chatbots
Tencent knows that it's headed in the right direction in terms of AI development. However, the bigger question is how they will monetize the AI chatbots.
While some look at subscription-based services, others can embed AI in current offerings to boost user engagement and ad income.
Tencent's Yuanbao AI is no wonder the newest platform that AI enthusiasts will watch. China is indeed in a fast-paced battle with the US in the AI revolution and it will be a matter of time before the sleeping giant catches up with the latter.
While chatbots can give us all the convenience we need- from scientific questions to mathematical equations, it's still not a reliable source of information. As a matter of fact, some of them are still "hallucinating" with misinformation. This is alarming since it can mix up real news with made-up data.
