China’s leading technology companies have been steadily releasing artificial intelligence models that perform nearly as well as the best systems in the world. But they are all facing the same problem: overcoming the punishing economics behind the technology.

Chinese A.I. companies have tried different approaches to bring in enough money to sustain the enormous expense of building A.I. systems.

Start-ups like DeepSeek and Moonshot AI have raised billions from investors. Alibaba, China’s A.I. heavyweight, has started charging users for access to its best models. ByteDance, the parent company of TikTok and an A.I. powerhouse itself, launched a tiered pricing system, hoping to get people to pay more for using its most advanced models.

To build state-of-the-art A.I. models, A.I. companies constantly need to buy powerful computer chips — enough to build the models, more to test improvements and still more to ensure they can perform for users all over the world. The companies also need to build or rent space in data centers that house all this computing power.

Chinese A.I. companies are not the only ones confronting these tough economics. Their giant rivals in Silicon Valley, from OpenAI and Anthropic to Google, are also investing more in A.I. than they are earning from it.

For Chinese companies, the challenge is compounded by a central paradox of the country’s approach to A.I. development. Most of China’s leading A.I. systems are open source or open weight. That has accelerated their development — the entire industry gains when every company shares its work in public.