Top Chinese AI models make 10% of OpenAI, Anthropic revenue despite high valuations: report

Chinese AI model developers account for approximately 10% of the combined revenue generated by OpenAI and Anthropic, according to a report from US-based research firm Rhodium Group. The Chinese models generated an estimated $10.7 billion in annual recurring revenue (ARR) between March and August. This figure is significantly lower compared to the combined ARR of over $100 billion for OpenAI and Anthropic.

The report covered seven major Chinese AI developers: DeepSeek, Moonshot AI, Z.ai, MiniMax, Alibaba Group Holding, ByteDance, and Kuaishou Technology, which operates the Kling AI video generator. ByteDance led the Chinese group with $4 billion in ARR as of July, followed by Alibaba at $2.4 billion in August. DeepSeek and Kling had the lowest ARR among the major Chinese AI companies tracked by Rhodium, at $500 million each as of June and March, respectively.

Despite these numbers, investors have continued to pour money into Chinese AI companies, leading to high valuations that remain substantially lower than those of OpenAI and Anthropic. Some Chinese AI companies are going through funding rounds that could value them at around $50 billion and $74 billion, respectively. However, these valuations are seen as exorbitant relative to revenue, with valuation-to-ARR multiples of 50 times and 163 times for Moonshot and DeepSeek, respectively, compared to 34 times for OpenAI and 21 times for Anthropic.

This highlights a significant challenge for China's AI industry: finding sustainable business models while investing heavily in technological advancement. Despite rapid revenue growth, Chinese AI companies may remain loss-making through 2030 due to the high costs associated with computing power.