Chinese AI start-ups are reshaping business strategies

Chinese artificial intelligence start-ups are changing their business strategies to stay competitive after DeepSeek, a leading AI company, achieved rapid success. DeepSeek's technology has been widely adopted, prompting other firms to rethink their approaches. Zhipu, a major player in China's large language model (LLM) sector, is focusing on an initial public offering (IPO) to support its growth. The company is shifting its focus towards enterprise sales while facing losses. Other start-ups, like 01.ai, are moving away from large model training and concentrating on customized AI solutions using DeepSeek's models. 01.ai, founded by former Google China head Kai-Fu Lee, has stopped pre-training large models due to rising costs. It recently announced plans to sell tailored AI services to businesses utilizing DeepSeek’s models. Moonshot, known for its Kimi chatbot, is cutting marketing costs and shifting its focus to model training as it faces tough competition and cash flow challenges. Baichuan has also pivoted its business focus. The company, once exploring various AI chatbots, is now concentrating on the healthcare sector. It recently laid off its financial sales team and is developing AI technology to assist in medical diagnoses. Zhipu, however, is diversifying its efforts. The firm is pursuing multiple business avenues but is burning through cash as it tries to build its enterprise sales. Despite gaining investors' support, concerns grow regarding its financial sustainability after DeepSeek's rise. DeepSeek's success has created a competitive landscape, forcing other start-ups to decide whether to counter DeepSeek directly or adopt its models for efficiency. This shake-up could reshape how AI firms operate in China going forward.