Chinese AI Executives Warn Technology Gap with United States May Be Widening

Leading Chinese artificial intelligence executives have expressed stark scepticism about their country’s ability to catch up with American AI firms, warning that the technology gap may be widening despite recent successful public market debuts for Chinese AI start-ups. The candid assessments came during a panel discussion at the AGI-Next summit in Beijing on Saturday, where senior figures from Alibaba, Zhipu AI, and Tencent painted a sobering picture of the challenges facing China’s AI sector.

Justin Lin, who heads Alibaba’s Qwen series of open-source models, estimated there is less than a 20 per cent chance of any Chinese company overtaking OpenAI or Anthropic with fundamental breakthroughs over the next three to five years. His pessimistic outlook was echoed by Tang Jie, founder and chief AI scientist of Zhipu AI, and Yao Shunyu, who recently departed OpenAI to lead AI initiatives at Tencent. The summit, co-hosted by Zhipu and Tsinghua University, provided a rare glimpse into the strategic concerns at the highest levels of China’s AI industry.

Lin highlighted resource allocation as a critical constraint, noting that a significant portion of OpenAI’s computational power is dedicated to pioneering research whilst Chinese firms remain stretched thin fulfilling delivery demands. Tang offered an even more direct assessment of the competitive landscape. Despite recent launches of open-source models that generated enthusiasm amongst some observers, he argued that the reality points to a widening rather than narrowing gap. The remarks suggest that market excitement around Chinese AI capabilities may not reflect the fundamental technological disparities that persist.

The executives’ warnings came during a week when two of China’s “AI tigers” collectively raised over USD 1 billion through initial public offerings in Hong Kong. MiniMax’s shares surged 109 per cent on their Friday debut, closing at HKD 345 after pricing at HKD 165, valuing the company at approximately USD 13.7 billion. Zhipu’s Thursday debut proved more modest, with shares rising 13.2 per cent to close at HKD 131.50. The strong market reception demonstrates robust investor appetite for Chinese AI assets, even as industry leaders express caution about competitive positioning.

Chinese AI firms face substantial headwinds beyond technological challenges. The executives pointed to limited computing resources and US export restrictions on advanced chips and lithography equipment as major obstacles. Since October 2022, the United States has progressively tightened semiconductor export controls aimed at limiting China’s AI capabilities. The scale disparity remains pronounced, with OpenAI valued at approximately USD 500 billion and Anthropic at around USD 350 billion, dwarfing their Chinese counterparts in both market capitalisation and available resources.

The release of DeepSeek’s R1 model in January 2025 marked a significant moment for China’s AI industry, demonstrating that competitive reasoning models could be built at a fraction of Western costs. This breakthrough triggered a wave of Chinese companies to release open-source models, narrowing the distance with US proprietary products. Yet industry leaders remain circumspect about claiming parity with frontier American models, suggesting that cost efficiency alone cannot overcome fundamental research and resource advantages.

Yao encouraged his peers to focus on overcoming challenges associated with next-generation models, including long-term memory and self-learning capabilities. Tang emphasised the need for collaboration rather than internal competition, stating that Chinese firms should represent the country collectively to advance artificial general intelligence for the world. The call for unity reflects growing recognition that fragmented efforts may prove insufficient against well-resourced American competitors.

Moonshot AI, another prominent Chinese AI firm, announced completion of a USD 500 million Series C funding round led by IDG Capital, bringing its valuation to USD 4.3 billion and cash reserves to over USD 1.4 billion. The company stated it is not rushing to pursue a public listing, choosing instead to focus on developing its K3 model and expanding computing capacity. The decision suggests some Chinese AI firms are prioritising technological development over near-term liquidity events, potentially heeding the warnings about competitive gaps articulated by industry leaders.

The contrast between market enthusiasm and executive pessimism highlights a tension at the heart of China’s AI ambitions. Whilst investors have demonstrated willingness to assign substantial valuations to Chinese AI companies, senior executives with direct knowledge of technological capabilities warn that fundamental gaps persist and may be growing. This divergence raises questions about whether capital markets are accurately pricing the competitive dynamics in the global AI race, or whether they are overlooking structural disadvantages that could limit Chinese firms’ ability to challenge American dominance in frontier AI development.