Chinese AI Startups Lag Behind US Rivals in Global Revenue Race
A new report by Unique Research and San Francisco–based consultancy Tech Buzz China highlights the growing gap between Chinese and American AI startups. Despite significant domestic funding and government support, Chinese private firms remain far behind their US counterparts in monetization and global reach.
Just four Chinese firms in the top 100
As of August 2025, only four China-based AI applications — Glority, Plaud, ByteDance, and Zuoyebang — appeared in the global top-100 ranking by annual recurring revenue (ARR). Together, these companies generated $447 million, representing just 1.23% of the total $36.4 billion market.
The contrast is striking: American firms such as OpenAI and Anthropic dominate the leaderboard with annual revenues of $17 billion and $7 billion respectively, accounting for nearly two-thirds of global AI app earnings.
Glority leads China’s AI revenue scene
Hangzhou-based Glority emerged as the most profitable Chinese AI company thanks to its flagship app, PictureThis, which uses machine learning to identify plants, flowers, and trees. The app achieved $173 million in annual revenue, ranking 20th worldwide — far ahead of other Chinese contenders.
By contrast, education-focused Zuoyebang and AI-audio startup Plaud posted more modest figures, while ByteDance’s AI-driven products remain primarily anchored in advertising rather than subscription-based models.
Structural and market challenges
Analysts attribute China’s underperformance to several factors: limited international expansion, stricter data-use regulations, and a business environment focused on consumer volume rather than software monetization.
US startups, meanwhile, benefit from cloud infrastructure maturity, higher subscription penetration, and more aggressive enterprise partnerships — particularly across education, design, and programming sectors. Many Chinese AI apps still rely heavily on domestic markets with intense competition and lower average revenue per user.
The dominance of US AI giants
OpenAI’s ChatGPT and Anthropic’s Claude families lead not only in scale but also in profitability per active user. Both companies have successfully integrated AI assistants into paid APIs and enterprise solutions, converting mass adoption into stable income streams.
American startups also maintain strong ecosystems through partnerships with tech giants like Microsoft, Google, and Amazon — providing a global backbone for distribution and monetization that Chinese developers often lack due to geopolitical and regulatory barriers.
Outlook: China’s path to competitiveness
Experts suggest that Chinese AI companies must shift from user acquisition toward sustainable monetization strategies — including cloud-based APIs, enterprise integrations, and cross-border expansion. Government incentives and increased R&D spending could help bridge the gap, but catching up to US leaders will require several years of consistent innovation.
Nevertheless, China retains enormous potential: with one of the largest AI talent pools and rapid domestic adoption of generative technologies, the next wave of growth may come from industrial and scientific applications rather than consumer apps.
Editorial Team — CoinBotLab