When it comes to the sheer number of generative artificial intelligence users in China, the question shouldn’t be how many there are, but how they’re using it.
A new report from the China Internet Network Information Center indicates the nation had some 515 million users as of June, up by 266 million since December, according to a readout from Xinhua. At a first glance, the figure suggests that Beijing’s push to spread the technology throughout industries to boost productivity — the so-called AI Plus initiative — is bearing fruit.
In the US-China tech competition, usage is an increasingly important metric to watch. An outsize amount of attention is paid to leading-model benchmarks, but the best way to measure the impact of AI in the long run is how quickly it spreads across the economy. Beijing may see the data as an early win, but it still fails to answer the more important question: Is it spurring an economic revolution or simply a chatbot craze?
On this front, the data is more opaque. It’s possible that the rocketing domestic consumer demand, marked by a boom of various AI assistant apps, stems from a dearth of search engines. Baidu Inc., and to a lesser extent Microsoft Corp.’s Bing, have dominated this local market. But a fragmented super-app ecosystem behind the Great Firewall and the absence of Alphabet Inc.’s Google have long created appetite for basic search functions. It’s very likely that the recent crop of free-to-use AI products have helped fill this void.
OpenAI’s ChatGPT isn’t available in China, but the company said in a research paper last month that nearly half of queries on the chatbot were related to “practical guidance” or “seeking information.” It’s a safe bet that Chinese consumers are using these domestic chatbots in a similar manner. This may be a magnet for consumers, but it’s not clear if it will translate into the growth engine Beijing is hoping for.
Using proprietary data to estimate the share of each country’s working-age population actively using AI tools, Microsoft researchers in September tagged China as “the world’s largest AI market.” The team found that the launch of DeepSeek’s reasoning model in January supercharged adoption. The Hangzhou-based startup has been credited with spurring widespread AI deployment across local governments, state-owned enterprises and hospitals. But on closer inspection, it’s not always clear how much the technology has been incorporated into these operations or whether it’s boosted productivity.
Many of these use-cases may be propelled by a desire to meet government performance indicators. Some medical researchers in China have questioned whether the push to adopt DeepSeek across hospitals was happening “too fast, too soon.” And while state-owned enterprises are adept at following government directives, they aren’t known for excelling at the experimentation necessary for nascent technology integration.
Getting people to use or play around with AI is the easy part. Ensuring it has an impact on the bottom line has been trickier. A majority of US firms haven’t cracked this, either. Some 70% of OpenAI’s revenue comes from consumers using ChatGPT, the Financial Times reported, citing people familiar with the matter. (And the Silicon Valley titan found a majority of queries to the chatbot are non-work related.) This doesn’t bode well for China’s AI market, which is dominated by free-to-use services that are increasingly hard to monetize amid intense competition.
The low-cost approach of firms like DeepSeek will help the technology proliferate, and open-sourcing has made these tools more accessible for developers and startups to experiment with. But if China wants its adoption edge to endure, it must make the math add up.
This isn’t something that a government blueprint can solve. Beijing is wise to focus on spreading the technology, rather than obsessing over artificial general intelligence, but headline user counts don’t translate into lasting economic value. There are mounting headwinds: Local governments currently have less cash on hand, private investment into the tech sector has sagged, and the sheer difficulty of integrating AI across industries takes time, notes Matt Sheehan, a senior fellow at the Carnegie Endowment for International Peace.
I agree with his prediction that if China does succeed at beating the US in AI adoption, it won’t be because of a policy directive, but rather the “tenacity of Chinese entrepreneurs who always find a way to squeeze any possible business opportunity for all that it’s worth.”
The finish line in this tech race may be a decade or more away. Scaling users may be the first step for Beijing, but this is different from scaling usefulness.
This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Catherine Thorbecke is a Bloomberg Opinion columnist covering Asia tech. Previously she was a tech reporter at CNN and ABC News.
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