AI race enters a new phase

Hi, this is Evelyn, writing to you from Beijing. Welcome to the latest edition of The China Connection — a succinct snapshot of what I’m seeing and hearing from local businesses.

Today, I unpack what’s next for Chinese companies using AI to make money. As more than one executive tells me, large language models like DeepSeek are no longer enough. What are they looking for instead?

Just as Chinese AI chatbots similar to ChatGPT seem to be catching up to their U.S. peers, a new race is shaping up: industry-specific artificial intelligence.

That’s what companies in China are focusing on, as they pursue AI-driven revenue growth. It’s a step forward from the broader category of large-language models such as DeepSeek.

Alibaba.com, a platform that connects millions of small businesses in the U.S. and Europe with China-based suppliers, is looking to partner with U.S. AI models to handle the legal, financial and dealmaking aspects of doing business around the world.

That’s what Kuo Zhang, president of the business, told me. It comes as Alibaba last week launched an AI-integrated upgrade to its Accio sourcing platform called Accio Work. It lets buyers search for parts and customized products on the platform. The tool can also process customs paperwork autonomously and calculate profit margins for businesses, Zhang said.

That’s critical in a time of tariff volatility.

Accio already has millions of monthly active users and hopes to grow to tens of millions of monthly active users by this time next year, Zhang added.

Partnering with overseas AI to understand country-specific law, finance or human resources laws and regulations will enhance the product further, Zhang said, allowing individual entrepreneurs to quickly turn their ideas into products they can sell.

It’s not just Alibaba that’s searching for U.S. partners and specialized AI.

Li Renhan, founder of three-year-old startup MagicPen Bio, produces plants that glow in the dark, providing an eco-friendly form of lighting. That’s thanks to AI-powered biological research from Chinese agricultural researchers that combines the naturally occurring luminescence of fireflies and fungi with landscaping plants.

On the business front, Li told me the company plans to finalize partnerships in the U.S. and the Middle East this year for local sales, and is looking for more U.S. businesses to work with. He predicts global revenue of 200 million yuan ($28.94 million) this year.

Rather than exporting the fragile plants, Li said the startup is selling the underlying technology, for which it has about 20 patents.

It’s an intellectual property trend that China is promoting at a high level. This year’s state-organized Zhongguancun Forum, at which Li was presenting last week, described its expo pavilion as an international technology trade fair for companies to “buy globally” and “sell globally.”

Inside, a screen showed that much of what was for sale were patents.

Even the popular world of humanoid robots is looking for more specialized AI.

Leaders of some of the top Chinese robot startups said at the Zhongguancun Forum on Friday that one of their biggest pain points was training data for real-world scenarios.

Linkerbot, a Beijing-based startup that is beginning its humanoid robot development by focusing on hands, has built an online database to collect all the unique skills that human dexterity is capable of.

During a speech Thursday at the forum, Linkerbot founder and CEO Alex Zhou Yong said he aimed to map out all basic human hand skills within three years. Before then, he wants to enable humanoid robots to assemble robotic hands and humanoids on their own, bringing the cost of a robot down to less than an iPhone.

The goals of AI research might be lofty, but AI as the world knows it has its limits. In China, businesses are trying to get specialized so the tech can deliver industry-targeted results.

Trump’s May visit. The White House said U.S. President Donald Trump now plans to travel to Beijing from May 14 to 15 for a meeting with Chinese President Xi Jinping. The trip was delayed from late March due to the Iran war.

Meta-Manus deal. More than 100 Manus employees moved into Meta’s Singapore offices in early March, CNBC has learned, signaling the controversial AI business deal has moved ahead despite Beijing’s discouragement.

U.S. execs in China. More than 30 senior leaders of American corporations attended a state-organized China Development Forum in Beijing, with Apple CEO Tim Cook taking the stage right after Chinese Premier Li Qiang.

March 31: China official Purchasing Managers’ Index for March

April 1: RatingDog China General Manufacturing PMI for March

April 3: RatingDog China General Services PMI for March

April 3 – 7: Hong Kong stock market closed for holidays

April 6: Mainland China stock markets closed for Qingming festival