China's tech titans are giving away money and cars in 'The Lunar New Year AI War'

As the Year of the Horse approaches, China's artificial intelligence sector is engaging in a fierce competition dubbed the "Lunar New Year AI War." Leading tech company ByteDance, the parent of TikTok, is making a significant splash by distributing 100,000 prizes during the nation's highly anticipated holiday TV gala, which includes luxury vehicles among its giveaways. Additionally, ByteDance is offering monetary gifts, with some packets featuring the auspicious amount of CNY8,888, roughly equivalent to $1,280. Meanwhile, other major players like Baidu, Tencent, and Alibaba are upping the ante with even larger digital red envelopes, some reaching CNY10,000 (around $1,450), along with various vouchers, gadgets, and other enticing freebies. Baidu has allocated CNY500 million (approximately $72 million) to promote its Ernie chatbot, while Tencent has doubled that investment to CNY1 billion ($145 million) for its Yuanbao model. Alibaba stands out with a staggering CNY3 billion (about $434 million) dedicated to encouraging users to explore its AI model, Qwen. The scale of these giveaways has led to high demand, prompting Alibaba to acknowledge the need to "urgently add resources" to stabilize its Qwen app against unexpected surges in usage. Industry analysts suggest that this promotional frenzy represents a critical opportunity for companies to attract AI-interested consumers amid intense competition for market share. Charlie Dai, a principal analyst at Forrester, emphasized the urgency of this race: "They are in a high-stakes race to capture users and build developer ecosystems before rivals lock in market dominance. The challenge remains that profitability and sustainable business models are still uncertain for every significant player in the global market." In addition to the giveaways, companies are actively enhancing their AI offerings. Recently, ByteDance unveiled its new video generation model, Seedance 2.0, designed specifically for professional film production. A viral AI-generated video featuring Tom Cruise and Brad Pitt showcased the platform's capabilities, catching the attention of figures like Elon Musk, who commented on the rapid advancements in this space. Newcomer Zhipu AI, known as Z.ai outside China, has also joined the fray with its latest AI model, GLM-5, aimed at competing with established players like Anthropic's Claude Opus 4.5. Furthermore, Shanghai-based MiniMax has made its M2.5 model available for public testing, and the industry is poised for announcements of next-generation models from DeepSeek and Alibaba in the coming festive period. The Lunar New Year has historically been a season of consumer spending and product launches. Last year, the debut of DeepSeek's low-cost AI model made headlines globally, marking a pivotal moment in the industry. The current barrage of cash incentives and aggressive competition echoes the early strategies employed by China in other sectors, such as steel and solar energy, which eventually drew criticism from international trading partners. In 2015, Lunar New Year promotions significantly boosted Tencent's dominant WeChat messaging app. Amid these intense AI marketing campaigns, the Chinese government is also taking action. Premier Li Qiang recently led a study session on AI, advocating for enhanced coordination of data and technology resources to expedite the "large-scale commercial application" of artificial intelligence in the country.