China tech's old guard lose their AI thunder
16/03/2026 12:00
The author is a Reuters Breakingviews columnist. The opinions expressed are her own. By Robyn Mak HONG KONG, March 16 (Reuters Breakingviews) - There's a new kid on the block in China's technology sector. Shares in established giants Alibaba 9988.HK and Tencent 0700.HK have underperformed the broader market, while five-year-old MiniMax 0100.HK briefly surpassed Baidu's 9888.HK $40 billion-plus market value last week. It's still early days for artificial intelligence models, apps and agents, but this may be the start of a changing of the guard. The so-called BAT trio is synonymous with China's consumer internet, having blazed a trail in e-commerce, search, mobile payments, messaging and more. But they are increasingly playing catch-up in AI. ByteDance's Doubao, for instance, is the country's most popular chatbot, even after aggressive marketing campaigns from the incumbents to lure users. And Knowledge Atlas Technology 2513.HK, an upstart also called Zhipu that's virtually unknown outside of the People's Republic, now boasts the country's best large language model, accordingto independent research shop Artificial Analysis. That has translated into a dramatic divergence in market performance. Shares in AI labs MiniMax and Zhipu have delivered triple-digit percentage gains since their January debuts in Hong Kong. Privately held peer Moonshot is planning a $1 billion funding round that would take its valuation to $18 billion, up from $4.3 billion last year, Bloomberg reported, citing sources. Compare that to Alibaba and Tencent, whose shares have fallen 7% and 9%, respectively, this year. One factor is that growth in their core businesses is slowing. Revenue at Alibaba's main Chinese commerce unit is forecast to grow less than 5% year-on-year in the three months to the end of December, per analysts forecasts on Visible Alpha, and account for 47% of the total. Meanwhile, Tencent's cash cow divisions of video games, digital media and social networking are expected to do better, with sales on track to rise by 13% over the same period. But that is upstaged by MiniMax's 159% surge in full-year 2025 sales, albeit from a much lower base. A bigger concern is how AI will disrupt Alibaba's and Tencent's closely guarded digital ecosystems. Having a virtual assistant order and pay for takeout or schedule meetings will mean less human engagement with all-in-one super apps, many of which prize their hold on user data and advertising dollars. Little wonder China's recent craze for OpenClaw, an open-source agent that anyone can install on their devices and grant broad access to apps and systems, has prompted Tencent, Zhipu and other rivals to quickly launchtheir own versions as part of a frenzy known as "raising lobsters". The silver lining is that rapid adoption is spurring demand for large language models from incumbents and upstarts. But the supremacy of China tech's old guard is no longer guaranteed. Follow Robyn Mak on X. CONTEXT NEWS China's Moonshot AI is planning to raise as much as $1 billion in a funding round that would value the startup at around $18 billion, Bloomberg reported on March 14, citing sources. The company, which owns the popular Kimi chatbot, raised more than $700 million earlier this year at a $10 billion valuation, compared to a $4.3 billion valuation at the end of 2025, the report added. Moonshot's existing backers include Alibaba and Tencent. It's unclear if they are participating in this round. Tencent is due to report financial earnings on March 18 and Alibaba on March 19. China's tech giants underperform on AI expectations https://www.reuters.com/graphics/BRV-BRV/movaojomava/chart.png (Editing by Antony Currie; Production by Ujjaini Dutta) ((For previous columns by the author, Reuters customers can click on MAK/ robyn.mak@thomsonreuters.com))