Tencent Holdings Ltd.’s Yuanbao AI chatbot has surpassed DeepSeek to become the most downloaded iPhone app in China this week, underscoring the growing competition in the domestic AI market. Tencent’s app combines its proprietary Hunyuan artificial intelligence technology with DeepSeek’s R1 reasoning model, gaining traction during a period of heightened interest and rivalry in AI within the country. Notably, three of the top five most downloaded free apps are AI chatbots, with ByteDance Ltd.’s Doubao joining Tencent and DeepSeek in the ranks.
DeepSeek’s chatbot, which has experienced remarkable growth over the past month, has energized China’s tech and internet landscape, prompting increased investment and the launch of new products. Alibaba Group Holding Ltd. has begun to measure its progress against DeepSeek, announcing a substantial $53 billion investment in AI initiatives. Meanwhile, Tencent has integrated DeepSeek R1 across various products, including enhancing WeChat’s search capabilities and powering a virtual companion in its popular game, Peacekeeper Elite. Last week, Tencent also unveiled a Hunyuan Turbo edition, claiming it delivers responses faster than DeepSeek.
Based in Shenzhen, Tencent is the world’s leading game distributor, and its WeChat platform boasts over 1.4 billion users, which likely contributed to its ascendance in the AI race. The company is keen to strengthen its foothold as it competes for AI users.
However, questions remain regarding how companies will eventually monetize these services, which are currently offered for free and are increasingly available in open-source formats for other developers to utilize, as is the case with DeepSeek’s AI models. For now, the primary emphasis is on acquiring users, and Tencent has gained an advantage over rivals like Alibaba and Baidu Inc., both of which have made larger investments in AI than Tencent.
