China’s AI titans are giving away money and cars to try and woo users
A dozen actors perform a traditional lion dance in front of the Todtown shopping mall ahead of the Chinese Lunar New Year in Shanghai, China, during the opening of the Xinzhuang Lantern Festival on February 13, 2026.
YingTang | Nurfoto | Getty Images
The Year of the Horse begins this weekend, and China’s AI companies are throwing money at what’s being called the “Lunar New Year AI War.”
TikTok owner ByteDance is giving away 100,000 prizes, including luxury cars, at the country’s main holiday TV gala in a bid to take first place for its Doubao AI model. He also gives out money packages worth CNY 8,888 (about $1,280).
baidu, Tencent And Alibaba’s Some offer as high as CNY 10,000, offering even larger digital red envelopes worth about $1,450, as well as coupons, gadgets, and other freebies.
Baidu allocated CNY 500 million (about $72 million) to promote its Ernie chatbot. Tencent doubled that at CNY1 billion (about $145 million) for its Yuanbao model. Alibaba is spending a whopping CNY 3 billion (about $434 million) to get users to try Qwen.
The giveaways created such an uproar that Alibaba admitted it had to “urgently add resources” to end outages on the Qwen app.
Analysts say companies see this moment as key to capturing AI-curious customers for their own survival.
“Competitors are in a huge race to capture users and build developer ecosystems before they seize market dominance,” Charlie Dai, principal analyst at research group Forrester, told CNBC. “The problem is that profitability and sustainable business models remain unclear for all major players in the global market.”
Companies are also upgrading their models.
ByteDance on Thursday officially introduced Sedance 2.0, its new video generation model that the company says is designed for professional film production. A video created by artificial intelligence Tom Cruise and Brad Pitt Fights on the platform quickly went viral and attracted attention in Hollywood.
The new AI version has already caught the attention of Elon Musk, who responded to a post about the release on social media platform X with the comment, “It’s happening fast.”
On Wednesday, startup Zhipu AI, or Z.ai outside of China, launched a new AI model, the GLM-5, to compete with rivals like Anthropic’s Claude Opus 4.5 in coding and other tasks.
Shanghai-based MiniMax has released the M2.5 model for the public to test.
The industry also expects DeepSeek and Alibaba to announce new generation models during the holiday period.
Lunar New Year is traditionally a time when people spend and companies build excitement around new products.
A year ago, Chinese startup DeepSeek shocked the industry globally by launching its low-cost AI model; this development is often referred to as the “DeepSeek moment”.
Cash incentives and fierce competition are reminiscent of early stages in other industries Beijing aims to dominate globally, such as steel, solar panels and electric vehicles; This eventually led trading partners to backtrack on flooding world markets with unfairly cheap products.
In 2015, tech giant Tencent’s Lunar New Year promotions led to explosive growth for WeChat, the company’s now dominant messaging app.
Amid aggressive AI rollouts, Beijing is also joining the push.
Premier Li Qiang chaired a government study session on artificial intelligence, calling for stronger coordination of data, computing, power and the internet and saying China should accelerate the “large-scale commercial application” of artificial intelligence.
