China’s seven leading AI developers together generated an estimated $10.7 billion in annual recurring revenue between March and August, about 10% of the more than $100 billion combined for OpenAI and Anthropic, U.S.-based research firm Rhodium Group said in a report published Thursday.
The figure uses annual recurring revenue (ARR), a metric that projects a recent month’s subscription income over 12 months. Rhodium’s report covers DeepSeek, Moonshot AI, Z.ai, MiniMax, Alibaba Group Holding, ByteDance and Kuaishou Technology, which runs the Kling AI video generator.
ByteDance led the Chinese group at $4 billion as of July, followed by Alibaba at $2.4 billion in August. OpenAI alone reached $40 billion in August, with Anthropic at $65 billion in July. Among the smaller labs, DeepSeek and Kling each stood at $500 million, MiniMax at $800 million and Moonshot at $1 billion.
Z.ai, also known as Zhipu AI, told investors on Wednesday its ARR had reached $1.8 billion, of which $1.6 billion came from its API business in August.
Despite the revenue gap, investors have continued to back Chinese AI companies at valuations Rhodium called exorbitant relative to earnings. It estimated valuation-to-ARR multiples of 50 times for Moonshot and 163 times for DeepSeek, against 34 times for OpenAI and 21 times for Anthropic.
Moonshot has been raising funds at a valuation near $50 billion and has filed confidentially for a Hong Kong initial public offering, while DeepSeek was nearing a pre-IPO round valuing it at about 500 billion yuan (approximately $74 billion). Anthropic was expected to list in the U.S. later this year, reportedly targeting a valuation near $2 trillion, while OpenAI discussed a round valuing it at about $1.2 trillion in a Financial Times report Tuesday.
Rhodium noted that China’s open-weight strategy has made the models harder to monetise, because third-party cloud providers can deploy them and sell access without paying the original developer. “This could be changing, as Moonshot and Alibaba are pushing for revenue-sharing agreements with major users of their open-weight models,” the report said.
“The financing gap means it will be far more difficult for Chinese frontier AI labs to scale sustainably,” said Logan Wright, a partner at Rhodium Group who co-authored the report. He added they would be heavily dependent on a favourable equity-market climate, historically not an easy bet in China.
Revenue has grown fast at some developers. Z.ai recorded a 400% year-on-year rise in first-half revenue to 953.9 million yuan (approximately $134 million), while MiniMax’s revenue surged 283% to $116.6 million over the same period. Both remain loss-making and could stay so through 2030 given computing costs.
Rhodium estimated more than 60% of equity investment in Chinese AI chips and servers came from state-affiliated sources. Z.ai stated a year-end ARR target of $3 billion, up from a prior forecast of $2.4 billion.