Chinese AI companies are enjoying ads, report shows, as chatbot market crowded

Chinese artificial intelligence (AI) companies are racking up huge advertising bills, according to figures from a marketing consultancy, as firms seek every possible advantage in a highly competitive market.

In the third quarter alone, AI firms—from high-profile start-ups like Moonshot AI and Zhipu AI to tech giants like ByteDance and Alibaba Group Holding – have spent more than 500 million yuan ($70.2 million) to promote chatbots and other AI applications, according to marketing analytics firm AppGrowing. Alibaba owns the South China Morning Post.

The companies themselves have not published their ad spend. AppGrowing said it estimates spending using public data from earnings reports and third-party marketing metrics, such as daily active users, fees, ad loads and effective cost per million. It combines these data points to estimate a platform’s revenue. advertising and advertisers’ placement plans for a given period of time, deducting ad spend from them, according to the company, which calls its numbers “for reference” only.

The latest figures have fueled debate in China over whether domestic AI firms are spending too much too quickly in an effort to monetize their products. Some in the industry fear that too much prioritization of marketable products over basic research could, in the long term, widen the technology gap with the US.

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TikTik parent ByteDance and Moonshot AI, an Alibaba- and Tencent Holdingsthe backed start-up, whose chatbots are among the most popular in China, were recognized in the report as the top two ad spenders, paying 200 million yuan and 150 million yuan respectively on AI products in the third trimester.

ByteDance declined to comment. Moonshot AI did not immediately respond to a request for comment on Thursday.