American Models Are Making 10 Times More Money Than Chinese Ones

Chinese artificial intelligence companies may be seeing rapid adoption of their models, but revenue remains well below that of leading U.S. rivals, raising questions about the valuations of some of the country’s most closely watched AI startups, research firm Rhodium Group said.

All Chinese AI models combined generate only about 10% of the revenue reported by OpenAI and Anthropic, according to Rhodium estimates published today.

The figures are based on annual recurring revenue, an industry measure that annualizes a company’s recent monthly revenue and is intended to capture rapidly growing businesses.

DeepSeek had the lowest annual recurring revenue among major Chinese AI companies tracked by Rhodium, at about $500 million, followed by MiniMax at $800 million and Moonshot at $1 billion, the report said.

Z.ai told investors on Wednesday that its latest annual recurring revenue was $1.8 billion. Even including about $4 billion for ByteDance and $2.4 billion for Alibaba, the combined figures remained well below the $40 billion estimated for OpenAI and $65 billion for Anthropic, Rhodium said.

The gap between revenue and valuations is particularly pronounced among some Chinese AI startups.

“Valuations relative to revenue appear exorbitant for Moonshot and DeepSeek at present,” the Rhodium report said.

The report estimated valuation-to-revenue ratios of about 50 times for Moonshot and 163 times for DeepSeek, compared with 34 times for OpenAI and 21 times for Anthropic.

The revenue figures may not fully capture the latest growth in China’s AI sector, Rhodium said, noting that its analysis relied on the latest figures available from the summer and that usage of Chinese AI models had increased sharply from low levels earlier in the year.

Z.ai said on Wednesday that it expected its annual recurring revenue to reach $3 billion by the end of the year, up from a previous forecast of $2.4 billion.

Chinese AI companies are also exploring ways to capture more revenue from third-party providers offering access to their models. Many Chinese models are open source, allowing users with sufficient computing capacity to download and operate them independently.

Most leading U.S. models are closed, while the cost per task for models from OpenAI and Anthropic is significantly higher than for Chinese models, according to AI comparison firm Artificial Analysis.

The lower revenue base could make it harder for Chinese AI companies to finance the computing and infrastructure needed to compete at the frontier, Rhodium said.

“The financing gap means it will be far more difficult for Chinese frontier AI labs to scale sustainably,” Logan Wright, a partner at Rhodium Group, said in a statement. He co-authored the report with research analyst Endeavour Tian.

“They will be heavily dependent upon a favorable climate in the equity market—historically that’s not an easy bet in China,” he said. “Government funding has been helpful on the hardware side of the buildout of compute capacity, but similarly will probably balk at direct funding for the frontier labs.”

Rhodium estimated that more than 60% of equity investment in Chinese AI chips and servers came from state-affiliated sources.

The financing environment comes as Chinese AI companies have experienced sharp swings in their stock prices.

Z.ai shares rose more than 5% in Thursday morning trading, recovering from a decline earlier in the week after news of its second major fundraising in two months. The Hong Kong-listed stock had fallen back to levels last seen in the spring after more than tripling during the summer.

Shares of MiniMax have also struggled in recent months to sustain gains made on their initial public offering day, following a sharp rise in the spring.

Moonshot has reportedly filed confidentially for a Hong Kong listing, while DeepSeek is also preparing for a potential IPO.

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