HONG KONG, March 16 (Reuters Breakingviews) - There’s a new kid on the block in China’s technology sector. Shares in established giants Alibaba (9988.HK), opens new tab and Tencent (0700.HK), opens new tab have underperformed the broader market, while five-year-old ​MiniMax (0100.HK), opens new tab briefly surpassed Baidu’s (9888.HK), opens new tab $40 billion-plus market value last week. It’s still early days for artificial intelligence models, apps and ‌agents, but this may be the start of a changing of the guard.

The so-called BAT trio is synonymous with China’s consumer internet, having blazed a trail in e-commerce, search, mobile payments, messaging and more. But they are increasingly playing catch-up in AI. ByteDance’s Doubao, for instance, is the country’s most popular chatbot, ​even after aggressive marketing campaigns from the incumbents to lure users. And Knowledge Atlas Technology (2513.HK), opens new tab, an upstart also called Zhipu that’s ​virtually unknown outside of the People’s Republic, now boasts the country’s best large language model, according, opens new tabto independent research shop ⁠Artificial Analysis.

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That has translated into a dramatic divergence in market performance. Shares in AI labs MiniMax and Zhipu have delivered triple-digit percentage ​gains since their January debuts in Hong Kong. Privately held peer Moonshot is planning a $1 billion funding round that would take its ​valuation to $18 billion, up from $4.3 billion last year, Bloomberg reported, opens new tab, citing sources. Compare that to Alibaba and Tencent, whose shares have fallen 7% and 9%, respectively, this year.

One factor is that growth in their core businesses is slowing. Revenue at Alibaba’s main Chinese commerce unit is forecast to grow less than 5% year-on-year ​in the three months to the end of December, per analysts forecasts on Visible Alpha, and account for 47% of the total. Meanwhile, ​Tencent’s cash cow divisions of video games, digital media and social networking are expected to do better, with sales on track to rise by 13% ‌over the ⁠same period. But that is upstaged by MiniMax’s 159% surge in full-year 2025 sales, albeit from a much lower base.

A bigger concern is how AI will disrupt Alibaba’s and Tencent’s closely guarded digital ecosystems. Having a virtual assistant order and pay for takeout or schedule meetings will mean less human engagement with all-in-one super apps, many of which prize their hold on user data and advertising dollars.

Little wonder ​China’s recent craze for OpenClaw, an ​open-source agent that anyone can ⁠install on their devices and grant broad access to apps and systems, has prompted Tencent, Zhipu and other rivals to quickly launch, opens new tabtheir own versions as part of a frenzy known as “raising lobsters”. The silver lining ​is that rapid adoption is spurring demand for large language models from incumbents and upstarts. But ​the supremacy of China ⁠tech’s old guard is no longer guaranteed.

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Context News

• China’s Moonshot AI is planning to raise as much as $1 billion in a funding round that would value the startup at around $18 billion, Bloomberg reported on March 14, citing sources. The company, which owns the popular Kimi ⁠chatbot, raised ​more than $700 million earlier this year at a $10 billion valuation, compared to a $4.3 billion ​valuation at the end of 2025, the report added.
• Moonshot’s existing backers include Alibaba and Tencent. It’s unclear if they are participating in this round.
• Tencent is due to report ​financial earnings on March 18 and Alibaba on March 19.

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Editing by Antony Currie; Production by Ujjaini Dutta

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Robyn Mak

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Robyn Mak joined Reuters Breakingviews in 2013. Previously, she was a Research Associate for the Global Policy Programs at the Asia Society in New York. She has also worked at the Carnegie Endowment for International Peace in Washington DC and interned at several consulting firms, including the Albright Stonebridge Group. She holds a masters degree in international economics and international relations from the Johns Hopkins School of Advanced International Studies and is a magna cum laude graduate of New York University.

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