More than a dozen actors perform a traditional lion dance in front of Tod Town Shopping Mall during the opening of the Xinzhuang Lantern Festival ahead of the Lunar New Year in Shanghai, China, February 13, 2026.
Ying Tan | Null Photo | Getty Images
The Year of the Horse begins this weekend, and Chinese artificial intelligence companies are pouring money into what’s being dubbed the “Lunar New Year AI War.”
To win prime placement for its Doubao AI model, TikTok owner ByteDance is handing out 100,000 prizes, including luxury cars, at the country’s major holiday TV gala. They are also handing out packets of money, some of which are worth 8,888 yuan (about $1,280) for good luck.
Baidu, tencent and alibaba is offering even bigger digital red envelopes, some of which can reach up to 10,000 RMB (approximately $1,450), as well as vouchers, gadgets, and other freebies.
Baidu has allocated RMB 500 million (approximately $72 million) to promote the Ernie chatbot. Tencent doubled that amount to 1 billion yuan (approximately $145 million) for the Yuanbao model. Alibaba is spending a whopping 3 billion yuan (approximately $434 million) to get users to try Qwen.
The perk caused such an uproar that Alibaba admitted it needed to “urgently add resources” to resolve the Qwen app outage.
Analysts say companies believe now is the key to their survival and attracting customers interested in AI.
“They’re in a high-stakes race to acquire users and build a developer ecosystem before their competitors can secure market dominance,” Charlie Dye, principal analyst at research group Forrester, told CNBC. “The problem is that profitability and sustainable business models remain uncertain for any major player in the global market.”
Companies are also upgrading their models.
On Thursday, ByteDance officially announced its new video generation model Seedance 2.0. The company says it’s designed for professional film production. The AI-generated, on-platform video of Tom Cruise and Brad Pitt fighting quickly went viral and garnered attention in Hollywood.
The release of the new AI has already caught the attention of Elon Musk, who responded to a post about the release on his social media platform X with the comment, “It’s happening fast.”
On Wednesday, startup Zhipu AI (Z.ai outside China) unveiled a new AI model, GLM-5, to compete with rivals such as Anthropic’s Claude Opus 4.5 in coding and other tasks.
Shanghai-based MiniMax has released the M2.5 model for public testing.
The industry expects DeepSeek and Alibaba to also announce next-generation models around the holiday season.
Chinese New Year is traditionally a time when people spend money and companies create buzz for new products.
A year ago, Chinese startup DeepSeek released its low-cost AI model, shocking industries around the world. This development is often referred to as the “DeepSeek moment.”
The cash incentives and fierce competition are reminiscent of the early stages of other industries the Chinese government sought to dominate globally, such as steel, solar panels and electric cars, but ultimately flooded global markets with unfairly cheap products, leading to a backlash from trading partners.
In 2015, tech giant Tencent’s Lunar New Year promotion led to explosive growth for its now dominant messaging app, WeChat.
The Chinese government is also joining in the aggressive promotion of AI.
Premier Li Qiang chaired a government study group on AI, called for stronger collaboration between data, computing, power and the internet, and said China should accelerate the “large-scale commercial application” of AI.
