Zhipu and ByteDance Release AI Models as China AI Arms Race Intensifies Pre-New Year

ByteDance Ltd. (BIDU) and Zhipu Inc. (09612.HK) released major AI model upgrades this week, intensifying competition in China’s AI sector ahead of the Lunar New Year. Zhipu’s GLM-5 surpassed Moonshot AI’s offering on Artificial Analysis and marked a 30% price hike for its GLM Coding Plan, driving a 34% surge in its Hong Kong shares. The model, with over double the parameters of its predecessor, targets complex coding and agentic tasks and is part of Zhipu’s shift to global distribution. ByteDance’s Seedance 2.0, a video model still in testing, has generated broad online interest. Startups and tech giants are accelerating rollouts to precede a likely DeepSeek release during early February and the debut of Alibaba Group Holding Ltd.’s (BABA) Qwen-3.5. The timing coincides with a subsidy war for AI chatbot users and heightened market sensitivity to disruptive AI debuts. Analysts note the narrowing performance gap between Chinese and U.S. LLMs, while spending on user acquisition could strain margins for Qwen, Doubao, Ernie Bot, and Yuanbao.