According to industry insiders, Chinese developers of artificial intelligence (AI) apps are increasingly focusing on international users as the domestic market has become too competitive.

While China’s big tech companies and startups have rushed to launch hundreds of large language models (LLMs) and corresponding apps, convincing Chinese enterprise customers and consumers to pay for these services has been a challenge, prompting some companies to seek growth overseas.

According to a recent study by Unique Capital, 103 of the world’s 1,500 active AI companies are based in China, but have already begun expanding into overseas markets.

Alibaba Group Holding, for example, last year launched SeaLLMs, a model tailored to Southeast Asian markets that aligns with the company’s e-commerce and cloud computing businesses in the region. Alibaba owns the South China Morning Post.

ByteDance, the owner of TikTok, has released consumer-focused apps including “AI homework helper” Gauth, interactive character app AnyDoor and AI bot platform Coze for global markets. Minimax, one of China’s leading AI startups, has also launched Talkie AI for international users.

Industry experts said foreign markets offered greater growth potential given strong domestic competition.

“Foreign users are more willing to pay for software, and there is a larger base of professionals who can provide valuable feedback,” said Ryan Zhang Haoran, co-founder of Motiff, the developer of an AI-powered user interface design tool launched in June. Zhang noted that Motiff has been pursuing business opportunities at home and abroad from day one.

“Use-oriented tools fit well in global markets where the need for customization is lower,” Zhang added. Motiff’s platform, which supports team collaboration and AI-powered design and creation, quickly secured its first users in the US, Japan, Southeast Asia and Latin America. It is priced at about 20 percent of current market leader Figma.

Beijing-based Kunlun Tech, operator of the Opera web browser and former owner of gay dating app Grindr, is a veteran among Chinese tech companies expanding overseas. Chief Executive Fang Han noted that the competitive landscape abroad has also tightened as more Chinese rivals expand overseas.

“AI-generated content (AIGC) fundamentally lowers the hurdles and costs for creators, which is shaking up the content industry,” said Fang. Recently, Kunlun has launched a number of AI-driven applications, including the music streaming service Melodio, an AI-powered music creation platform for commercial users called Mureka, and SkyReels, a short drama creation platform.

“We are focusing on markets with higher average revenue per user, such as North America, Europe and Japan,” Fang said.

The divide among Chinese developers, exacerbated by tensions between Washington and Beijing, means they must navigate the politics of a rapidly changing landscape, particularly in semiconductors and artificial intelligence.

In response, some Chinese companies are trying to conceal their origins. For example, Shenzhen-based generative AI startup HeyGen moved its headquarters to Los Angeles and asked its Chinese investors to sell their shares in favor of U.S. competitors. The move was aimed at cutting ties with mainland China as it comes under increasing scrutiny from Beijing and Washington.

“Compliance is key. Anyone entering a new market must comply with its regulations,” said Motiff’s Zhang, adding that while the company’s products are consistent across the world, its infrastructure is adapted to different markets using different open source models and cloud services.

Fang said Kunlun’s domestic products focus on “efficiency,” while the overseas team is experimenting more with AIGC tools and different business models. The Mureka app, for example, lets users pay for access to AIGC tools and offer their AI-generated music for sale, with the platform receiving a commission on each transaction.

Fang said that while China’s AI technology still faces challenges in areas such as chip development and computing power, Chinese companies excel in developing consumer-oriented applications and have a strong sense of commercialization.