As the Lunar New Year begins, China’s tech giants are launching an unprecedented campaign to dominate the artificial intelligence race, dubbed “The Lunar New Year AI War.” In a high-stakes effort to gain user traction and developer momentum, companies like ByteDance, Baidu, Tencent, and Alibaba are offering massive giveaways, including cash, luxury cars, gadgets, and digital red envelopes worth up to CNY10,000 (about $1,450). ByteDance, owner of TikTok, is leading the charge by distributing 100,000 prizes during China’s most-watched holiday TV gala, including high-end vehicles and lucky money packets—some with the auspicious amount of CNY8,888 ($1,280). Meanwhile, Baidu has committed CNY500 million ($72 million) to promote its Ernie chatbot, Tencent has doubled that with CNY1 billion ($145 million) for its Yuanbao model, and Alibaba has poured in a staggering CNY3 billion ($434 million) to drive adoption of its Qwen AI system. The scale of these promotions has already caused technical strain. Alibaba admitted it had to urgently scale up resources to resolve outages on the Qwen app amid surging user demand. Analysts say the frenzy reflects a critical moment for Chinese AI firms. “They are in a high-stakes race to capture users and build developer ecosystems before rivals lock in market dominance,” said Charlie Dai, principal analyst at Forrester. “The challenge remains: profitability and sustainable business models are still unclear for every major player in the global AI market.” Beyond giveaways, companies are also advancing their technology. ByteDance recently unveiled Seedance 2.0, a new video generation model aimed at professional film production. A viral AI-generated clip featuring Tom Cruise and Brad Pitt in a fictional fight quickly drew attention from Hollywood and even Elon Musk, who commented on X, “It's happening fast.” Meanwhile, Zhipu AI, known internationally as Z.ai, launched its GLM-5 model, positioning it as a strong competitor to Anthropic’s Claude Opus 4.5 in coding and complex reasoning tasks. Shanghai-based MiniMax also released its M2.5 model for public testing, signaling a wave of innovation during the holiday season. Industry insiders expect DeepSeek and Alibaba to unveil next-generation AI models in the coming days. The Lunar New Year has long been a time for product launches and consumer promotions in China. A year ago, DeepSeek’s release of a cost-effective AI model—known as the “DeepSeek moment”—sent shockwaves through the global AI community. Today’s promotional blitz echoes earlier government-backed industrial campaigns in sectors like steel, solar panels, and electric vehicles, which led to international trade concerns over overcapacity and subsidized exports. This year, Beijing is also stepping up its involvement. Premier Li Qiang chaired a government study session on AI, urging stronger coordination of data, computing power, energy, and internet infrastructure. He emphasized the need to accelerate the large-scale commercial use of AI across industries. With massive spending, rapid innovation, and state support, China’s AI ambitions are reaching a fever pitch—driven not just by market competition, but by national strategic goals.