Chinese AI Models Surge Globally, But Profitability Remains Elusive

Alibaba's Qwen, DeepSeek, and other Chinese-made large language models have captured roughly 30 percent of global AI downloads and overtaken American counterparts in raw adoption, yet the companies behind them continue to lose billions of dollars while racing to expand internationally. Chinese open-source models surpassed US models in cumulative downloads on the Hugging Face platform in 2025 and continued climbing through 2026, with Alibaba's Qwen family surpassing 1 billion total downloads and Meta's Llama for the first time. On OpenRouter, a token marketplace, Chinese models rose from nearly none in late 2024 to nearly 30 percent of usage by mid-2026. Among US startups adopting open-source AI stacks, approximately 80 percent are now running Chinese models, according to venture capitalist Martin Casado.