China holds a meaningful edge over the United States in deploying artificial intelligence applications to everyday consumers, according to tech executives and investors who spoke on Thursday, June 11, 2026, at the 2026 HKEX Future Tech Summit in Shenzhen, hosted by Hong Kong Exchanges and Clearing. However, the same voices cautioned that Chinese AI companies are looking increasingly overvalued.

China is '100 days behind' the US in frontier AI models

Chi Zhang, General Manager of Finance Industry at Alibaba Cloud Intelligence Group, told the summit panel that China still lags in raw computing power but is only '100 days behind' the US in frontier AI model capabilities. Zhang framed this not as a deficit but as a narrowing gap that underscores China's accelerating pace of development. The remarks reflect a broader industry consensus that the technology distance between the two AI superpowers is shrinking faster than many anticipated.

Why it matters: applications as China's true advantage

Zhang argued that China's most significant and durable advantages lie not in foundational models but in AI applications, driven by its vast pool of entrepreneurs and engineers and its current stage of economic development. The country's scale of talent and the hunger of its domestic market create conditions that are difficult for US rivals to replicate. This application-layer dominance could prove strategically decisive even if China trails on raw model benchmarks.

AGI race: energy, infrastructure, and open-source as growth levers

Lixue Xia, Co-founder and CEO of Infinigence AI, a Shanghai-based AI computing service provider, said that in the race toward artificial general intelligence (AGI), China's enormous growth potential would be propelled by sectors including energy, infrastructure buildout, and its open-source ecosystem. Xia's framing positions China as competing on a different axis than pure model performance — one rooted in industrial integration and open collaboration. These structural levers could compound China's application-layer lead over time.

The competitive backdrop: DeepSeek and cost-driven disruption

Chinese AI labs have in recent months unveiled new proprietary and open-source models that trail closely behind those from US peers such as OpenAI and Anthropic in capabilities. Their ability to maintain a significantly lower cost structure has prompted some US firms to switch to Chinese vendors, with DeepSeek emerging as a notable beneficiary of this trend. The cost arbitrage is reshaping procurement decisions across the global AI supply chain.

What's next: valuation reality check looms

Despite the optimism around China's application-layer strengths, the executives and investors at the summit flagged a growing concern: Chinese AI firms appear increasingly overvalued relative to their current revenue and profitability fundamentals. As capital markets scrutinise AI monetisation more rigorously in 2026, companies that cannot demonstrate sustainable unit economics risk a sharp correction. Investors and industry watchers will be monitoring whether China's application-layer lead translates into durable earnings before valuations reset.