5 companies powering China’s next tech cycle

China’s innovation economy has matured well beyond its early phase of infrastructure rollout and industrial scaling. Over the past decade, it has laid the foundation across semiconductors, advanced robotics, electric vehicle value chain, and AI-enabled ecosystem.1 

What we’re now seeing is not a return to hype, but a reset towards execution. The companies leading this shift are no longer just building capacity but are delivering, expanding, and embedding themselves deeper into high-value areas of the global tech stack.

Against this backdrop, a handful of names are emerging with the operational scale, technological edge, and vertical control to sustain growth through the next cycle. They are not chasing headlines or speculative markets. They are commercialising, scaling, and competing globally, often in categories where China is beginning to lead, not follow.2

Key takeaways

• Alibaba: Transitioning from e-commerce to infrastructure scale AI and cloud, with deep platform monetisation
• Tencent: Embedding AI across WeChat, gaming, and cloud to become the backbone of digital infrastructure
• CATL: Leading battery innovation with charging, sodium ion, and grid storage at industrial scale
• BYD: Scaling EV production and technology integration from battery to software with full stack execution
• Xiaomi: Evolving from phones to an integrated ecosystem across EV, AI, and smart home infrastructure

Alibaba: From marketplace to digital Infrastructure

Alibaba’s evolution is one of the clearest examples of how China’s tech leaders are positioning for the decade ahead. Once defined by e commerce, the company now plays a central role in China’s push to build out artificial intelligence, cloud computing, and digital infrastructure.

The cloud business is seeing rising demand from industries like finance, education, manufacturing, and agriculture as more workloads shift online. Alibaba has committed RMB380 billion towards AI infrastructure, reflecting its ambition to become China’s leading external cloud provider.3 Inference workloads are growing steadily, with adoption expanding beyond large enterprises to mid-sized firms and new verticals.

On the consumer side, Alibaba continues to strengthen monetisation. Customer management revenue is rising faster than gross merchandise volume, driven by broader use of its Quanzhantui marketing tool.4 This has helped merchants improve reach and ad efficiency without relying on aggressive discounting. At the same time, the company is expanding into instant commerce, targeting higher frequency purchases through its existing user base and delivery network.

Artificial intelligence is being applied across its platforms. Its proprietary language model, Qwen, supports improvements in search, personalisation, and merchant tools. These upgrades are designed to deepen engagement while making the ecosystem more efficient and competitive.5

Alibaba is repositioning itself around long term infrastructure and digital capability. Its role in powering enterprise AI, while continuing to scale its consumer reach, makes it a key player in China’s broader technology agenda.

Tencent: Scaling AI across China’s digital economy

Tencent is best known for WeChat, the all in one app that blends messaging, payments, content, and services into a single platform used by over a billion people in China. But its business stretches far beyond chat. Tencent operates one of the world’s largest online gaming empires, runs a growing cloud and enterprise services division, and is now emerging as a major player in artificial intelligence.6

It is the company’s ability to integrate AI across this ecosystem that sets it apart. In advertising, Tencent has rolled out AI powered upgrades that improve targeting and performance across video feeds, mini apps, and search. This helps brands reach consumers more effectively and drives stronger engagement without saturating users with ads. In gaming, AI is already being used to speed up content creation and personalise in game experiences, improving longevity in franchises like Honour of Kings and Peacekeeper Elite.7

These established businesses are generating enough operating leverage for Tencent to make significant long-term investments. Its AI model, Hunyuan, is being built into everything from customer service bots to content search and productivity tools like the Yuanbao assistant.8 Tencent is also adopting new models like DeepSeek to enhance search, recommendation, and task automation within its apps.9 These efforts are turning WeChat from a communications platform into what some analysts are calling China’s AI super app.

The company’s enterprise unit is also benefitting from this shift. Tencent Cloud is growing as more businesses adopt AI based inference tools for customer interaction, logistics, and online services.10 As China moves to build its own digital infrastructure, Tencent is well placed with a combination of reach, capability, and alignment to national tech priorities.

It is no longer just a platform. Tencent is becoming the engine room behind the next generation of China’s digital economy.

CATL: Building the battery backbone of China’s tech ambitions

CATL is not a car company, but it powers nearly every electric vehicle rolling off China’s production lines. From BYD to Tesla, Nio to Geely, the company sits at the centre of the global EV battery supply chain.11 What makes CATL stand out, though, is not just scale but its ability to stay ahead of the curve on battery chemistry, manufacturing, and energy storage innovation.

It has led the shift to lithium iron phosphate batteries, pushed superfast charging into mass production, and is already trialling sodium ion batteries designed for harsh environments and long duty cycles. Its new generation Shenxing battery can deliver over 500 kilometres of range with just five minutes of charge. This is not an incremental upgrade but a major leap in EV usability.12

Beyond cars, CATL is expanding into energy storage systems for grid use and industrial applications.13 Nearly 20 percent of battery shipments now support energy storage customers, with growing demand from both state backed utilities and private operators. The technology is also being used to stabilise China’s solar and wind power infrastructure, linking CATL to the broader decarbonisation agenda.

Importantly, CATL remains a step ahead of its rivals. Despite price competition and policy shifts in the US and Europe, it retains cost leadership, strong margins, and the capacity to self-fund R&D. Recent launches include the Freevoy dual power battery, a two chemistry design built for long range and cold climates, and progress toward solid state battery production by 2027.14

CATL is not trying to be everything. It is focused on building the battery infrastructure that will drive China’s future whether on the road, the grid, or the factory floor.

BYD: Leading the charge in scale, speed and system control

BYD is the world’s largest electric vehicle producer, but the story goes far deeper than just volume.15 With roots in battery manufacturing, it has built an end-to-end ecosystem spanning EVs, plug in hybrids, powertrain systems, semiconductors, and energy storage. Its success is tied to scale, yes, but also to its control over the full stack of technology and production.

That integration gives BYD the ability to deliver innovation faster and at lower cost than its peers. Whether it is the rollout of high-speed supercharging systems, proprietary ADAS platforms like God’s Eye, or the expansion of premium models under the Denza and Yangwang brands, the company consistently brings advanced technologies to market at scale.16 It dominates the mass market EV category in China and is steadily expanding into the mid and high end, including in international markets.

It is also one of the few automakers delivering positive free cash flow while continuing to invest heavily. Export volumes are climbing, led by Latin America, Southeast Asia, and the Middle East.17 While the company has no immediate plans to enter the US, it is gaining share in key global regions and building localised manufacturing capacity where it sees long term opportunity.18

Unlike many EV startups, BYD is not reliant on a single product or market. Its strength lies in system level execution, owning the battery plant, the chip foundry, the software stack, and the design studio. In a fragmented and protectionist world, that level of self-reliance is not just a competitive edge. It is a survival strategy.

Figure 4: BYD combines EV scale with in-house battery, chip, and software integration

Xiaomi: From budget phones to a multi engine technology powerhouse

Xiaomi started out as a low cost smartphone brand, building its reputation on delivering reliable performance at unbeatable prices. That reputation helped it become the third largest smartphone maker globally, with over 700 million devices shipped and an installed base that spans every major emerging market.19 But Xiaomi today is not just a phone company. It has become a full stack technology group with strategic reach across electric vehicles, AI, and the connected home.

The launch of its first electric vehicle, the SU7 Ultra, marked a turning point. Rather than enter at the low end, Xiaomi chose to debut with a high performance, high specification sedan priced alongside luxury incumbents.20 It backed this with an end to end manufacturing setup, proprietary software, and its own highly automated driving system. Early demand far exceeded expectations, with the company now accelerating its second factory to meet the growing order book.21 A second model, the YU7, is also expected to expand its presence further into the mass market.

Outside of autos, Xiaomi is using its smartphone reach and IoT ecosystem to scale AI across the consumer landscape. Its MiMo model is designed for on device reasoning and optimisation, positioning Xiaomi to lead in AI enabled mobile experiences. With over 900 million connected AIoT devices and a dominant presence in wearables, appliances, and home automation, the company is building a closed loop platform across phone, home, and car.22

This combination of hardware scale, platform stickiness, and growing software ambition is what makes Xiaomi stand out. It is not trying to outspend its peers. It is integrating its way up the stack, turning hardware into recurring platform value and laying the foundation for a broader consumer tech ecosystem.

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