Chinas AI Sector Hits Fever Pitch Ahead of Lunar New Year

China's AI Industry Surges: Technical Breakthroughs and Fierce Market Competition Coincide Ahead of Lunar New Year

A potent combination of a significant technical breakthrough in generative video AI and an intense, high-stakes battle for user adoption is defining China's artificial intelligence landscape as the Lunar New Year holiday approaches. The sector is witnessing a dual-front advancement: one marked by a domestic model garnering unprecedented global attention for its capabilities, and another characterized by massive consumer-facing campaigns by tech giants aiming to cement their AI products as indispensable daily tools.

Seedance 2.0: A Chinese Video Generation Model Captivates Global Audience

In recent days, AI-generated videos from a platform called "Jimeng" (即梦), powered by ByteDance's in-house video generation model Seedance 2.0, have spread virally across social media, from Chinese platforms like Douyin and WeChat to international networks like X. The fervor, however, is notably skewed. A surge of international users and AI video creators are actively seeking ways to access the Chinese-only platform, with many posting on X in search of registration guides, invitation codes, or Chinese (+86) phone numbers to bypass access barriers. Some reports even mention users reselling platform credits for substantial profits, claiming earnings over $8,000 in two days.

The driving force behind this unusual reverse demand is the perceived leap in quality demonstrated by Seedance 2.0. Overseas AI creators have posted effusive reactions, with comments ranging from "Seedance 2.0 from China is going to be the most advanced tech" to more hyperbolic statements like "This is AI. We are finished." The shared video samples showcase a level of coherence, cinematic motion, and creative execution that appears to address many persistent shortcomings in AI video generation.

Seedance 2.0's key advancement lies in its flexible, multi-modal input system, which fundamentally rethinks the user creative workflow. Moving beyond simple text-to-video or limited image prompts, the model supports the free combination of four input modalities: images, video clips, audio, and text. Users can upload up to 12 files (with limits of 9 images, 3 videos, and 3 audio clips, total audiovisual length not exceeding 15 seconds) to guide the generation. An image can set an artistic style or serve as a keyframe; a short video clip can be used to replicate complex camera movements and character actions; audio can dictate rhythm and atmosphere; and a final text prompt ties the vision together.

This "director-like" control is enhanced by what is described as powerful deep video reference capabilities. Instead of painstakingly describing camera angles or fight choreography in text, users can simply reference uploaded material. Reporting indicates the model can understand overall scene style, capture character details, and accurately replicate lens language, action节奏, and even creative visual effects from the references. Demonstrated outputs include faithful recreations of complex tracking shots from popular series, original action sequences with precise martial arts movements, and stylized advertisements with effects like liquid glass.

The model, accessible via the Jimeng AI website, currently operates on a credit consumption system for generating videos between 4 to 15 seconds in length. While still requiring skillful prompt engineering and element combination, the outputs have struck a chord for their perceived realism and creative potential, positioning Seedance 2.0 as a significant contender in the global race for advanced video synthesis.

The "Spring Festival Offensive": AI Giants Vie for Users with Cash and Culture

While Seedance 2.0 captures the imagination of technologists, China's major AI players are engaged in a separate, massive campaign to win over mainstream consumers during the critical Lunar New Year period. This "Spring Festival offensive" involves traditional tactics like cash giveaways and high-profile partnerships, repurposed for the AI era.

Tencent's AI assistant "Yuanbao" (元宝) launched a 10-billion-yuan cash red envelope campaign on February 1st, explicitly hoping to "recreate the spectacular scene of WeChat red envelopes years ago." The campaign, offering chances to win up to 10,000 yuan, drove such a surge in traffic that it briefly overwhelmed the service, causing instability. Following closely, Alibaba's "Qianwen" announced a 30-billion-yuan "Spring Festival Treat Plan," offering free meals, drinks, and entertainment through Alibaba's ecosystem of apps like Taobao, Fliggy, and Ele.me. The demand was so high that the milk tea ordering feature reportedly crashed due to overwhelming participation.

ByteDance took a different route, leveraging cultural prestige. Its cloud AI service platform, Volcano Engine, was announced as the exclusive AI cloud partner for the 2026 China Central Television (CCTV) Spring Festival Gala, the most-watched televised event in the world. This marks ByteDance's third collaboration with the gala, but the first under its AI brand, signaling a strategic push to associate its AI capabilities with a national institution.

Analysts observe that this new wave of红包大战 (red envelope wars) has evolved in its essence. A decade ago, digital red envelopes were a battleground for payment and social networking dominance. Today, they are being deployed as "experience coupons" for AI capabilities and ecosystem services. The surface-level competition is for app downloads and daily active users, but the underlying test is whether AI can seamlessly integrate into high-frequency consumer scenarios and become a daily habit.

Underlying the Hype: A Relentless "Arms Race" in Model Capabilities

Beneath the consumer-facing marketing blitz, a more fundamental technical competition is accelerating. Major AI firms are rushing to deploy significant model updates before and during the holiday period, treating it as a key milestone for showcasing progress.

In late January, two leading domestic models, DeepSeek and Kimi, released major updates on the same day. DeepSeek launched DeepSeek-OCR 2, an optical character recognition system that introduces a "Causal Flow" logic, aiming to enable AI to understand the structural layout of documents and images in a more human-like, logical sequence rather than simply scanning from top to bottom. This is part of a rapid series of technical releases from DeepSeek in January, with a larger V4 model anticipated during the holiday, expected to rival leading closed-source models in programming capability.

Concurrently, Kimi's K2.5 update focused on transforming AI from a "question-answering machine" to a "task executor." By enhancing ultra-long context memory, multi-modal understanding, and introducing "Agent Clusters," the model aims to manage complex, multi-step projects autonomously—such as coordinating a team of AI "analysts" to conduct market research on hundreds of companies or having "researchers" summarize cross-disciplinary papers.

Alibaba also contributed to the pre-holiday model rollout with the release of its flagship reasoning model, Qwen3-Max-Thinking.

This concentrated burst of upgrades highlights the fierce competition to solve core practical challenges—document intelligence and complex task automation—which are seen as critical for enterprise adoption and long-term utility.

Convergence at an Inflection Point

The current moment presents a revealing snapshot of China's AI sector. On one front, a technical demonstration from ByteDance is generating palpable excitement within the global AI community, suggesting a narrowing gap, or even a lead, in specific areas like generative video. On the other, the country's tech behemoths are investing billions in a ferocious, culturally-timed campaign to translate technical prowess into widespread domestic user adoption and habit formation.

The Spring Festival, a time of tradition and family, has become an unlikely but crucial proving ground. The outcomes will offer early indicators not only of which company can capture the public's attention with flashy campaigns but, more importantly, which AI models and applications can demonstrate sufficient utility, reliability, and creativity to become embedded in the fabric of daily digital life, both in China and beyond. The race for the "national-level AI tool" is fully underway, with technical innovation and market saturation strategies advancing in tandem.