China's AI Wave: Five New Models Emerge as UBS Backs MiniMax
Chinese technology firms, including Alibaba and ByteDance, released five new generative AI models around the 2025 Lunar New Year. UBS analysts have singled out MiniMax's M2.5 model for its competitive performance against leading U.S. offerings at a fraction of the cost, initiating coverage with a buy rating and a 1000 HKD target price. The bank predicts MiniMax could secure 3% of the global enterprise services market, citing its broad AI capabilities in text, video, audio, and companionship. Unlike rivals focused on coding, MiniMax's versatility sets it apart. The AI race in China is shifting toward consumer apps with heavy holiday promotions, though UBS notes the sector's rapid evolution and associated risks.
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Amid speculation around DeepSeek, Chinese tech firms have launched five new generative AI models, with UBS identifying MiniMax's M2.5 as a top contender due to its cost-performance ratio.
New Chinese AI Models Debut
During the 2025 Lunar New Year, multiple Chinese technology companies released updated AI models:
Alibaba introduced Qwen 3.5.
ByteDance launched Seedance 2.0 for video generation.
Tencent and Baidu also unveiled new offerings.
Other players like Zhipu (GLM 5.0) and Moonshot (Kimi 2.5) released models, though with different focuses.
MiniMax's M2.5 Gains Developer Traction
MiniMax, listed in Hong Kong in January, released its M2.5 model in mid-February:
Performance rivals Anthropic's Claude 4.6.
Priced at approximately one-tenth of Claude's cost.
Data from OpenRouter indicates higher developer adoption than DeepSeek's V3.2 and some U.S. models.
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UBS Bullish on MiniMax's Prospects
UBS analysts initiated coverage with a buy rating:
Target price: 1000 Hong Kong dollars, implying over 30% upside from recent levels.
Forecasts MiniMax could capture 3% of the global enterprise services market, representing $41 billion in segment revenue.
Highlights MiniMax's versatile AI tools: text, video, audio generation, and AI companionship.
Contrasts with rivals: Zhipu focuses on coding with GLM 5.0, while Moonshot's Kimi 2.5 emphasizes coding and task completion.
Shift to Consumer-Focused AI Applications
Chinese companies leveraged the Lunar New Year for consumer AI promotion:
Integrated AI models with existing apps like e-commerce.
Invested heavily in red packet campaigns to drive user adoption.
UBS expects this to boost AI penetration in lower-tier Chinese cities and increase usage of features like video generation and quick commerce.
Revenue Opportunities and Market Dynamics
MiniMax's video generation could yield $5 billion in revenue; AI companionship, $4 billion.
The AI market is fluid, with users rapidly shifting to more efficient tools.
In an optimistic case, MiniMax's stock might reach 1380 HKD, but UBS cautions on volatility and competition.
