China Story Briefing: Finding the wrong '0' means you might never get to '1'"

Jun 30, 2025

Hi everyone, welcome to this issue of the China Story Briefing! This week was marked by a surge of open-source activity from China's AI players across foundation models and multimodal applications. AI hardware and robotics also emerged as new hotspots for investment and strategic deployment.

(Reminder: Besides this Briefing, more in-depth Deep Dives are in the works. All content is currently free.)

News

China's New Wave of AI Open Source & Models:

Huawei & Baidu Release Flurry of Open Source Models Simultaneously: Huawei open-sourced its 72B parameter Pangu Pro MoE model and inference code, while Baidu launched over ten Wenxin 4.5 series models on its PaddlePaddle platform, including powerful multimodal VL models. Two of China's tech giants are aggressively accelerating their open-source strategies, aiming to build developer ecosystems. [Sources: Sina Tech]
Moonshot AI Open Sources Kimi-VL Multimodal Model, Surpassing GPT-4o on Benchmarks: Moonshot AI open-sourced its Kimi-VL-A3B-Thinking-2506 model, which reportedly outperforms GPT-4o on several benchmarks (including math and video understanding) with only 2.8B active parameters. [Source: Love CV]
Tencent Open Sources Hunyuan 3D 2.1, a Leading 3D Generation Model, at CVPR: This model, optimized for geometry and PBR textures and runnable on consumer GPUs, was fully open-sourced, becoming the first industrial-grade 3D generation LLM to do so. [Source: AI New Media University]
Kuaishou Open Sources Multimodal Video Understanding LLM Keye-VL-8B: This model demonstrates strong performance in short-video understanding, outperforming competitors on benchmarks like VideoMME. [Source: AIFrontier]

Takeaway: A wave of open-sourcing from Chinese tech giants (Huawei, Baidu, Tencent) and leading AI startups (Moonshot AI, Kuaishou) is underway. The focus is expanding from foundational language models to cutting-edge multimodal, 3D generation, and video understanding capabilities, aiming to build developer ecosystems and showcase technical strength.

AI Hardware & Robotics Take Center Stage:

Galaxy General Secures ¥1.1B for Humanoid Robots, Led by CATL: Humanoid robot firm Galaxy General received significant new funding at a unicorn valuation. The company has released an open-source teleoperation system and plans to deploy 100 robots in retail stores this year. [Source: Xinz Jijia]
Xiaomi Unveils Ray-Ban-like AI Smart Glasses: Xiaomi launched its first AI smart glasses, featuring a lightweight design, 2K video recording, and multi-language simultaneous interpretation, with integrations for platforms like Douyin and Bilibili. [Source: LeiKeji]
TicNote: A New "AI Brain" That Attaches to Your Phone: Mobvoi (Chumen Wenwen) introduced TicNote, an ultra-thin AI hardware device that magnetically attaches to phones, offering multi-language transcription and AI-powered summaries. [Source: AIFrontier]

Takeaway: The AI race is expanding from cloud models to the physical world and personal devices. EV makers, robotics startups, and consumer electronics giants are actively deploying strategies for robotics and smart wearables, while frontier explorations like BCI also see breakthroughs.

AI Applications & Market Dynamics:

Kuaishou Premieres World's First AI-Generated Episodic Story Collection: Using its Keling AI model, Kuaishou produced and premiered a 180-minute AI-generated story collection, marking a new stage in AI-powered film/TV content creation and aiming to address production bottlenecks in the microdrama industry. [Source: Kuaishou Tech]
Alibaba Cloud's Bailian Platform Enables "AI Tipping" for Developers: In partnership with Alipay, Alibaba Cloud allows developers to add a tipping feature to their AI Agent applications, enabling direct monetization. [Source: Alibaba Cloud]

Takeaway: AI applications are deepening and finding real-world use cases in China, from content creation (AI TV series) and specialized services (college applications) to e-commerce (digital human livestreaming) and developer monetization.

Global Perspectives on Companies & Markets:

Tesla Faces Leadership Void Amid Executive Departures: The recent departure of several senior executives, including a long-time Musk lieutenant, raises concerns about leadership stability at Tesla during a critical transition period. [Source: Bloomberg]
Trump Says TikTok Buyer Decided, Announcement in 2 Weeks: President Trump stated a buyer for TikTok has been secured, bringing a new potential turning point to the long-running saga. [Source: Axios]
TIME Releases "100 Most Influential Companies," Featuring Many from China: Numerous Chinese companies were featured on TIME's 2025 list, with ByteDance, Huawei, Alibaba, and BYD recognized as "Titans" or "Innovators," and DeepSeek, Pop Mart, and Unitree as "Disrupters." [Source: Time]

Takeaway: Global tech giants face internal governance and leadership challenges. Geopolitical events (TikTok) continue to evolve. Mainstream international media is paying high attention to the innovation and market influence of Chinese companies.

Wang Mengqiu, Founder of ZeroZero Tech, on Product Philosophy

(This week, we share insights from Wang Mengqiu, founder of ZeroZero Tech, whose hovering follow-cam drone became a viral hit. His thoughts are highly relevant for understanding hardware product innovation in the AI era.)

Company Intro: ZeroZero Tech is an innovative company focused on consumer drones and smart imaging devices, known for its portable and user-friendly design philosophy. Founder Wang Mengqiu is a Stanford PhD with a deep technical background.
Key Insights (from his interview with Z Potentials):
- "Finding the wrong '0' means you might never get to '1'": Wang argues that the starting point of product innovation ("0") is critical. If the initial understanding of user needs or the definition of the technology's application scenario is flawed, no amount of execution excellence ("1") can lead to success. He stresses the importance of defining the right problem over merely chasing tech trends.
- Product Philosophy: From "Performance Specs" to "User Stories": He points out that many hardware products are obsessed with stacking performance specs while ignoring what users truly need. A great product should create a "magic moment," solve a real-life pain point, and tell a compelling "user story."
- The AI hardware opportunity lies in "automation" and "freeing hands": He believes AI should make complex hardware feel as intuitive as a human instinct. AI's value is in automatically doing what users want but can't do well or easily, thereby liberating them from tedious operations to focus on the experience and creation itself.
Our Take: Wang Mengqiu's perspective offers a sober framework for the red-hot AI hardware race. As numerous companies (Xiaomi, Li Auto, Mobvoi) rush into this space, his philosophy of prioritizing "user stories" over "tech specs" is particularly important. How AI is used to truly simplify user interaction and solve core pain points—rather than just creating another feature-heavy gadget—may be the key differentiator for the next generation of smart hardware.

China's "Open Source with Chinese Characteristics": From Catching Up to Contributing, and Competing for Ecosystem Dominance? This week's flurry of open-source releases from Huawei, Baidu, Moonshot AI, Tencent, and Kuaishou covers everything from foundational models to specialized 3D and video understanding. This wave suggests China's AI open-source strategy has evolved from following to actively contributing, and now to attempting to establish leadership in specific open ecosystems. This approach accelerates domestic tech adoption while also serving as a key move to gain influence in the global AI discourse and developer community.

China Story