(Yicai) Feb. 25 -- Tencent Holdings has cranked up paid advertising for the Chinese tech giant's Yuanbao artificial intelligence assistant, which has overtaken competitors from ByteDance and MoonShot AI by downloads in the Chinese mainland, according to a new report.

Tencent has launched advertising for Yuanbao on nearly all products in its product ecosystem, digital content marketing platform DataEye reported yesterday. The app ranked second on the free download charts on Apple's mainland App Store on Feb. 22, behind only DeepSeek-R1.

The promotion of Yuanbao began to tick up on Feb. 15, with the number of ads Shenzhen-based Tencent released surging 345 percent to 55,000 between Feb. 18 and 23 from the previous six days, according to DataEye. But the figure has not yet reached the peak levels previously set by ByteDance's Doubao and MoonShot AI's Kimi.

The marketing push for Yuanbao is closely related to its integration with Deepseek's large language model, DataEye researchers noted, adding that Doubao has not yet integrated DeepSeek-R1.

ByteDance does not consider the innovations of the long-chain thinking model DeepSeek-R1 to be an industry first, but the Beijing-based TikTok owner was slower than AI startups to recognize and act on the new opportunities in LLMs, Chief Executive Liang Rubo told staff on Feb. 13.

Leading AI startups were set up and began work between 2018 and 2021, while ByteDance only started discussing frontier models such as OpenAI's GPT in its semi-annual technical review in 2023, Liang noted.

Liang's observations follow the release of an updated LLM from Chinese AI developer DeepSeek last month, which was described by Silicon Valley venture capitalist Marc Andreessen as an "AI Sputnik moment." DeepSeek-R1's performance compares favorably with some leading LLMs but at a much lower cost.

ByteDance recognized the significant technological shift but did not respond quickly enough, Liang said, pointing out that the company could have achieved similar results earlier had it been more attentive.

ByteDance will focus on pursuing the upper limits of "intelligence" this year rather than chasing the daily active users of any specific product, such as Doubao, Liang said, adding that this approach will inspire more experimentation and ensure critical technological milestones are not overlooked. That will include exploring new interactions and enhancing economies of scale, he said.

ByteDance recently adjusted its strategy and business structure, with Wu Yonghui, former vice president of Google DeepMind, joining to lead AI basic research, while its AI business head, Zhu Wenjia, switched focus to model applications.

As AI technology develops, China's internet sector is gradually dividing into two major camps, namely AI infrastructure and AI applications, according to a prior report by Goldman Sachs.

Based on current disclosures made by major players, Alibaba Group Holding aims to consolidate its cloud computing advantages and Tencent will delve deeper into AI applications, enhancing user experience and monetization through intelligent upgrades of consumer applications and traffic advantages, the report said.

Meanwhile, ByteDance will work on AI basic research and model applications, solidifying its position in the short video field, Goldman Sachs said.

Editor: Martin Kadiev