China’s artificial intelligence model companies are unlikely to dominate the domestic software market due to their lack of in-depth industry expertise necessary to cater to enterprise needs. Unlike the US, China’s less developed software-as-a-service (SaaS) market is poised to benefit as AI models advance, with a collaborative approach emerging between AI model companies and traditional software firms to jointly serve enterprises. This perspective comes amidst fears earlier this year that AI advancements could disrupt traditional SaaS giants. Prominent US software firms like Salesforce and Adobe have seen significant declines, with similar trends observed in China. However, on the ground, legacy Chinese SaaS firms are integrating AI into their offerings, leading to substantial growth. For instance, Kingdee International Software Group, a major SaaS provider in China, projected a significant increase in revenue from its AI products this year.
Is AI boosting rather than consuming China’s software market?
