China's consumer AI "activation year": AI application winners and losers still undecided, JPMorgan favors "second-order beneficiaries"

JPMorgan Chase pointed out that **2026 will be the “activation year” for consumer-grade AI in China, with chatbots shifting from the curiosity stage to the habit-forming stage for users.** According to Goflow Trading Desk, JPMorgan Chase released its latest report on January 30, stating that **although major internet platforms are trying to shape the next traffic gateway, the market is currently not ready to uniformly price the ultimate ‘winners and losers’ of AI applications. Early market share shifts represent distribution capacity rather than a true moat.** Based on this assessment, JPMorgan advises investors to avoid making binary bets on the application layer at this stage, and instead anchor transactions on “second-order beneficiaries.” These include AI infrastructure benefiting from increased inference workloads, advertising platforms benefiting from enhanced industry marketing intensity, and productivity enhancers in content-intensive industries. JPMorgan specifically noted that Doubao, a ByteDance subsidiary, has reached around 100 million daily active users (DAU), marking a milestone that demonstrates generic chat interaction has crossed into the mass market. Meanwhile, according to Reuters, OpenAI’s ChatGPT reached 800 million weekly active users, further proving the global trend that once consumer-grade AI achieves alignment in product utility and distribution, it will experience extremely rapid compound growth. **As chatbots evolve into high-frequency traffic portals, JPMorgan expects China’s major internet platforms to engage in intense competition in 2026.** This competition will have two direct market impacts: **first, conversations will shift from occasional queries to daily multi-turn interactions, accelerating token consumption; second, platforms will increase customer acquisition spending to capture mindshare, driving budgets toward performance-oriented channels.** **Infrastructure and Advertising: The Most Certain “Second-Order Exposure”** JPMorgan stresses in its report that **it is still too early to trade on the ultimate landscape of China’s chatbot market.** Short-term share changes mainly reflect distribution paths, marketing pace, and product iteration speed and have not yet formed solid competitive barriers. Therefore, **JPMorgan believes a more feasible investment logic is to target the certain beneficiaries advancing the AI interaction process within the industry.** In terms of infrastructure, the growth of daily multi-turn chatbot conversations will directly benefit inference demands and token throughput. As intelligent agents expand from simple dialogue to deep querying and execution, token consumption is expected to achieve compound growth, thereby driving higher utilization of cloud and AI technology stacks. **JPMorgan believes Alibaba and Baidu can clearly reflect the token growth theme, and their value chains will reward scalable infrastructure and ecosystem-level integration.** In terms of advertising and marketing, as giants such as Alibaba and Tencent compete to create new traffic gateways, industry sales and marketing intensity will increase significantly. JPMorgan notes that **platform spending for customer acquisition and repeated interaction will rise, with performance-oriented channels taking a larger share of budgets.** This creates a favorable trading environment for Kuaishou Technology, allowing it to benefit ahead of the determination of the industry’s ultimate “winner” from marketing dividends generated by competition. **Enterprise Adoption: ROI Realization in High-Stakes Workflows** The report highlights that **the turning point in enterprise AI adoption lies in making the value proposition measurable within high-stakes workflows.** Software development is currently the clearest validation scenario. Alphabet CEO Sundar Pichai noted that over a quarter of Google’s new code is AI-generated; Tencent also disclosed its AI coding tool CodeBuddy reduced coding time by 40%. JPMorgan believes that **these data validate the underlying principle that AI assistants can translate model capability into improved throughput for mission-critical workflows.** Beyond coding, sectors such as customer operations show similar trends. According to Reuters, Klarna revealed its AI assistant’s work efficiency equates to 700 employees. In China, platforms are productizing AI into enterprise toolkits, allowing foundational model developers and platform AI providers to benefit financially (capturing workload demand) and operationally (lowering R&D costs). **Agentic Commerce: From “Dialogue” to “Execution”** After consumer adoption of chatbots, JPMorgan believes the next step is “agentic commerce,” where the interface not only answers questions but also initiates and completes transactions. Alibaba recently upgraded its Qianwen app, integrating services like Taobao and Alipay, so users can order takeout and book travel directly in the chatbot interface—a sign this transition is becoming a reality in China. The report analyzes that **in the short term, the opportunity from this transformation lies in improving funnel efficiency rather than immediately disrupting market share.** Dialogue interfaces can reduce friction between discovery, comparison, and checkout, thereby improving conversion and retention within ecosystems. While vertical domains (like OTA) face long-term upstream entry interception risks, given the complexity of services such as travel, **JPMorgan expects the market will experience a sustained trial period before any structural share shifts become clear.** **Gaming Industry: AI Accelerates Supply and Genre Innovation** Regarding the gaming industry, JPMorgan believes China’s gaming industry will remain robust in 2026, **with AI adoption being an underestimated positive.** Rather than replacing creativity, AI’s main impact lies in compressing the “creation-to-market” cycle, speeding up asset creation and iteration. According to Reuters, Tencent has released an open-source 3D generation model, indicating leading publishers are actively integrating AI as a productivity tool into their pipelines. Additionally, a stable regulatory environment provides support for the industry. Data shows that in 2025, China’s National Press and Publication Administration approved 1,771 games—a new high since 2018—signaling a healthier content reserve. In terms of game genres, the popularity of extraction shooters such as PUBG derivatives and Arena Breakout: Infinite is seen as a positive signal for industry growth. **Risk Disclaimer** The market has risks; investment requires caution. This article does not constitute personal investment advice and does not take into account individual users’ specific investment objectives, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article suit their specific conditions. Investments made based on this are at the investor’s own risk.