[China Watch] The Reality Behind China’s AI Breakthroughs: Combined Revenue of Top 7 Models Reaches Barely 10% of America‘s Top Two

Oh, marvellous. Rhodium Group released a report on September 17 with a number in it: every Chinese AI model, every lab, every wildly confident keynote, adds up to $10.7 billion in annual recurring revenue. OpenAI and Anthropic — two companies, one country — come in at about $105 billion. Seven frontier models against two, and the headline's own verdict is 'barely 10%,' a word doing more heavy lifting than the entire business development function of the Chinese AI sector combined.

Then there is Moonshot, whose reported valuation climbed from $4 billion in late 2025 to $50 billion by August 2026. Twelve and a half times in under a year — a growth curve that would make a meme stock send flowers. Rhodium's assessment is that 'valuation-to-revenue multiples look stretched,' which is the phrase a structural engineer uses while backing slowly away from the bridge and reaching for his phone. Note the careful framing: Chinese frontier labs' absolute valuations remain below OpenAI's or Anthropic's. So this isn't a Chinese illness; it's a global one with a passport, a pitch deck and an unusual fondness for the word 'frontier.'

The column runs under the heading 'The Reality Behind China's AI Breakthroughs,' and the reality, as ever, is that breakthroughs are the cheap part. Revenue is the bit where strangers have to hand over money every month, indefinitely, and nobody on either side of the Pacific has convincingly explained how that scales to the sticker prices currently being attached to these labs. So we get 'stretched multiples,' delivered with a straight face, while capital keeps arriving, because the alternative — admitting the curve is aspirational — would require everyone to take a very long lunch. At some point, someone will ask what the exit looks like, and everyone will suddenly remember a meeting.