China’s Free AI Agent Just Changed Everything—Is This the End for OpenAI?
Artificial intelligence is evolving at an unprecedented pace, with new breakthroughs emerging almost daily. One of the most competitive AI markets in the world right now is China, where companies are racing to outdo each other in innovation, efficiency, and affordability.
A major disruptor in this space has been DeepSeek, which introduced a cost-effective AI model earlier this year that significantly undercut Western rivals. This shift has triggered a wave of intense competition among Chinese AI firms, with government investment flooding the sector and companies scrambling to gain dominance. Among these, Zepu AI has emerged as a major player.
Zepu AI and Its Groundbreaking Developments
Zepu AI, a company spun out of Tsinghua University in 2019, has been making waves with its GLM series of large language models (LLMs). Their latest, GLM4, is claimed to outperform GPT-4 in various benchmarks—a bold statement that has certainly drawn attention.
But the real game-changer is their new free AI agent, AutoGM Rumination. This digital assistant can:
- Research topics
- Plan trips
- Search the web
- Write reports
- Handle a variety of other everyday tasks
What makes AutoGM Rumination stand out is not just its capabilities, but its zero-cost access—a stark contrast to Manis AI, a competitor that charges as much as $199 per month for similar services.
Why Offering AI for Free is a Big Deal
The Chinese AI agent market is extremely competitive, with different companies taking varied approaches to gain an edge. While Manis relies on a premium pricing model, DeepSeek has disrupted the landscape with a cost-efficient approach, forcing others to rethink their strategies.
Zepu AI’s CEO, Jang Pong, recently stated that AutoGM Rumination runs on their proprietary models, including GLM Z1 Air. According to the company, Z1 Air matches DeepSeek’s Star Model R1 in performance but operates 8x faster while consuming significantly fewer computing resources. This is a crucial factor in the AI race, as efficiency directly impacts scalability and cost-effectiveness.
Financial Backing and Challenges
Zepu AI has been attracting massive financial backing from Chinese local governments. The city of Chengdu alone invested 300 million yuan (~$41.5 million), marking its third round of government-backed funding in just one month. However, the company has also faced challenges, particularly from the U.S. Department of Commerce, which placed it on an export control entity list, blocking its access to critical U.S. components like Nvidia’s AI chips.
Despite this setback, Zepu AI secured 500 million yuan from the Huafa Group, a state-owned conglomerate, and earlier announced a 1 billion yuan funding round. The Chinese government sees AI as a strategic sector, meaning firms like Zepu AI receive significant backing to maintain a competitive edge.
AI Market Shifts in China
DeepSeek’s rapid rise has forced many AI startups to rethink their approach. Some key trends include:
- Companies slashing marketing budgets to focus on cost-efficient operations.
- Startups pivoting to industry-specific AI solutions, such as healthcare-focused AI models.
- Others abandoning training their own models in favor of AI service provision, as seen with 01.AI, founded by former Google China head Kai-Fu Lee.
For instance, Bichuan AI, previously focused on financial AI solutions, has shifted entirely to healthcare AI. Meanwhile, Moonshot AI, which gained attention for its chatbot Kimi, is doubling down on model training after encountering reliability issues.
Zepu AI’s IPO and Future Outlook
Unlike competitors making drastic changes, Zepu AI continues to pursue multiple business avenues, including:
- Consumer AI applications
- Enterprise AI solutions
- A rumored IPO on Shanghai’s STAR Market
Recent reports indicate that Zepu AI generated 300 million yuan in revenue in 2024 but also suffered losses of 2 billion yuan. Investors are now questioning whether its high cash burn rate is sustainable, especially as DeepSeek has demonstrated that a leaner model can be more profitable.
Another critical factor is the government’s stance on AI. While Zepu AI has received considerable government support, DeepSeek has been crowned as the “official champion” of China’s AI sector. If local governments fully pivot to DeepSeek for their AI needs, Zepu AI’s revenue model could face serious disruptions.
The Global AI Race: Apple and Musk Enter the Scene
China isn’t the only place seeing major AI developments. In the U.S., Apple is reportedly working on a revolutionary AI-powered virtual doctor under the project name “Project Mulberry”. This system builds on Apple’s existing health-tracking capabilities and is expected to:
- Provide personalized exercise routines
- Recommend diets
- Track sleep schedules
- Offer AI-powered health coaching
With Apple possibly integrating food tracking for the first time, it could become a direct competitor to apps like MyFitnessPal and Noom. The AI is being trained with the help of real medical professionals, making Apple’s move into AI-driven healthcare a potential game-changer.
Meanwhile, Elon Musk has made a bold AI move by merging X (formerly Twitter) with his AI company XAI. The deal, valued at $52 billion, aims to:
- Integrate AI features directly into the social media experience
- Improve AI-driven content recommendations and moderation
- Potentially introduce AI-assisted replies and new AI-powered subscription tiers
Musk has framed this as part of a broader “quest for truth and knowledge”, but how it will impact everyday users remains to be seen.
The Future of AI: Disruption and Innovation
The AI landscape is rapidly evolving, with new models, free AI agents, and government-backed mega-funding shaping the future of technology. Whether it’s China’s AI powerhouses, Apple’s AI-driven healthcare, or Musk’s AI-infused social media vision, one thing is certain—AI is no longer just a tool; it’s reshaping entire industries.
As these developments unfold, staying informed is more important than ever. To keep up with the latest AI breakthroughs and opportunities, be sure to subscribe to our newsletter, where we’ll provide deep dives into AI trends, industry shifts, and even free educational resources.
Conclusion
China’s AI landscape is undergoing a dramatic transformation, with Jepu AI’s free AutoGM Rumination leading the charge against premium alternatives. The intense rivalry between Jepu AI, DeepSeek, and other competitors highlights how AI is reshaping business models, government policies, and entire industries.
As AI adoption accelerates, we can expect more government-backed funding, strategic realignments, and rapid technological advancements. Whether Jepu AI’s IPO succeeds amid DeepSeek’s dominance remains to be seen, but one thing is certain—AI is no longer just about innovation; it’s a full-scale economic battleground.
FAQs
1. What makes AutoGM Rumination different from other AI agents?
AutoGM Rumination is a free AI agent that offers capabilities similar to premium alternatives like Manis ($199/month). It claims to run 8x faster than DeepSeek R1 while consuming fewer resources.
2. Why is Jepu AI offering its AI agent for free?
By making AutoGM Rumination free, Jepu AI aims to capture market share quickly and establish dominance in China’s AI space. This aggressive strategy puts pressure on competitors who charge for similar services.
3. How does China’s government support AI startups like Jepu AI?
China’s government views AI as a strategic priority and provides financial backing. Jepu AI recently received 300 million yuan ($41.5 million) from the city of Chengdu, alongside additional state-backed investments.
4. How does U.S. trade policy affect Chinese AI companies?
The U.S. has blacklisted Jepu AI, preventing it from purchasing advanced American chips (like Nvidia’s GPUs). This limits access to cutting-edge hardware, but China’s domestic AI sector continues to find alternative solutions.
5. What’s next for Jepu AI?
Jepu AI is preparing for an IPO on China’s STAR Market, though its financial losses raise concerns. The company continues to expand into consumer apps, enterprise AI solutions, and government services.
6. What are Apple and Elon Musk doing in AI?
Apple is developing Project Mulberry, an AI-powered health coach, while Elon Musk merged X (Twitter) with XAI in a $52 billion deal, signaling greater AI integration in social media.
