ByteDance has rolled out Doubao 2.0, upgrading China’s most widely used artificial intelligence chatbot just as the Lunar New Year holiday begins on Sunday, the company announced on Saturday.
The release is widely seen as a preemptive move to maintain market leadership and prevent a repeat of last year’s Spring Festival surprise, when DeepSeek’s low-cost, high-performance model stunned global observers and briefly captured international attention. Doubao 2.0 is designed for the emerging “agent era,” where AI systems are expected to execute complex, multi-step real-world tasks rather than simply answer questions.
ByteDance claims the model’s pro version delivers reasoning and task-execution capabilities comparable to OpenAI’s GPT-5.2 and Google’s Gemini 3 Pro, while reducing usage costs by roughly an order of magnitude.
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“This cost advantage will become even more crucial as real-world, complex tasks involve large-scale inference and multi-step generation that will expend a huge amount of tokens,” the company stated, referring to the fundamental unit of data processed by large language models.
Last year, DeepSeek leveraged the Lunar New Year period—when hundreds of millions of Chinese return to their hometowns for family gatherings—to generate viral buzz both domestically and overseas. ByteDance appears intent on avoiding a similar scenario this holiday season. The company released a competing video-generation model, Seedance 2.0, on Thursday, which quickly went viral on Chinese social media and drew praise on platforms like X, including from owner Elon Musk.
Doubao maintains a commanding lead in China with 155 million weekly active users as of late December 2025, according to QuestMobile data—nearly double DeepSeek’s 81.6 million. However, recent competitive pressure has intensified. On February 6, Alibaba announced a 3 billion yuan ($400 million) coupon giveaway campaign for its Qwen AI app, allowing users to redeem incentives for food and drink directly within the chatbot.
The promotion drove Qwen’s daily active users from 7 million to 58 million in a matter of days, closing much of the gap with Doubao.
ByteDance’s aggressive upgrade and holiday timing reflect the high stakes in China’s domestic AI market. While global attention often focuses on U.S. leaders like OpenAI and Anthropic, the real competitive intensity is playing out inside China, where domestic giants are racing to dominate the world’s largest internet user base and build ecosystems around chatbots, agents, and multimodal AI.
The company continues to pursue an open-source strategy with parts of its Qwen family, mirroring Alibaba’s approach and aiming to drive developer adoption and ecosystem growth. Doubao 2.0’s claimed cost efficiency—achieved through optimized inference and potentially lower token consumption for complex tasks—could prove decisive in enterprise and developer markets, where usage costs scale rapidly with task complexity.
China’s AI race is shaped by both domestic dynamics and external constraints. U.S. export controls have restricted access to Nvidia’s most advanced GPUs, pushing Chinese firms to optimize for efficiency on available hardware and accelerate development of domestic alternatives. ByteDance’s heavy investment in AI—reportedly planning over 160 billion yuan ($22 billion) in AI-related procurement in 2026—underscores the company’s determination to compete at the frontier despite these limitations.
The Lunar New Year period has become a key battleground for Chinese AI companies. Last year’s DeepSeek surprise demonstrated how holiday downtime and family sharing can rapidly amplify viral adoption. ByteDance’s pre-holiday release of Doubao 2.0 and Seedance 2.0 appears designed to capture attention and usage during this high-engagement window.
While Doubao leads in user numbers, competitors are closing the gap through aggressive promotions and model improvements. Alibaba’s coupon campaign showed how quickly user metrics can shift with targeted incentives. DeepSeek remains a wildcard, with anticipation building around its next model release.
ByteDance’s broader AI strategy extends beyond chatbots. Its Seed division, founded in 2023, focuses on developing large language models and promoting their applications across the company’s portfolio—from Douyin/TikTok content recommendation to e-commerce and enterprise cloud services. While the company has acknowledged that its models still trail global leaders like OpenAI, it has pledged to continue heavy investment throughout 2026.
The AI competition is expected to play out in real time across family gatherings, social media shares, and app downloads as China enters the Lunar New Year holiday. Doubao 2.0’s performance during this high-visibility period could solidify ByteDance’s lead or expose vulnerabilities if competitors manage to capture significant attention and usage.