AI is not eating up China’s software market but turbocharging it: HSBC analyst
SCMP Tech / 4/19/2026
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Key Points
- An HSBC analyst says China’s AI model companies are unlikely to “eat up” the domestic software market because they lack the deep industry know-how needed for enterprise requirements.
- As AI models improve, China’s still-less-mature SaaS ecosystem is expected to benefit rather than collapse.
- The most likely path is a collaboration in which AI model providers and legacy software/SaaS firms jointly serve enterprise customers.
- Legacy Chinese SaaS companies are already integrating AI into their products and are seeing “significant robust growth” as a result.
- The article frames AI as a turbocharger for China’s software market expansion, not a disruptor that replaces established vendors overnight.
China’s artificial intelligence model companies are unlikely to “eat up” the domestic software market because they lack the deep industry know-how and experience to meet enterprise needs, according to an HSBC analyst.
Unlike the US, China’s less developed software-as-a-service (SaaS) market stands to gain even as AI models continue to improve, with the most likely outcome being a collaborative approach where model companies and legacy software firms serve enterprises in tandem, said Yiran Liu,...
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