MiniMax AI: Chinese Startup Challenging US Models with Lower Prices & Strong Performance

The race to dominate China’s artificial intelligence sector is heating up, but according to a new report from UBS, one company is emerging as a clear frontrunner: MiniMax. While anticipation builds for a potential update to the DeepSeek AI model, UBS analysts have initiated coverage of MiniMax with a “buy” rating, citing its competitive pricing, expanding toolset, and potential to capture a significant share of the global enterprise market. The Hong Kong-listed company’s M2.5 model is already rivaling Anthropic’s Claude Opus 4.6 in performance, but at a fraction of the cost.

A Price Disruption in AI

MiniMax’s aggressive pricing strategy is already having a noticeable impact. Data from OpenRouter shows that usage of MiniMax’s M2.5 model has reached one-third of Anthropic’s Claude, despite being priced at one-tenth the cost. This cost advantage is attracting developers and driving adoption, positioning MiniMax as a compelling alternative to both established US players and other Chinese competitors. UBS analysts estimate that MiniMax could achieve 3% of the global market for enterprise services, translating to segment revenue of $41 billion.

The company went public in Hong Kong in January 2026, and released its M2.5 model in mid-February. Currently trading around HKD763.50, UBS has set a price target of HKD1000, representing potential upside of over 30%. This optimistic outlook is based on MiniMax’s ability to gain market share in both China and global markets.

Beyond Text: A Diversified AI Toolkit

What sets MiniMax apart isn’t just its pricing, but also the breadth of its AI capabilities. Unlike some competitors, such as Zhipu, which focuses primarily on coding with its GLM 5.0 model, and Moonshot, which emphasizes coding and agentic task completion with its Kimi 2.5 model, MiniMax offers a more diversified suite of tools. These include not only text generation, but also video generation, audio generation (similar to ElevenLabs), and AI companionship features. Seeking Alpha reported on MiniMax’s launch of its M1 model, claiming it surpassed DeepSeek’s R1.

This broader approach could prove advantageous as the AI market matures and demand for diverse applications grows. UBS analysts highlight that video generation alone could represent a $5 billion revenue opportunity for MiniMax, while AI companionship could contribute another $4 billion.

China’s AI Landscape: A Shift Towards Applications

The rise of MiniMax comes amidst a broader shift in China’s AI landscape. Following a period of rapid model development, Chinese tech giants are now focusing on integrating AI into existing applications and services. During the nine-day Lunar New Year holiday, companies like Tencent, Alibaba, Baidu, and ByteDance leveraged AI to attract local consumers, offering promotions and integrating AI features into their platforms. CNN reported on the broader competitive landscape, noting the rapid advancements of Chinese AI companies like DeepSeek, Minimax, and Moonshot AI.

UBS analysts believe this trend will accelerate AI penetration, particularly in lower-tier Chinese cities, and drive usage of AI-powered features like image and video generation, quick commerce, and transactional bookings. MiniMax, with its diversified toolkit, is well-positioned to benefit from this trend.

Distillation Concerns and Competitive Pressures

The rapid progress of Chinese AI companies has also raised concerns among US firms. Anthropic and OpenAI have both accused Chinese labs, including DeepSeek, Minimax, and Moonshot AI, of using “distillation attacks” to replicate their models’ capabilities without authorization. NYU Shanghai details Anthropic’s allegations, outlining how these companies allegedly created over 24,000 fraudulent accounts to generate over 16 million exchanges with Anthropic’s Claude model.

Distillation involves training a smaller “student” model on the outputs of a larger “teacher” model. While a legitimate technique for optimization, it becomes problematic when used to illegally replicate proprietary models. These accusations highlight the intense competition and intellectual property concerns within the AI industry.

The DeepSeek Factor and Future Developments

Despite the current focus on MiniMax, anticipation remains high for a new version of the DeepSeek model. Last year’s release of DeepSeek’s model shocked global markets with its advanced capabilities, even in the face of US chip restrictions. The company’s ability to achieve comparable performance to leading models with fewer computing resources raised questions about the effectiveness of US export controls.

However, the current momentum appears to be with MiniMax. The company’s diversified approach, competitive pricing, and strong performance are attracting developers and investors alike. The UBS report suggests that MiniMax is currently the preferred choice for many, surpassing even DeepSeek’s current offerings.

What’s Next for MiniMax?

MiniMax’s continued success hinges on its ability to maintain its technological edge and expand its market reach. The company will need to continue innovating and developing new AI tools to stay ahead of the competition. Further expansion into global markets will also be crucial for realizing its full potential. Investors will be closely watching MiniMax’s financial performance and its ability to capitalize on the growing demand for AI-powered solutions. The company’s next earnings report will provide further insight into its progress and future outlook.