Chinese AI firms are beginning to achieve sustainable profitability in niche markets, thanks to China's industrial scale and market volume. XtalPi, an AI drug discovery company listed in Hong Kong, made a profit of 134.6 million yuan (approximately 19.5 million U.S. dollars) in 2025, following a loss of 1.5 billion yuan the previous year. This turnaround occurred despite increasing R&D expenditure by approximately 36 percent. This success reflects China's broader strategy in the global tech race: integrating AI with its industrial base to gain premium advantages in specialized sectors. The success of these companies is seen as occurring against China's rapidly growing biopharmaceutical sector. Shanghai-based AI unicorn Blacklake achieved profitability in late 2024 and has seen rapid profit growth since then.