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Want to Play China AI Companies? 5 Pure-Play ETFs in Focus
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Key Takeaways
China's AI industry is expanding rapidly across AI models, agents, robotics and memory.
Lower valuations could add to the appeal of Chinese AI stocks, while weak AI monetization is a key risk.
Five pure-play ETFs like AICH, CROB, CRAM, TGRZ and DRGN offer exposure to China's AI ecosystem.
China has hit headlines multiple times for coming up with low-cost artificial intelligence (AI) models in recent years. Since early 2025, China's growing influence in the AI arena has been on investors’ radar with the help of DeepSeek's success. DeepSeek grabbed headlines at that time, with the release of its new R1 model (read: DeepSeek Buzz Boosts China Tech ETFs).
In July 2026, China again hit headlines with its Moonshot AI unveiling Kimi K3, the largest open-source AI model released so far (per Fortune, as reported by Yahoo Finance). It has been claimed to deliver performance close to Anthropic's Fable 5 at a much lower cost.
The launch fueled concerns that China's AI capabilities are advancing faster than expected despite U.S. export restrictions.Analysts said that Kimi K3 highlights how quickly Chinese AI developers have narrowed the performance gap with U.S. rivals despite limited access to advanced chips, per the above-mentioned source.
Inside China’s AI Growth
China's tech giants are joining the AI race in bulk. The country’s core AI industry surpassed 1.2 trillion yuan – about $177 billion – in 2025, growing roughly 40% year over year. The sector topped 900 billion yuan in 2024, up 24% year over year. China had about 15% of total global AI companies by September 2025, according to the China Academy of Information and Communications Technology.
More than 1,500 large AI models had reportedly been released by the end of 2025, while generative-AI users reached 602 million, per People's Daily Online. China's AI industry is transitioning from foundational large models toward the commercial deployment of AI agents.
A recent China Telecom Research Institute report said AI agents could drive nearly tenfold annual growth in computing demand over the next two to three years, with inference expected to account for 80% of China’s computing market by 2029, per Bloomberg.
Moreover, 2026 marks China’s emergence in the public memory market. Since memory is foundational to the AI economy, China’s increasing focus in this arena is also noteworthy. China’s largest DRAM maker raised $8.6 billion in July.
Chinese technology companies are now value stocks courtesy of AI tailwinds and attractive valuations. The Hang Seng Tech Index trades at 30.78 times trailing 12-month earnings (as of August, 2026), lower than the Nasdaq 100's 34.15 times (per WSJ) (as of Sept. 18, 2026).
ETFs in Focus
Against this backdrop, pure-play China AI ETFs deserve a look. Most of the ETFs have been launched recently.
AICH is actively managed to provide targeted and pure exposure across China’s entire AI sector, including energy, semiconductors, memory, GPUs, optics, AI models, robotics and applications. Debuting in mid-September, the fund charges 76 bps in fees.
The portfolio includes companies like CXMT, CATL, MetaX, Moore Threads, Cambricon, Montage Technology, Biren, Eoptolink, Innolight, Unitree Robotics, Z.ai and Iluvatar CoreX.
It is the first U.S.-listed ETF dedicated to China’s humanoid robotics ecosystem. Humanoid robots are moving from prototypes to production, and China has been facilitating that shift.
China is home to major producers of many of the components that make a humanoid robot work: precision actuators, harmonic reducers, high-precision motors, sensors and motion control systems, per Defiance ETFs.
CROB charges 89 bps in fees. Leader Harmonious Drive Systems Co Ltd-A (7.62%), Shenzhen Megmeet Electrica-A (6.67%) and Guangdong LY Intelligent M-A (6.49%) hold the top three spots in the fund.
The Defiance China Memory ETF provides exposure to companies listed on exchanges in mainland China and Hong Kong that are engaged in the China memory and storage semiconductor value chain. The fund is heavy on Cxmt Corp-A (24.61%), Gigadevice Semiconductor-Cl A (20.88%) and Montage Technology Co Ltd-A (17.24%). It charges 67 bps in fees.
TGRZ focuses on the companies developing the AI models that power chatbots, agents, applications and the next generation of AI. Making its debut in late August, the fund charges 86 bps in fees. Z.Ai Co., Ltd-SWAP-MREX-L takes about 70% of the fund.
Themes China Generative Artificial Intelligence ETF (DRGN - Free Report)
The underlying BITA China Generative AI Select Index aims to track the performance of Chinese companies that derive significant revenues from Generative AI-related activities. It charges 39 bps in fees. Yuanjie Semiconductor, Montage Technology and Cambricon Technologies are the top three stocks.
Any Wall of Worry?
U.S.-based Rhodium Group recently estimated that Chinese AI models make about only 10% of the revenue that OpenAI and Anthropic do, as mentioned in CNBC.“Valuations relative to revenue appear exorbitant for Moonshot and DeepSeek at present,” the Rhodium report said.
DeepSeek’s ARR was the lowest among major Chinese AI companies, at $500 million, followed by MiniMax at $800 million and Moonshot at $1 billion.Z.ai recently upped its revenue forecast, but it remained well below that of U.S. rivals.
Bottom Line
China’s AI industry is expanding rapidly, supported by growing AI adoption, robotics, memory demand and attractive valuations. However, lower revenues and monetization challenges compared with U.S. peers remain key risks.
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Want to Play China AI Companies? 5 Pure-Play ETFs in Focus
Key Takeaways
China has hit headlines multiple times for coming up with low-cost artificial intelligence (AI) models in recent years. Since early 2025, China's growing influence in the AI arena has been on investors’ radar with the help of DeepSeek's success. DeepSeek grabbed headlines at that time, with the release of its new R1 model (read: DeepSeek Buzz Boosts China Tech ETFs).
In July 2026, China again hit headlines with its Moonshot AI unveiling Kimi K3, the largest open-source AI model released so far (per Fortune, as reported by Yahoo Finance). It has been claimed to deliver performance close to Anthropic's Fable 5 at a much lower cost.
The launch fueled concerns that China's AI capabilities are advancing faster than expected despite U.S. export restrictions.Analysts said that Kimi K3 highlights how quickly Chinese AI developers have narrowed the performance gap with U.S. rivals despite limited access to advanced chips, per the above-mentioned source.
Inside China’s AI Growth
China's tech giants are joining the AI race in bulk. The country’s core AI industry surpassed 1.2 trillion yuan – about $177 billion – in 2025, growing roughly 40% year over year. The sector topped 900 billion yuan in 2024, up 24% year over year. China had about 15% of total global AI companies by September 2025, according to the China Academy of Information and Communications Technology.
More than 1,500 large AI models had reportedly been released by the end of 2025, while generative-AI users reached 602 million, per People's Daily Online. China's AI industry is transitioning from foundational large models toward the commercial deployment of AI agents.
A recent China Telecom Research Institute report said AI agents could drive nearly tenfold annual growth in computing demand over the next two to three years, with inference expected to account for 80% of China’s computing market by 2029, per Bloomberg.
Moreover, 2026 marks China’s emergence in the public memory market. Since memory is foundational to the AI economy, China’s increasing focus in this arena is also noteworthy. China’s largest DRAM maker raised $8.6 billion in July.
And its leading NAND maker filed for a $4.9 billion Shanghai listing in August, per Defiance ETFs. The global crunch of memory is making the industry profitable too (read: What Lies Ahead of DRAM ETF as Memory Crisis May Intensify in 2027?).
Cheaper Valuation of Chinese Tech Stocks
Chinese technology companies are now value stocks courtesy of AI tailwinds and attractive valuations. The Hang Seng Tech Index trades at 30.78 times trailing 12-month earnings (as of August, 2026), lower than the Nasdaq 100's 34.15 times (per WSJ) (as of Sept. 18, 2026).
ETFs in Focus
Against this backdrop, pure-play China AI ETFs deserve a look. Most of the ETFs have been launched recently.
China AI ETF (AICH - Free Report)
AICH is actively managed to provide targeted and pure exposure across China’s entire AI sector, including energy, semiconductors, memory, GPUs, optics, AI models, robotics and applications. Debuting in mid-September, the fund charges 76 bps in fees.
The portfolio includes companies like CXMT, CATL, MetaX, Moore Threads, Cambricon, Montage Technology, Biren, Eoptolink, Innolight, Unitree Robotics, Z.ai and Iluvatar CoreX.
Defiance China Robotics ETF (CROB - Free Report)
It is the first U.S.-listed ETF dedicated to China’s humanoid robotics ecosystem. Humanoid robots are moving from prototypes to production, and China has been facilitating that shift.
China is home to major producers of many of the components that make a humanoid robot work: precision actuators, harmonic reducers, high-precision motors, sensors and motion control systems, per Defiance ETFs.
CROB charges 89 bps in fees. Leader Harmonious Drive Systems Co Ltd-A (7.62%), Shenzhen Megmeet Electrica-A (6.67%) and Guangdong LY Intelligent M-A (6.49%) hold the top three spots in the fund.
Defiance China Memory ETF (CRAM - Free Report)
The Defiance China Memory ETF provides exposure to companies listed on exchanges in mainland China and Hong Kong that are engaged in the China memory and storage semiconductor value chain. The fund is heavy on Cxmt Corp-A (24.61%), Gigadevice Semiconductor-Cl A (20.88%) and Montage Technology Co Ltd-A (17.24%). It charges 67 bps in fees.
China AI Tigers LLM ETF (TGRZ - Free Report)
TGRZ focuses on the companies developing the AI models that power chatbots, agents, applications and the next generation of AI. Making its debut in late August, the fund charges 86 bps in fees. Z.Ai Co., Ltd-SWAP-MREX-L takes about 70% of the fund.
Themes China Generative Artificial Intelligence ETF (DRGN - Free Report)
The underlying BITA China Generative AI Select Index aims to track the performance of Chinese companies that derive significant revenues from Generative AI-related activities. It charges 39 bps in fees. Yuanjie Semiconductor, Montage Technology and Cambricon Technologies are the top three stocks.
Any Wall of Worry?
U.S.-based Rhodium Group recently estimated that Chinese AI models make about only 10% of the revenue that OpenAI and Anthropic do, as mentioned in CNBC.“Valuations relative to revenue appear exorbitant for Moonshot and DeepSeek at present,” the Rhodium report said.
DeepSeek’s ARR was the lowest among major Chinese AI companies, at $500 million, followed by MiniMax at $800 million and Moonshot at $1 billion.Z.ai recently upped its revenue forecast, but it remained well below that of U.S. rivals.
Bottom Line
China’s AI industry is expanding rapidly, supported by growing AI adoption, robotics, memory demand and attractive valuations. However, lower revenues and monetization challenges compared with U.S. peers remain key risks.