What is ‘tokenomics’ and how would China gain the edge in artificial intelligence era?
As tokens are positioned as the AI era’s commodity, China’s energy scale and low-cost models could give it a structural edge
The chip designer’s helmsman wants to recast his company not as a silicon vendor but as the architect of what he calls “AI [artificial intelligence] factories”, whose standard product is “token”.
While Nvidia is busy writing the rules of a new token economy, a parallel debate is emerging in China around the idea of “token exports”. AI-generated intelligence is essentially a tradeable good measured by token, and China is positioning itself across the value chain – from energy and computing power to models and output.
This explainer examines how “tokenomics” works – and why some believe China has the edge.
What is a token, and why does it matter?
In AI, a token is the smallest unit of data an AI model processes or generates. Unlike crypto tokens – which encode ownership or speculative value – AI tokens are purely computational: they are what users pay for, and what models produce.
If Satoshi Nakamoto, the presumed creator of bitcoin, gave the world a token you could trade, Huang is selling one that works.
How does this reshape global tech competition?
Tokens are a resource, and like every resource, they have a supply constraint. Producing them at scale requires chips, cooling and essentially electricity.
Tokens are consumed via models. Weekly data from OpenRouter showed that the four most-used models by token consumption are all Chinese – from StepFun, MiniMax, Xiaomi and DeepSeek – with Zhipu’s also in the top 10. Together, the top 10 account for 18.8 trillion tokens. There are also popular Chinese models, like Alibaba’s Qwen series, that are not in the chart because of their open-source nature.
The reason is largely cost. Application programming interface pricing for models such as Zhipu’s GLM-5 can be an order of magnitude lower than premium Western models like Claude 4.6 Opus. As token usage scales, price becomes a decisive factor.
China still lags the US at the cutting edge of chips. But in a token economy – where the key metrics are output per watt and cost per million tokens – it is building a different kind of advantage.
How does electricity give China a structural edge?
By the end of 2025, the country’s total installed generating capacity was 3.89 billion kilowatts – nearly three times that of the US, according to their respective energy agencies. Solar alone grew 35 per cent last year, while wind increased 23 per cent.
China’s government work report this year introduced “compute-electricity synergy” as a national priority, aiming to align data centre deployment with energy resources and address geographic mismatches between supply and demand – through projects such as west-to-east power transmission and the “East Data, West Compute” programme.
What makes this advantage harder to replicate is the depth of China’s supply chain. The country dominated the manufacturing of key grid and energy components – including transformers, inverters, switching equipment and solar panels – many of which were now being sourced by companies such as Google, Tesla and Amazon, reports said.
China’s MiniMax, Moonshot top AI token use ranking, ending year of US dominance
AI hosting platform OpenRouter’s latest ranking shows high demand for Chinese open-source models following a series of new releases
Online AI hosting platform OpenRouter’s latest ranking reflected the increased international demand for Chinese open-source models on its site following a series of new releases.
A token is the fundamental unit of data input – including whole words, parts of words, characters or punctuation marks – that an AI model processes to generate output.
MiniMax, Moonshot and DeepSeek accounted for nearly two thirds of the total token usage among the top five models ranked this month, according to OpenRouter.
