The transformative journey of a company from restructuring to profitability often raises the question: how many years does it take for such a turnaround? For Doushen Education, the answer has been commendably reduced to just one year.

Doushen Education, which originally started as Lishiceng in 1999, made its significant move to the market by going public in 2009. The company strategically focused on language literature and aesthetic education trainingHowever, in July 2021, Doushen found itself entangled in a crisis due to policy shifts impacting its K12 business, culminating in a bankruptcy restructuring application to the Beijing First Intermediate Court by 2023.

Fast forward one year, and rather than fading into obscurity, Doushen emerged from the shadows with a game-changing collaborationThe company partnered with Zhipu Huazhang to introduce an innovative AI education application known as Doushen AI

This not only revitalized its brand but also ignited a fervor around the “Zhipu AI” concept within the secondary market.

The decisive turning point came in 2024, under the leadership of Chairman Dou XinDuring this pivotal year, he achieved three significant milestones: he completed the restructuring process, transitioned Doushen Education into a family education solution provider, and launched the consumer-facing intelligent learning product “Doushen AI.”

The successful transformation of Doushen Education coincided with its recognition as a leading light in operational recoveryOn August 28, 2024, it released its semi-annual performance report, revealing a remarkable net profit of approximately 69.09 million yuan, a staggering increase of 224.41% compared to previous periods.

Such phenomenal performance placed Doushen Education at the forefront of business success stories arising from adversity.

On December 9, 2024, Doushen Education made another impactful announcement by collaborating with Microsoft, bringing the Doushen AI Windows PC version 1.0 into Microsoft’s marketplace

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This step signaled a new era for Doushen AI, especially in the realms of classroom teaching and associated services.

During this development, Dou Xin emphasized the utilization of Microsoft's GraphRAG technology, which helped Doushen leverage its extensive experience in the field of comprehensive language educationThis synergy allowed the creation of the fifth-generation course content generation system known as the Jiuxiao Content Production PlatformThe platform not only ensured the accuracy and practicality of Doushen AI but also delivered high-quality educational content tailored to various teaching styles.

Looking forward, Dou Xin has laid out two strategic focuses for the company’s future endeavors.

In traditional education, Doushen Education will continue to deepen its commitment to online quality education services, leveraging the company’s wealth of research capabilities and esteemed instructor resources to roll out online courses centered on traditional culture, classical literature, ancient poems, and literary appreciation.

In the realm of AI, Doushen Education plans to expand its use of artificial intelligence technologies within the company

It aims to strengthen the central role of AI in its software solutions while also developing a range of hardware products including portable intelligent devices and humanoid robots.

According to Dou Xin, the impact of artificial intelligence on the education sector is anticipated to be transformativeAnalyzing the two dimensions of “learning” and “practice,” he articulated that the practice aspect has already surpassed human capabilities through the use of large models and specialized knowledge graphsThe learning aspect is still in the exploratory phase for technological solutions but is undeniably moving towards irreversible trends.

“If both ‘learning’ and ‘practice’ are surpassed by artificial intelligence, the role and value of human involvement in education will fundamentally shift,” Dou Xin stated.

As 2024 unfolded, numerous successful cases of AI model commercialization in various industries began to emerge, rapidly electrifying the market

Enhanced computational speed, improved generation quality, and more efficient training methods brought foundational technologies into practical use.

According to an iResearch report, the AI+ education market rapidly penetrated multiple levels of educationBy 2023, the B-end AI+ education market reached an estimated scale of 21.3 billion yuan and is projected to maintain a compound growth rate exceeding 20% over the next three years.

Education has been recognized as a critical application scenario for large-scale modelsSeveral educational technology firms, such as Xueersi, Zuoyebang, and Squirrel AI, have launched self-developed large models, while tech giants like Baidu and iFlytek have announced the application of their generic large models in educational hardware products.

However, Dou Xin made a conscious decision not to pursue the independent development of large language models.

His rationale was that investing significantly in a project that may not align with an education company’s expertise can be both financially taxing and ineffective

Instead, Dou suggested concentrating resources on niche areas, particularly integrating specialized small models into foundational large modelsThis approach would essentially ensure the quality, reliability, and applicability of educational content outputs.

As early as the beginning of 2023, Doushen Education formed a partnership with Zhipu, which is recognized as one of the "new AI startups." The choice to collaborate with Zhipu stemmed from its strong backing by Tsinghua University’s research capabilities, which instilled confidence in Dou Xin about Zhipu’s potential to navigate the large model arms race without solely focusing on commercial gains but rather on fulfilling a mission.

Moreover, Dou Xin expressed a personal commitment to creating a wholly domestic product, believing that teaching Chinese mandates a distinctly Chinese service model for a perfect match from the outset.

With cooperation from both Microsoft China and Zhipu, Doushen has employed GraphRAG technology to build a neural network knowledge graph, thereby establishing a comprehensive knowledge graph within the liberal arts domain.

This collaborative approach led to the birth of a vertical AI model named Jiuxiao, which underwent eighteen months of development and five iterations before its launch

At inception, it quickly evolved into a platform capable of generating high-quality teaching content efficiently, reducing the cost of lesson preparation from 2600 yuan to a mere 4 yuan.

By October 2024, consumer applications featuring Doushen AI had significantly increased their user base from about ten thousand to over two hundred thousand.

Two months later, the Doushen AI Windows PC version 1.0 was officially launched on the Microsoft StoreThe extensive application scene and massive user base within the Windows ecosystem opened up fresh opportunities for Doushen Education.

Dou Xin recognized that education differs from other sectors in terms of the rigorous demands for content output reliability and precisionPresently, generic large language models often face challenges related to “hallucination issues.” Microsoft’s GraphRAG technology notably combines retrieved information with knowledge graphs to provide comprehensive and accurate insights, integrating more contextual information during the generation process, thus effectively enhancing the quality, precision, and accuracy of large language models and preventing hallucination problems.

“Imagine a scenario where there are typos in a child’s essay guidance or the theme is unclear; the implications of such mistakes can be quite significant,” Dou Xin remarked.

Winning strategies in future markets hinge significantly on companies’ ability to adapt, as demonstrated by Doushen’s remarkable turnaround story

This success story is grounded in Dou Xin's unwavering commitment to an “all-in AI + education ecosystem.”

In an interview held on the 18th, Dou Xin elaborated on Doushen Education’s forward-looking strategic plans: the company will continue to deepen its online quality education services by utilizing its research strength and esteemed educator resources to develop a rich array of language literature and aesthetic online courses, incorporating elements of traditional culture and literature study.

In the AI vertical, Doushen will intensify its deployment of artificial intelligence technologies, strengthening the core capabilities of AI in software, while also launching various hardware products such as portable intelligent devices and humanoid robots.

Dou Xin posits that the combination of AI and education has the potential to triple the current size of the education training market

Particularly in the K12 sector, the uplift in service-oriented products can allow educational resources to reach areas previously hard to penetrateHowever, the market potential extends beyond just these initiatives; it will also span adult education, vocational training, and elderly education, among other domains.

This suggests that as AI continues to interweave with education, the determinants of market change are shiftingTraditional competitive advantages and hardware cost benefits are on an accelerated path of diminishment.

In response to these evolving conditions, Dou Xin candidly declared, “The critical factors in determining market success will not be centered on price or other conventional elements but instead should focus on the tangible visibility of AI capabilities—making its benefits unquestionable.”

Taking the educational tablet market as an example, in 2020, BBK led the market with a share of nearly 38.4%, followed by Read boy and Youxue World with respective shares of 14.5% and 13.3%. However, data from RUNTO Technology in 2023 showed a complete metamorphosis; the top three brands had transitioned to include Xiaomi, iFlytek, and Xueersi.

In just three years, the competitive landscape within the market had changed significantly.

Doushen Education’s customer service offerings also reflect the evolving market dynamics

In a bid to manifest the capabilities of AI more evidently, Dou Xin outlined three essential goals in both software and hardware aspects: developing AI live streaming course technology, crafting intelligent portable devices, and providing comprehensive hardware solutions.

In software, Doushen Education aims to create a novel interactive experience for AI live streaming courses, merging the strengths of real human instructors and AI avatarsHere, AI would manage instructional duties, while human instructors would take on roles as guides and planners for the learners, assisting in crafting personalized learning schedules and utilizing products effectively.

Dou Xin believes this human-AI interactive model can significantly reduce costsPresently, the price for live courses can soar above a thousand yuan, becoming a burdensome expense for parents, particularly in third-and fourth-tier cities

He envisions using hyper-personalized AI instruction to provide a pleasant experience while delivering detailed, tailored services.

On the hardware front, Doushen Education plans to develop a portable intelligent device aimed at aiding parents in assisting children with daily tasks such as listening to, writing, reciting ancient poems, and checking homework“Similar to the small smart devices on the market, this product will feature a screen and camera, keeping costs low while providing parents the ability to engage with their children's educational activities,” he added.

Dou Xin intends to roll out two versions of this product: an economical model and a higher-performance variant, with the budget one potentially offered as a complimentary item while the high-performing option would include graphic and video capabilitiesBoth versions are designed to enhance the user experience of Doushen AI.

Furthermore, Dou Xin observed that in the current marketplace, most profits from learning hardware products are funneled towards front-end costs, including marketing and sales divisions, leading firms to struggle with actual profitability on hardware

Beyond recorded courses, few of the educational hardware offerings genuinely reflect AI capabilities and user engagement.

In light of this, Doushen Education is refraining from conducting expansive investments in hardwareRather, it has opted to collaborate with established consumer electronics manufacturers, leveraging its strengths in content and educational research to generate revenue in content and services insteadThis strategy focuses on rapidly introducing hardware to users and creating an ecosystem for Doushen Education.

Dou Xin asserted that the first company to achieve this goal would secure a favorable double-win situationAt present, Doushen’s subsidiary firms have successfully engaged in over thirty million AI Class and AI School service projects.

To manifest AI capabilities more overtly, Doushen Education has ambitious plans to introduce a humanoid robot in the near future, designed to function as a versatile aid for students in this ever-evolving AI-assisted learning landscape