01 When Civil Service Exam Takers Embrace AI

If AI large language models had not yet seen widespread adoption due to various issues, the sudden rise of DeepSeek during the 2025 Chinese New Year made many people take notice of the current advancements in artificial intelligence.

Using AI to answer questions and create literary works became the first viral trend of the Chinese new year—fortune-telling emerged as one of DeepSeek's major applications.

But AI wasn’t just about leisure and entertainment. Many people began leveraging AI large language model applications to handle serious tasks. After receiving assistance, they affectionately referred to products like DeepSeek, Doubao, and ChatGPT as "Teacher DS," "Teacher Dou," and "Teacher GPT."

Among these users were civil service exam takers.

From creating study plans and addressing psychological challenges to seeking answers and explanations for specific questions and drafting interview scripts, AI large language models have essentially become their study companions.

Some young people were drawn to AI because they were already interested in the field of artificial intelligence.

Back in late 2023, before DeepSeek became a household name, Da Jin, a third-year university student, encountered products like Doubao and Wenxin Yiyan during China's first wave of enthusiasm for large language models. He even used them to complete assignments for several courses. After deciding to take the civil service exam, he opted for self-study due to the high cost of prep courses, relying on large language models to practice questions and verify answers. While some responses were not entirely accurate, Da Jin was generally satisfied, as his goal of reducing costs was achieved.

For many others, the decision to use AI for exam preparation was influenced by external factors.

Starting last year, Xiao Yue, who has been preparing for civil service exams while working, dedicated an entire day to studying how to use DeepSeek after it went viral. She eventually identified two key use cases for it: organizing trending materials and generating verbatim interview scripts. Tasks that used to take her an entire evening can now be completed by the large language model in just 20 minutes.

The civil service exam industry might be among the first to feel the impact of AI-powered large language models. In early February, a well-known figure in the field of interview coaching, "Lao Xia," published an article titled "The Death Knell Tolls for the Civil Service Exam Industry." The article encouraged candidates to embrace AI proactively. It quickly garnered over 100,000 views on WeChat and received 12,000 likes on Xiaohongshu (Little Red Book). The majority of the comments expressed agreement with the sentiment.

Yoyo, who has been preparing full-time for the civil service exams for three years, started using AI for interview practice after reading Lao Xia's article. After comparing several large language models available in the market, she ultimately chose Doubao and DeepSeek. The former offers voice interaction capabilities, while the latter excels at presenting thought processes through its deep-thinking functionality. Most importantly, both tools share a common strength: they provide clear, comprehensive, and well-structured responses that can serve as valuable references.

However, these tools are far from perfect.

Yoyo encountered several issues during her usage. DeepSeek frequently displayed "service busy" messages, its database appeared outdated with no content updates after 2023, and it failed to display content on sensitive topics. Meanwhile, Doubao's content generation quality was inconsistent and heavily reliant on precise instructions.

Searching on Xiaohongshu, she discovered that these problems were widespread. As for solutions, most users suggested comparing multiple large language models, extracting the best parts from each, and synthesizing them into a final answer.

Yet, based on feedback from multiple users, no one has abandoned AI tools to return to the traditional, labor-intensive manual approach.

02 A Lifeline

It's not just young civil service exam candidates who are seizing the opportunity presented by AI—civil service training institutions are doing the same.

Take the three major players in the industry: Offcn Education, Huatu Education, and Chalk Technology. Chalk Technology and Offcn Education integrated their proprietary large language models with DeepSeek in late 2024 and February 2025, respectively.

In fact, their embrace of AI began even earlier. Starting in 2023, all three companies prominently highlighted their increased investment in and application of AI technology in their financial reports. Notably, Zhang Xiaolong, Chairman of the Board at Chalk Technology, emphasized that year: "Chalk's investment in AI is not about following trends. The company has maintained a high-level AI algorithm team even before the advent of ChatGPT."

By 2025, all three companies had already made attempts and launched at least two AI-related products.

The primary applications of AI have been concentrated in areas such as teaching, answering questions, and interview feedback:

In 2023, Offcn Education introduced an AI-powered intelligent system class featuring virtual digital lecturers for teaching and Q&A sessions, while Huatu Education launched the "Thousand-Face Interview AI" course, which combines human expertise with AI for interview preparation.

In 2024, Chalk integrated its AI teacher large model, "Chalk Head," and the "Premium Interview AI Feedback" feature into its app. Huatu Education released its "AI Interview Feedback" product, and Offcn Education established a sub-brand, "Offcn AI Employment," which introduced an AI employment large model along with two physical products: the AI Employment Direct Access Card and the AI Employment Learning Device.

Latecomers have also been catching up with the trend. Companies like Gaodun and Palm Gardener, which also operate in the civil service exam training sector, have successively launched their own AI products, emphasizing their "presence" in the market.

For civil service exam candidates, AI may not be the entirety of their preparation process, but for civil service exam training institutions, AI carries the hope of sustaining their survival.

Pressure has been the defining keyword for the civil service exam training industry over the past few years. Although enthusiasm among university graduates for civil service exams has remained high in the years following the pandemic, the civil service exam market has not been all sunshine and roses.

In a sense, these companies are paying off debts.

This leads to a key term: "agreement-based classes." In this model, candidates who enroll in such classes are eligible for partial refunds if they fail the exam. However, they must pay tuition fees that are typically five times higher than those of regular classes, often exceeding tens of thousands of yuan.

In 2010, Offcn Education pioneered this model, followed by Huatu Education in 2011 and Chalk Technology in 2018. Similar to how Lianjia broke through competition by focusing on service, Offcn Education also reaped significant benefits, consistently maintaining its position as the industry leader for years in terms of market share, revenue, and net profit, with a clear lead over the second place.

By 2017, the proportion of its "guaranteed refund classes" in its in-person courses had risen from 59.02% to 73.75%. That year, Offcn Education's revenue and net profit grew by 56% and 60.55% year-on-year, respectively.

However, this approach turned out to be a double-edged sword.

The "refund guarantee" model of the guaranteed refund classes demands higher cash flow. When the pandemic disrupted the offline training business of civil service exam preparation institutions, the pressure it brought far outweighed the benefits. Take Offcn Education as an example: its refund rate increased from 44.14% in 2019 to 68.46% in 2021, and its operating cash flow shifted from an inflow of 2.474 billion yuan in 2019 to an outflow of 4.098 billion yuan in 2021.

Perhaps in an effort to cut its losses, Offcn Education removed all full-refund products at the end of 2021.

However, due to factors such as the refund cycle, the positive effects of this move were not reflected in its financial data: Offcn Education's asset-liability ratio rose from 81.67% in 2021 to 92.06% in 2023.

As a result, while Huatu Education and Chalk Technology gradually recovered from the pandemic's impact in 2023, Offcn Education remained "in the ICU." Its revenue for 2023 was 3.086 billion yuan, less than one-third of its 2020 revenue. The company has been unable to escape losses for three consecutive years, with annual losses of 2.37 billion yuan, 1.101 billion yuan, and 209 million yuan in 2021, 2022, and 2023, respectively.

By July 2024, Offcn Education's market value had plummeted to just 8.573 billion yuan, a 95% drop from its peak of 265.815 billion yuan in November 2020.

Unsurprisingly, it also lost its position as the industry leader. In terms of revenue, net profit, and other metrics for the first half of 2024, Offcn Education lagged behind both Chalk Technology and Huatu Education.

03 Training Schools Competing with AI for Students

That said, the other two companies are not having an easy time either.

In the first half of 2024, Huatu Education's asset-liability ratio remained at 80.55%. Chalk Technology, which has now taken the lead as the new "top player," experienced three consecutive years of losses starting from 2020, with losses exceeding 2 billion yuan in two of those years. It wasn't until 2023 that the company managed to turn a profit, but its revenue still lagged 400 million yuan behind its 2021 peak.

In the first half of 2024, Chalk Technology's revenue declined by 3.1% year-on-year. Additionally, the growth rate of monthly active users (MAUs) on the Chalk App has been slowing. From 2019 to 2023, the Chalk App added over 1 million MAUs annually, but in the subsequent six months, the increase was less than 130,000.

Amid this challenging landscape, the new hope brought by AI is something no one dares to ignore. However, the improvements AI has brought to the operational conditions of civil service exam preparation institutions are currently reflected only in cost reductions.

Even for Chalk, which is considered one of the earliest and most proactive players in the industry in adopting AI, the benefits of AI applications as shown in its financial reports are limited to reduced training service costs and improved profitability.

The reason lies in the fact that these AI products have contributed more to improving company efficiency than enhancing the learning experience for students.

Take the data shared at Chalk's in-house large language model launch event as an example: With the introduction of AI teachers, the number of students a premium class tutor at Chalk can serve simultaneously increased from around 40 to 150, representing a 275% improvement in efficiency.

Now, let’s look at the student side.

Among the three industry giants, Chalk has the strongest technological edge. Its AI-powered interview evaluation feature has received considerable praise on social media platforms. Notable advantages include: objective and comprehensive evaluation dimensions, highly tailored feedback aligned with the requirements of civil service interviews, and the ability to provide optimized examples based on students' answers.

However, the drawbacks are equally apparent:

First, the price of 29 yuan per session deters many potential users. Second, once students optimize their performance based on the system's suggestions and reach a certain level, further improvement becomes difficult. Most importantly, AI can only assess standardized metrics and cannot genuinely evaluate a person's critical thinking ability or demeanor—qualities that are often the core focus of civil service interviews.

As for Huatu Education's AI-powered interview evaluation product, its price is less than a quarter of Chalk's offering, but its user base is minimal, with current sales not even reaching 400. As such, it holds little value for discussion at this stage.

That said, both Chalk Technology and Offcn Education have already integrated DeepSeek, which may help address or optimize some of the existing issues.

However, in the face of the free DeepSeek platform, civil service exam preparation institutions may need to work even harder to retain their student base.

                                                     A hot topic on RedNote

The era of civil service exam training institutions making easy money is long gone. For instance, the decade from 2003 to 2013 marked the gradual rise of the civil service exam craze. During this period, the number of applicants for the national civil service exam surged from 125,000 to 1.52 million, while the market size for civil service exam training expanded from less than 1 billion yuan to 19 billion yuan.

From 2012 to 2014, the revenue of Huatu Education grew from 633 million yuan to 1.155 billion yuan, while its net profit increased from 49.69 million yuan to 109 million yuan. Starting in 2011, Huatu began investing in other companies, channeling tens of millions to over 100 million yuan into firms like Yuanpei Translation and Dawo Times.

At the end of 2013, Zhonggong Education declared it had entered a new phase of development, marked by the launch of a brand-new, integrated office space spanning over 10,000 square meters and the procurement of hundreds of business vehicles.

Later, the civil service exam craze experienced a brief slowdown and even a decline. However, leading institutions maintained growth by promoting higher-priced agreement-based courses, adopting a hybrid online-offline model, and expanding into lower-tier markets. Zhonggong Education, for example, achieved over 20% annual revenue growth for five consecutive years starting in 2015, went public in 2018, and reached a peak of 1,669 directly operated institutions by 2020.

The pandemic pressed the pause button, exposing many issues that had previously been masked by rapid growth. Amid a trend of consumer downgrading, more local institutions emerged, successfully seizing business from the industry giants. In 2022, the CR3 (the combined market share of the top three players) in the civil service exam training industry dropped from 47.9% in 2019 to 26.99%. According to Guosen Securities’ 2025 Investment Strategy for the Education Industry, this figure further declined in 2023.

Old challenges remain unresolved, yet new ones have already arrived. AI products like DeepSeek may take away even more business. For young people, if free AI tools become sufficiently effective, there would be little reason to pay civil service exam training institutions.