Xiao Zhou still remembers the first day he started working with the AI model. It was November 2022, and he'd just been transferred to his company's newly formed tech subsidiary as a quality inspection supervisor. His job: review the model's responses to user queries, correct its mistakes, and feed those corrections back into the system.

For two years, that's what he did. Eight hours a day, sometimes more, sitting across from the model like a teacher with a particularly slow student. The AI got better. Zhou got better at teaching it. He took pride in the work — in knowing that his expertise was making the system smarter.

Then came the demotion notice.

The company's reasoning was straightforward: the AI had improved enough that it no longer needed human supervision at the supervisor level. Zhou's position was being downgraded. His salary would drop from 25,000 yuan a month to 15,000. His title would change from supervisor to general employee.

"I was 35 years old," he said. "I had a mortgage. My son had just started kindergarten. My parents were getting older and needed support. A 40% pay cut wasn't just bad news — it was a threat to my family's whole life."

He tried negotiating. He pointed out that the AI still made errors, especially with edge cases that only his experience could catch. He offered to take on additional responsibilities. The company wouldn't budge.

In January 2025, he was fired.

What happened next surprised even him: he decided to fight. "I kept thinking — if they can do this to me, they can do this to anyone," he said. "I spent two years making that system work. You can't just throw people away when the technology they built is good enough to replace them."

The case made its way through the courts, becoming one of the first major AI-related labor disputes in China. The company argued that AI technology upgrades constituted a legitimate change in business conditions, justifying the reassignment. Zhou argued that using AI as an excuse to cut pay and demote workers was exactly the kind of exploitation labor laws were designed to prevent.

In April 2026, the Hangzhou Intermediate Court issued its final ruling: the termination was illegal. The company was ordered to pay Zhou more than 260,000 yuan in compensation.

The judge's words stuck with him: "Using AI to reduce costs and increase efficiency is a business decision. But the dividends of technological progress should be shared between capital and labor."

Zhou has since found new work, though he declined to say where. What he will say is that the case changed how he thinks about technology. "I used to believe that better tech always means better lives," he said. "Now I know — it depends on who controls it, and who gets to decide what 'better' means."