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The backstory: About a year ago, the world of generative artificial intelligence (AI) started buzzing with excitement when OpenAI's ChatGPT came onto the scene. This marked a significant moment in the realm of AI. But it's important to note that China, the world’s biggest internet market, wasn't initially part of this AI conversation, as those AI models weren’t available in the country. But then Chinese tech giants started exploring the idea of launching their own generative AI services, and they did it on a large scale.
According to data from brokerage firm CLSA, China now has 130 large language models, which is 40% of the global total, just behind the US with 50%. In this China AI race, companies like Zhipu and Baichuan are making waves. They aim to go head-to-head with global players like OpenAI, backed by Microsoft and Google. One noteworthy startup is Zhipu, a private enterprise based in Beijing, striving to create homegrown alternatives to ChatGPT.
More recently: In mid-August, China’s government released its first regulations targeting AI technology. At the end of August, Baidu got regulatory approval to launch its AI model Ernie Bot to the public in China. Then, Zhipu and Baichuan also got the green light for a public release in August. Zhipu’s first AI product was an open-source model named Qingyan.
Earlier this month, Beijing rolled out new security regulations aimed at companies using AI tech. These rules included a list of no-go areas for training AI models. And last week, Baidu introduced ERNIE 4.0, the latest version of its generative AI model, saying it's just as good as OpenAI's GPT-4.
The development: China's two largest tech giants, Alibaba and Tencent, are among a group of Chinese investors pumping 2.5 billion yuan (about US$342 million) into Zhipu. This is a monumental show of support for the startup’s ambitions. Other industry leaders jumping on board include Ant Group and Xiaomi. Notably, this funding round also saw participation from HongShan (formerly Sequoia China) and Meituan, a major player in the food delivery sector.
Many of these same companies were also part of a recent US$300 million financing round for Zhipu's rival, Baichuan, showing just how fierce the competition in China's generative AI landscape has become.
“China is very much ahead of the game in terms of self-regulating AI within their own nation-state,” said US Senator Mark Warner to Politico.
“The way China approaches AI regulation will likely be consistent with its approach to regulating other areas of prominent technology, such as internet or social media, where it operates strict censorship to control the flow of information,” Citi analysts said in a research note in July.
"Technological innovation has become the main battleground of the global playing field and competition for tech dominance will grow unprecedentedly fierce," Chinese President Xi Jinping said in 2021.