China Inc. shows how generative AI can be serious business

Nikkei Asia ^

[FarCenter]

...

As global competition in AI inevitably intensifies, Western companies should be taking lessons from China. While it is undeniable that the U.S. still dominates globally in AI, how long it can retain leadership with China snapping at its heels is debatable, given China's high technology adoption rates, mass digitalization, government support that amounts to over $150 billion for AI research and development, the world's largest AI model, and over 4.5 million science, technology, engineering and math graduates a year.

China, though, also faces some major hurdles. Private-sector funding for AI in China amounted to just $13.5 billion last year versus $47 billion in the U.S., according to semiconductor information service Wikichip. Just 1.5% of websites globally are in Chinese versus 56% in English. A tally of high-level AI talent by Tsinghua University counted 232 such individuals in China as compared with 1,146 in the U.S. China's dependence on imported computer chips is particularly a problem in AI, with Washington already beginning to restrict exports from Nvidia and other suppliers.

For now, these challenges are preventing Chinese companies from competing in bleeding-edge AI development. Instead, they are working lean, investing in practical solutions to help pave the way for future advancements that can bring their capabilities up to par with those of U.S. rivals.

This strategy is not new or unique to AI and has been applied across a range of sectors for over a decade. What drives the success of this strategy is China's global innovation advantage: its unrivaled ability to rapidly adopt, scale and commercialize new technologies to solve the most immediate challenges the country faces.

We have seen this play out in mobile payments, where over 90% of the population now pays for things with super apps Alipay and WeChat.

More recently, we have seen this as BYD has suddenly come on to threaten the long dominance of Volkswagen in China's domestic car market and Tesla in the global electric vehicle market thanks to the Shenzhen company's innovative models and cutting-edge battery technology. Other Chinese EV players are shaking up global export markets. Indeed, in the first quarter of the year, China surpassed Japan as the world's top auto exporter.

Time and time again, Western companies have either overlooked or underestimated China's innovation advantage, first getting caught out in third countries and then increasingly in their home markets.

As this strategy is once again coming into play with generative AI, we are seeing a myriad practical applications hit the Chinese market.

Prominent examples include online retailer JD.com launching ChatJD in February to provide shoppers with personalized recommendations and give sellers automated smart pricing and advertising tools; NetEase, the world's second-largest gaming company, launching a "low-code" platform that customers can use to produce simple software based on text prompts; search engine operator Baidu and carmaker Zhejiang Geely Holding Group joining forces to develop smart vehicles, with AI supporting the user interface, assisted driving and an intelligent voice assistant; and Up Fintech Holdings' Tiger Brokers introducing an AI-powered investment assistant that analyzes market data and generates real-time insights to guide clients to make investment decisions.

[FarCenter]

A key factor in AI is the scope and quality of the training data. Effective business AI requires training on carefully curated information specific to the context of business application. This approach reduces the size of the training effort and the power of the hardware used, but it increases the labor of assembling the training information, compared with scraping the internet.

[momincombatboots]

As a side note… if you are like going off government checks.. the job losses will be catastrophic and AI won’t be paying SS tax which is the biggest fed dip into your pocket.

[bert]

The current upheaval in China being accomplished by the CCP makes articles like this based on the past totally irrelevant.

That is especially true of electric vehicles where tens of thousands are literally unsalable and parked in fields

[srmanuel]

Supposedly one of the reasons Elon Musk started limiting the number of tweets users can read and post per day was the extreme scraping that companies like Microsoft were doing on a daily basis, feeding the information to their AI model.

[isthisnickcool]

That’s correct. Musk doesn’t like his content poached for their machine learning. Way back the first time I saw google I thought the same thing and that was that they are running their business via theft. IMO, google scrapped trillions of dollars of content off the work of others.

[SunkenCiv]

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