{"id":7738,"date":"2023-05-12T08:14:24","date_gmt":"2023-05-12T12:14:24","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/china-is-in-the-ai-game-how-alibaba-and-baidu-will-have-to-play-by-beijings-rules\/"},"modified":"2023-05-12T08:14:25","modified_gmt":"2023-05-12T12:14:25","slug":"china-is-in-the-ai-game-how-alibaba-and-baidu-will-have-to-play-by-beijings-rules","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=7738","title":{"rendered":"China Is in the AI Game. How Alibaba and Baidu Will Have to Play by Beijing\u2019s Rules."},"content":{"rendered":"
\n

What will artificial intelligence with Chinese characteristics look like? The past month or so has given us a better idea. <\/p>\n

E-commerce giant
\n Alibaba Group Holding
\n (ticker: BABA) and facial-recognition pioneer
\n SenseTime Group
\n (0020.Hong Kong) joined search champion
\n Baidu
\n (BIDU) in releasing generative AI products, albeit in limited distribution. The Beijing government laid out draft regulations giving AI developers a green light, so long as their training data sets are \u201ctruthful, accurate, and objective\u201d\u2014quite a conundrum for the industry to bear in mind. <\/p>\n

\n

Investors aren\u2019t looking for a Chinese equivalent to OpenAI, the proto-garage company that upended the U.S. tech establishment by unveiling ChatGPT half a year ago. In China, the establishment wins.<\/p>\n

Retail investors have gone wild for domestically listed stocks with a whiff of AI, such as
\n Cambricon Technologies
\n (688256.China), whose shares have more than tripled this year. <\/p>\n

The pros from abroad are staying away. \u201cThe current leading companies are the ones who can afford to be successful in AI,\u201d says Sharukh Malik, a portfolio manager for Asian equities at Guinness Asset Management. <\/p>\n

Markets were underwhelmed by Baidu\u2019s Ernie bot. The company\u2019s shares have slumped 6% since its March 6 release. Baidu nevertheless retains some first-mover advantage, says Charlie Chai, vice head of research at 86 Research in Shanghai. \u201cBaidu has been investing in AI for the past decade, with hundreds of Ph.Ds,\u201d he says. <\/p>\n

Its in-house Kunlun semiconductors are also the best among China\u2019s internet elite, which could be important as the U.S. squeezes chip imports.<\/p>\n

The competition looks stiff, though.
\n Tencent Holdings
\n (700.Hong Kong), which dominates Chinese social media and online gaming, and TikTok parent ByteDance, are expected in the AI ring soon, leveraging their own enormous data troves and customer bases. <\/p>\n

\u201cAll the first-tier players could end up as winners in their own focus area,\u201d says Vivian Lin Thurston, an emerging markets portfolio manager at William Blair. <\/p>\n

They\u2019ll have to deal with the government first. Beijing\u2019s AI push is a sort of ad hoc rehabilitation for China\u2019s Big Tech, which was in the regulatory doghouse for the past two years. But the industry will have to leap forward Beijing\u2019s way. <\/p>\n

\u201cThe U.S. model is to learn from all the data sets, so the system can argue one way or another,\u201d says Dylan Patel, chief analyst at SemiAnalysis. <\/p>\n

That won\u2019t be the Chinese model. The new regs make tech companies potentially liable if their bots produce the wrong answers from officials\u2019 point of view, Chai says. \u201cThis will slow down releases as companies very carefully test their products,\u201d he adds. No kidding.<\/p>\n

Would-be Chinese AI champions need to keep an eye on Washington, too. <\/p>\n

\u201cThe semis challenge is very real,\u201d say AB Bernstein analysts led by Robin Zhu. Advanced AI systems largely depend on microchips from a single U.S. designer,
\n Nvidia
\n (NVDA), whose A100 chip was banned for China sales last year. The company substituted the A800, which is one-third slower. <\/p>\n

All these obstacles will slow, not stop, Chinese companies\u2019 march into AI. Patel estimates they are two years at most off OpenAI\u2019s pace. \u201cBaidu\u2019s product is not as good as ChatGPT, but it\u2019s pretty good,\u201d he says. <\/p>\n

Two years is too long, in tech time, to place bets on any horse race between the Chinese giants, Guinness\u2019 Malik says. \u201cI would give it a year to see who\u2019s the most competent,\u201d he says. <\/p>\n

The training laps will be worth watching, though. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

What will artificial intelligence with Chinese characteristics look like? The past month or so has given us a better idea. E-commerce giant Alibaba Group Holding (ticker: BABA) and facial-recognition pioneer SenseTime Group (0020.Hong Kong) joined search champion Baidu (BIDU) in releasing generative AI products, albeit in limited distribution. The Beijing government laid out draft regulations […]<\/p>\n","protected":false},"author":1,"featured_media":7739,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-7738","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nChina Is in the AI Game. 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