OpenAI leaving China is actually blessing in disguise for local AI firms
A potential local-led AI boom in China is bound to happen
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Key notes
- OpenAI’s exit from China sparks a boom for local AI firms like Baidu and SenseTime.
- Chinese companies offer incentives like free tokens and training to attract users from OpenAI.
- The US aims to curb China’s access to advanced AI and semiconductor tech due to security concerns.
A little while ago, OpenAI shocked its customers in China that it’s ceasing its operations in the country. The Microsoft-backed tech giant sent memos to users, saying that all operations related to the AI service will be ending on July 9, 2024, amidst the height of the AI race tensions between the US and China.
But, it seems like it’ll be another case of a blessing in disguise, especially for local Chinese AI firms. Since that news broke out, companies like Baidu, which had asserted that its Ernie chatbot surpassed OpenAI’s in various tests, are now providing incentives such as migration strategies and price reductions to attract users transitioning from OpenAI’s APIs.
The Ernie model maker said that switchers can expect complimentary AI model adjustments and experts on the Ernie model, coupled with 50M free tokens for devs to use in querying the bot.
Other Chinese firms, including SenseTime Group Inc., Zhipu, and Baichuan, are also offering generous incentives. SenseTime Group Inc. is providing 50 million tokens and training sessions. Zhipu offers 150 million tokens and training. Baichuan, backed by Alibaba and Tencent, gives away 10 million tokens to attract developers to their AI platforms.
Even creators of open-source models, like Meta and its Llama LLM family, could also leave the country, pushing local firms to move fast.
The US has been restricting China’s access to advanced AI and semiconductor tech, citing security risks and intellectual property theft as its reasons. The Biden administration said that it aimed to prevent “countries of concern”, including the rivaling China, from using these technologies for military or economic spying—an effort that’s been heavily criticized by AI players in the two countries (via Asia Financial).
“President Biden and Secretary Yellen are committed to taking clear and targeted measures to prevent the advancement of key technologies like artificial intelligence by countries of concern from threatening U.S. national security,” US’ Department of Treasury said.
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