Chinese Tech Giants Alibaba, Tencent, Baidu Go All-In on AI Amid Regulations, Sanctions

John Lopez, Tech Times 23 May 2023, 12:05 pm

In a parallel trend to the AI-driven stock rally observed in the S&P 500, Chinese tech giants Alibaba, Tencent, and Baidu are heavily investing in artificial intelligence (AI), with a particular focus on generative AI.

AI Tech Companies Rushing for Latest AI Tech

A CNBC report tells us that these companies recognize the potential of generative AI, which enables content creation in response to user prompts and are racing to incorporate the technology into their businesses.

In a recent update during Baidu's first-quarter earnings call, CEO Robin Li expressed his optimism for the immense potential of generative AI and drew comparisons to the transformative effects of the internet and smartphones. "Generative AI represents a tremendous opportunity for us," the CEO points out.

Like Microsoft's popular ChatGPT, generative AI tools have captured the attention of investors, sparking a wave of interest in this transformative technology. As a result, companies worldwide are striving to integrate generative AI or develop their alternatives.

Are Regulations Slowing Chinese AI Tech?

However, the Chinese government, known for its tight control over internet services, has imposed restrictions on the usage of generative AI tools.

While an outright ban has not been implemented, new regulations have been introduced to govern their development and usage.

Bloomberg reported in February that some high-flying stocks began to falter after the Chinese government forced local apps and websites to stop offering services that allow ChatGPT use.

CNBC reports that Baidu, one of the tech giants in China, is awaiting regulatory approval for its Ernie Bot chatbot service. Tencent, on the other hand, is working on its own foundation model called HunyuanAide. Alibaba has already developed its generative AI tool named Tongyi Qianwen, which has witnessed significant demand from enterprise customers.

The embrace of generative AI by Chinese tech giants goes beyond mere business considerations. They view it as a technological revolution akin to the advent of the internet and smartphones.

These companies recognize generative AI's significant opportunities, such as accelerating customer adoption of cloud computing services.

Another Challenge: US Chip Ban

However, the progress of China's AI sector may face obstacles due to the US ban on Chinese companies acquiring advanced chips and chipmaking equipment.

Alibaba, Baidu, and Tencent rely on chip manufacturers like Nvidia for their computing operations, rendering them vulnerable to potential US sanctions.

In February, we reported that industry experts warned that increased US sanctions could cause China's semiconductor and artificial intelligence industries to fall decades behind as the United States attempts to prevent Beijing from acquiring the most advanced chipmaking technologies.

Despite these challenges, Chinese tech companies remain aware of the need for regulatory compliance. They understand the importance of responsible development and usage of AI and are investing in technology and compliance development to meet the applicable requirements.

The AI Race

In a global context, the ambitions of Chinese tech giants in AI align with a broader arms race within the technology sector.

Currently, Microsoft and Google dominate the AI conversation with their advanced language processing technologies. Chinese companies aspire to compete on a global scale and establish themselves as leaders in the field.

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