Top 5 Chinese OpenAI competitors

• Microsoft’s OpenAI is strongly leading the AI ​​boom in the US, but competitors are emerging in China.
• Analysts say several Chinese companies could rival OpenAI, including Alibaba, Bytedance and Tencent.
• As the market for AI develops in China, a clear winner-take-all scenario is unlikely to emerge.

OpenAI faces stiff competition in the United States. Google, Amazon, and countless startups that have stepped up to implement AI products in the AI ​​boom race. China has emerged as a serious competitor to the country’s largest tech companies, which are developing their own large-scale language models, the underlying technology powering ChatGPT, and similar tools.

Tencent, Alibaba, Bytedance, Baidu, and SenseTime ranked as the top five AI candidates for ChatGPT on OpenAI, according to Bernstein analysts.

“For investors looking to profit financially from this technological evolution, commercial success will require competitors to own stacks of semiconductors, train models at scale, and offer a range of capabilities. I would argue that it is a must-have,” said Robin Zhu, senior Bernstein senior. written by an analyst.

The Chinese firm’s FOMO shows a wide range of internet and software providers offering its services, but analysts say competition will dwindle next year. However, these companies must work within new Chinese government regulations that dictate the types of content and messages that AI engines can generate.

The top five companies leading the Chinese AI race are:

Tencent

Gaming and entertainment giant Tencent launched HuyuanAide, a ChatGPT-like tool, in February. However, the company is likely to focus its AI efforts on games and enterprise software his tools, and increased functionality could drive demand and benefit the company’s cloud offerings. WeChat makers also utilize large amounts of data from large numbers of users to train their models. The company’s chat tool Hunyuan is fairly fluent in Chinese, but the company has yet to release an updated model since its debut.

Alibaba

In April, e-commerce giant Alibaba announced Tongyi Qianwen, its answer to ChatGPT. Tongyi Qianwen integrates enterprise tools such as DingTalk, a workplace communication software. Bernstein analysts have warned that Alibaba’s AI tools could undermine its core business as a marketplace. For example, Tongyi Qianwen can show results for products that competitors are selling cheaper, making customers more likely to shop elsewhere.

“The shopping intent that exists in Alibaba’s various ecosystems provides an organic environment for monetizing AI-generated ideas, but price comparison will continue to be important to consumers. ‘ the analyst noted.

byte dance

TikTok, the parent company of TikTok, has a head start as an early adopter of AI-based recommendation algorithms, leveraging large amounts of data from users and short user-generated video content.

But Bytedance is less likely to compete in enterprise tools, as its productivity suite Lark has struggled to gain traction.

Baidu

Search engine and Internet service provider Baidu launched Ernie, a conversational chatbot, in March to mixed reviews. But since launching Ernie, the company’s search capabilities and volume have both improved.

The company also has to reconcile the high investment costs of developing better AI with plans to monetize these tools.

The main concern is that “strategies that focus too much on innovation without providing a clear monetization path will result in technology becoming a cash sink in the long run,” Bernstein said. analyst writes.

sense time

AI software company SenseTime recently launched a handful of products that compete directly with OpenAI’s. This includes the SenseChat chatbot, image generator and developer tools, adding to the product portfolio already including facial recognition and image recognition technology.

The company leverages its massive AI data center to train more models with larger parameters, giving it a strong computational advantage over its competitors. This will enable more enterprise customers to develop and train customized models.

The downside is that SenseTime needs to do more work to implement such tools to end users and lacks the scalability of competitors such as Tencent, Baidu and Alibaba.

The race for AI dominance in the US already has early incumbents who are likely to dominate the market. However, the development of AI in China is expected to play out a little differently.

“The final market is unlikely to exhibit winner-take-all dynamics and will likely evolve in a more fragmented fashion,” wrote Bernstein analysts.