Microsoft’s OpenAI has been gaining traction in the US AI boom, but Chinese companies are emerging as fierce rivals in the market. Analysts have predicted Alibaba, Bytedance, Tencent, Baidu and SenseTime to be the five top contenders competing against OpenAI in a game of fierce ‘winner-takes-all’ through large language models and underlying technologies such as ChatGPT and similar tools.
By possessing a multitude of capabilities and owning stacks of semiconductors and training larger models, Robin Zhu, a senior analyst of Berstein argued that large firms would be needed to generate large returns from the technology’s development. Chinese firms have been attempting to compete with the heavily resourced OpenAI through Google, Amazon and startups materializing across the AI boom history.
Tencent, with the launch of the AI-chat tool HunyuanAide in February, is focusing its AI progress on gaming, entertainment and enterprise software, potentially influencing their cloud sector as well. The large user base of WeChat provides an immense source of data that can be used to train models.
Alibaba, an e-commerce giant released Tongyi Qianwen in April, a rival to OpenAI’s ChatGPT. This spans multiple enterprise tools and could steer away customers from the main site through its AI-generated ideas due to the possibility of comparing prices from other providers.
However, Bytedance’s productivity suite Lark fell flat with their launch, making it unlikely for them to contend for enterprise tools. Baidu’s Ernie also met with mixed responses, and the company must be careful about balancing costs of investment with the potential for monetizing their tools.
SenseTime, a software company developed facial and image recognition prior to launching a range of tools directly competing with OpenAI’s. This includes SenseChat, an AI-chatbot, along with image generators, and developer tools. It’s AI data center allows the training of larger models with more end users, while they will be required to work within the new regulation published by the Chinese government.
Ultimately, it is unlikely that the market will adopt a ‘winner-takes-all’ scenario and more fragmented evolvement is expected, according to the Berstein analyst. In the face of such diverse and well-resourced competitors, OpenAI will certainly be backed into a corner if they hope to continue their reign as one of China’s top AI contenders.
Alibaba is an online and mobile commerce company founded in 1998 by Jack Ma. It provides the technology infrastructure and marketing reach to help businesses leverage the power of the Internet to establish an online presence and conduct commerce with hundreds of millions of consumers and other businesses. In addition to the Alibaba.com websit, the company’s product portfolio includes Taobao Marketplace, an online shopping destination; Tmall, a third-party platform for brands and retailers; Juhuasuan, a group buying marketplace; 1688.com, a wholesale marketplace; AliExpress, an online retail service; and Alipay, a third-party online payment platform.
Robin Zhu is a senior analyst at Bernstein. He has been a research analyst in the financial services sector since 2006 and has been covering global technology companies since 2015. He is experienced in monitoring the trends, forces and developments of the technology industry and is passionate about the opportunities and challenges of digital transformation.
