Generative AI in the spotlight at 2023 World Internet Conference

Generative AI in the spotlight at 2023 World Internet Conference

The 2023 World Internet Conference (WIC) Wuzhen Summit was held last week in Wuzhen, Zhejiang province with generative artificial intelligence (AI) a heated topic during the event.

AI start-up Lingyi Wanwu launched its first pre-trained large model Yi-34B. “We have assembled a team with great potential that can compete with industry leaders like OpenAI and Google. After nearly half a year of accumulation and development at a steady pace, we have achieved remarkable results that are highly competitive compared to the international level,” said Lee Kai-Fu, a prominent venture capitalist who led the establishment of the AI start-up based in Beijing. Lingyi Wanwu's latest funding round, led by Alibaba Cloud, has put the start-up's valuation at more than USD1 billion, making it a unicorn, according to a report by industry media outlet Pedaily. The newly launched large language model (LLM), which is open source, will have the longest text input of all LLMs with approximately 400,000 Chinese characters. In comparison, OpenAI's GPT-4 can process about 25,000 words.

Since the start of the year, a growing number of tech firms as well as start-ups in China have been doubling down on LLMs, believing it's a historic opportunity for the next-generation technology. Chinese search engine Baidu was the first Chinese tech firm to debut an AI product to rival ChatGPT when it unveiled its language AI Ernie Bot in March. In April, Alibaba launched its LLM called Tongyi Qianwen, which allows AI content generation in both English and Chinese. The biggest opportunity that AI 2.0 brings to change the world could be platforms and technologies, just like Microsoft Office in the personal computer era, and WeChat, Douyin and Meituan in the mobile internet era. Consumer-oriented applications will have the highest probability of explosive growth in commercialization, said Lee.

While Chinese players are ramping up efforts on the research and development of LLMs, U.S. companies are also accelerating the pace in the global race for AI supremacy. Elon Musk's new AI venture xAI launched its first AI chatbot named Grok in early November. About 100 million people are using ChatGPT on a weekly basis, OpenAI CEO Sam Altman said, adding that more than 2 million developers use the platform, including 92% of Fortune 500 companies. China and the U.S. are the two major forces in the world in the generative AI sector, accounting for more than 80% of the world's LLMs. The U.S. as the first mover is leading the race, while China is rapidly catching up, Liu Dingding, a Beijing-based tech analyst, told the Global Times. “China has apparent advantages in core application scenarios, which is crucial for implementation of any cutting-edge technology,” Liu said, adding that Chinese firms should ramp up efforts to improve computing power, algorithms and data quality. China has led a surge of global investment in the generative AI sector. In the first half of the year, China had 22 generative AI start-ups that received funding, while the U.S. had 21 and the UK had four, according to a report by Zhidongxi, an AI-focused research firm in China.

But the South China Morning Post notes that China’s third-quarter investments in the internet sector plunged by 36.4% year-on-year to USD1.36 billion after a steep drop of 70% year-on-year in the second quarter, according to the China Academy of Information and Communications Technology. The number of investment deals dropped by 54% to 210, following a 60.9% fall from the second quarter. “Due to U.S. restrictions, many venture capital firms have been forced to restructure their China presence or lower their investment,” Wang Tao, Chief China Economist of Swiss investment bank UBS said at a seminar held by Renmin University. Since last year, barriers to the tech trade have been reinforced, with legislation targeting semiconductors, micro-electronics, quantum technologies and artificial intelligence, and hundreds of Chinese companies newly added to a U.S. trade blacklist.

U.S. private equity and venture capital investments in China dropped by around 76% year-on-year, to USD7.02 billion in 2022. China’s leadership is now relying on its ability to marshal a whole-of-nation response to offset the impact of U.S. curbs in tech and several other sectors. With that pivot has come a profound re-emphasis on security. At this year’s WIC banners hailed the establishment of an “Inclusive and Resilient Digital World”, with breakout sessions on topics like the inherent risks of artificial intelligence (AI). Many of the tycoons present in 2017 at the first WIC are now absent, and few delegates from Western countries could be found. From 2012 to 2022, the scale of China's digital economy jumped from CNY11 trillion to CNY50.2 trillion, with internet applications, the number of netizens and AI development leading the world, Xia Xueping, President of the China Cyberspace Research Institute, said at the Summit.

On the occasion of the conference, the World Internet Science and Technology Museum, the world's first large internet-themed museum, opened in Wuzhen. The museum shows the history and development of the internet and achievements and applications in internet technology. With an area of about 43,000 square meters, the museum has six permanent exhibition areas.

This overview is based on reports by the China Daily, the Global Times and the South China Morning Post