Regulatory Milestone: First-ever Government-Approved AI Chatbots.
Four Chinese tech firms have begun offering artificial intelligence chatbots to the public, in an unprecedented move.
This week the Chinese authorities have granted approval to four trailblazing technology firms to launch AI chatbots accessible to the general public. Leading this pack are Baidu, China's primary search engine provider, with its Ernie Bot, and SenseTime, a major player in facial recognition, introducing SenseChat. This marks a pivotal moment in China's regulatory landscape, revealing a loosening grip over AI technology
In many parts of the world, companies with plentiful cash can buy market share whenever they like. In China, first movers enjoy a level of success even “me too” investment cannot overcome. That is what makes Thursday’s launch of China’s homemade versions of ChatGPT so important.
Four Chinese tech firms have begun offering artificial intelligence chatbots to the public. They were the first to receive government approval. The chatbots include Ernie Bot, from China’s top internet search provider Baidu, and SenseChat, from dominant facial recognition group SenseTime.
Baidu released Ernie 3.5 in June, claiming it broadly outperformed OpenAI’s ChatGPT 3.5 and beat the more advanced GPT 4 in some Chinese language skills. Ernie Bot, China’s first public answer to OpenAI’s generative chat bot, was unveiled by Baidu in March.
Ernie Bot remains available only to a limited number of users as Baidu awaits the green light from Beijing for the rollout of consumer-facing apps to the public.
The launches are a big win for the companies. Beijing was previously wary of AI chatbots. Now it is permitting them, albeit after rigorous scrutiny. Tough regulation had stoked fears launches would suffer long delays.
Baidu and SenseTime hope AI chatbots will bolster waning competitive advantage. First movers TikTok, Alibaba and BYD dominate areas of new technology such as short video, ecommerce and electric cars.
The duo can thank US rivals for speedy official approval in China. The popularity of US services such as OpenAI’s GPT-4 has spurred Beijing to encourage homegrown versions. China is afraid of falling further behind in AI.
The problem for this one-party state is that generative AI may create content that challenges the government. But unless Beijing allows chatbots to develop via public interaction, their capabilities will remain limited.
Shares in Baidu and SenseTime rose on Thursday, reflecting hopes they will take a lead. Both companies face challenges in their core businesses. Baidu trades at just 14 times forward earnings, a wide discount to global peers. SenseTime shares have fallen 34 per cent in the past year.
Accelerating Technological Capabilities: China's Regulatory Reassessment Enables AI Chatbot Deployment
The Chinese technology landscape is experiencing a pivotal shift as authorities have granted permission to four pioneering firms to release public-facing artificial intelligence (AI) chatbots. This policy adjustment is a significant departure from Beijing's previous caution around AI and demonstrates a keen awareness of global competitive dynamics in this sector.
Among the companies granted this regulatory green light are Baidu, China’s leading search engine provider, with its offering 'Ernie Bot,' and SenseTime, a market leader in facial recognition technology, which has introduced 'SenseChat.' This approval process, though stringent, reflects an implicit acknowledgment by the Chinese government of the strategic importance of AI, and signals a notable willingness to relax previously hard-line stances.
Despite facing strong competition from established giants like TikTok, Alibaba, and BYD in their respective industries, both Baidu and SenseTime view AI chatbots as an opportunity to regain their competitive edge. A crucial driver behind the accelerated approval process appears to be China's growing concern over technological lag, particularly in comparison to U.S. counterparts like OpenAI's GPT-4.
However, Beijing's decision to permit these AI initiatives is not without its challenges, particularly in balancing technological innovation with the inherent risks associated with generative AI, which might produce content that contravenes governmental narratives. Nonetheless, this move acknowledges the unavoidable reality that, without public interaction, the AI chatbots’ capabilities will inevitably stagnate.
In response to the news, shares of Baidu and SenseTime experienced a marked increase, signifying investor confidence in their future prospects. Yet, both firms continue to face headwinds in their core businesses, with Baidu trading at a mere 14 times forward earnings and SenseTime experiencing a 34% stock decline over the past year.
China's recent public launch of chatbot technologies through Baidu and ByteDance signals its intent to not just compete but potentially lead in the AI landscape. Robin Li, Baidu's CEO, sees the public rollout as an avenue for "valuable real-world feedback," but the challenge of aligning with China's "core socialist values" remains a unique hurdle for the country.
Baidu founder and chief executive Robin Li on Thursday said the public rollout meant:
“Baidu will collect massive valuable real-world human feedback” to make the chatbot work at a “much faster pace”.
ByteDance has debuted its Doubao chatbot, created by multiple internal teams focusing on various aspects of generative AI. Additionally, SenseTime, a Chinese surveillance company, and Zhipu, an AI start-up backed by Meituan, have also introduced their chatbots to the market. Following these developments, Baidu's stock price increased by 2%, while SenseTime shares enjoyed a 3.3% rise.
“China is under pressure to make these models public. Every day they are not open to the public, they are losing out to the US companies,” - Boris Van, tech analyst at Bernstein.
This wave of approvals from Beijing coincides with continued advancements by American tech firms like Microsoft and Google. For instance, OpenAI's newest chatbot, GPT-4, has evolved to accept both text and images, enabling users to pose questions about visual content.
A Complex Yet Promising Trajectory
China's cautious approval of AI chatbots represents a nuanced recalibration of its technology regulatory framework, triggered by the imperative to stay competitive globally. While challenges remain in aligning AI advancements with governmental controls, this policy shift indicates a more open, albeit guarded, approach to technological innovation in China.
