China’s AI applications are coming — where it matters for monetization
![](https://www.newspostalk.com/wp-content/uploads/https://image.cnbcfm.com/api/v1/image/107270651-16891871352023-07-12t065357z_76281055_rc2gx1amogo7_rtrmadp_0_china-regulation-ai.jpeg?v=1694969202&w=1920&h=1080)
[ad_1]
Chinese companies are making announcements about artificial intelligence again – this time about applications. Search engine giant Baidu earlier this month revealed, among other AI tools, a platform for creating advertising campaigns – similar to Google’s AI-powered ads. Early corporate testers of Baidu’s AI ad platform, called QingGe, told reporters conversion rates are up 20% – at a fraction of the typical time an agency would usually need. “Early movers in the [large language model] market have already started the commercialization process, and regulatory approval for 10+ LLMs to open to the public has further cleared roadblocks to monetization,” Nomura analysts said in a Sept. 10 note, citing meetings with businesses and industry experts in Beijing in the few days prior. Around the same time, Tencent announced it is integrating its AI model into advertising content creation, and its own Zoom-like video conferencing app. The company also opened the waitlist for a ChatGPT-like chatbot that sits within its social messaging app WeChat. Known locally as Weixin, the app has more than 1 billion users. That scale is the advantage China has had, coupled with an ability to ramp up internet penetration to support an online ecosystem – from Taobao e-commerce sales to scan-to-ride bike shares. Open-minded consumer Locals are still eager to participate. Luckin Coffee teamed up with Chinese alcohol giant Kweichow Moutai this month to sell a spiked latte. It sold more than 5.4 million cups on the first day, Luckin said. That surge in popularity just “reinforces our understanding and our belief that Chinese consumers are very open-minded with new products,” Joey Wat, CEO of KFC parent Yum China , told me on Friday. Her company is also exploring how to use generative AI to boost business, but she said the tech needs to understand more about internal operations before it can be really helpful. It’s also not clear how powerful China’s AI applications currently are, beyond demos and select business partnerships. “Overall we see generally Chinese language model[s] still lag behind the most advanced ChatGPT version 4,” CLSA’s Tony Zhang said in a phone interview in the last week. But “China’s LLM is developing very fast and improving very fast.” He said some new AI tools in China — such as integration with word processing, in commercial advertising or in consulting – could be the first few fields with real commercial use. “There are some kind of applications open to the general user for some enterprise users, I think this is a necessary process, [a] model to improve and also explore their monetization model,” he said. In general, the more generative AI is used, the better it is supposed to get. Now with Beijing’s green light, public-facing AI applications such as Baidu’s Ernie bot can be widely used in China. Alibaba Cloud on Wednesday said it was opening its large language model Tongyi Qianwen to the public, and said it was working with Taobao, smartphone brand Oppo and others to create applications. How to play it Just testing can bring in revenue. Generative AI and large language model-related revenue contributed to 20% of SenseTime’ s revenue in the first half of 2023, Nomura analysts said, citing company management. While Nomura doesn’t have a rating on SenseTime, or most of the companies the analysts visited this month, the investment firm has a neutral rating on Baidu and a buy rating on Tencent. For a sense of what applications at scale can mean for business efficiency and reach, it’s worth looking at the giant in the room of AI and consumer-facing applications: ByteDance, owner of TikTok and its equally popular version in China, Douyin. The apps allow brands to quickly assess what works – and what doesn’t – with consumers, Oliver Wyman’s David Xie said. He’s working on an upcoming report with Douyin that found one apparel brand was able to use its presence on the app to influence consumers to make a purchase far more quickly than on Alibaba’s Tmall – by about two weeks. “Previously,” he said, “when you don’t have these kinds of content platform, all you can do is run 2,000-sample survey.” In China, there is a market of hundreds of millions of internet users who can’t easily use ChatGPT or Google.
[ad_2]
Source link