China Green Lights Over 40 AI Models in 6 Months – Impact on Alibaba & Baidu

China has recently approved over 40 artificial intelligence (AI) models for public use within the last half-year, marking a strategic maneuver by the country to compete with U.S. AI development. This wave of approvals includes the endorsement of 14 large language models (LLMs), benefitting companies like Xiaomi Corp^XIACF, 4Paradigm, and 01.AI, as reported by Reuters.

Tech companies are now required to seek regulatory approval before releasing their LLMs for public use following Beijing’s introduction of this policy in August. This stringent regulatory measure underscores China’s commitment to advancing AI technology development while maintaining control and oversight.

Baidu Inc, Alibaba Group Holding Ltd, and ByteDance were among the first companies to receive approval for their AI models. While a comprehensive list of approved firms remains undisclosed, it is reported that over 40 AI models have been green-lighted to date. The impetus to create AI products in China was largely driven by OpenAI‘s chatbot ChatGPT’s global success in 2022.

What makes this development significant is the prediction by McKinsey that China would invest trillions in AI over the next decade, acknowledging it as a pivotal area for research and economic growth. However, the much-anticipated AI boom has not translated into a substantial increase in cloud services spending within the country.

While China’s progress in AI is noteworthy, it has also raised concerns about the potential misuse of AI for espionage. The FBI has voiced apprehensions about AI being exploited for China’s alleged hacking activities. There are reports of China’s intelligence agency, the MSS, using AI to challenge the CIA and gather intelligence on U.S. companies developing emerging technologies.

According to CLSA, at the time of this approval, China held 130 LLMs, accounting for 40% of the global total, trailing behind the U.S. which held 50%. Baidu’s Ernie Bot, a leading Chinese chatbot akin to ChatGPT, garnered 100 million users in December.

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