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As the artificial intelligence industry grows, the U.S. and China have become two of the most important regions to the development of the technology.
This is something that appears to concern OpenAI at least who earlier this week blocked access in China. The move will not only prevent everyday users from using the large language models (LLM), but will deny developers the chance to use the model as part of various products and services.
Although ChatGPT was already blocked in China by the state firewall, users could get around this by using virtual private network to access OpenAI’s website, but the world’s largest AI startup is cracking down on this by preventing users from accessing its application programming interfaces (APIs).
While this will undoubtedly be an inconvenience to a number of developers, it’s unlikely to knock the win out of the Chinese AI ecosystem, which is becoming ever more sophisticated and self-sufficient.
Breaking Down China’s Ecosystem
Outside of the ChatGPT block, things are looking pretty good for AI development in China, with Alibaba Cloud’s Qwen-2-72B-Instruct model leading Hugging Face’s Open LLM Leaderboard followed by Meta’s Llama 3.
On a similar note, a study released this week surveyed 1,600 business decision makers and found that China leads the world in generative AI usage, with 83% of Chinese organizations using the technology compared to 70% in the UK and 65% in the United States.
China is also leading the AI patent race, filing six times more patents than the United States, with 38,000 parents filed in 2014-2023 compared to 6,273 in the same period.
Bella Liu, co-founder and CEO of Orby AI, told Techopedia:
“The Chinese AI market is experiencing a boom, but so is the US market. We view AI as a global phenomenon no matter where you are in the world. For China specifically, market estimates vary widely however, generally speaking, most predict the market will reach north of US $30 billion in 2024, almost doubling by 2030.
“This includes everything from AI chips to AI software and enterprise platforms. While the big names like Google and Baidu are involved, China also has its own homegrown AI players to watch like SenseTime, UBtech Robotics and Cambricon (chips).”
While the U.S. is still the top dog in the market, home to some of the biggest vendors, including OpenAI, Anthropic, Google, Microsoft, X, and Meta, Chinese AI is still extremely competitive.
Notable Wins for China’s AI Ecosystem
In addition to the companies outlined by Liu above, the Chinese AI ecosystem is home to key players including Alibaba, ByteDance, Huawei, and Tencent, some of the most valuable tech companies in the world.
Many products developed in the country have been extremely successful. For instance, Baidu’s Ernie AI chatbot, effectively China’s answer to ChatGPT, has 200 million users.
Likewise, over 500,000 users have applied to test Kling AI, Kuaishou Technology’s photorealistic text-to-video model, which is competing head-to-head against OpenAI’s Sora, while offering high-quality outputs and longer video lengths.
At the same time, earlier this month, we saw SenseTime unveiled SenseNova 5.5, the “first real-time multimodal model in China,” that claims to “provide a new AI interaction model on par with GPT-4os streaming interaction capabilities.”
The key takeaway here is that Chinese AI vendors are successfully innovating industry-leading products that serve a market that U.S and EU-centric vendors do not; that of Chinese citizens and developers that speak Mandarin and Cantonese.
Will OpenAI’s Block on ChatGPT Access Slow Down AI Development in China?
Chinese AI development is strong enough that OpenAI’s block on access in the region is unlikely to be more than a minor inconvenience to developers, particularly when considering that the ban won’t apply to Microsoft Azure customers in the country.
It’s also possible that the ban may encourage developers to work more closely with locally produced models to create new solutions and products.
After all, the Chinese AI market has its own needs. U.S.-produced tools like ChatGPT are primarily designed to support English and other European languages rather than Chinese users who speak Mandarin or Cantonese.
Thus, models designed to support Mandarin or Cantonese speakers will undoubtedly have a greater use in the region than those focused on English-speaking users. Many providers are focusing on the needs of Chinese users, such as Kling AI which only supports prompts in Chinese.
Given that China has a population of 1.4 billion, there are plenty of users to market these products to, which American and European developers aren’t targeting in the same way.
The Bottom Line
China is home to a wealth of AI and technology startups and OpenAI’s API block will do little to slow down the pace of development in China.
But it is a sign of a slowly heating up political battle for dominance drawn on geographic boundaries.
