ChatGPT Sparks China's AI Boom
The introduction of ChatGPT in November 2020 has ignited a lively conversation about artificial intelligence (AI). This revolutionary development has created new investment opportunities in China and has shifted the focus from AI 1.0 to AI 2.0, where a common platform is envisioned. The four "AI dragons" in China, namely SenseTime, Megvii, CloudWalk, and Yitu, have dominated AI 1.0. However, with the independent platforms of AI 2.0, everyone wants to participate in the new trend. Wang Huiwen, one of the co-founders of Meituan, has created a company worth $200 million to participate in the AI 2.0 battle.
China's late start in AI development has created ample room for growth for the sector. The government-sponsored think tank, China Academy of Information and Communications Technology, estimates that there are currently 4,227 companies in China that are developing AI software. This number is significant, but it is only 16 percent of the global number of companies in this business segment. The absolute size of the market, however, such as the number of smartphone users, is the world's largest.
While AI is quite broad-based, some areas have proven to be particularly lucrative for investors. Some prefer to invest in areas that have proven their worth and have a higher potential for generating profits. These areas include AI within industrial robots, linguistic AI, HR, and design. Mobility with self-driving trucks and later cars is another growing area, but it has proved to be more complex than initially anticipated.
The possibility of a new megatrend exists within the metaverse. In a metaverse world, one can create an avatar of themselves and socialize with others on social media. However, the current hype in China is in generative AI, where software similar to ChatGPT is considered the new gold.
While the current gold-digging mood in China is exciting, challenges remain, particularly replicating complex functions of the human brain, such as intuition, abstract thinking, and common sense. Investing in AI presents significant potential for growth and profit, but the real-world complexities must be considered.
