Chinese companies are making announcements about artificial intelligence again – this time about applications. Search engine giant Baidu unveiled a platform for creating advertising campaigns – similar to Google’s AI-powered ads – alongside other AI tools earlier this month. Early corporate testers of Baidu’s AI advertising platform called QingGe told reporters that conversion rates increased by 20% – and in a fraction of the typical time it would normally take an agency. “Early movers in the [large language model] “The market has already begun the commercialization process, and regulatory approval to open more than 10 LLMs to the public has further removed barriers to monetization,” Nomura analysts said in a Sept. 10 note, citing meetings with companies and industry experts in Beijing in the few days before. Around the same time, Tencent announced that it was integrating its AI model into advertising content creation and its own Zoom-like video conferencing app. The company also opened the waiting list for a ChatGPT-like chatbot integrated into its social messaging app WeChat. The app, known locally as Weixin, has more than a billion users. That scale is the advantage China has had, coupled with the ability to increase internet penetration to support an online ecosystem – from Taobao e-commerce sales to scan-to-bike stocks. Receptive consumer Locals are still eager to get involved. Luckin Coffee teamed up with Chinese alcohol giant Kweichow Moutai this month to sell a spiked latte. More than 5.4 million cups were sold on the first day, Luckin said. This surge in popularity reinforces “our understanding and belief that Chinese consumers are very open to new products,” Joey Wat, CEO of KFC parent company Yum China, told me on Friday. Her company is also exploring how to use generative AI to boost business. However, she said the technology needs to understand more about internal operations before it can be truly helpful. It’s also not clear how powerful China’s AI applications currently are, beyond demos and select business partnerships. “Overall, we generally see a Chinese language model[s] still lagging behind the most advanced ChatGPT version 4,” CLSA’s Tony Zhang said in a phone interview last week. But “China’s LLM is developing and improving very quickly.” He said some new AI tools in China – such as integration into word processing, in commercial advertising or in consulting – could be the first areas of real commercial use be. “There are some types of applications that are open to the general user, to some enterprise users. I think this is a necessary process.” [a] model to improve their monetization model and also explore,” he said. In general, the more generative AI is used, the better it should become. With Beijing’s green light, public-facing AI applications like Baidu’s Ernie bot can now be widely used in China. Alibaba Cloud said on Wednesday that it is releasing its major language model Tongyi Qianwen to the public and working with Taobao, smartphone brand Oppo and others to build applications. How to play it. Testing alone can bring in revenue. Generative AI and revenue related to large language models 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 companies, the investment firm has a neutral rating on Baidu and a buy rating on Tencent, according to analysts who visited this month. To get a sense of what applications at scale can mean for business efficiency and reach, it’s worth taking a look at the giant in the space of AI and consumer-focused applications: ByteDance, owner of TikTok and its equally popular version in China, Douyin. The apps allow brands to quickly assess what’s working – and what’s not – with consumers, said David Xie of Oliver Wyman. He’s working on an upcoming report with Douyin that found that a clothing brand was able to use its presence on the app to get consumers to buy much faster than on Alibaba’s Tmall – by about two weeks. “Before,” he said, “if you don’t have a content platform like this, you could only do a survey with 2,000 samples.” In China, there is a market of hundreds of millions of internet users who can’t easily use ChatGPT or Google .

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