OpenAI’s sudden move to restrict access to its services in China has set the stage for a battle between domestic AI players, from Alibaba (NYSE:BABA) to Baidu (NASDAQ:BIDU), to grab more of the space in the AI arena, Bloomberg News reported.
Microsoft (MSFT)-backed OpenAI sent memos this week to Chinese users warning it will ban access to its AI development software and tools from July 9.
Since Tuesday, several companies including Tencent (OTCPK:TCEHY) (OTCPK:TCTZF) and Zhipu AI started offering incentives to developers to make the switch, the report added.
Baidu has vowed free AI model fine-tuning and expert guidance for its AI model Ernie, plus 50 million free tokens which developers can use to for asking questions to the bot. Meanwhile, Alibaba and Tencent posted ads encouraging a switch to their platforms.
Baichuan — which is backed by Alibaba and Tencent — has offered 10 million free tokens, SenseTime (OTCPK:SNTMF) has promised 50 million tokens, and Zhipu has offered 150 million tokens and training sessions for easing the transition. Tech pioneer Kai-fu Lee’s 01.AI has also offered heavy discounts.
Even Microsoft has published a guide on WeChat on how to migrate its local service, operated by domestic partner 21Vianet, the report noted.
Generative AI services have become the talk of the town since the launch of OpenAI’s ChatGPT in 2022. Globally, companies have launched their own large language models, or LLMs, which can provide services such as content, image, video and voice generation, to name a few.
Alibaba’s (BABA) Qwen2.5, Tongyi Qianwen 2.0, and Tongyi Wanxiang, Baidu’s (BIDU) Ernie Bot and Tencent’s Hunyuan are some of the LLMs, among the many, being developed.
Last month, Alibaba, Baidu, Bytedance (BDNCE), Tencent and iFlytek cut prices of their LLMs services, igniting a price war in the cloud arena in the country.
China has set up a 344B yuan ($47.5B) investment fund to boost its semiconductor industry. The investment push comes amid U.S. curbs aimed at restricting China’s access to advanced chips and equipment, including those used for making AI products. The U.S. and its allies including the Netherlands, Germany, South Korea and Japan have also been tightening curbs on the Asian country’s access to advanced semiconductor technology.