China's artificial intelligence (AI) sector is rapidly advancing, matching the pace set by the United States in the development of cutting-edge technology. The country has witnessed a notable increase in the adoption of generative AI among businesses. Over 10% of Chinese businesses are now using this innovative technology, up from 8% just six months ago. Noteworthy developments in the sector are driven by major tech companies like Baidu, Alibaba, and Tencent, which are developing applications and tools that integrate AI into everyday business and consumer experiences.
Baidu's ChatGPT-like Ernie bot received approval from Beijing for a public rollout in August 2023, marking a significant milestone for the company. Meanwhile, the Wenku platform, known for its ability to swiftly create presentations and documents, achieved substantial growth with 40 million paying users and a 60% increase in revenue compared to the previous year. Similarly, Alibaba's international arm announced that Accio, an AI-powered search engine for product sourcing, has gained traction among small businesses, now serving 500,000 users. Accio empowers businesses by allowing them to use text or image prompts to find wholesale products and providing detailed analysis on their consumer popularity and potential profitability.
The integration of AI features is also evident in China's domestic smartphone industry. Companies such as Honor, Xiaomi, and Vivo are incorporating these features to enhance user experiences. Tencent plans to integrate AI agents with WeChat, its popular messaging and social media app, further embedding AI into daily activities. In contrast, Apple's AI intelligence functions have yet to reach iPhone users in China, highlighting a gap between local and international tech giants.
"We believe that China's AI sector is advancing at a pace comparable to that of the United States," remarked Jo Huang, head of private equity at Raffles Family Office.
The evolving landscape of AI in China is characterized by rapid advancements and strategic investments. Notably, a leading China AI deep tech fund is under consideration for investment by Raffles Family Office, indicating strong confidence in the sector's potential. Chinese tech companies like DeepSeek and ByteDance have also been proactive in developing AI models that rival OpenAI's ChatGPT, further emphasizing their competitive stance.
"I think [multinational corporations are] much more cautious than Chinese brands because of copyrights and legal issues," observed Chris Reitermann, CEO of Ogilvy Asia-Pacific and Greater China.
"Local brands, they may be a little less worried about these issues, more trial and error," he added.
Chinese companies are leveraging their ability to swiftly experiment with AI technologies without being bogged down by concerns over copyrights and legalities. This approach has enabled them to innovate rapidly and introduce new features that cater to regional preferences. Wei Sun, principal artificial intelligence analyst at Counterpoint Research, noted a shift towards a growing preference for local brands offering advanced AI features tailored to local consumer needs.
"There is also a shift towards a growing user preference for local brands that can offer advanced AI features tailored to regional consumer preferences," stated Wei Sun.
The potential of AI applications extends beyond current implementations. The next gamechanger is anticipated to involve using AI to seamlessly insert product images into various scenarios for advertising purposes. AI agents are expected to expedite the corporate implementation of these emerging technologies. Despite the rapid growth, the recent 2 percentage point increase in generative AI adoption took over a year to materialize, underscoring the challenges associated with widespread integration.
"With our clients, we hear more and more success stories," shared Ben Yan, Gartner data and analytics director analyst.
Success stories abound as businesses continue to explore the potential of AI technologies. The consistent growth in user adoption suggests a promising future for generative AI in China. As both local and international companies focus on developing innovative solutions, the competition between China's AI sector and global counterparts remains intense.