Chinese firms are making more announcements about artificial intelligent – but this time they’re about applications. Baidu, the search engine giant, revealed earlier this month, among other AI features, a platform to create advertising campaigns, similar to Google’s AI ads. QingGe is Baidu’s AI-powered ad platform. Early corporate testers told reporters that conversion rates were up by 20%, and in a fraction the time it would normally take an agency. Nomura analysts stated in a note dated Sept. 10, that “early movers have started the commercialization of the [large language model] industry, and regulatory approval has cleared the roadblocks for monetization.” They cited meetings held with business and industry experts just a few days earlier in Beijing. Tencent also announced that it would integrate its AI model in the creation of advertising content and create its own Zoom-like app. The company has also announced the opening of a waitlist for ChatGPT, a chatbot within its social messaging application WeChat. The app, locally known as Weixin has over 1 billion users. China’s scale, combined with its ability to increase internet penetration and support an online eco-system – from Taobao sales to scan to ride bike sharing – is an advantage. Consumers in the locality are open-minded and still willing to participate. Luckin Coffee and Chinese alcohol giant Kweichow Moutai teamed up this month to create a spiked latté. Luckin Coffee reported that it sold over 5.4 million cups in the first day. Joey Wat told me Friday that this surge in popularity “reinforces the fact that Chinese consumers are open-minded to new products”. She said her company is exploring the use of generative AI in order to boost its business. However, she added that it needs to learn more about how internal operations work before it will be able to help. China’s AI capabilities are not yet fully understood, and they go beyond demonstrations and selected business partnerships. Tony Zhang, CLSA’s Tony Zhang, said in an interview by phone last week that the Chinese language model[s] is still behind the most sophisticated ChatGPT version 4. China’s LLM, however, is improving and developing at a rapid pace. He said that some of the new AI tools being developed in China, such as those used in word processing, commercial advertising and consulting could be the first to have a real commercial application. He said that some applications are available to all users for enterprise users. I believe this is an important process. [a] models to improve, and also explore the monetization model, he added. The more AI generated by generative processes is used, it should get better. With Beijing’s approval, AI applications for the public such as Baidu Ernie bot and other AI-based services can now be widely used throughout China. Alibaba Cloud announced on Wednesday that it would be opening up its large language model Tongyi Qianwen for the public and working with Taobao as well as smartphone brand Oppo to create applications. It’s easy to make money by just testing. Nomura analysts cited by company management said that revenue related to large language models and generative AI accounted for 20% of SenseTime’s revenue in the second half of 2023. Nomura does not have a rating for SenseTime or the majority of companies that the analysts visited in the last month. However, it has a neutral ranking on Baidu, and a Buy rating on Tencent. ByteDance is the owner of TikTok, and Douyin, its Chinese version, which is also popular. David Xie, an Oliver Wyman consultant, said that the apps help brands quickly determine what is popular with consumers. David Xie is working with Douyin on a report that shows how one apparel brand used its presence on the app’s to influence customers to purchase much more quickly than they could on Alibaba’s Tmall. This was by two weeks. He said that before, when you didn’t have this kind of platform, you could only run a 2,000-sample study. There are hundreds of millions internet users in China who cannot easily use ChatGPT and Google.
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