China Has Not Yet Had Its ChatGPT Moment, Says Kai-Fu Lee

The Chinese startup, initiated by Kai-Fu Lee, who is a technology pioneer, is going to launch its first AI app for consumers, a measure designed to help China stand against its Western rivals.

China is waiting for it. ChatGPT moment

Lee’s company, 01.AI, is developing a series of AI products, and the one they are launching first is called Wanzhi, which is a free productivity assistant. The product is tailored for the Chinese market, and users can create spreadsheets, presentation slides, and documents with it more quickly in a way like Microsoft’s Office 360 Copilot works.

The app works in Chinese and English and is capable of interpreting financial reports, noting minutes of meetings, and reading books at speed to provide a summary or a brief outline.

China needs its own ChatGPT, said Lee in an interview with Bloomberg, to enhance interest, investment, and adoption. OpenAI’s chatbot is banned in China.

In a Zoom call with the publication from Beijing, Lee said that

“For Americans, the moment happened 17 months ago; China’s users didn’t have a ChatGPT moment. Until now, none of the Chinese chatbots or tools have been good enough.” Source: Bloomberg.

62-year-old Lee was born in Taiwan and has worked for Apple and Google previously. Around 10 years ago, he started his own venture capital firm, and last year he became CEO at 01.AI. The startup achieved Unicron status as it reached a valuation of $1 billion in just eight months because of its success in developing an open-source model of artificial intelligence that performed better on many key measures compared to its rivals from Silicon Valley.

Beijing is ensuring a non-competitive local market for national players

While Chinese firms are trying to catch up, US firms like OpenAI, Google parent Alphabet, and Meta Platforms are ahead of them in AI with striking models already catering to users. Along with Lee’s 01.AI, other Chinese firms like TikTok’s master company BiteDance and search giant Baidu are also investing heavily to develop their own chatbots and AI products.

Beijing’s alleged Great Firewall restricts foreign artificial intelligence models because of its extremely strict censorship policy, but the country also ensures to keep global competition at a distance and to let its national players leverage the local market, which is quite vast.

01.AI is also launching a large language model called Yi-Large as an enterprise solution. This is the same technology that works behind chatbots. According to Lee, their model will be available at lower prices to developers, even less than what the GPT-4 Turbo offers. He noted that for 1 million input tokens, the API will cost $2.50, and for 1 million output tokens, the price will be $12. As we know, each query consumes both input and output tokens, so at this price, developers will be able to send and receive nearly 25 replies.

China is under US restrictions for AI accelerators from Western producers like Nvidia, which holds an 80% share of graphic processors required for AI development, but companies like Lee’s 01. AI has already stocked a huge number of these accelerators from the semiconductor maker.

When the US was planning and working on banning exports, 01.AI’s backer Alibaba Group Holdings Ltd supplied already acquired Nvidia H100s to Lee’s company. 01.AI also used less powerful accelerators, like the Nvidia H800, to satisfy its needs. H100 and H200 are Nvidia’s flagship processors that are used in machines for training advanced AI models. Mentioning the processors, Lee said,

“Our models have been trained on H100s processors legally brought into China. Necessity is the mother of invention; we squeeze everything we can from the compute available.” Source: Bloomberg.

While many global AI startups are yet to incur expenses, Lee’s company is edging towards profitability. The firm is in negotiations with global and domestic partners to boost revenue.

Wanzhi is debuting a version with advanced features for PCs and another version for mobile users, which will be available through WeChat.