Generative Artificial Intelligence — China Big Tech Firms Experiment with Personalised Chatbots: 7 Insightful Talking Points

Chinese Big Tech firms are intensifying efforts to capitalise on the consumer-facing generative Artificial Intelligence (AI) services market, seizing an opportunity in the absence of competition from OpenAI’s ChatGPT and Google’s Bard.

Amid China’s annual Singles’ Day shopping festival, Alibaba Group Holding’s Taobao marketplace has introduced a novel virtual product – a digital assistant named Duxiaoxiao, powered by Baidu’s AI chatbot, Ernie Bot, and customised to align with the preferences of individual buyers; It’s noteworthy that Alibaba also owns the South China Morning Post.

Baidu has not provided an immediate response to a request for comment. Despite being just a few days old, the shop featuring the digital assistant Duxiaoxiao on Taobao has quickly gained over 20,000 followers and has recorded sales of more than 600 items, as indicated by Taobao shop records.

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Meintuan, Has Followed Suit with Its Very Own Generative Artificial Intelligence Service

In the same vein, Meituan, the prominent Chinese delivery services giant, has recently introduced its generative Artificial Intelligence service, Wow, a chatbot celebrated as a “Community of AI friends for youngsters”, that engages users with a personalised touch, drawing on various foundational AI models.

While still in development and undergoing testing, according to an unnamed source due to lack of authorisation to speak to the media, this internal project showcases the ongoing efforts of Chinese Big Tech firms to deliver a varied array of generative Artificial Intelligence services to both consumers and enterprise clients, underscoring the escalating costs associated with the competition to build and refine generative Artificial Intelligence models and products.

Morningstar Asia analysts, in a client note from July, expressed the view that the revenue contribution from generative Artificial Intelligence might be comparatively modest when contrasted with the contributions from core businesses at companies like Baidu and Alibaba. Despite their intensified marketing efforts in AI services targeting sectors such as IT, finance, legal, entertainment, and transport, the analysts suggested that the impact of generative Artificial Intelligence on overall revenue might remain limited compared to the robust contributions from established core business operations.

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How Does Baidu’s Qianfan Operate?

Baidu’s Qianfan, operating as a model-as-a-service platform, provides clients with access to a range of AI models and capabilities, starting at a price of 0.002 yuan (USD $ 0.00027) per 1,000 tokens. For access to the more robust Ernie Bot 4.0, the pricing is set at 0.12 yuan (USD $ 0.016) per 1,000 tokens. In this context, tokens represent the units of text that AI models read and generate.

In addition, Baidu introduced a paid version of Ernie Bot at the end of the previous month, with a monthly subscription fee of 59.9 yuan (USD $8.21). For users opting for auto-renewal subscriptions, the cost is reduced to 49 yuan (USD $ 6.72) per month. This move represents an effort to monetise and offer enhanced features for the more potent Ernie Bot 4.0.

In contrast, OpenAI adopts a subscription model with a monthly fee of 145.88 yuan (US$20) for its ChatGPT Plus membership. This subscription offers subscribers benefits such as faster response times and access to the more advanced GPT-4 large language model. This illustrates a different pricing approach compared to Baidu’s Ernie Bot subscription model.

The Development of Home-Grown AI Services Remains Strict in China

During its inaugural developer event, San Francisco-based OpenAI reported that ChatGPT has amassed over 100 million weekly active personal users, indicating significant global demand for personal AI products.

It’s worth noting, however, that in China, the development of home-grown AI services faces strict government restrictions. Beijing has only granted approval to a limited number of AI chatbots, and there are already stringent regulations in place governing the use and development of this emerging technology.

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7 Key Talking Points About How China Is Managing Its AI Services

These regulatory constraints may pose challenges to the future expansion and development of AI services in China. Here are some key aspects of how China has been managing its AI chatbots:

1. Regulatory Framework

China has implemented a regulatory framework to govern the development and deployment of AI technologies, including chatbots. This framework includes guidelines for data privacy, security, and ethical use of AI.

2. Approval Process

The Chinese government has a centralised approval process for AI chatbots. Companies must seek approval before deploying AI chatbots, and only a limited number of chatbots have received official approval.

3. Data Privacy and Security

China places a strong emphasis on data privacy and security in the context of AI applications, including chatbots. Companies are required to adhere to strict standards to protect user data and ensure that generative Artificial Intelligence systems operate in compliance with privacy regulations.

4. Ethical Use of AI

Guidelines for the ethical use of AI have been established to ensure that generative Artificial Intelligence technologies, including chatbots, are developed and deployed in a manner that aligns with societal values and norms.

#ChinaDailyCartoon Key to the future #AI pic.twitter.com/HdLcUHvBMk

— China Daily (@ChinaDaily) November 13, 2023

5. Monitoring and Enforcement

There is likely ongoing monitoring and enforcement of generative Artificial Intelligence regulations to ensure compliance. Non-compliance with regulations can lead to penalties or other legal consequences for companies.

6. National Security Considerations

Given the sensitive nature of AI technologies, including potential national security implications, China may apply additional scrutiny to AI applications, and this could impact the deployment of AI chatbots.

7. Promotion of AI Innovation

While there are regulatory controls, China also recognises the strategic importance of generative Artificial Intelligence innovation. The government has been supportive of AI development in various industries, fostering innovation while maintaining regulatory oversight.

It’s essential to keep in mind that the regulatory landscape and government policies can evolve. As of my last update, China had a proactive approach to managing AI chatbots, balancing innovation with regulatory control and ethical considerations. For the latest information, it’s recommended to refer to recent government announcements, regulatory updates, and industry news.