The ongoing decoupling between the United States and China is reshaping the tech landscape and fueling the growth of generative AI, a red-hot field that converts text into various content forms such as prose, images, and videos.
To reduce reliance on U.S. technology foundations, China has been actively developing its own large language models (LLMs) to compete with OpenAI’s GPT models. Unlike the U.S., China’s most advanced AI initiatives are emerging from established internet giants like Baidu.
In March, Baidu, known for its search engine and autonomous driving technology, introduced its version of ChatGPT. Now, the company aims to extend its involvement in the AI sector by investing in other AI startups. During a recent JPMorgan summit in China, Baidu’s co-founder and CEO, Robin Li, announced the launch of a one billion yuan ($145 million) fund dedicated to supporting generative AI companies.
This fund bears resemblance to the OpenAI Startup Fund, which started at $100 million and later expanded to $175 million. Baidu’s fund will invest up to 10 million yuan (approximately $1.4 million) in each selected project. Given the investment size, it is evident that the fund targets early-stage AI applications. This aligns with the current state of generative AI startups in China, which are still in the early phases of adoption, with most investments concentrated in seed and early stages.
Additionally, Baidu intends to leverage the fund to drive the adoption of its own large language model, Ernie Bot. Robin Li stated, “While American developers are building new applications based on ChatGPT or other language models, in China, there will be an increasing number of developers building AI applications using Ernie as their foundation.”
Thus, the fund’s focus appears to be on promoting AI applications rather than developing foundational AI technologies. With China’s track record of innovative business models, from live streaming to short videos, Baidu anticipates that Chinese companies will once again take the lead in discovering commercial applications for AI in the generative AI era.
However, a crucial question remains: Will China’s homegrown large language models be robust enough to support the diverse real-life scenarios expected of them? China seeks to develop its LLMs to mitigate the risk of U.S. sanctions that could disrupt key technological supply chains, as witnessed in the semiconductor industry. In addition to Baidu, other Chinese tech giants like Alibaba and Tencent are also working on their own large language models.
