OpenAI’s decision to block access for China-based developers will reshape the AI landscape in the region. Industry insiders and analysts believe this move will not hinder but rather accelerate the growth of the Chinese AI sector.
Zhou Hongyi, CEO of Qihoo 360, anticipates that the ban will drive Chinese users towards local AI models. Qihoo 360 has already developed its large language model (LLM). Despite OpenAI’s services being officially unavailable in China, developers have been using VPNs and APIs to bypass restrictions. However, the new ban is prompting a swift response from Chinese tech firms eager to capitalize on the opportunity.
In reaction to OpenAI’s ban, several Chinese companies are offering incentives to attract developers. Beijing-based Zhipu AI, for example, has launched a “special house-moving plan” to facilitate the transition to its platform. Major firms like Alibaba, Baidu, Baichuan, and 01.ai are also providing various perks, including discounts, freebies, and technical support. Baidu is offering free AI model fine-tuning and 50 million free tokens, while SenseTime Group Inc. is providing 50 million free tokens and Zhipu AI is giving away 150 million tokens along with training sessions.
The ban could significantly impact the market, leading to an exit of smaller startups that emerged during the “battle of a hundred models.” There are concerns about whether other open-source models, like Meta’s Llama, will also cut off access to Chinese developers.
OpenAI’s move will likely benefit local LLMs by reducing competition, but Chinese developers might face challenges accessing advanced global algorithms. This aligns with the US government’s efforts to limit Chinese access to advanced AI and semiconductor technology, impacting the broader US-China tech competition.
In the long term, the lack of access to global tools may slow down Chinese AI progress. Alibaba Chairman Joe Tsai estimates it will take two years for Chinese AI models to match their US counterparts. This situation might also accelerate the migration of Chinese tech startups overseas to find more stable markets.
Microsoft, however, is maintaining access to OpenAI models for eligible Hong Kong customers through its Azure cloud platform, with no changes to Azure OpenAI service offerings in Hong Kong. This continues to provide some developers in the region with the tools they need.
Overall, OpenAI’s ban is not a setback but a catalyst for growth and transformation in the Chinese AI sector. With over 200 home-grown LLMs, including 117 approved for public release, China is poised to strengthen its position in the global AI industry.
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