Still, Xia’s investment firm remains cautious when it comes to investing in Chinese start-ups working on large language models (LLMs), the technology that underpins ChatGPT-like services, he said.
Chinese start-ups hoping to join the generative AI race face an underdeveloped capital market in the country, where most investment institutions and government-backed funds are hesitant to put in billions of dollars or wait more than a decade for the companies to succeed, according to Xia.
“It’s difficult for very fundamentally innovative technologies in the field of AI to come out of China in the short term,” he said. “So we’re not very hopeful of investing in ChatGPT-like services.”
BYD grew from a battery maker in 1995 into the world’s largest electric vehicle maker last year. Photo: AP
Zhou Hongyi, founder and chairman of Chinese cybersecurity firm 360 Security Technology, said earlier this month that government bodies and enterprises in China should take a cautious approach towards adopting LLMs by keeping them “in a cage”, separate from their main businesses, because the tech is still “unreliable”.
Investment interest in generative AI is high in China, where the largest number of start-ups in the industry received funding in the first half of the year, according to a report by Zhidongxi, an AI-focused research firm in China. Of 51 generative AI start-ups to receive funding around the world for the period, 22 were in China compared with 21 in the US.
China’s AI market continues to attract high-profile figures. Lee Kai-fu, a prominent venture capitalist and former president of Google China, earlier this month unveiled his new venture Lingyi Wanwu, which aims to develop its own LLM.
Lee called LLMs a “historical opportunity” that China must not miss, adding that China faces risks such as high fees and restricted access if it keeps relying on open-source models built by foreign companies.
