NOBODY WILLING TO BACK OUT OF THE RAT RACE
An industry concentration would help ameliorate some of the pressures. But instead, the release of DeepSeek’s market-moving reasoning model earlier this year has only spurred fresh pandemonium. Nobody seems willing to back out of the rat race anytime soon.
There were more than 3,700 registered generative AI tools operating in China, according to one analysis of government registration data as of April, and cyberspace administrators were approving roughly 250 to 300 new products per month. Not all will survive.
Some firms may be tempted to seek growth abroad. But geopolitical realities may get in the way of making it in overseas markets, where consumers have shown more willingness to pay for AI services.
Already, countries from Australia to Italy are restricting the use of DeepSeek or banning it on government devices. There was brief hope that the rise of AI agents would offer a way to differentiate a company’s products, but even this has already become a crowded field.
This puts the Little Dragons at higher risk. Tech giants like Alibaba, ByteDance and Tencent have more resources to play the long game, especially in a sector marked by high costs for chips and computing resources.
Official support and insatiable hype remains a strong propellant of China’s AI sector. A former top official predicted earlier this week that the nation is on the cusp of generating more than 100 DeepSeek-like breakthroughs. But in the long run, it seems just as likely to produce at least a hundred zombie chatbots or AI agents.
Read the full article here
