Chinese language synthetic intelligence (AI) firms, together with tech giants Alibaba Group Holding BABA and ByteDance, are investing closely in promoting to realize a foothold within the aggressive AI market.
Within the third quarter alone, these firms spent over 500 million yuan ($70.2 million) on promotional campaigns for varied AI functions, SCMP reports.
Among the many huge spenders, Alibaba allotted almost 200 million yuan to advertise Quark, a cloud storage and on-line search platform enhanced with generative AI options.
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Spending on its ChatGPT-like service, Tongyi Qianwen, was notably decrease at 4.5 million yuan. A Tongyi Qianwen spokesperson disputed this determine, SCMP says.
The numerous advertising and marketing budgets have sparked considerations inside China concerning the sustainability of such excessive spending.
Chinese language AI startup Moonshot AI, backed by Alibaba and Tencent Holdings TCEHY, is among the many prime advert spenders, with roughly 150 million yuan dedicated to selling its chatbot.
The corporate’s substantial advert price range displays the more and more crowded AI market, the place lots of of chatbots are vying for person consideration. Nevertheless, a supply near Moonshot instructed the SCMP that AppGrowing’s knowledge on the corporate’s advert spending is exaggerated.
Yan Junjie, CEO of Shanghai-based AI agency MiniMax, highlighted a basic distinction in technique between Chinese language and U.S. AI firms.
Whereas American firms depend on product capabilities to draw customers, Chinese language firms closely spend money on on-line advertising and marketing to distinguish their choices.
Chinese language tech giants Alibaba, Tencent, and Baidu Inc BIDU spent $7 billion on AI-focused infrastructure and processors within the first half of this yr, a major rise from final yr.
Regardless of elevated spending, China’s AI capital investments lag behind U.S. companies like Alphabet Inc GOOG GOOGL, Amazon.Com Inc AMZN, Meta Platforms Inc META, and Microsoft Corp MSFT, which spent $106 billion. Wedbush analyst Dan Ives projected $1 trillion in AI capital spending by U.S. tech giants, with Nvidia Corp NVDA a key beneficiary.
Worth Motion: BABA inventory traded decrease by 2.93% at $96.31 on the final verify on Wednesday.
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