China's price competition on AI and the Japanese who “don't know how you can use it”

Greetings from Yifan in California, your #techAsia host this week. I just got back from Independence Day, which officially kicked off the summer season.

I've attended several 4th of July and summer parties in Silicon Valley over the past few weeks. While AI continues to be the most well liked topic on the town, the upcoming US presidential election also got here up in almost every conversation I had or overheard.

While California stays a deep blue state, Silicon Valley has been divided over Biden and Trump lately as some within the traditionally liberal tech industry began to lean right following the Covid-19 pandemic and social justice movements like Black Lives Matters. The shift was led by tech billionaires like Elon Musk, who has spoken out against so-called “woke culture.”

But neither presidential candidate was particularly popular on the parties I attended. One reason is that they don’t have any plan for the way they plan to control the rapidly evolving field of artificial intelligence. The tech industry doesn't like regulation, but because the founding father of an AI startup told me, “No industry can thrive in the long run without regulation. That's chaos.”

As AI becomes more widespread and powerful, the U.S. needs a concrete plan to control this technology, and neither Trump nor Biden have offered anything.

After President Biden’s lower than outstanding debate against former President Trump, calls for a brand new Democratic presidential candidate are growing. Vice President Kamala Harris, who some see because the almost certainly successor should Biden withdraw from the race, has led the administration's efforts to control AI, including attending a world AI security summit hosted within the UK last 12 months. The US could have a clearer path to federal AI regulation if Harris ultimately results in the White House.

Whoever is elected, Washington's goal of outpacing China in technology is not going to change, nor will its crackdown on the country's access to American AI technologies. ChatGPT developer OpenAI recently informed users in China that they’d be banned from using its tools starting July 9, and a few politicians are even pushing for export controls on open-source AI models.

Will such measures hinder China's AI development or inadvertently boost the expansion of domestic developers? We may have to attend and see.

AI at a bargain price

While much of the world continues to be attempting to determine how you can commercialize artificial intelligence, a price competition has already begun amongst developers of AI models in China. OpenAI's decision to dam all access from the country has fueled the race between Chinese web giants and startups to Filling the gap.

Companies like Alibaba, Baidu, TikTok owner ByteDance and various startups are competing to supply a lower cost per 1 million tokens. Tokens are a unit used to measure the variety of words in a question or answer, in line with Nikkei Asia's Wataru Suzuki writes.

While price cuts might help increase sales, they don’t contribute to profitability. How sustainable can a price competition be when AI's path to profit continues to be unclear?

Financing power

Neil Shen, China's strongest technology investor, launched the biggest fund by a personal enterprise capital firm in China last 12 months despite a financing freeze.

The Financial Times revealed this week that his enterprise capital firm, which has been called HongShan because the spin-off, has launched a fund of 18 billion RMB (2.5 billion dollars) this 12 months, Tabby Children And Eleanor Olcott.

This is the corporate's seventh yuan fund and comes almost exactly a 12 months after its separation from Sequoia Capital.

Shen has launched a $9 billion fund in 2022 but has struggled to deploy that capital amid rising geopolitical tensions between Washington and Beijing, including President Joe Biden's proposals last month to ban U.S. investment in sensitive Chinese technologies akin to artificial intelligence, quantum computing and chips.

Shen's latest yuan fund gives him more clout to launch Chinese startups, including in sensitive industries.

Who uses it?

Many of our #techAsia readers now take using AI as a right. From ChatGPT to Microsoft CoPilot, generative AI tools have quickly develop into an important a part of our lives.

However, only 9.1 percent of individuals in Japan use generative artificial intelligence, Nikkei’s Kensuke Watanabe reports.

According to the Japanese government's 2024 White Paper on Information and Communication, Japan is lagging behind within the adoption of generative AI. In contrast to Japan, 56.3 percent of respondents in China, 46.3 percent within the United States, 39.8 percent within the United Kingdom, and 34.6 percent in Germany said they use generative AI.

The commonest reason for not using generative AI in Japan was that individuals “don’t know how you can use it.” More than 40 percent of survey respondents said that generative AI “will not be needed in my every day life.” That’s greater than in the opposite 4 countries.

Appetite for Turkey

China's BYD will invest 1 billion dollars in Turkey The group plans to construct a factory for electric and plug-in hybrid vehicles with an annual capability of 150,000 units. This will create a second European production and export center along with the production and export center currently being in-built Hungary.

This can be the primary EV factory by a foreign manufacturer in Turkey. The facility is predicted to start out production before the tip of 2026 and is predicted to employ 5,000 people, in line with Nikkei's Sinan Tavsan writes.

The news got here after the European Union decided to impose significantly higher tariffs on electric cars from China. The higher tariffs have come into effect temporarily while negotiations between Beijing and the 27-nation bloc proceed. A final vote by member states will happen in October to make a decision whether to lock within the tariffs for the following five years.

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