Talk about taking away the punch bowl just as party gets going.
Alibaba
Group Holding had only just unveiled its new artificial-intelligence product when the Chinese government swooped in to dampen the mood.
Alibaba
(ticker: BABA) on Tuesday officially announced its long-awaited ChatGPT-style AI system. On the same day, Chinese regulators detailed draft measures for managing generative AI products, including requiring security assessments.
Alibaba
said it was launching its generative AI system, to be named “Tongyi Qianwen,” which roughly translates as “truth from a thousand questions.”
Alibaba said the system has English and Chinese language capabilities and will initially be added to DingTalk, its workplace-messaging app, and Tmall Genie, a smart-speaker system. It intends to integrate it into all the company’s apps in the near future.
“We are at a technological watershed moment driven by generative AI and cloud computing, and businesses across all sectors have started to embrace intelligence transformation to stay ahead of the game,” said Alibaba CEO Daniel Zhang.
How that plays out looks likely to be profoundly affected by the government’s latest move. The Cyberspace Administration of China on Tuesday published proposed rules that would require companies to go through a government security review before providing ChatGPT-style tools, Companies would be responsible for the content their AI services generate.
If those rules are put in place, Alibaba and its rivals could face greater risks in releasing AI products to their customers, potentially forcing them to limit the systems’ capabilities. Chinese AI developers already face challenges in training their models to conform with the country’s censorship policies.
American depositary receipts of Alibaba fell 1.1% in early trading.
While Alibaba is currently looking at splitting itself up, the scrutiny of the Chinese government means the company is likely to keep tight control of the AI business. Zhang personally runs the cloud-computing unit, which houses Alibaba’s AI offerings.
Alibaba is racing to keep up with both Western rivals and domestic peers. China’s
Baidu
(BIDU) launched its own AI chatbot last month. On Monday, the Chinese company
SenseTime
(0020.HK) held an event to showcase its own range of AI-powered applications including a chatbot and image generator.
Baidu stock closed down more than 5% in Hong Kong on Tuesday. SenseTime shares fell 0.9%.
Write to Adam Clark at adam.clark@barrons.com
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