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China’s AI ‘war of a hundred models’ heads for a shakeout

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China’s craze over generative artificial intelligence has triggered a flurry of product announcements from startups and tech giants almost daily. Still, investors are warning a shakeout is imminent as cost and profit pressures grow.

The buzz in China, first ignited by the success of OpenAI’s ChatGPT almost a year ago, has given rise to what a senior Tencent executive described this month as a “war of a hundred models”, as it and rivals from Baidu to Alibaba to Huawei promote their offerings.

China now has at least 130 large language models (LLMs), accounting for 40% of the global total and just behind the United States’ 50% share, according to brokerage CLSA. Companies have also announced dozens of “industry-specific LLMs” that link to their core model.

However, investors and analysts say that most were yet to find viable business models, were too similar to each other and were now grappling with surging costs.

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