News Analysis: How are Chinese AI firms reacting to OpenAI's API restrictions?

Chinese artificial intelligence (AI) firms are swiftly courting users of OpenAI's technology amid reports that the U.S. company intends to limit access to its application programming interface (API), a platform that allows developers of other products to integrate its AI models, in China and other nations.

OpenAI, known for its ChatGPT model, is reportedly planning to restrict access to its AI-building technology for entities based in China and other countries, Chinese newspaper Securities Times reported on Tuesday.

Although ChatGPT itself is not directly available on the Chinese mainland, numerous Chinese startups have leveraged OpenAI's API platform to develop their own applications, the Securities Times said.

"We are taking additional steps to block API traffic from regions where we do not support access to OpenAI's services," said an OpenAI spokesperson in a statement to Reuters.

Since late Monday, Chinese users of OpenAI's platform have been receiving emails informing them that their region is not currently supported by OpenAI. Starting on July 9, additional measures will be implemented to block API traffic from these unsupported regions.

How China reacts?

Chinese billionaire entrepreneur Zhou Hongyi took a positive stance on OpenAI's reported plans to restrict access in China.

In a video posted Wednesday on Weibo, a popular Chinese social media platform, Zhou, Qihoo 360 Technology Co., Ltd.'s founder and chairman, stated that OpenAI's suspension of services in China could actually act as a catalyst for the development of China's domestic large language model industry. "It might not be a bad thing after all," said Zhou.

He further elaborated that with OpenAI's API no longer accessible, domestic applications would be compelled to adopt Chinese large language models. This shift, could potentially bridge the gap between China's domestic models and OpenAI's GPT, Zhou added. 

Over the past year, numerous Chinese companies have introduced chatbots powered by their proprietary AI models, signaling a robust evolution within the country's AI landscape.

In response to OpenAI's announcement, Baidu, China's leading AI developer, unveiled plans to introduce an "inclusive program." This initiative aims to facilitate a smooth transition for new users to migrate to its Ernie platform. Baidu's cloud unit stated that it will provide new Ernie 3.5 flagship model tokens to match the scale of usage that OpenAI users currently have. Tokens represent units of text processed by AI models.

Similarly, Alibaba Cloud has also stepped in, offering free tokens and migration services to users of OpenAI's API through its own AI platform. According to Alibaba, a Chinese tech giant, its Qwen-plus model is competitively priced compared to GPT-4.

In addition, Zhipu AI, another prominent player in China's AI sector, announced a special program tailored for users of OpenAI's API. "Our GLM model fully benchmarks against OpenAI's product ecosystem. With our entirely self-developed technology, we ensure security and controllability," said Zhipu AI.