Major Chinese companies have accelerated their pace of adoption artificial intelligence (AI) this year, with the number of related contracts soaring in the first half, government data show.
The number of tender contracts for services using large language models (LLMs) where successful bidders were found more than doubled between the first and second quarters – from 23 in the three months to March to 58 from April to June 24 – according to figures published on the websites of the China Government Procurement and the China Tendering and Bidding Public Service Platform. The keyword was used in all contracts damoxenthe Chinese term for LLM.
LLMs are the technology underlying conversational AI bots such as ChatGPT from OpenAI. Since Microsoft-backed OpenAI debuted its popular chatbot in late 2022, Chinese tech companies have scrambled to release hundreds of their own LLMs and products running on them. Only one tender contract related to LLMs was signed in the first half of 2023, before a jump in the last quarter of the year, the websites show.
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The contracts reflect the interest of major Chinese companies, as public disclosures are only required for projects involving public interests and security, public funds or loans from foreign entities. Tech giants Baidu, Huawei Technologies and Tencent Holdings – in addition to several well-funded start-ups – were among the providers with successful bids in the first half.
The figures provide a glimpse into the growing adoption of AI in China, which is receiving the most attention in this area, and the industries where these technologies are being applied.
Operators in the energy, telecoms, financial and scientific research sectors are the most keen to tap into the potential of LLMs, with these sectors seeing 19, 14, 12 and 10 deals respectively.
A district environmental protection bureau in Beijing purchased custom-made LLMs to help predict flood seasons. The Nuclear Power Institute of China and China Merchants Securities are counting on LLMs developed by Beijing-based start-up Zhipu AI to help organize knowledge from materials collected over years of operations for easier use by staff, according to contracts reviewed by the Post.
Chinese power plants also want to use LLMs to detect flaws in a variety of equipment used in power grids and for oil exploration.
The most prolific bidders were not China’s traditional internet giants. Zhipu AI, known as one of China’s four “AI tigers”has won the most LLM-related contracts this year at the age of 12. AI firm iFlyTek, a US-sanctioned company known for its speech recognition technology, has successfully bid for 10 contracts from Chinese state-owned enterprises and government agencies.
Baidu and Huawei followed with five and three successful bids respectively.
On a month-on-month basis, there was a significant increase in the pace of bidding for LLM contracts in the second quarter. In January, February and March there were nine, five and nine contracts with successful bids respectively. That number rose to 20 in April and then to 24 in May. In June there were fourteen.
Of the 81 contracts with successful bids this year, the most lucrative came from PipeChina, officially known as China Oil & Gas Piping Network Corporation, which is paying 152.6 million yuan (US$21 million) for LLM-related technology from Taifu Industry, a subsidiary from state-affiliated Shandong Energy Group.
Taifu will develop both software and hardware for training and developing LLMs for PipeChina, which oversees the management of the country’s extensive oil and gas pipelines. The contract did not specify how these LLMs will be used.
The total value of all 81 contracts is 433 million yuan, with an average of 5.3 million yuan per contract.
This article originally appeared in the South China Morning Mail (SCMP), the most authoritative voice covering China and Asia for more than a century. For more SCMP stories, please visit the SCMP app or visit the SCMPs Facebook And Tweet Pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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