Startups and Big Tech in Asia
Alphabet Inc.’s Google, Microsoft Corp., and Baidu Inc. are all fiercely competing to create the world’s most advanced chatbot. However, it was a startup that ignited this worldwide frenzy. OpenAI, now flush with cash thanks to a $10 billion investment from Microsoft, has demonstrated that this moment presents opportunities for smaller players to succeed.
One of the most significant challenges of artificial intelligence (AI) is figuring out the best way to use it, and startups have an advantage in being able to experiment more freely. Google’s ChatGPT competitor, Bard, lost $120 billion in market value overnight after making a mistake during a public demonstration.
Entrepreneurs in China and India contend that tech behemoths will have to collaborate with startups to win the race. The former has the necessary computational power and exclusive data troves to make chatbots sound intelligent, while the latter has the ability to experiment with bold and potentially foolish ideas.
One Indian startup, Synth AI Labs Inc. founded by Urvin Soneta, uses software to transcribe and summarize audio conversations for corporate clients. Soneta believes that small companies can focus on a specific niche and do not need to pursue a large market from the outset like large tech companies do.
Hong Kong-based Pantheon Lab Ltd. uses OpenAI’s GPT-3 to power its product. CEO Ivan Lau acknowledges that Pantheon lacks the resources to train its language models and must rely on companies like Meta Platforms Inc. to open-source their language libraries. According to Lau, small businesses concentrate on the applications that people use, while large corporations provide the raw materials.
Despite the challenges, there is much for big tech companies to be optimistic about. Cloud providers enjoy a disproportionate advantage, according to Rathin Rawal, a PwC and Kearney alum who is incubating a new AI startup in Toronto. Daniel Zhang, CEO of Alibaba Group Holding Ltd., concurs, stating that the exponential growth in demand for computing power to support AI applications is a significant opportunity for Alibaba.
Silicon Valley is unlikely to overcome China’s unique challenge. Chinese companies are not only trying to create intelligent chatbots but ones that adhere to the country’s strict censorship regulations. Baidu or Tencent Holdings Ltd. is better equipped to implement state mandates than any newcomers.
