OpenAI's closed door boost to local LLM developers

Beginning Tuesday, US-based OpenAI will block application programming interface traffic from countries and regions that are not on its supported list, which, while posing a challenge to certain domestic artificial intelligence companies, might also push the latter to focus more on innovation.

Quite a few AI startups in the Chinese mainland, which are "unsupported" by OpenAI, have been developing large language models or AI applications by integrating with the OpenAI API. Those might suffer from Open-AI's blocking of data traffic.

By doing so, OpenAI has actually exited the mainland market and given up the opportunity of training LLMs in the large market, giving domestic LLM companies an opportunity to accelerate their independent R&D and encourage more startups to opt for domestically produced LLMs.

China doesn't lag far behind the US in terms of LLM development. Its developed LLMs account for 36 percent of the global whole compared to the US' 44 percent, according to the Global Digital Economy White Paper 2024 released by the Global Digital Economy Conference on July 2.

And despite the US leading in fundamental model research and development, China holds a strong position in the number of AI patents and the installation of industrial robots. In 2022, China accounted for 61.1 percent of the global AI patents, surpassing the 20.9 percent held by the US. The installation of industrial robots in China reached 290,300 units in 2022, which is 7.4 times the 39,500 units in the US at that time.

From all aspects, the gap between the US and China is not that huge. As startups in China will now have to turn to integrating with domestic LLM developers, there will be huge amounts of linguistic materials for the latter to train their models with. That's how China's advantage of a large, active population with access to the internet will be made use of in speeding up the development of its AI sector.