On November 20, Kai-Fu Lee, CEO of 01.AI, shared his insights on the divergent development paths of AI models in the U.S. and China, business model evolution, and future technological trends. Lee believes that the U.S. approach, represented by OpenAI, is making an all-or-nothing bet on achieving Artificial General Intelligence (AGI). In contrast, Chinese AI firms are forging a distinct "co-evolution" path through open-source collaboration.
Regarding the differing AI strategies, Lee stated, "I actually favor the Chinese model more. While companies like Alibaba, ByteDance, and Baidu are investing heavily, they continue to fund AI because it holds strategic value for their core businesses—be it e-commerce, search, or social media."
"These companies are led by shrewd business leaders who understand balance. Their current investments are a fraction of OpenAI's spending. OpenAI's cash-burning strategy is a high-stakes gamble, betting on winner-takes-all dominance," Lee noted. Chinese tech giants, however, adopt a more measured approach, ensuring financial stability while delivering solid performance. "We haven’t seen these companies report massive losses yet, making the Chinese model far less risky for investors."
In the U.S., investors chase winner-takes-all outcomes, forcing them to bet on individual frontrunners—either reaping huge rewards or suffering total losses.
On the AI gap between the U.S. and China, Lee remarked, "The U.S. undoubtedly leads in foundational large models, but China is rapidly learning from its advancements while leveraging its own strengths. The lag remains around three to six months—a view I’ve held for a year and a half, which still holds true."
Lee believes China needs more time to produce groundbreaking innovations that reshape global tech paradigms. For now, the country is more likely to deliver eye-catching consumer applications, with hardware being the most promising sector. While Chinese VCs remain cautious about large language models, they are aggressively investing in hardware, including ventures backed by Lee’s Sinovation Ventures.
"When people discuss hardware, humanoid robots often come to mind first, but valuations in that space are inflated. Smarter bets lie in lightweight, intelligent hardware," Lee concluded.
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