Baidu, SenseTime lead China’s market for business-focused large language models, says IDC

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Chinese artificial intelligence (AI) giants Baidu and SenseTime, along with start-up Zhipu AI, are the country’s biggest providers of business-facing large language model (LLM) services, according to a new report, as tech firms continue to push for generative AI adoption.

Baidu AI Cloud leads China’s industry-facing LLM market with a 19.9 per cent market share and 350 million yuan (US$49 million) in revenue in 2023, according to a report released by market research firm IDC on Wednesday.

SenseTime was in second spot with 16 per cent of the market, followed by start-up Zhipu AI, IDC said, without revealing the latter’s market share.

Chinese start-up Baichuan and Hong Kong-listed 4Paradigm were the fourth and fifth largest players in the market, respectively, according to IDC. Baichuan and Zhipu AI are among the mainland’s four “AI tigers”.
The Baidu logo seen during the company’s Create conference in Shenzhen, China, April 16, 2024. Photo: Bloomberg

The size of China’s LLM market and related applications for business customers was 1.76 billion yuan last year, which the report described as “not significant” because company investments into AI models were still in the early stage, and many were still adopting a wait-and-see approach. LLMs are the technology underpinning GenAI services like ChatGPT.

But IDC noted that over the next two to three years, the market will undergo “multiple rounds of significant changes”.

In a blog post published on Wednesday citing the IDC report, Baidu wrote that more than half of China’s state-owned enterprises were using Baidu services for “AI innovation”. The company’s Ernie LLM-based enterprise-facing platform Qianfan is now serving 150,000 clients and has helped them develop 55 original applications, according to Baidu.

The latest IDC data reflects intense competition among Chinese AI firms, which are racing to sign up more industries and sectors for their generative AI solutions.

TikTok owner ByteDance, e-commerce giant Alibaba Group Holding and SenseTime are China’s biggest providers of AI infrastructure-as-a-service, which focuses on leasing software, computing power, storage and networking resources for enterprises building LLM applications, according to an IDC report last month. Alibaba owns the South China Morning Post.
More than 600 million people in mainland China are now using LLMs. Photo: Shutterstock Images

Consumer enthusiasm for generative AI products, however, seems to have plateaued. As of June this year, Baidu’s Ernie Bot and ByteDance’s Doubao were the only two GenAI mobile apps with more than 10 million monthly active users, according to a report published by research firm QuestMobile in July.

In China, 80 per cent of GenAI apps have fewer than 500,000 monthly active users, QuestMobile said.

Others paint a rosier picture. Zhuang Rongwen, director of internet watchdog the Cyberspace Administration of China, told the state-run Xinhua News Agency earlier this month that more than 600 million people in mainland China are now using LLMs, which are “forcefully driving economic and societal growth”.
In China, 83 per cent of respondents to a July survey by US AI and analytics software company SAS and Coleman Parkes Research said that they had used generative AI, higher than the global average of 54 per cent.

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