BYD’s Cofounder Has Expressed Doubt About Whether China Can Create Its Own ChatGPT

Xia Zuoquan, a wealthy investor from China who became rich by investing in the small battery maker BYD, is not so sure about China’s ability to achieve major technological advancements like OpenAI’s ChatGPT in the near future.

Although Xia made huge profits from his 1995 investment in BYD, which is now the largest electric vehicle manufacturer in the world, he believes that China’s lack of fundamental research and a mature capital market poses a challenge to technological breakthroughs.

“I don’t think China can all of a sudden produce ChatGPT-level applications or technologies,” Xia told the South China Morning Post on Friday on the sidelines of an industry forum organised by the Shanghai Advanced Institute of Finance in Hong Kong.

“China still lacks a lot of fundamental things,” he said. “For instance, certain foundational algorithms are American. Chips are American, and a lot of key industrial software and hardware.”

Xia is currently a non-executive director at the electric vehicle company he co-founded and runs his own technology investment firm called Zhengxuan Investment since 2003. According to Forbes, his net worth is $3.7 billion.

Zhengxuan Investment focuses on high-tech sectors such as advanced manufacturing, artificial intelligence (AI), robotics, new energy, and semiconductors. The firm has provided support to Chinese companies like OneSpace, a rocket manufacturer, and UBTech, a maker of humanoid robots, which recently filed for an IPO in Hong Kong.

However, Xia’s investment firm is cautious about investing in Chinese startups that work on large language models (LLMs) similar to ChatGPT. He explains that Chinese startups in this field face challenges due to the underdeveloped capital market in China.

“It’s difficult for very fundamentally innovative technologies in the field of AI to come out of China in the short term,” he said. “So we’re not very hopeful of investing in ChatGPT-like services.”

Most investment institutions and government-backed funds are hesitant to invest billions of dollars or wait for more than a decade for these companies to succeed. Zhou Hongyi, the founder and chairman of Chinese cybersecurity firm 360 Security Technology, also expressed caution about adopting LLMs, considering them “unreliable” and suggesting that they should be kept separate from core business operations.

Despite these challenges, there is significant investment interest in generative AI in China. The country had the largest number of funded startups in the industry during the first half of the year, surpassing the United States.

China’s AI market continues to attract attention from prominent figures, such as Lee Kai-fu, a well-known venture capitalist and former president of Google China. Lee recently unveiled his new venture, Lingyi Wanwu, which aims to develop its own large language model.

He emphasized that LLMs represent a “historic opportunity” that China should not miss, cautioning against reliance on open-source models created by foreign companies due to high costs and limited access.

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