China's Public Sector Embraces AI with Surge in Adoption of Language Models

China’s Public Sector Embraces AI with Surge in Adoption of Language Models

In a remarkable display of technological progress, large Chinese firms have embraced artificial intelligence (AI) at an accelerated pace this year. Government data reveals a significant surge in the number of tender contracts for services involving the use of large language models (LLMs) in the first half of the year. The figures, published on the China Government Procurement and China Tendering and Bidding Public Service Platform websites, show that the number of successful bids more than doubled from 23 in the first quarter to 58 in the second quarter.

LLMs are the foundation of conversational AI bots like OpenAI’s ChatGPT, and their adoption has gained momentum since the debut of OpenAI’s hit chatbot in late 2022. Chinese technology firms have quickly followed suit, developing hundreds of their own LLMs and products based on LLM technology. The surge in tender contracts for LLM-related services reflects the interest of large Chinese firms, as public disclosures are only required for projects involving public interest and safety, public funds, or loans from foreign entities.

Notably, it is not just China’s traditional internet giants that have secured successful bids in this space. Zhipu AI, one of China’s four “AI Tigers,” has emerged as the frontrunner with 12 LLM-related contracts. Meanwhile, iFlyTek, a US-sanctioned company recognized for its voice-recognition technology, has won 10 contracts from Chinese state-owned enterprises and government agencies.

These tender contracts provide valuable insights into the industries driving the adoption of AI in China. Operators in energy, telecommunications, finance, and scientific research are leading the charge, accounting for 19, 14, 12, and 10 deals, respectively. For instance, a district environmental protection agency in Beijing purchased customized LLMs to predict flood seasons accurately. The Nuclear Power Institute of China and China Merchants Securities have enlisted the help of Beijing-based start-up Zhipu AI to organize knowledge accumulated over years of operations, facilitating more convenient staff use.

The application of LLMs extends to various sectors, such as identifying deficiencies in power grids and aiding in oil exploration for Chinese energy powerhouses. The second quarter witnessed a significant increase in the pace of bidding for LLM contracts, with the number of successful bids rising from nine in January to 24 in May. As of June, there have been 14 successful bids.

Among the contracts secured this year, the most lucrative one came from PipeChina, also known as China Oil & Gas Piping Network Corporation. The corporation will pay 152.6 million yuan (US$21 million) to Taifu Industry, a subsidiary of state-affiliated Shandong Energy Group, for LLM-related tech. Taifu will develop both software and hardware for training and developing LLMs for PipeChina, which is responsible for managing the nation’s oil and gas pipelines.

While the specific applications of these LLMs may vary, the growing adoption of AI in China’s public sector is undeniable. With large firms across industries recognizing the potential of AI technology, China is solidifying itself as a frontrunner in the AI race. The surge in AI adoption brings about exciting opportunities for language models and further advances in AI capabilities. As the world continues to witness China’s rapid progress in AI, we can expect to see innovative breakthroughs and transformative applications emerge in the near future.

In the words of renowned AI pioneer Ray Kurzweil, “Accelerating technological progress will transform the way we live and work, and AI is at the forefront of this transformation. As China’s public sector embraces AI with a surge in adoption of language models, we are witnessing the power of AI unfold before our eyes. The opportunities that lie ahead are truly remarkable.”