China’s rise in generative AI shows market vitality: insiders

China is the world leader in the use of generative artificial intelligence (AI), according to a study published Tuesday. Analysts said it was a sign that the country was making technological progress and that there were bright prospects for the country’s AI sector.

AI adoption among respondents in China rose to 83 percent, according to a report by U.S. AI software and analytics firm SAS and Coleman Parkes Research, which surveyed 1,600 decision-makers from key global markets.

The study found increases in generative AI use around the world, with the largest increases in China. Specifically, China’s generative AI adoption rate was higher than 16 other countries and regions, surpassing the U.S., where only 65 percent of respondents reported using generative AI.

The market size for AI-generated content in China’s e-commerce industry is expected to triple in 2024, reaching 1.2 billion yuan ($171.4 million). This significant growth shows the growing importance and effectiveness of generative AI tools in driving brand sales and driving e-commerce brand traffic, Wu Bin, CEO of infimind, a Beijing-based AI technology solutions provider for the fashion and e-commerce industries, told the Global Times on Wednesday.

Yan Junjie, CEO of Shanghai-based startup MiniMax, told the Global Times that the rapid adoption of large language models (LLMs) and enterprise data to develop custom generative AI applications will lead to significant market growth. The long-term outlook for generative AI is promising, Yan said.

“As the cost of LLM services for enterprises continues to decline, we can expect to see Chinese companies adopting generative AI at an increasingly rapid pace in the coming years,” Yan noted.

A recent UN report found that China has topped the list of generative AI patent applications over the past decade. Industry insiders said all these signs point to China leaping ahead in the generative AI landscape.

Generative AI continues to transform many business sectors in China. As its adoption across sectors accelerates, benefits include reduced costs and increased revenues, observers say.

In terms of specific industries, respondents working in TMT, retail, insurance, banking and life sciences saw the greatest growth in generative AI adoption.

Generative AI can be used to create new content, including audio, code, images, text, simulations, and videos. Some of the most popular generative models in use today are large language models—like the one that powers ChatGPT, which can create language and text—and diffusion models, which create images and video.

Since ChatGPT burst onto the scene in November 2022, generative AI has come a long way. Leveraging its large market size and homegrown innovation, China has seen a range of generative AI applications, including short film creation, e-commerce, and education.

For example, in e-commerce and short video platforms, generative AI can provide exceptional levels of personalization and enable more dynamic and efficient content creation.

A report last week from the U.N.’s World Intellectual Property Organization found that China is leading the race for generative patents, filing more than 38,000 applications between 2014 and 2023, compared with 6,276 filed by the U.S. during the same period. China’s biggest patent applicants include TikTok owner ByteDance, Tencent, Ping An Insurance Group and Baidu.

Generative AI is driving economic growth. A 2023 McKinsey report estimates that generative AI is set to add up to $4.4 trillion in value to the global economy annually. That would increase AI’s impact by 15 to 40 percent. Another recent report on China, McKinsey predicted that generative AI is set to be a significant contributor to China’s economy, with the potential to add up to $2 trillion to GDP. That’s part of a broader $6 trillion economic impact expected from AI in China.