OpenAI's exit from China leaves developers scrambling

Chinese developers are on their toes as OpenAi decides to block access to all its tools in the country, starting July 9th (yesterday). 

ChatGPT wasn’t completely secure from China’s firewall, it was partially banned already but developers managed to circumvent the blockage by using VPNs. 

"We are taking additional steps to block API traffic from regions where we do not support access to OpenAI’s services," an OpenAI spokesperson told Bloomberg last month.

Notably, this ban is courtesy of OpenAI rather than the Chinese government and is poised to have a m, major impact on the Chinese market.

As per The Guardian, OpenAI hasn't elaborated on the matter yet. All this comes under the backdrop of tensions between Washington and Beijing, the US having recently barred the export of advanced semiconductors essential to AI technology to be exported to China.

The Chinese AI community has reacted with "significant concern", Xiaohu Zhu, founder of the Shanghai-based Centre for Safe AGI, told The Guardian.

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He said, "The decision raises questions about equitable access to AI technologies globally."

Effects of OpenAI's exit from China

Regardless, this will create a vacuum, which native AI firms like SenseTime, Baidu, Zhipu AI and Tencent Cloud will be eager to fill.

There are reports of free token offerings and migration services to bait former OpenAI users.

While Baidu is offering 50m free tokens as well as free migration services, ZhipuAI, a local company, offered 150m free tokens for its model. Tencent Cloud meanwhile is giving away 100m free tokens to new users till the end of this month (July).

"Competitors are offering migration pathways for former OpenAI users, seeing this as an opportunity to expand their user base," explained Zhu.

Alternatively, OpenAI's exit may help the cause of local Chinese AI companies, which are already in tight competition with US counterparts. 

Given that, experts like Winston Ma of New York University suggest that this situation comes "at a time when Chinese big tech players are closing on performance gap with OpenAI and are offering these Chinese LLM models essentially free."

"OpenAI’s departure is a short-term shock to the China market, but it may provide a long-term opportunity for Chinese domestic LLM models to be put to the real test," he added.