Chinese entrepreneurs express awe and fear of OpenAI's Sora text-to-video generator, as US sanctions weigh on AI race

China's business and technology communities are expressing both excitement and concern about OpenAI's latest achievement in generative artificial intelligence with its Sora text-to-video model, amid rising competition in this area and potential constraints from US-China trade tensions.

One business leader called Sora a "Newton moment", noting how the AI video generation tech learns using the laws of physics. Another noted that the Microsoft-backed start-up behind the model could already be working on other "secret weapons" that could further widen the gap between China and the US in the field owing to US export restrictions on semiconductors and other core components needed for AI applications.

Yin Ye, CEO of genomics giant BGI Group, said that when OpenAI launched ChatGPT in 2022, Chinese AI rivals felt confident that they could catch up "because the focus was on language and text only". Sora proves that "the digital world can truly be twinned with the laws of physics in the real world", he added in a video he posted on Saturday to his channel on Tencent Holdings' WeChat.

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"I'd like to compare this to the Newton moment of AI development," Yin said.

Zhou Hongyi, chairman and CEO of 360 Security Technology, said on the microblogging site Weibo that the gap between China and the US in AI development "may be bigger" if OpenAI is working on other "secret weapons".

Zhou estimated that China's best large language models (LLMs), the tech that powers AI tools like ChatGPT, "have neared the level of GPT-3.5, but there is still a 1.5-year gap from GPT-4". OpenAI launched GPT-4, its text generation model, in March 2023.

Some Chinese entrepreneurs say they do not want to overstate Sora's capabilities.

"Given the demo videos provided by Sora, it hasn't achieved great breakthroughs in understanding [the world]," said Fang Han, CEO of game developer and publisher Kunlun Tech, in an interview with government-run Shang Securities News.

"The gap between Sora and China's home-developed text-to-video tools isn't as big as in the LLM sector," he added.

Domestic investors appear to have taken the news of Sora's arrival as a positive sign for the market. The Sora Index - consisting of 49 tech, entertainment and media companies listed in Shanghai and Shenzhen that could be impacted by the AI model compiled by financial information provider Wind - soared 11.4 per cent on Monday, the first trading day after the Lunar New Year holiday.

The market sees opportunity in generative AI development. The fast-growing LLM and generative AI sector "will provide a strong impetus to the growth of computing power in China and the world", Ping An Securities said in a report published on Monday. The finance giant added that industries including computing power, algorithms and cybersecurity will all benefit.

However, Ping An warned that there may be "supply chain risks" if the US continues to restrict chip exports to China. The sanctions "may accelerate the maturity of the domestic AI chip industry", but "home-grown alternatives may fall short of expectations", the report said.

BGI's Yin also questioned whether China has enough time to catch up given "the unfavourable background of decoupling and supply chain disruptions".

Washington has blocked Chinese companies from accessing the world's most advanced semiconductor tools through escalating restrictions on exports of such products that use US-origin technology. In October, the US again tightened those restrictions, blocking the mainland's access to graphics processing units (GPUs) that Nvidia had specifically designed for Chinese clients in response to earlier curbs.

As such, the US chip giant has developed three new data centre GPUs - the H20, L20 and L2. Nevertheless, US Commerce Secretary Gina Raimondo has warned that Washington will take a dim view of any workaround solutions targeted at the mainland.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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