Chinese market huger for emerging technology

As if generative artificial intelligence occupies most of the space in news reporting, an industry report claims that widespread aggregation of different AI methods likely unlocks new value and pragmatically improves businesses of diverse characteristics.

Yet, the early buzz over GenAI is deflating, as early adopters are delivering returns on investment that are considerably less than what had been expected. As Gartner’s latest Hype Cycle for Data, Analytics and AI in China has now revealed, GenAI is starting to unleash its limitation from inflated expectations.

Intensive competition in the industry is very likely to bring at least two-thirds of GenAI projects to abandonment by 2025 after proof of concept, mainly for reasons of poor-quality data, inadequate risk management, cost increases, and unclear business value, the report said.

Ben Yan, a director analyst at Gartner, said, “For China, it will take about two to five years for the GenAI technologies to mature to a productive level.” According to him, the current rate of GenAI in production is lagging behind global standards and lower than it should be, hence quite a surprise.

So far, it seems that China has been slow in adopting GenAI production, at just 8 percent as of June. That’s modestly 2 percentage points higher than the adoption rate from the same period last year. The global average exceeded 21 percent as of this year’s first quarter, Gartner said.

This shows that the major barriers for companies to develop GenAI in production are as follows: corporate unreadiness with regard to AI-driven data.

The greatest barrier, Yan emphasized, is that such GenAI is used in production. He says such advanced LLMs are not always appropriate for every business process, adding that service robots could find themselves not needing to support programming complexities associated with most LLMs, which makes smaller or mid-tier LLMs much more practical.

He observed a significant trend of interests from enterprises, from LLMs to end applications on successful implementation. “It’s about fitting the right AI technique with the proper context,” said Yan.
Apart from these promising trends, other new AI technologies, such as domain-specific GenAI models, multimodal GenAI, and decision intelligence, are gaining the ground and require attention.

Unleash future systems as composite AI techniques rather than trying to shape it at one point in time as a single solution or idea for the various stages involved in the development cycle. This will maximize profit and value,” Yan adds.

As the efficiency of its implementation is relatively not high, great interest remains for AI from Chinese businesses and consumers. According to the latest Vodafone Business report, 65 percent of all companies surveyed believe that new technologies can help them overcome business challenges, compared with the Asia-Pacific region.

“Chinese companies are indeed very enthusiastic about embracing emerging technologies like GenAI and this makes it easier for them to get ahead in the global arena,” said Eliza Kwok, senior vice-president and head of North Asia at Vodafone Business. “AI technology has become a catalyst for business trust in the Chinese market. If used prudently and efficiently, it can bridge the trust gap between business operators and customers.”

At the customer level, the Vodafone Business report indicates that 35 percent of Chinese customers believe that GenAI usage would make them more trusting of an organization, surpassing figures seen in Singapore at 23 percent and Australia at 19 percent. Moreover, 71 percent of customers in China stated that they are more trusting and confident of businesses regarding the use of new technologies, a number that far exceeds other Asia-Pacific markets in Singapore at 45 percent and Australia at 34 percent.

“Compared with other Asia-Pacific markets, Chinese consumers are more open to AI technologies,” Kwok said. “Your consumers may be more tech-savvy than you think.”

There is immense enthusiasm about AI in the market, but companies are called upon to use these novel technologies responsibly, with transparency and security overriding data to build trust and ensure long-term sustainable growth, she added.