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* HOME * MAIL * NEWS * FINANCE * SPORTS * ENTERTAINMENT * LIFE * SEARCH * SHOPPING * YAHOO PLUS * MORE... * * YAHOO FINANCE Yahoo Finance Tip: Try a valid symbol or a specific company name for relevant results TRENDING TICKERS * MU * ROKU * GM * CPT * PERI Sign in NOTIFICATIONS TODAY * News • 12 hours ago On Sunday, President Biden called the GOP’s stance on debt-ceiling talks 'unacceptable.' He's headed back to Washington today. * News • yesterday Debt limit negotiators don't plan to meet on Saturday * News • yesterday Want a 5% mortgage rate? Buy a newly built home. OLDER * Breaking News • May 19, 2023 Nasdaq, S&P 500 have best week since March, but stocks end lower after GOP halts debt ceiling talks * News • May 19, 2023 Why Montana's TikTok ban faces massive challenges * News • May 19, 2023 The Fed chair said future decisions on interest rate moves will be made on a 'meeting by meeting' basis * News • May 19, 2023 Top House negotiator on debt limit says it's time to 'press pause' as talks come to a standstill * News • May 19, 2023 Stocks rise amid debt limit confidence * News • May 19, 2023 Bank of America says markets 'underestimate' the Fed's next move * Breaking News • May 18, 2023 Nasdaq, S&P 500 jump amid debt ceiling debate, Walmart earnings beat * News • May 18, 2023 Disney is canceling plans to relocate thousands of employees to Florida amid its feud with Gov. Ron DeSantis * News • May 18, 2023 Two Fed officials on Thursday made the case for another rate hike in June * News • May 18, 2023 Walmart CFO: Still sky-high grocery inflation is the 'biggest issue' facing consumers * News • May 18, 2023 Sam Zell, billionaire real estate investor, dies at 81 * News • May 18, 2023 Fed's Logan: 'Much too high' inflation is not cooling fast enough yet to allow the Fed to pause in June * Breaking News • May 18, 2023 Stocks open mixed amid continued debt ceiling debate, Walmart earnings * News • May 18, 2023 Walmart raises full year outlook as first quarter sales top expectations * Breaking News • May 17, 2023 Stocks surge amid new hopes for debt-ceiling resolution * News • May 17, 2023 Democrats' long-shot plan to solve the debt-ceiling crisis * News • May 17, 2023 Western Alliance led regional bank stocks higher after telling investors that its deposits rose again last week * Breaking News • May 17, 2023 Stocks rise at open as debt-ceiling talks, retail earnings stay in focus * News • May 17, 2023 Target earnings beat but company warns on current quarter, calls out cautious consumer * News • May 16, 2023 ‘We've got a lot of work to do’: Biden and McCarthy have new negotiators but no deal * Breaking News • May 16, 2023 Stocks tumble after retail sales miss, gloomy Home Depot outlook * News • May 16, 2023 Elevated mortgage rates are still keeping many homeowners from listing. "They're just bowing out," one expert says. * News • May 16, 2023 Biden, McCarthy set to meet again amid new uncertainty about a debt-ceiling deal * Breaking News • May 16, 2023 Stocks open lower after retail sales miss, ahead of key debt-ceiling talks * News • May 16, 2023 Sales rose 0.4% in April, representing only half the growth Wall Street had expected * News • May 16, 2023 Home Depot posts Q1 revenue miss, cuts forecasts as shoppers pull back spending * News • May 15, 2023 Warren Buffett sells stakes in two banks, raises Bank of America bet * Breaking News • May 15, 2023 Stocks end higher Monday as investors hope for debt-ceiling deal, digest new data * News • May 15, 2023 Debt ceiling: Two key issues in focus as McCarthy says sides are 'far apart' * News • May 15, 2023 EU approves Microsoft's deal to buy 'Call of Duty' maker, weeks after regulators in the UK rejected the same plan * Breaking News • May 15, 2023 Stocks rise at open as Wall Street hopes for debt-limit deal * News • May 15, 2023 Inflation fears from Corporate America are falling fast * News • May 14, 2023 Monthly fees for heated seats or more horsepower? Car subscriptions are coming, and most people aren't thrilled * News • May 13, 2023 Debt ceiling: How the 2023 drama is ‘100% different’ than 2011 * News • May 12, 2023 Elon Musk names NBCUniversal's Linda Yaccarino as Twitter CEO * News • May 12, 2023 Peloton stock hits all-time low after company recalls more than 2 million bikes * News • May 12, 2023 Stocks open higher to kick off week's final trading day * News • May 11, 2023 PacWest stock plunged 23% after it said it lost 9.5% of deposits last week. Other regional bank stocks followed suit. * Breaking News • May 11, 2023 Stocks finish mixed as Disney sinks and investors weigh more regional bank turmoil * News • May 11, 2023 Google is firing back at Microsoft, and investors seem to be loving it * News • May 11, 2023 Rates declined for the second week in a row, but inventory remains 'a key problem' for buyers * News • May 11, 2023 The FDIC wants banks bigger than $5 billion to pay for SVB and Signature failures * Breaking News • May 11, 2023 Stocks fall at open amid more cool inflation data, renewed regional bank turmoil * News • May 11, 2023 The regional bank's stock was under pressure again, falling 30% after reporting it lost 9.5% of deposits last week * News • May 10, 2023 Disney reported narrowing losses in its streaming business, while its parks outperformed * Breaking News • May 10, 2023 Nasdaq, S&P 500 jump after CPI report shows more cooling in inflation * News • May 10, 2023 In a strike at Microsoft, Google announced major generative AI-powered updates to its ubiquitous search engine View all notifications Mail Sign in to view your mail * Finance * Watchlists * My Portfolio * Markets * Calendars * Trending Tickers * Stocks: Most Actives * Stocks: Gainers * Stocks: Losers * Top ETFs * Futures * World Indices * Currencies * Top Mutual Funds * Options: Highest Open Interest * Options: Highest Implied Volatility * US Treasury Bonds Rates * Currency Converter * News * Latest News * Yahoo Finance Originals * Stock Market News * Earnings * Politics * Economic News * Morning Brief * Personal Finance * Crypto News * Bidenomics Report Card * Videos * Yahoo Finance Live * ETF Report * FA Corner * Yahoo Finance Plus * Dashboard * Research Reports * Investment Ideas * Community Insights * Webinars * Blog * Screeners * Saved Screeners * Equity Screener * Mutual Fund Screener * ETF Screener * Futures Screener * Index Screener * Analyst Rating Screener * Technical Events Screener * Smart Money Screener * Top Holdings Screener * Personal Finance * Home * Retirement * Taxes * Rates * Crypto * Industries * Basic Materials * Communication Services * Consumer Cyclical * Consumer Defensive * Energy * Financial Services * Healthcare * Industrials * Real Estate * Technology * Utilities * Contact Us … * Contact Us U.S. markets closed * S&P FUTURES 4,195.50 -9.25 (-0.22%) * DOW FUTURES 33,430.00 -66.00 (-0.20%) * NASDAQ FUTURES 13,833.75 -24.25 (-0.17%) * RUSSELL 2000 FUTURES 1,774.50 -4.70 (-0.26%) * CRUDE OIL 71.69 +0.14 (+0.20%) * GOLD 1,982.10 +0.50 (+0.03%) * SILVER 24.02 -0.04 (-0.17%) * EUR/USD 1.0818 +0.0048 (+0.4485%) * 10-YR BOND 3.6920 +0.1110 (+3.10%) * VIX 16.81 +0.76 (+4.74%) * GBP/USD 1.2454 +0.0051 (+0.4112%) * USD/JPY 137.6710 -0.9870 (-0.7118%) * BITCOIN USD 26,781.46 -289.25 (-1.07%) * CMC CRYPTO 200 593.88 +1.09 (+0.18%) * FTSE 100 7,756.87 +14.57 (+0.19%) * NIKKEI 225 30,808.35 +234.45 (+0.77%) The Economist JUST HOW GOOD CAN CHINA GET AT GENERATIVE AI? Read full article 12 Captions will look like this 10 10 Ad: 0:06 0:15 1x Video Quality Best Better Good Auto More Captions Settings Caption Languages English Closed Captions ON More Captions Settings Effects Plain Position Bottom Font Size Medium Font Family Helvetica Font Color White Background Color Black Background Transparency 75% WENDY'S, GOOGLE PREVIEW PARTNERSHIP WITH NEW AI-POWERED DRIVE-THRU Yahoo Finance culinary correspondent Brooke DiPalma joins the Live Show to discuss the partnership between Wendy's and Google to revolutionize drive-thru orders with the use of AI technology, first premiering in Columbus, Ohio in June of this year, and how AI is transforming the restaurant industry. The Economist May 9, 2023·10 min read IF YOU LISTEN to the bombastic rhetoric in Beijing and Washington, America and China are engaged in an all-out contest for technological supremacy. “Fundamentally, we believe that a select few technologies are set to play an outsized importance over the coming decade,” thundered Jake Sullivan, President Joe Biden’s national security adviser, last September. In February Xi Jinping, China’s paramount leader, echoed the sentiment, stating that “we urgently need to strengthen basic research and solve key technology problems” in order to “cope with international science and technology competition, achieve a high level of self-reliance and self-improvement”. No technology seems to obsess policymakers on both sides of the Pacific more right now than artificial intelligence (AI). The rapid improvements in the abilities of “generative” AIs like ChatGPT , which analyse the web’s worth of human text, images or sounds and can then create increasingly passable simulacrums, have only strengthened the obsession. If generative AI proves as transformational as its boosters claim, the technology could give those who wield them an economic and military edge in the 21st century’s chief geopolitical contest. Western and Chinese strategists already talk of an AI arms race. Can China win it? On some measures of AI prowess, the autocracy pulled ahead some time ago (see chart 1). China surpassed America in the share of highly cited AI papers in 2019; in 2021 26% of AI conference publications globally came from China, compared with America’s share of 17%. Nine of the world’s top ten institutions, by volume of AI publications, are Chinese. According to one popular benchmark, so are the top five labs working on computer vision, a type of AI particularly useful to a communist surveillance state. At the same time, when it comes to “foundation models”, which give the buzzy generative AIs their wits, America finds itself firmly in front (see chart 2). ChatGPT and the pioneering model behind it, the latest version of which is called GPT-4, are the brain child of OpenAI, an American startup. A handful of other American firms, from small firms such as Anthropic or Stability AI to tech giants like Google, Meta and Microsoft (which part-owns OpenAI), have their own powerful systems. ERNIE, a Chinese rival to ChatGPT built by Baidu, China’s internet-search giant, is widely seen as less clever than most of them (see chart 3). Alibaba and Tencent, China’s mightiest tech titans, have yet even to unveil their own generative AIs. Story continues This leads those in the know to conclude that China is two or three years behind America in foundation-model building. There are three reasons for this underperformance. The first concerns data. On the surface, a centralised autocracy should be able to marshal a lot of it—the government was, for instance, able to hand over its troves of surveillance information on Chinese citizens to companies such as SenseTime or Megvii that, with the help of the country’s leading computer-vision labs, then used it to develop top-notch facial-recognition systems. That advantage has proved less formidable in the context of generative AIs, because foundation models are trained on the much more voluminous unstructured data of the internet. American model-builders benefit from the fact that 56% of all websites are in English, whereas just 1.5% are in Mandarin or China’s other languages, according to data from the W3Techs, an internet-research site. As Yiqin Fu of Stanford University points out, the Chinese interact with the internet primarily through mobile super-apps like WeChat and Weibo. These are “walled gardens”, so much of their content is not indexed on search engines. This makes that content harder for AI models to suck up. Lack of data may explain why Wu Dao 2.0, a Chinese model unveiled in 2021 by the Beijing Academy of Artificial Intelligence, a state-backed outfit, failed to make a splash despite its possibly being more computationally complex than GPT-4. The second reason for China’s lacklustre generative achievements has to do with hardware. Last year America imposed swingeing export controls on any technology that might give its main geostrategic rival a leg-up in AI. In particular, that includes the powerful chips used in the cloud-computing data centres where foundation models do their learning, and the chipmaking tools that could enable China to build such semiconductors on its own. That was a blow to Chinese model-builders. An analysis of 26 big Chinese models by the Centre for the Governance of AI, a British think-tank, found that more than half depended on Nvidia, an American chip designer, for their processing power. Some reports suggest that SMIC, China’s biggest chip manufacturer, has produced prototype chips which are just a generation or two behind TSMC, the Taiwanese industry leader that manufactures chips for Nvidia (see chart 4). But the Chinese firm may only be able to mass-produce chips which TSMC was churning out by the million three or four years ago. A professor at a leading Chinese university laments his country’s weakness in such “basic infrastructure” of AI. Chinese AI firms are also having more trouble getting their hands on another American export: know-how. America remains a magnet for the world’s tech talent; two-thirds of AI experts in America who present papers at the biggest AI conference are foreign-born. Chinese engineers made up 27% of that select group in 2019. Many Chinese AI boffins studied or worked in America before bringing their machine learnings back home. (Few non-Chinese boffins would consider moving to a police state a wise career move.) The covid-19 pandemic and rising Sino-American tensions are causing their numbers to dwindle. In the first half of 2022 America granted half as many visas to Chinese students as in the same period in 2019. The triple shortage—of data, hardware and expertise—has been a genuine hurdle for China. Whether it will hold Chinese AI ambitions back much longer is, though, another matter. Info attainment Take data. On February 13th the local authorities in Beijing, where nearly a third of China’s AI firms are located, said they were releasing data from 115 state-affiliated organisations, giving model-builders 15,880 data sets to play with. To liberate more data, the central government also wants to dismantle Chinese apps’ walled gardens. Most important, the latest models appear able to transfer learnings from one language to another. In the paper describing GPT-4, OpenAI said that the model performed remarkably well on tasks in Chinese despite the dearth of Chinese source material in the model’s training data. Already Baidu’s ERNIE was trained on lots of English-language data, notes Jeffrey Ding of George Washington University. In hardware, too, China is finding workarounds. The Financial Times reported in March that SenseTime, which is blacklisted by America’s government, has used intermediaries to skirt the export controls. Some Chinese AI firms are able to harness the computing power of Nvidia’s advanced chips through cloud servers based in other countries. Alternatively, they can simply buy more of Nvidia’s less advanced semiconductors or use them more efficiently with the help of clever software. To continue serving the vast Chinese market, the American company has designed less powerful sanctions-compliant processors. These are between 10% and 30% slower than its top-of-the-range kit, and end up being costlier for the Chinese customers per unit of processing power. But they do the job. China could partly alleviate the dearth of chips—and of brain power—with the help of “open-source” models. Such models’ inner workings can be downloaded by anyone and fine-tuned to a specific task. Most importantly, that includes the numbers, called “weights”, which define the structure of the model and which are derived from costly training runs. Alpaca, a model built by researchers at Stanford University using the weights from LLaMA, a foundation model created by Meta, was made for less than $600, compared with sums on the order of $100m for training something like GPT-4. Alpaca performs just as well as the original version of ChatGPT on many tasks. Chinese AI labs could similarly avail themselves of open-source models, which embody the collective wisdom of international research teams. Matt Sheehan of the Carnegie Endowment for International Peace, another think-tank, says that China has form in being a “fast follower”—its labs have absorbed advances from abroad and then rapidly incorporated them into their own models, often with flush state resources. A prominent Silicon Valley venture capitalist is more blunt, calling open-source models a gift to the Communist Party. Such considerations make it hard to imagine that either America or China could in the long run build an unbridgeable lead in AI modelling. Each may well end up with AIs of roughly similar ability, even if it costs China over the odds to keep up in the face of American sanctions. But even if the race of the model-builders is a dead heat, America has one thing going for it that could make it the big AI winner—its peerless ability to spread cutting-edge innovation throughout the economy. It was, after all, more efficient diffusion of technology that helped America open up a technological lead over the Soviet Union, which in the 1950s was producing twice as many science PhDs as its democratic adversary. China is, of course, far more competent than the Soviet Union ever was at adopting new technologies. Its fintech platforms, 5G telecoms and high-speed rail are all world-class. But those successes may be the exception, not the rule, says Mr Ding. Particularly, in the deployment of sensors, cloud computing and business software—all complementary to AI—China has done less well. Although American export controls may not derail all Chinese model-building, they do constrain China’s tech industry more broadly, thereby slowing the adoption of any new technology. Moreover, corporate China as a whole, and especially small and medium-sized companies, is short of technologists who act as conduits for technological diffusion. Swathes of the economy are dominated by state-owned firms, which tend to be stodgy and change-averse. China’s “Big Fund” for chips, which raised $50bn in 2014 with a view to backing domestic semiconductor firms, has been mired in scandals. Many of the thousands of AI startups created in recent years have simply slapped on the AI label in the hope of getting a slice of the lavish subsidies doled out by the state to the favoured industry. As a consequence, China’s private sector may find it hard to take full advantage of generative AI, especially if the Communist Party imposes heavy regulations to prevent chatbots from saying something its censors do not like. Such handicaps would come on top of Mr Xi’s broader suborning of private enterprise, including a two-and-a-half-year crackdown on China’s tech industry. Although this anti-tech campaign has officially ended, it has left businesses scarred. The result is a chill in tech sentiment. Last year private investments in Chinese AI startups amounted to $13.5bn, less than one-third the amount that flowed to their American rivals. In the first four months of 2023 the funding gap appears only to have widened, according to PitchBook, a data provider. Whether or not generative AI proves revolutionary, the free market has placed its bet on who will make the most of it. © 2023 The Economist Newspaper Limited. All rights reserved. From The Economist, published under licence. The original content can be found on https://www.economist.com/business/2023/05/09/just-how-good-can-china-get-at-generative-ai Tip: Try a valid symbol or a specific company name for relevant results TRENDING * 1. AUSTRALIA TO REGULATE BUY NOW, PAY LATER SECTOR WITH CREDIT LAWS * 2. STOCK FUTURES DECLINE, CURRENCIES IN TIGHT RANGES: MARKETS WRAP * 3. 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