In China, local companies that operate in the artificial intelligence area are currently racking up huge advertising bills.
The mentioned information was published by the media of the specified Asian country with reference to data from a marketing consultancy firm. Huge advertising costs are associated with the fact that companies use all available opportunities to promote their products in the artificial intelligence market, which is currently characterized by a high level of competition in China in particular and at the global level in general. AI has already demonstrated its significant capabilities in the area of practical activity. Moreover, artificial intelligence has huge potential. Against this background, the rapid growth of competition in the machine intelligence market is natural. There is also a high probability that the corresponding tendency will scale. This assumption is based on the fact that new players are emerging in the artificial intelligence market. Also, in the relevant context, it is worth noting separately that technology giants are expanding their product lines based on AI.
Data from the marketing analytics company AppGrowing, which is referenced by the media, indicates that in the third quarter of the current year alone, Chinese firms operating in the area of artificial intelligence spent more than 500 million yuan ($70.2 million) to promote chatbots and other apps based on the advanced technology. It is worth clarifying that in this case the total amount of expenses meant, which includes both the corresponding indicators of startups, including Moonshot AI and Zhipu AI, and figures of technology giants, for example, ByteDance and Alibaba Group Holding.
It is worth noting that Chinese companies operating in the artificial intelligence area do not publish information about their advertising-related spending. AppGrowing specialists estimate the relevant indicators using publicly available data from earnings reports. They also pay attention to third-party marketing metrics, including daily active users, fees, ad loads, and effective cost per mille. AppGrowing combines relevant data to estimate the revenue of the advertising platform and the plans of advertisers to place appropriate materials for a certain period. Then the specialists deduce the ad spend from those. It is worth noting that the company characterizes these data as figures for reference only.
A kind of discussion has formed among Chinese experts regarding the advertising costs of local firms operating in the artificial intelligence area. In this case, the difference in answers to the question of whether financial injections into advertising materials are too large and too fast became a platform of disagreement. Some experts say that the excessive attention of companies to the monetization of marketable products is a factor of negative impact on the process of carrying out fundamental research in the area of artificial intelligence. Proponents of the corresponding point of view also argue that the mentioned system of priorities within the framework of AI firms’ activities in the long term may expand the technological gap between China and the United States not in favor of the Asian country. Currently, against the background of objective circumstances and obvious conditions, Beijing should definitely intensify efforts to evolve the domestic artificial intelligence industry at the level of quality, not quantity. This means that China is more interested in progress in the context of technology development in a fundamental sense, rather than in terms of rapid product scaling without moving forward in terms of performance. The corresponding need is to some extent related, among other things, to the fact that the United States has limited the supply of advanced chips and equipment for making microcircuits appropriate category to the Asian country. At the same time, the training and subsequent functioning of artificial intelligence systems is virtually impossible without chips. This also means that China should develop the homegrown production base necessary for the AI industry. Moreover, the growth of geopolitical tensions, which is already noticeable in the space of relations between Beijing and Washington, increases the importance of technological sovereignty in a certain degree of vital necessity, including in an economic context. Also, the mentioned tension signals a high probability of scaling up the practice of restricting interaction between different countries. Against this background, autonomy in the area of technologies, including artificial intelligence, is gradually moving into the category of existential factors for the states in terms of their prospects.
ByteDance, the parent company of TikTok, and startup Moonshot AI, backed by Alibaba and Tencent Holdings, according to AppGrowing, are the largest investors in advertising among machine intelligence developers in China. ByteDance spent 200 million yuan on corresponding purposes in the third quarter of the current year. A similar figure for Moonshot AI over the same period was recorded at 150 million yuan. It is worth noting that the mentioned companies’ chatbots are among the most popular in China.
ByteDance did not provide journalists with comments on the data on advertising expenses. Moonshot AI also chose the tactic of silence in this case. There is no answer to the question about the refusal to comment on advertising costs. It is possible that in this case, companies are trying to build a reputation for artificial intelligence developers who focus on the evolution of technology and do not pay a lot of attention to other aspects of their activities. However, this is just a guess. It is also possible that companies refuse to comment due to some kind of market considerations. However, this is again just a guess.
The media, citing an insider who is close to Moonshot AI, reported that the startup’s promotional expenditures in the third quarter of 2024 were not as big as AppGrowing claims. The mentioned insider used the right of anonymity, since in this case confidential information is implied.
Information from AppGrowing also indicates that Alibaba spent almost 200 million yuan to put Quark to Chinese users. This product is a cloud storage and online search service that integrates generative artificial intelligence to upgrade its capabilities. Also, information from AppGrowing indicates that Alibaba’s spending for Tongyi Qianwen amounted to 4.5 million yuan. In this case, it means a service similar to ChatGPT from OpenAI. Tongyi Qianwen stated that the mentioned number is incorrect.
It is worth noting that Chinese companies operating in the area of artificial intelligence also face such a circumstance, which can be described as regional specifics. In this case, it is implied that in an Asian country, the AI market is on the verge of oversaturation of products. As of today, Chinese artificial intelligence developers have launched hundreds of chatbots and other apps based on generative AI.
Yan Junjie, founder and chief executive officer of Shanghai-based MiniMax, stated that in China, almost all artificial intelligence products will be promoted through online marketing campaigns, which is a very significant divergence from their counterparts in the United States. Also in this context, it was separately noted that US firms operating in the AI area generally rely on the technological capabilities of their products for promotion. According to Yan Junjie, these companies do not spend large amounts on advertising. Moreover, it was noted that Chinese firms rely heavily on marketing due to technological homogeneity. This means that, for example, chatbots developed by companies in an Asian country have no fundamental differences from each other. Yan Junjie stated that it’s a conundrum for Chinese firms operating in the artificial intelligence area to gain customers by relying on marketing campaigns.
It is worth noting that against the background of the active development of artificial intelligence and the scaling of the practice of using AI, the issue of cybersecurity is becoming more and more urgent. Fraudsters and other criminals operating in the virtual space also have access to machine intelligence technologies, which is why their methodology has become more sophisticated. To counter the corresponding threat in the cybersecurity area, personal awareness of users is important, among other things. For example, a query in an Internet search system, such as how to know if my camera is hacked, will allow anyone to get information about signs of unauthorized access to the device. It is also worth noting separately that the relevant knowledge should be updated periodically, as technologies are constantly evolving and becoming more complex. Artificial intelligence can also realistically mimic human voices. Using this AI ability, scammers force their victims to transfer money to certain accounts. In this case, people are mistakenly convinced that they are having a conversation with their colleagues, friends, or relatives.
