Finance

China’s AI models lag their U.S. counterparts by 6 to 9 months, says former head of Google China

Published

9 months ago

September 11, 2024

Kai-Fu Lee, chairman and chief executive officer of Sinovation Ventures, speaks during the HICOOL Global Entrepreneur Summit on September 11, 2021 in Beijing, China.

China News Service | China News Service | Getty Images

BEIJING — Chinese artificial intelligence models may be at least half a year behind those developed in the U.S., but Chinese AI apps will likely take off much faster, said Kai-Fu Lee, former head of Google China.

He was referring to large language models, which are trained on massive amounts of data that can process and produce text, images and videos.

The top Chinese companies’ LLMs are about six to nine months behind their U.S. counterparts, while less advanced Chinese models may lag the U.S. by about 15 months, Lee said. He was speaking at the AVCJ Private Equity Forum China on Wednesday.

Lee, author of “AI Superpowers: China, Silicon Valley, and the New World Order,“ is a widely followed commentator on AI, and is the founder of startup 01.AI as well as venture capital firm Sinovation Ventures.

“Apps, I would predict, by early next year will proliferate in China much faster than in the U.S.,” Lee said, noting that the cost of training a good AI model has fallen significantly.

“It’s inevitable that China will [build] the best AI apps in the world,” he said. “But it’s not clear whether it will be built by big companies or small companies.”

Lee, whose startup is focused on search apps right how, said it may take five to eight years to take generative AI consumer applications to the next level — a single “super app” that can perform multiple tasks.

The industry will likely need completely new devices versus existing smartphones, he said, adding “the right device ought to be always on, always listening.”

Major Chinese companies such as Alibaba and Tencent have released their AI models and business products. These companies and investors have also backed several AI startups.

Beijing-based ShengShu Technology, backed by Alibaba-affiliate Ant Group, announced Wednesday that its text-to-video model Vidu has introduced a new feature for improving how a main element or character in AI-generated clips can be portrayed consistently, without distortion. That can enable advertisers to create promotional videos for their products.

Vidu was released earlier this year and its basic tools are open to the public, with more advanced capabilities available via subscription. Co-founder and CEO Jiayu Tang told reporters Wednesday that several companies were interested in buying ShengShu’s services, and were not just exploring the tech.

Finance

Stocks making the biggest moves midday: WOOF, TSLA, CRCL, LULU

Published

2 days ago

June 6, 2025

Business Finance News

Finance

Swiss government proposes tough new capital rules in major blow to UBS

Published

2 days ago

June 6, 2025

Business Finance News

A sign in German that reads “part of the UBS group” in Basel on May 5, 2025.

Fabrice Coffrini | AFP | Getty Images

The Swiss government on Friday proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital, following its 2023 takeover of stricken rival Credit Suisse.

The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

“The rise in the going-concern requirement needs to be met with up to USD 26 billion of CET1 capital, to allow the AT1 bond holdings to be reduced by around USD 8 billion,” the government said in a Friday statement, referring to UBS’ holding of Additional Tier 1 (AT1) bonds.

The Swiss National Bank said it supported the measures from the government as they will “significantly strengthen” UBS’ resilience.

“As well as reducing the likelihood of a large systemically important bank such as UBS getting into financial distress, this measure also increases a bank’s room for manoeuvre to stabilise itself in a crisis through its own efforts. This makes it less likely that UBS has to be bailed out by the government in the event of a crisis,” SNB said in a Friday statement.

‘Too big to fail’

UBS has been battling the specter of tighter capital rules since acquiring the country’s second-largest bank at a cut-price following years of strategic errors, mismanagement and scandals at Credit Suisse.

The shock demise of the banking giant also brought Swiss financial regulator FINMA under fire for its perceived scarce supervision of the bank and the ultimate timing of its intervention.

Swiss regulators argue that UBS must have stronger capital requirements to safeguard the national economy and financial system, given the bank’s balance topped $1.7 trillion in 2023, roughly double the projected Swiss economic output of last year. UBS insists it is not “too big to fail” and that the additional capital requirements — set to drain its cash liquidity — will impact the bank’s competitiveness.

At the heart of the standoff are pressing concerns over UBS’ ability to buffer any prospective losses at its foreign units, where it has, until now, had the duty to back 60% of capital with capital at the parent bank.

Higher capital requirements can whittle down a bank’s balance sheet and credit supply by bolstering a lender’s funding costs and choking off their willingness to lend — as well as waning their appetite for risk. For shareholders, of note will be the potential impact on discretionary funds available for distribution, including dividends, share buybacks and bonus payments.

“While winding down Credit Suisse’s legacy businesses should free up capital and reduce costs for UBS, much of these gains could be absorbed by stricter regulatory demands,” Johann Scholtz, senior equity analyst at Morningstar, said in a note preceding the FINMA announcement.

“Such measures may place UBS’s capital requirements well above those faced by rivals in the United States, putting pressure on returns and reducing prospects for narrowing its long-term valuation gap. Even its long-standing premium rating relative to the European banking sector has recently evaporated.”