AI’s amazing race

Hello. Jane and Saritha here, human reporters in Hong Kong and Bangalore covering artificial intelligence in Asia. But first...Today’s must- [View in browser]( [Bloomberg]( Hello. Jane and Saritha here, human reporters in Hong Kong and Bangalore covering artificial intelligence in Asia. But first... Today’s must-reads: • Microsoft construction workers [were fired]( • Salesforce investors [watch for activist investor influence]( • Goldman Sachs’ digital asset team [is hiring]( Taking risks Alphabet Inc.’s Google, Baidu Inc. and Microsoft Corp. are all sprinting to get ahead in the race to create the world’s best chatbot, and yet, the one that sparked this global frenzy was a startup. OpenAI is now very well funded, courtesy of a $10 billion commitment from Microsoft, but it does suggest that the moment we’re in harbors opportunity for the little guys. The biggest challenge with artificial intelligence today is how to best use it, and startups will always have the advantage of being able to experiment more freely. Google’s ChatGPT rival, Bard, cost the company $120 billion in market value overnight after the machine made a mistake during a public demonstration. Entrepreneurs in China and India said tech giants will have to work in tandem with startups to win the race. The former has the huge computational power and proprietary data troves needed to make a chatbot sound intelligent — and the other has the agency to try bold, and potentially foolish, things. One example is Urvin Soneta’s Synth AI Labs Inc., an Indian startup whose software transcribes and summarizes audio conversations for corporate customers. Soneta, 26, said small companies can own a niche and don’t have to go after a giant market from the start like a big tech company does. The Hong Kong-based startup Pantheon Lab Ltd. uses OpenAI’s GPT-3 to power its product. Ivan Lau, the CEO, said Pantheon doesn’t have the resources to train its own large language models and has to rely on big companies like Meta Platforms Inc. to open-source their language libraries. Small companies focus on the applications people use while the big ones provide the raw materials — that’s Lau’s vision. There’s plenty for big tech to be optimistic about, though. Cloud providers enjoy a disproportionate advantage, said Rathin Rawal, a PwC and Kearney alum who’s incubating a new AI startup in Toronto. Alibaba Group Holding Ltd.’s Daniel Zhang agrees. The chief executive officer said during the company’s last earnings call that there’ll be exponential growth in demand for computing power to support AI applications and that will be “a big opportunity” for Alibaba. China presents a unique challenge that Silicon Valley is unlikely to crack. Chinese companies are rushing not just to create a smart chatbot but one that complies with the country’s strict censorship rules. Baidu or Tencent Holdings Ltd. is much better practiced at implementing state diktats than any newcomers might hope to be. —[Jane Zhang](mailto:hzhang901@bloomberg.net) and [Saritha Rai](mailto:srai33@bloomberg.net) The big story Apple’s Chinese suppliers are seeking to exit the country far faster than many observers believed as tensions rise between Beijing and Washington, [investing in expansion plans in countries like Vietnam and India](. Get fully charged The European Union’s top antitrust official warned that global regulators focusing on mega deals like Microsoft-Activision may reach different conclusions, saying, “[We cannot be in a race](.” The US is reviewing existing licenses for [exporting items to Huawei](. The EU is narrowing its probe into Apple over the company’s [treatment of music streaming services like Spotify](. Watch: Zoom’s financial chief indicated the [video conferencing company is making a comeback](. Bain Capital’s venture arm closed a $1.9 billion tech investment fund, [setting a new record for the private equity giant](’s 20-year-old venture capital business. More from Bloomberg Listen: [Foundering: The John McAfee Story]( is a new six-part podcast series retracing the life, the myths and the self-destruction of a Silicon Valley icon. Subscribe for free on [Apple](, [Spotify]( or wherever you get your podcasts. Get Bloomberg Tech weeklies in your inbox: - [Power On]( for Apple scoops, consumer tech news and more - [Cyber Bulletin]( for coverage of the shadow world of hackers and cyber-espionage - [Soundbite]( for reporting on podcasting, the music industry and audio trends - [Game On]( for reporting on the video game business - [Screentime]( for a front-row seat to the collision of Hollywood and Silicon Valley Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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