On February 20, Danny Lan, founder of West Lake Xinchen, an AI service enterprise, denied rumors that the company was considering acquisition by Wang Huiwen, the billionaire co-founder of Chinese takeout giant Meituan. Wang, who retired in 2020, was one of the first entrepreneurs to aim at creating the Chinese version of OpenAI.
The sharing economy, blockchain, 3D printing, VR/AR, metaverse, and autonomous driving have all been popular topics that emerged in Chinese scientific and technological circles and attracted entrepreneurs. Compared with those topics, the recently popular ChatGPT may hold even greater business and commercial opportunities.
Lan Zhenzhong’s comment may be a signal of the urgent need for talent by domestic companies looking to integrate AI services similar to ChatGPT.
On February 13, Wang Huiwen announced that he had invested $50 million to set up Beijing Lightyear Technology Co., Ltd., a company that develops smart voice assistance software, with a valuation of $200 million. However, the field of AI that encompasses programs such as ChatGPT is typically capital-intensive. According to Wang, the next round of financing has been secured for $230 million, backed by top venture capital institutions. According to 36Kr, these VCs include Source Code Capital, ZhenFund, and others.
However, finding talent in AI has always been a challenge for Chinese startups. The ownership structure of Beijing Lightyear Technology reflects the difficulty in finding talent with skills in algorithms. Wang’s funds accounted for 25% of the shares, and the remaining 75% of the shares will be used to attract top R&D talent to work for the company.
Lan himself may be able to meet Wang’s requirements for top R&D talent. Lan earned his doctorate degree from The School of Computer Science at Carnegie Mellon University. In 2018, he joined the Research and Machine Intelligence Group of Google AI and conducted research in natural language processing (NLP). In two months, he trained a lightweight version of a large language model called BERT.
After returning to China to join Westlake University in June 2020, Lan set up an in-depth learning laboratory. He started to develop an AI psychological counseling platform and established West Lake Xinchen. He recalled three advantages of creating a startup at the university. In particular, the university environment provided him access to data of over one million users, the complete training and reasoning framework, and a pool of available talent. Lan’s expectations for a CEO include an ability to integrate top resources, business foresight, and a firm belief in the opportunity brought by large language models.
A research report published by BOC International, a subsidiary of the Bank of China, showed that the number of registered users of ChatGPT has surged, suggesting that AI-generated content (AIGC) has great potential. However, the institution argued that the high investment cost in building ChatGPT is not yet justified considering its current usage, application scenarios, barriers to entry, and commercialization potential. Large companies with data and capital are expected to benefit more from ChatGPT than AI software companies.