In a surprise turn of events, OpenAI has announced they are cutting off API access to several regions including China and Hong Kong.

OpenAI Logo

Despite all the controversies surrounding the once “NGO in nature” AI firm created to revolutionize the industry that ended up in the opposite way, the sudden decision created quite a problem for AI startups based in China because a lot of them utilize API calls to effectively communicate with GPT models yet starting next week, they won’t be able to anymore.

There are 2 ways Chinese companies access OpenAI’s API – One, Through Microsoft Azure Cloud services; Two, by renting other overseas servers to act as a relay – though some would complain that the latter would occasionally contribute to stability issues and whatnot.

But looking from another point, this means that Chinese-made LLM solutions can now say “Hey, we are still here, we can cut you a deal, let’s work something out” because they essentially had their “greatest competitor” saying quits on their own.

Information from Qihoo 360 suggests just that, stating China’s LLM industry will finally be able to grow and nurture rising star companies while rooting out the lesser ones in addition to matching every regulatory requirement listed by the Chinese government.

On the other hand, many organizations like Alibaba, Zhipu, Tencent, Baidu, etc, are rallying for the switch to their own offerings that include “migration of data, plans, and discount schemes. Specifically Zhipu, they are matching one-to-one in terms of what OpenAI did from training and consulting services to tokens and other tech support. Meanwhile, Baidu Intelligence focuses on migration speed as “they only need 5 minutes to complete it”.

The trade war between China and the US isn’t just about “goods and products” anymore but expanding to anything that can bend geopolitical advantages to their side which in this case, tech and AI. With the appointment of NSA Director Paul M. Nakasone to OpenAI’s board and security committee, the decision to ban Chinese access to OpenAI might be connected and closer than one may think.

And let’s just say that Sam Altman will lose out on this huge chunk of revenue without his say in it, due to how many tokens were created and consumed.



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