A lesson from China’s first LLM wave

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In focus

• Gobi hunts for its next AI winners in university labs
• Douyin data reveals what AI sells best
• A look back at our map of Chinese founders in Southeast Asia

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Hello reader,

VC firm Gobi Partners had a reasonable case for sitting out China’s first wave of large language model startups. Training the best models takes money, chips, and talent, so it makes sense to root for the giants like Alibaba and ByteDance rather than pour money into emerging founders.

Yet in January, Zhipu, a spinout from a Tsinghua University lab, went public in Hong Kong. When I asked Gobi managing partner Chibo Tang whether the VC firm had been too cautious, he said it probably had.

In today’s first top story, Tang explains how universities have become a key part of Gobi’s investment strategy. Over the past year, the firm has backed more than 15 university projects – all AI-related.

But while Gobi is looking to universities for its next AI bets, Alibaba and ByteDance already have something startups can only dream of: millions of shoppers within reach of their chatbots.

Singles’ Day puts that advantage to the test. Getting chatbots in front of shoppers is one thing; getting them to buy is another.

Meanwhile, guest writer Jacob Cooke looked at sales data from 15 Douyin stores for our second top story. He found that the chatbot’s contribution varied widely depending on what shoppers were buying. Think water bottles and supplements, and how much consideration each purchase involves.

For brands selling products that take some explaining, it may already be worth tracking how many sales start with a question to a chatbot.

Glenn Kaonang, journalist

Editor’s note: The Nvidia scandal has sparked plenty of debate across Asia’s tech circles. In today’s edition of The Prompt, our twice-weekly AI newsletter, we examine what that means for Asia. We’ll have more on the reactions in next Monday’s edition. Catch up on past issues here.

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