China’s public sector accelerates AI adoption in 2024 as Zhipu and iFlyTek emerge as winners

81 contracts involving the use of large language models for public projects found successful bidders in the first half of 2024, up from one a year earlier

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Public contracts for large language model services with successful bids have surged in the first half of 2024. Photo: Shutterstock

Published: 9:00am, 25 Jun 2024Updated: 9:15am, 25 Jun 2024

Large Chinese firms have accelerated their pace of adopting artificial intelligence (AI) this year, with the number of related contracts surging in the first half, government data show.

The number of tender contracts for services involving the use of large language models (LLMs) that found successful bidders more than doubled between the first and second quarters – from 23 in the three months through March to 58 from April to June 24 – according to figures published on the China Government Procurement and China Tendering and Bidding Public Service Platform websites. The contracts all used the keyword damoxing, the Chinese term for LLM.

LLMs are the technology underpinning conversational AI bots such as OpenAI’s ChatGPT. Since Microsoft-backed OpenAI debuted its hit chatbot in late 2022, Chinese technology firms have raced to put out hundreds of their own LLMs and products that run on them. Only 1 tender contract related to LLMs was signed in the first half of 2023, before a jump in the last quarter of the year, the websites show.

The contracts reflect interest from large Chinese firms, as public disclosures are only required for projects that either involve public interest and safety, public funds or loans from foreign entities. Tech giants Baidu, Huawei Technologies and Tencent Holdings – in addition to some well-funded start-ups – were among the providers with successful bids in the first half.

The numbers offer a glimpse into the growing adoption of AI in China, who is gaining the most traction in this space, and the industries in which these technologies are being applied.

Operators in energy, telecoms, finance and scientific research are the most eager to tap into the potential of LLMs, with these industries seeing 19, 14, 12 and 10 deals, respectively.

A district environmental protection agency in Beijing bought bespoke LLMs to help it predict flood seasons. The Nuclear Power Institute of China and China Merchants Securities are counting on LLMs developed by Beijing-based start-up Zhipu AI to help organise knowledge from materials accumulated over years of operations for more convenient staff use, according to contracts reviewed by the Post.