How OpenAI's Decision Not to Operate in China Will Reshape the Chinese AI Scene

OpenAI's abrupt move to ban access to its services in China is setting the scene for an industry shakeup, as local AI leaders from Baidu Inc. to Alibaba Group Holding Ltd. move to grab more of the field. The ChatGPT creator this week sent memos to Chinese users warning it will cut off access to its widely used AI development software and tools from July, triggering a scramble to fill the void. Since Tuesday, at least a half-dozen companies and startups including Tencent Holdings Ltd. and Zhipu AI began offering incentives to developers making the switch. OpenAI's shift will accentuate the divide between China and the U.S., which is trying to curb Beijing's AI and chip efforts. While the startup's exit offers an opportunity for sector leaders to grow their user base, it also deprives entrepreneurs and cash-strapped startups of some of the best tools available to fine-tune or get their AI applications off the ground.