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Small companies should embrace AI, says VC investor Allen Zhu

Start-ups should be wary of ChatGPT, but embrace it anyway

Allen Zhu is Managing Director and the major partner at GSR Ventures

We’re at the Huawei Cloud Accelerator event, and you're going to speak tonight. What’s your headline message? 
Embrace AI, embrace ChatGPT immediately. Otherwise you'll be out of business very soon.

Just like 10 years ago, when mobile phones were first launched, at the time you had to be “mobile-first.” Now, I think you have to be AI-first. You have to embrace ChatGPT, or what we call generative AI.

Is it ChatGPT in particular? Or lots of different kinds of AI?
Different kinds. For the past few years, most have been analytical AI, like vision and video recognition.

Analytical AI can act according to certain algorithms. But generative AI, like ChatGPT, is very different. It can create a lot of things based on a large model. It's a totally different branch of AI, and more powerful. It can do many more jobs.

Does this really apply to every business? If I make chocolate chip cookies, do I need AI for that?
For cooking food, I think it’s still early. I’m saying it will replace all the white-collar jobs, like drafting documents, taking pictures, taking short videos, even writing code. I think a majority of work will be done by AI very soon.

What's the significance of being able to use AI to write code? Will it get done better, faster than humans can do it?
Much faster getting it done. Just tell the AI what kind of program you want. If you want to build a Snake game, the AI will do it for you automatically. It will check on Google about what a Snake game is, and will find the right code to do that.

Today, I think ChatGPT can improve the programming efficiency of software engineers by 100%. I think in three years, probably it can increase the efficiency by 300 to 500 times, which is really scary.

Will small companies and SMEs benefit, or will the big companies just come in and outcompete them?
Good question. I think every company can benefit from ChatGPT. For example, we [invest in] a company with a hundred employees. The HR Department had what they called an employee relationship manager to answer questions. ChatGPT learned all the answers in two days and the manager was fired.

ChatGPT can improve your internal efficiency immediately. But it’s so powerful, the value you can add to ChatGPT is very, very slim. That's why I think it's unfriendly for new startups. It's good for the incumbents. Uber, Priceline, and others – with plug-ins, they can easily embrace generative AI.

So AI and ChatGPT are not hype.
No, it's very, very real. Five years ago, it was only AlphaGo, which can only play chess, play poker. That's a hype. But now, today, they can really improve the productivity by 10X already. Maybe in three years or five years, we can improve the productivity by another 10X.

How can Huawei Cloud help small companies and startups expand into global markets?
I think Huawei Cloud can add a lot of value to SMEs to go global. China has many smart software engineers who are working very hard. But the single biggest challenge for them to go abroad is a go-to-market strategy. Huawei has experience and domain know-how in this area and has successfully expanded to countries all over the world. I think that can help startups a lot.

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