Great points. I don't know if this is analagous to what's happening in the US, but cloud storage ain't so cheap anymore. Could we be heading to a point where consumers start choosing their AI universe based on integrated services? Why do I keep paying for three different cloud storage plans from Apple, Microsoft, and Google? Thanks to Gemini, I am really tempted to switch to a Gmail+Docs+Sheets+Gemini exclusive, all on Google Cloud. I am even thinking about finally dropping my iPhone and Macbook for a Pixel+Chromebook hardware setup because I can talk to Gemini more easily that way. What do you think is more likely in China?
Great question, Anthony. The short answer: this is already happening in China, and faster.
Alibaba's whole restructuring is exactly this logic. Qwen as the free model that pulls developers and users in. Alibaba Cloud as the revenue engine underneath. Custom chips as the cost floor. That's the TongYunGe architecture I wrote about.
The difference in China is the entry point. Most Chinese users already live inside super apps like WeChat and Alipay. So the consolidation path isn't "switch your hardware." It's AI getting embedded into platforms people already use every day. ByteDance is doing this with Doubao inside Douyin. Tencent is doing it inside WeChat.
The competitive intensity is also higher. At least four major players (Alibaba, ByteDance, Tencent, Baidu) are all running full-stack strategies simultaneously. In the US, Google is arguably the only one with a comparable vertical integration from model to cloud to chips.
Your instinct is right. AI is becoming the reason people pick an ecosystem. China is just proving it on a compressed timeline.
Great points. I don't know if this is analagous to what's happening in the US, but cloud storage ain't so cheap anymore. Could we be heading to a point where consumers start choosing their AI universe based on integrated services? Why do I keep paying for three different cloud storage plans from Apple, Microsoft, and Google? Thanks to Gemini, I am really tempted to switch to a Gmail+Docs+Sheets+Gemini exclusive, all on Google Cloud. I am even thinking about finally dropping my iPhone and Macbook for a Pixel+Chromebook hardware setup because I can talk to Gemini more easily that way. What do you think is more likely in China?
Great question, Anthony. The short answer: this is already happening in China, and faster.
Alibaba's whole restructuring is exactly this logic. Qwen as the free model that pulls developers and users in. Alibaba Cloud as the revenue engine underneath. Custom chips as the cost floor. That's the TongYunGe architecture I wrote about.
The difference in China is the entry point. Most Chinese users already live inside super apps like WeChat and Alipay. So the consolidation path isn't "switch your hardware." It's AI getting embedded into platforms people already use every day. ByteDance is doing this with Doubao inside Douyin. Tencent is doing it inside WeChat.
The competitive intensity is also higher. At least four major players (Alibaba, ByteDance, Tencent, Baidu) are all running full-stack strategies simultaneously. In the US, Google is arguably the only one with a comparable vertical integration from model to cloud to chips.
Your instinct is right. AI is becoming the reason people pick an ecosystem. China is just proving it on a compressed timeline.
Great writeup! Thanks, Poe. Such interesting times. I wonder what he does / where he goes next...