Top 10 Predictions for China's Science and Technology Internet in 2023 (Part 1)

In 2022, artificial intelligence, metaverse, new energy vehicles, etc. have attracted much attention. In the new year, all walks of life will be full of opportunities and development. So, what changes will there be in China's technology and Internet industry in 2023? This article makes relevant predictions on this issue, let's take a look.

At the end of the year, several martial arts characters from Jin Yong's novels, such as Yang Guo and Yang Kang, have become popular again because their names all contain the word "Yang", which is homophonic with "Yang".

Indeed, many industries, including the technology and Internet industries, have had a hard time. But we expect, and have reason to believe, that after the pandemic is over, the word "yang" will become popular again, and because of its original meaning, "all things grow towards the sun, and everything warms up."

In 2023, driven by new energy vehicles, my country's automobile market will continue to develop steadily and positively. Starting from the Year of the Rabbit, artificial intelligence will enter the "precision strike year" of first having scenarios and then releasing technology, opening a new decade of scale and popularization. The metaverse is very likely to usher in explosive growth and appear in many application scenarios. At the same time, we will see that in 2023, digital technology will play the role of a new engine for industrial transformation and upgrading.

In 2023, we expect the technology and Internet industries to be as agile as a rabbit and show great vitality.

1. Seeing the rabbit and releasing the hawk: AI targets creativity and opens a new decade of popularization

• Original meaning: Only when you see a rabbit will you release the falcon to hunt it. It is a metaphor for taking action only when the time is right.
• New interpretation of the Year of the Rabbit: In the first ten years, the highlight of AI was undoubtedly AlphaGo's victory over the human Go champion. In this stage, the technology (eagle) came first and then the scenario (rabbit), and some detours were taken in commercialization. Starting from the Year of the Rabbit, AI entered the "precision strike year" of first having the scenario (rabbit) and then releasing the technology (eagle). Applications such as AI painting and conversational AI entered the homes of ordinary people at an astonishing speed. Only then did major AI companies start the "arms race" of generative AI, opening a new decade of large-scale and popularization.

Enter a descriptive text, and AI will understand your creativity and generate a painting or a video. Perhaps in the near future, we will no longer need a creative image library, and even one person can replace a video team. In 2022, AI painting will become the most popular AI application for ordinary people. After Stable Diffusion was open sourced, it has almost become synonymous with AI painting.

The growth rate of AI is beyond human imagination. In early December 2022, OpenAI threw out another "blockbuster" ChatGPT, which can actually type code, write manuscripts, write poems, write novels, teach people English, etc. In just 5 days, the number of registered users exceeded one million.

AI painting, ChatGPT, and digital humans are killer applications. The technology behind them is AIGC, which means artificial intelligence generated content, also known as generative AI. And all applications are proving one thing - AI is creative. In the "Top Ten Scientific Breakthroughs of 2022" published by the well-known academic journal Science, "AI is creative" is one of them.

For the capital market, generative AI is a new entrepreneurial track inspired by start-ups, and venture capital in the cold winter is generously betting on start-ups. PitchBook statistics show that in 2022, generative AI raised a total of 9.3 billion yuan, almost the sum of the past five years.

As the global economy is in a downturn, large companies are particularly cautious about innovation. They often come up with scenarios before technologies. After users, capital, and application scenarios are clearly revealed, large companies begin to lay out their plans one by one. It is no longer like the AlphaGo era, when they bet madly on technology and let capital pay for it.

In August 2022, when Stable Diffusion became popular, Baidu launched the AI ​​painting platform "Wenxin Yige" in China, and then developed AI copywriters, AI video producers and other applications based on the Wenxin model. Meta and Google then tried to break through AI painting and developed AI-generated video applications. As long as a descriptive text is input, a video can be output. However, both companies have not yet opened them to the public because AI-produced videos still have problems such as abnormal jitter and unsmooth movements.

He Junjie, head of Baidu's mobile ecology, said at the 2022 Baidu Wanxiang Conference that in the next ten years, AIGC will subvert the existing content production model and create content with unique value and independent perspective at one-tenth of the cost and at a production speed of a hundred or a thousand times.

Popularization and scale are complementary. In 2023, large models will inevitably become the main production mode of AI manufacturers, because only large-scale production can reduce costs. Cost is often an important factor affecting whether an application can achieve popularization.

When reviewing AI technology in 2022, Andrew Ng concluded that although new tools in the previous stage, such as reinforcement learning, failed to bring results that matched the hype, generative AI based on supervised learning ushered in a new wave in 2022.

In 2016, AlphaGo defeated the human Go champion, allowing humans to first meet AI, a powerful "opponent", and ushering in a new era of AI. However, AI technology companies are struggling to find killer applications. When the security market could not support so many AI companies, generative AI came into being, greatly lowering the threshold for AI use, ushering in an era where everyone can use it.

In 2023, the trend will become more and more obvious. Large companies will make profits through large-scale models, and small companies will raise funds through small and beautiful applications, but the vast majority will target generative AI.

In the new decade of AI's creativity, worries and controversies will not disappear. What AI companies need to think about is how AI painting and ChatGTP can go from free to paid? How to define the copyright of AI-created works? If it is unfair for robots to participate in the Olympics, then how can robots create paintings that beat humans and win awards? How can this be fair?

In the past few years, the general public's concerns about AI mainly came from the fact that robots will replace humans in repetitive mechanical labor, such as assembly line workers. In the future, we will worry about whether robots will replace humans in creative labor, such as painters and video editors.

2. Seeing the rabbit and the dog: the domestic gaming industry is recovering and overseas revenue is increasing

• Original meaning: Seeing a rabbit, then turning back to call the hounds to chase it. It means that although the action is a little late, it is still in time if you think of a solution quickly.
• New interpretation of the Year of the Rabbit: In 2022, the country resumed issuing game licenses, adding "fire" to the game industry in the cold winter. As the domestic market environment gradually improves, the game industry is actively planning and looking for new opportunities in 2023. After nearly eight months of suspension, the State Press and Publication Administration resumed issuing game licenses in April 2022. In December 2022, the State Press and Publication Administration announced the first batch of imported game licenses, which was a year and a half after the last issuance of imported game licenses. On January 17, 2023, the State Press and Publication Administration released the approval information of domestic online games in January 2023, and a total of 88 games were approved. With the improvement of policies, game stocks in the capital market continue to gain confidence, and it is generally believed that the issuance speed of Chinese game licenses will return to a stable level in 2023.

Relevant data shows that among the top 30 mobile game publishers with the highest revenue in the world, 7 Chinese companies are on the list. Among them, Tencent Games, NetEase Games and Mihoyo took the top three places, and jointly created an annual revenue of up to US$10.347 billion.

There is no doubt that the Chinese game market will further expand in 2023, and large companies will benefit more. However, it should be noted that the "survival path" of small and medium-sized game companies may be more difficult. In addition to facing the challenge of imported games, the heavy investment of leading game companies will further squeeze their living space.

It is worth looking forward to that 2023 will be a year of frequent blockbuster releases. In the issuance of game licenses in December 2022, NetEase and Tencent, as leading companies, both made gains. Tencent obtained multiple game licenses, including the domestic version of "The Edge of Rebirth" and the imported version of "Valorant", which are basically key game products.

Among them, Valorant is particularly anticipated and concerned by the domestic e-sports community. Although it has never been launched on the Chinese server, Valorant has already swept the world, and data in various dimensions such as online players and live broadcast viewers have repeatedly set new records in the overseas game market.

In 2023, Valorant, which has obtained a version number, is likely to drive a super boom in the PC online game market, relying on the word-of-mouth effect of Riot Games in China and the good foundation laid by League of Legends e-sports. In 2023, for domestic game manufacturers, going overseas is still a main line. Relevant data shows that in the first half of 2022, the actual sales revenue of China's self-developed games overseas reached 8.989 billion US dollars, a year-on-year increase of 6.16%.

As leading companies such as Tencent and NetEase actively expand overseas markets, many Internet giants have also joined in. It is said that ByteDance adjusted the organizational structure of its game business in December last year and determined the requirement that "new products are required to target global users and be globalized projects." Starting in 2023, there will be a number of globalized game products released in different regions.

Challenges lie with opportunities. It is expected that "going overseas" will continue to be a new revenue growth pole for game companies in 2023. Game companies will continue to deepen their overseas game business, expand their overseas market share, and cultivate game products.

3. Lion vs. Rabbit: Traditional Enterprises Complete Digital Transformation in One Go

• Original meaning: A lion uses all its strength to hunt a rabbit, which is a metaphor for taking all the effort to solve small problems seriously.
• New interpretation of the Year of the Rabbit: The digital transformation of enterprises has gone through a long process, but the times are sounding the alarm for all industries and enterprises. Digital transformation is a must for almost every enterprise, not an optional question. No matter which traditional enterprise, even if it does not take this crucial step in the Year of the Rabbit, it will start the process of embracing digitalization in a very short time in the future.

In this process, whether it is a giant with annual sales of billions or tens of billions, a small street shop or startup with only a few people, or even an entire city’s digital transformation, they must all be as serious as a lion fighting a rabbit, and achieve success in one battle, laying a solid digital foundation for subsequent development.

From ERP, OA, SaaS to RPA, 5G private networks, and digital employees, although China's enterprise digital transformation market has gone through a lot, the differences between different enterprises are still very large. Some traditional enterprises have billions in sales, but their ERP systems were only installed in the past two years. Some companies are small, but they are already "cloud-native" digital natives.

Enterprise digitalization is by no means as simple as moving processes, forms, data, etc. to computers and mobile phones; companies that have taken the first step in digitalization are faced with a large number of isolated chimney-like information systems, and secondary transformation and upgrading are imminent; what enterprise digitalization ultimately aims to achieve is a multi-faceted transformation - data analysis drives business improvement, achieves lean operations or business growth, and digital drives the productivity of the entire enterprise.

This has brought invisible pressure to traditional enterprises. In the Year of the Rabbit, if they cling to one corner, they will definitely be eliminated by the times. However, after the passion breaks in, enterprises are also facing complex digital problems, which is also the point where the lion fights the rabbit with all its strength.

For example, where should digital transformation start? How can an in-house technical team meet the standards? How great will the internal resistance to digital transformation be? How to measure input and return? Before answering these questions for enterprises, it is necessary to realize that the key production factors of the digital economy are digital knowledge and information, the carrier is the modern information network, and the driving force is the ability to use information and communication technology.

As a manufacturing powerhouse and an internet giant, my country has rich application scenarios, broad market space and strong endogenous driving force to promote the digital transformation of traditional industries, and the soil for digital transformation is fertile.

For Chinese companies, as long as they seize the opportunity and use information technology as a "guide" rather than a "tool", they can completely surpass European and American companies in information technology capabilities in many industries in the Year of the Rabbit and in the next few years.

However, we need to be aware that compared with foreign technology giants, my country's digital technology companies are still far from world-class standards, so it is particularly important to build a number of world-class digital industry clusters. Only when leading digital economy companies develop and focus on building digital industry clusters can we drive the development of small and medium-sized enterprises and cultivate a number of specialized and innovative digital model companies.

But there is no doubt that the Year of the Rabbit will be a big year for the digital transformation and development of enterprises. The digital economy is becoming a new engine for industrial transformation and upgrading, and digital enterprises that have successfully transformed will be the main force to help the new engine operate.

4. The Metaverse is entering a critical year of development

• Original meaning: To move as swiftly as a running rabbit.
• New interpretation of the Year of the Rabbit: 2021 is called the first year of the metaverse, and the popularity has risen sharply. In 2022, the metaverse will move from concept hype to exploration and practice. In 2023, the metaverse, which has entered its third year, is likely to usher in explosive growth and appear in many application scenarios. In the "Top Ten Technology Hot Words of 2022" selected by many media, "Metaverse" is on the list, and even tops the list. As the most dazzling new technology track, metaverse technology will not only become a new generation of productivity tools, but will also drive many industries into the "metaverse era." Some people say that we now live in two parallel universes of virtual and real, independent and interconnected. Looking back on the past year, both at the policy level and at the enterprise level, there is a "special liking" for the metaverse.

In terms of policies, many places in China have included the development of metaverse technology and industry in the local "14th Five-Year Plan" or issued special action plans in 2022. For example, in Shanghai, the "Action Plan for Cultivating a New Track of "Metaverse" (2022-2025)" was issued in July 2022, proposing that "the scale of metaverse-related industries will reach 350 billion yuan by 2025."

Zhejiang, for example, has launched the "Metaverse Industry Development Action Plan (2023-2025)", which plans to "basically form the province's metaverse industry chain system by 2025, and lead the country in comprehensive industry competitiveness". In addition, Beijing, Guangdong, Jiangxi and other places have also provided policy support for promoting the development of the metaverse.

At the corporate level, leading domestic Internet companies such as Alibaba, Tencent, NetEase, and ByteDance, as well as foreign giants such as Apple, Microsoft, and Meta, have continued to invest in the Metaverse. Even some home appliance companies, clothing companies, and trendy toy brands have crossed over to enter the Metaverse, hoping to get a piece of the pie.

The World Artificial Intelligence Conference held in September 2022 is full of "meta" content. The most advanced metaverse technologies and the hottest metaverse topics, such as digital twins, virtual-real interaction, holographic speeches, AI governance, and data protection, are all focused on the theme of "Intelligently Connected World Metaverse Unbounded", showing a new universe where virtual and real are integrated.

Entering 2023, the Metaverse is still hot. At the beginning of the new year, the Shanghai Municipal Commission of Economics and Information Technology posted the "Shanghai's First Batch of Metaverse Major Application Scenario Demand List", which includes 20 scenarios in 7 categories, including medical health, digital city, classroom education, commercial operation, brand entertainment, cultural tourism and intelligent manufacturing.

The website of the American biweekly Forbes stated that 2023 may be a key year for the metaverse to determine its development direction. According to the 2023 China Metaverse Industry Market Prospects and Investment Research Report, the scale of China's metaverse market will maintain a sustained growth trend from 2022 to 2027, and is expected to reach 126.35 billion yuan in 2027, with an average annual compound growth rate of 32.98%.

So, how should the Metaverse seize this once-in-a-lifetime development opportunity? Gong Caichun, director of the Wuhan Metaverse Research Institute, believes that by 2023, the goal of the Metaverse is to form a commercial closed loop as soon as possible, actively promote the application of the Metaverse in actual scenarios, and then generate actual value. At the same time, it is also necessary to formulate appropriate regulatory policies and find a balance between technological innovation and market order.

It is foreseeable that the metaverse will become one of the focal points of technological competition among countries. While promoting the development of core technologies such as digital twins, VR/AR/MR, and human-computer interaction, whoever can take the lead in formulating governance standards will be able to gain the right to speak in the metaverse market.

In addition, the Metaverse will become an important part of the digital economy and digital cities, and will enter the homes of ordinary people through applications in cultural tourism, medical care, education, entertainment and other scenarios. From the country to the enterprise to the individual, the development of the Metaverse is a top priority.

In 2023, the Metaverse will be able to take advantage of the situation and usher in important opportunities for development.

5. White Rabbit and Red Crow: China's semiconductor industry seeks opportunities amid crisis

• Original meaning: A metaphor for time passing quickly.
• New interpretation of the Year of the Rabbit: Adhere to long-termism and break through the blockade, and China's chips will eventually see the light of day. In recent years, the global semiconductor industry has experienced drastic changes of "alternating hot and cold". In 2021, the global semiconductor industry encountered a global shortage, and the industry was unprecedentedly high, investing in building factories and expanding production capacity. It's just that the situation is changing too fast. Affected by the new crown epidemic, the conflict between Russia and Ukraine, and global inflation, the market demand for chips in 2022 has shrunk rapidly, and manufacturers have shifted from "expanding production investment" to "reducing costs and increasing efficiency". Under the industry's predicament, layoffs, destocking, and compressed investment have become the "main theme" of the semiconductor industry. The World Semiconductor Trade Statistics Organization (WSTS) recently announced that the global semiconductor market growth rate is expected to slow to 4.4% in 2022, in sharp contrast to 26.2% in 2021.

In the capital market, the chill is even more obvious. In 2022, among the top ten semiconductor giants in the world by total market value, the market value of six companies shrank by more than 40%, including TSMC, the world's largest foundry, Intel, the world's largest IDM chipmaker, as well as Nvidia, Qualcomm, and AMD. In the domestic A-share market, the top ten semiconductor listed companies by total market value have all encountered the embarrassment of shrinking market value, with the largest shrinkage exceeding 66% and the smallest shrinkage exceeding 16%.

With the downturn in the global semiconductor market, cost cutting has become a response option for many leading manufacturers. The resulting wave of layoffs is also spreading. Many leading semiconductor companies such as Nvidia and SK Hynix have announced staff reductions.

In 2023, the shadow of economic recession looms over the world. At the just-concluded 2023 Davos World Economic Forum, two-thirds of the economists surveyed by the forum expected a global recession this year, and about 18% believed that a recession was "very likely" - more than double the proportion in the last survey conducted in September 2022. The US economy in particular is very likely to fall into recession.

The overall environment is not good, especially with weak demand from "big chip consumers" such as mobile phones and PCs, the outlook for the global semiconductor industry in 2023 is not optimistic.

Zhu Jing, deputy secretary-general of the Beijing Semiconductor Industry Association, believes that in the coming year, the strategic focus of global integrated circuit manufacturers will shift from "expanding production and investment" to "reducing costs and increasing efficiency." Recently, global smartphone leaders such as Apple and Samsung have also started to cut production and accelerate inventory reduction to reduce market risks.

However, in 2023, the environment for China's semiconductor industry may improve.

On the one hand, with the global market weak, the importance of the Chinese market has become increasingly prominent, making it impossible for semiconductor giants to give up. Just a few days ago, the Dutch Minister of Trade said on a TV show that the Netherlands would not hastily accept the new US regulations on the export of chip manufacturing technology to China, and was consulting with European and Asian allies. Previously, under pressure from the US government, the Dutch government rejected ASML's permission to ship its most advanced machines to China since 2019.

On the other hand, for the semiconductor industry, talent is the most scarce resource. At a time when the global market is weak, it is a good opportunity to absorb outstanding overseas talent and reserve key forces for the development of my country's semiconductor industry.

In 2023, China's semiconductor industry must strengthen its confidence, cultivate its internal strength, seek opportunities in crisis, and the prospects will continue to improve.

Author: Sun Yan, Wang Xin, Jia Tianrong, Shen Yibin, Mao Yu; Editor: Qian Lifu, Ai Tingmei

Source: IT Times (ID: vittimes)