The ChinaTalk host asked how open-weight AI can pay for itself when it needs so much capital. Bian says the spending worries him less than the economics of serving the models. Software could be built once and sold many times, but AI inference costs money every time it runs.
…for example. But are we there yet? Do we have a good agent which can be a very, I would say, day-to-day use applications on phone? I don't think we're there yet. We are at the stage in which you have, I would say, 2,000 weather and stock apps in App Store. I think we're at that moment. Yeah.
…were kind of the genre of the finding that you were talking about earlier is that AI is so capital intensive. Whereas unlike the example you raised earlier, this one is just eating up the bottom lines of big companies around the world. And I'm really curious where that bet leads in your projection.
…But now we all understand we need more than such a big volume. That big volume, that volume which we think is big, is much bigger. Yeah. So the capital expenditure of AI is really high. I wouldn't really worry too much about the expenditure itself. What really concerns me at this moment is the gross margin. But think that is because we just came out of our last hype cycle of technology. So for SaaS and for mobile internet, you're actually having a business model viable because the gross margins of building a software is probably 95%. That software is reproducible and standardized product. You only have to build it once and distribute that many times. We don't see the same thing happens in AI right now. The gross margin is really low and 30%, 40% are like pretty good already on inferences. But people having this strong perception that, you know, hey, I'm entitled to enjoy this for free. And I'm entitled to have this for free…
explain what semantic routing is for the uninitiated among us?
I apologize. So, semantic routing, I might not really use the term very accurately. So, if you're a technical listener, bear with me. So, imagine semantic routing as a gateway in which you're using a model or as models in this auto mode, quote unquote. So, the product will essentially show that…
When you say a good product experience in the context of an AI model, what are you thinking about?