Why U.S. Carriers Don't "Mix" Big Models

At the just-concluded 2023 World Artificial Intelligence Conference, the large models were completely popular. At the exhibition hall, many people lamented that “everywhere you go, there are large models.” Behind the excitement, it shows the industry’s confidence in the future development of the large model and the entire artificial intelligence industry, and confidence is particularly important at the moment.

In this “Hundred Model War”, apart from Huawei, Ali, Baidu, Tencent, SenseTime and other “big names” in the IT and Internet industry, there is another force that cannot be ignored, and that is the telecom operators. At this grand event, China Telecom officially released TeleChat, a large language model of China Telecom, and demonstrated products in the three directions of large-scale model empowerment data center, intelligent customer service and smart government affairs; China Mobile officially released the artificial intelligence technology innovation model. The latest achievements are the nine-day Haisuan government affairs model and the nine-day customer service model; China Unicom showed its first “innovative business-oriented model” - “Honghu”, which supports the use of text to generate images and images to generate Diversified AI capabilities such as graphs and video clips.

Chinese operators are not only speeding up on the new track of large-scale models, but also promoting the development of my country’s large-scale model and AI industries on a larger level, playing the role of “heroes behind the scenes”.

As we all know, computing power is the core resource of the digital age and the basis for supporting the development of large-scale models and artificial intelligence. To this end, it is necessary to build an integrated and innovative computing power infrastructure, improve the connection infrastructure of the network with the cloud, and create a green and low-carbon computing power. A new model of computing power to build a new pattern of safe and credible computing power.

The background of the new era puts forward higher requirements for traditional network and cloud computing, making operators have to think outside the box and vigorously promote the construction of integrated digital information infrastructure that integrates cloud and network. Chinese operators are working hard in a new direction Forward.

Compared with the high-spirited and fast-running situation of Chinese operators on the AI track, American operators generally appear to be “quiet”. It is those technology giants, such as Microsoft, Amazon, Google, etc., that promote the rapid development of the US artificial intelligence industry. . Over the years, we have rarely seen major moves by American operator giants such as Verizon, AT&T, and T-Mobile in the field of artificial intelligence and large-scale models. Of course, using AI to improve the intelligence level of their own networks does not include them.

The reason for such a situation is very simple. Compared with Chinese operators who walk on “two legs” and promote the integration of “cloud” and “network”, American operators are “lame” and basically do not have their own cloud infrastructure.

The “fruit” that bears today is the “cause” that was planted many years ago.

Time goes back to 2017, which is a year of major turning point in the development strategy of US operators. In May of this year, Verizon completed a data center sale to independent data center operator Equinix for $3.6 billion. On the same day that the transaction was completed, Verizon also announced a blockbuster news that it would sell its cloud and managed hosting business to IBM and cooperate with the latter in the cloud business. Earlier, Verizon has announced the closure of its own public cloud services.

Almost at the same time, CenturyLink, another mainstream operator in the United States, also sold its data center for a transaction value of US$2.3 billion.

Two years later, AT&T did the same, selling its data center hosting business and assets.

The reason why US operators “retreat” from the cloud computing and IDC market is mainly because their opponents are too strong. Verizon and AT&T face “terrorist” opponents such as Amazon AWS, Microsoft Azure, Google Cloud Services and IBM Cloud Services, as well as powerful independent data center service providers. This is obviously different from the Chinese market. Although China’s telecom operators are also facing pressure from Internet giants in terms of cloud service provision, operators have an advantage in the field of IDC data centers.

Verizon and AT&T are at a disadvantage in the fierce competition, so they embarked on the “asset-light” model, packaged and sold their own data centers, gave up the cloud business, and started to cooperate with Internet cloud giants. Judging from the current situation, a “two-two pairing” situation has formed between US operators and cloud service providers.

AT&T and Microsoft Cloud were the first “pair” formed. AT&T transferred its non-network infrastructure computing needs to Microsoft’s Azure cloud, and later even announced that it would migrate its 5G core network to Azure. Verizon and Amazon AWS “join hands” to develop 5G edge computing services. T-Mobile and Google Cloud have teamed up to combine the power of 5G and edge computing to give businesses more ways to embrace digital transformation.

There is only the Internet, no cloud, and US telecom operators have not become a strong participant in the cloud computing market. In sharp contrast to this, in recent years, China Telecom has continued to increase investment in cloud and broadband infrastructure construction. Tianyi Cloud has formed a “2+4+31+X+O” echelon distribution, becoming the world’s largest telecom operator cloud , China’s largest hybrid cloud. Mobile Cloud and China Unicom Cloud are also developing rapidly, continuously improving their competitiveness in the domestic cloud computing market.

Judging from the operating performance in recent years, driven by the strong development of emerging businesses represented by cloud computing, a second growth curve has been formed. The revenue and net profit of Chinese operators have shown a relatively large increase. Pretty good. On the just-announced Fortune 500 list of listed companies in China in 2023, the rankings of the three operators have further risen. To No. 30, China Unicom rose from No. 43 to No. 39. In stark contrast to this, US operators have performed poorly in recent years, and their rankings on the Fortune 500 list have continued to decline.

The impact of cloud computing and artificial intelligence on the development of the industry is undoubtedly profound and huge. At present, Chinese operators have seized the opportunity, while American operators have compromised with reality, but their future may become a bit bumpy.