IFLYTEK suffered from "censorship" and lost 12 billion yuan in one day

Production | Tiger Smell Technology Group

Author | Tongzhou Old Cat

Editor | Wang Yipeng

Head Picture | Visual China

On October 24th, according to a poster news report, parents claimed that the article "Lin Xiangru" contained content that slandered great figures, distorted history, and violated mainstream values in the iFlytek learning machine used by their children. The parent contacted iFlytek's online customer service and was informed that 'this article has been reviewed'.

Subsequently, the media contacted the staff of iFLYTEK, who stated that they had taken appropriate measures as soon as possible and permanently removed the content. And it was stated that as the article was introduced by a third party, further traceability verification is underway, and a systematic investigation has also been initiated.

Interestingly, at the 2023 Global 1024 Developers Festival, which opened today (October 24th) morning, Liu Qingfeng, Chairman of iFlytek, announced the official release of the Spark Cognition Model V3.0, fully benchmarking GPT3.5. And it is claimed that the iFlytek AI learning machine equipped with the Spark Cognitive Model V3.0 has the ability to inspire interactive AI Q&A and learning assistance.

On the afternoon of October 24th, the stock price of iFlytek jumped to the limit, with an intraday drop of over 10.01%; As of the close, it was trading at 46.7 yuan per share, with a turnover of over 5.3 billion yuan and a total market value of approximately 12 billion yuan evaporated.

01 earned 6 billion yuan a year through learning machines

With the implementation of the "double reduction" policy, training institutions have rapidly decreased, and children's main learning scenarios have returned to school and their families. The pressure of tutoring homework and the cruel enrollment rate have led to an increasing anxiety in many families' education,Many parents' unspoken pain points have given the "learning machines" in the education intelligent hardware circuit an opportunity to emerge.

According to Tianyancha data, there are currently over 7800 education hardware related enterprises; Since January 2023, there have been more than 20 newly registered enterprises, with an average registration growth rate of 35.5%. According to Frost& Sullivan predicts that by 2025, the domestic shipment of learning machines will reach 7.26 million units.

Against this backdrop, iFlytek's smart education business grew by 70% and 49% year-on-year in 2020 and 2021,The revenue exceeded the 6 billion yuan mark for the first time in 2021. By 2022, the smart education business had suddenly experienced sluggish growth, with a revenue of 6.16 billion yuan that year, a year-on-year increase of only 2.6%.

On the evening of October 19th, iFlytek released its third quarter report, stating that the company achieved a revenue of 12.6 billion yuan in the first three quarters, a slight decrease of 0.27% year-on-year; The net profit attributable to shareholders of the listed company was 99.36 million yuan, a year-on-year decrease of 76%. Among them,IFlytek's net profit in the third quarter was only 25.79 million yuan, a year-on-year decrease of 82%.

Image: iFlytek Financial Report

For the significant decline in net profit, iFLYTEK stated that the main reason is that the company actively seized the historical new opportunities of General Artificial Intelligence and firmly invested in the cognitive big model of General Artificial Intelligence.

It is worth mentioning that Liu Qingfeng, the chairman of iFlytek, chose to reduce his holdings of his own stocks in the third quarter. In August of this year, iFlytek announced that the company received a notice from Chairman Liu Qingfeng on August 14th, stating that Liu Qingfeng had sold some of the company's shares through the bulk trading system of the Shenzhen Stock Exchange.

Before this share change, Liu Qingfeng held 168 million shares in iFlytek, equivalent to a shareholding ratio of 7.27%. After this share change, Liu Qingfeng's shareholding decreased to 128 million shares, a decrease of 39.9561 million shares compared to before. At the same time, Liu Qingfeng's shareholding ratio also decreased to 5.54%. Calculated at the closing price of 63.98 yuan per share on August 14th,Liu Qingfeng's reduction in holdings is expected to cash out over 2.5 billion yuan.

What is the effect of 02 re casting the large model?

From the perspective of research and development speed, it is indeed very fast.

In May 2023, the Spark Model was officially released, and three months later, version 2.0 was released. On October 24th, today, iFlytek held a developer conference and released the Spark Model 3.0 version. The company introduced that the comprehensive ability of the model has surpassed that of its domestic counterparts, continuously improving in seven major abilities: text generation, language understanding, knowledge answering, logical reasoning, and mathematical ability. The company claims that the iFlytek Spark 3.0 universal model will fully benchmark ChatGPT, with Chinese language proficiency surpassing ChatGPT and English proficiency equivalent to it.

At the same time, iFlytek announced that it has partnered with Huawei to create an autonomous and controllable large model computing power base "Feixing 1" platform based on the Ascension ecosystem. On this basis, the iFlytek Spark model will initiate larger scale training for benchmarking GPT-4.

However,Compared to Baidu's Wenxin model, Alibaba's Tongyi Qianwen model, Tencent's hybrid model, and Huawei's Pangu model, it claims that the competitive advantage of the Spark model in benchmarking ChatGPT is not significant.According to the "Research Report on China's Artificial Intelligence Large Model Map" released by the New Generation Artificial Intelligence Development Research Center of the Ministry of Science and Technology, 79 large models with a parameter scale of over 1 billion have been released in China, almost entering the "Hundred Model War".

Image: iFLYTEK Learning Machine claims to be carrying a large model of Mars Image source: iFLYTEK official website

Shortly after the release of the Spark Model, the term "ChatGPT for Shell OpenAI" appeared on platforms such as Snowball. iFlytek immediately replied on investor platforms that this is neither factual nor logical.

On August 15th this year,Spark upgraded to version 2.0 and announced that its AI learning machine has been equipped with iFlytek Spark Cognitive Model V2.0, which has seven major human functional features based on the big model. However, the stock market response was mediocre, with a drop of even 8.63% on the 16th.

It was not yet known whether the large model capability had been applied to iFlytek's own production processes outside of product release, and how effective the application was.

03 Focused on big models, but content review fell off the hook

Regarding the inappropriate content of today's iFLYTEK learning machine, iFLYTEK Chairman Liu Qingfeng responded that the content was listed by the supplier for trial during the audit process. After discovering the problem, it was immediately removed from the shelves, and punishment was imposed on the cooperating supplier, as well as corresponding punishment on internal personnel. Liu Qingfeng stated that the content review mechanism of the large model has been quickly put into the learning machine to conduct stricter review.

On October 8th, the "Measures for the Review of Science and Technology Ethics (Trial)" (hereinafter referred to as the "Measures") issued by 10 departments including the Ministry of Science and Technology was officially announced and will come into effect from December 1, 2023. It is required that the design, implementation, and application of algorithms, models, and systems comply with the principles of fairness, impartiality, transparency, reliability, and controllability, comply with relevant national requirements, have reasonable ethical risk assessment and emergency response plans, and have comprehensive and appropriate measures to protect user rights and interests.

AI devices such as learning machines for minors should be given more attention. In the current job search for content security review series on a certain recruitment platform, the proportion of educational enterprises is not high, far lower than that of technology enterprises mainly engaged in social applications.