Kai-Fu Lee: Only big tech can chase super-large models

Why it matters

In early 2025, Kai-Fu Lee made a decision that shook China's AI community — merging part of 01.AI's team into Alibaba. In this LatePost interview, he becomes China's first AI founder to publicly admit 'we're no longer chasing AGI': 'For startups to chase super-large models is overreaching — only big tech can burn that kind of money.' He details 01.AI's strategic pivot from model company to application company, his frank response to 'bubble' concerns, and his sober advice to Chinese AI founders.

Full Interview

Key takeaways

• 'For startups to chase super-large models is overreaching' — compute costs are measured in billions; startup funding structures can't sustain this arms race.
• 'We're no longer chasing AGI' — he was the first in China's AI circle to say this publicly; many founders agree privately but won't say it.
• 01.AI's strategic pivot: from building foundation models → focusing on enterprise applications (Wanzhi and productivity tools).
• On the 'bubble': 'It's not a bubble yet, but if nobody builds applications and everyone just races model parameters, it will be in two years.'
• Advice to founders: 'Pick directions big tech doesn't want to do and can't do well — vertical scenarios, deep services, non-standard needs.'