Author | Bai Jiajia
Editor | Shan Hetao
Art Editor | Fisherman
Source: Silicon Research Lab
The ancients said, "At fifty, one knows the mandate of heaven." This "profound and mysterious" mandate of heaven has now struck Ding Lei, the 51-year-old founder of NetEase.
As a "happy and slow tycoon" in the Chinese internet industry, Ding Lei and NetEase do not chase after trends, appearing extremely laid-back. In contrast to the miraculous achievements of BAT, NetEase has developed a methodology of making money slowly over the years.
What many people do not know is that between 2000 and 2020, only two companies in China achieved an annual capital return rate of over 20%: Maotai and NetEase.
To some extent, this low-key money-making impression is being shattered by AI's large models. Not long ago, Ding Lei stated that "exploring the innovation and application of AI large models at the fastest speed is NetEase's top priority at present."
At the same time, NetEase is making frequent moves in the field of large models. NetEase Youdao has released the vertical large model "Ziyue" in the education field, while NetEase Fuxi's self-developed Yuyan, Fuxi, and industrial large models have all been implemented.
For today's technology companies, large models symbolize opportunities to change the company, industry, or even the world, undoubtedly a kind of mandate of heaven. But for 51-year-old Ding Lei, what exactly has awakened him to large models? And what will it bring to NetEase?
01. The first half of life driven by self-esteem
To understand NetEase's various layouts in the field of large models, we need to go back to Ding Lei's first half of life.
As Ding Lei himself said, he only does things that interest him. Whether in the early days of entrepreneurship or the subsequent launch of Yixin and pig farming, this "interest-driven" approach runs through his first half of life.
"Let's do something for the internet together." In 1997, Ding Zhifeng, the founder of China's earliest IT studio dedicated to popularizing internet knowledge, was moved by Ding Lei's words and agreed to work with NetEase on the relevant matters of a free electronic magazine without discussing any conditions. The magazine became one of the leading electronic magazines at the time, alongside Sohu.
Equally moved was Zhang Jingjun, then the director of the Guangzhou Telecom Data Bureau.
One afternoon in May of the same year, Zhang Jingjun flipped through a five or six-page "Enrichment and Development of ChinaNet Proposal" in his hand. Ding Lei, in a fluent manner, described his possession of search engine, PUSH, and BBS deployment technologies. Through these technologies, the problem of the lack of Chinese information on ChinaNet could be solved, and users could "go abroad" on the internet.
Ding Lei's enthusiasm and professionalism won the favor of Guangzhou Telecom. They provided Ding Lei with servers, network bandwidth directly connected to the backbone network, telephones, and office space.
In addition to the early days of entrepreneurship, two things happened during NetEase's development that "interested" Ding Lei.
One was in 2009 when NetEase started pig farming. At that time, many people took it as a joke and criticized Ding Lei for showing off, but he was serious.
In Ding Lei's view, as the world's largest producer and consumer of pork, China was unable to produce the best pigs, which he found shameful. Additionally, he had an idea that if NetEase could integrate the entire industry chain and promote it to everyone involved in pig farming, young adults would no longer need to go to the city to earn money, and many problems such as left-behind children in rural areas and hollowing out of the countryside could be alleviated.
The other was the launch of Yixin in 2013.
At that time, the user base of WeChat had approached 500 million, making it the second national-level communication application after QQ for Tencent. Ding Lei was full of dissatisfaction with this product, and in an interview, he emphasized that WeChat was a "non-progressive" software. In private gatherings, he even criticized a certain feature of WeChat as a morally questionable design, likening it to "a brothel opened downstairs in a five-star hotel."
To outsiders, Ding Lei's launch of Yixin was seen as a move to compete with WeChat for the communication market. However, when asked about the necessity of Yixin's existence, Ding Lei first denied the claim that Yixin would definitely be defeated by WeChat, and then turned the conversation around, stating that as long as Yixin existed, users would have a fair choice, and Tencent would have to consider Yixin's movements in making every decision.
Whether it was pig farming or confronting WeChat, these were things that NetEase was not good at and were very difficult. But Ding Lei's "interest" in these matters was actually driven by a strong sense of self-esteem. This strong self-esteem made him unafraid to engage in seemingly very difficult matters, hoping to use them to change the industry or field.
In many of the detailed stories about Ding Lei, behind the labels of happiness, laid-backness, and nonchalance, the desire for respect is the underlying theme of these stories.
Financial writer Wu Xiaobo once commented that Ding Lei is the "only happy boss among the richest," and reports about Ding Lei on the internet often use his iconic smile as the cover.
But the reality is different. In the context of being the richest, Ding Lei is the happiest, but if judged by Ding Lei himself, although these more than 20 years of experience may not have left any regrets, they have not brought any labels that truly make him proud either.
For example, regarding being the "richest," Ding Lei publicly expressed disdain for this identity. From 2003 to 2004, he was the Forbes richest person, but he refused all interviews and used the excuse of going on vacation abroad.
The first generation of internet entrepreneurs may be one of the few labels that he is proud of. Several parts of the history of internet development have used a lot of ink to describe his entrepreneurial origins—personally smashing his iron rice bowl, being expelled by the Ningbo Telecom Bureau as a "rebel."
Years later, Ding Lei still feels proud and excited about this "rebel" moment: "This was the first time I fired myself. In one's life, there are always many opportunities, but opportunities come with a price. Whether there is the courage to take the first step is often a watershed in life."
This kind of courage to "fire oneself" is hard to find in NetEase's later development. Today's NetEase is far from the three major portals of the past. Ding Lei is trying to shape the company into a more tasteful and responsible image with cloud music and Youdao, but NetEase is still seen as a "gaming company," with some media even questioning, "Apart from games, what else does NetEase have?"
The once emerging "Three Musketeers of the Internet," Sohu's Zhang Chaoyang has returned to his beloved physics classroom, and Sina's Wang Zhidong has long faded from the internet scene. Only Ding Lei is still waiting, waiting for the next opportunity to change the world and gain self-respect.
Finally, he waited for the so-called "empowering thousands of industries" large model.
02. Ding Lei's "Large Model View"
Before large models truly changed the world, various business stories had already emerged. In addition to BAT and Huawei, there is also a large group of entrepreneurs and academics, reminiscent of the flourishing scene of the internet era.
ChatGPT has indeed brought large AI models into the spotlight, adding fuel to the industry's development.
Ding Lei is certainly aware of all this. Over the past few years, whether it is NetEase Youdao or Fuxi Studio, a specialized institution under NetEase for game and AI research and application, they have been involved in the field of artificial intelligence. Ding Lei understands the industry's progress and, as an entrepreneur who has gone through the grassroots era of the internet, he can also foresee the astonishing vitality behind the technological wave.
"This is a historic moment, and its significance may be no less than the second invention of fire by humans," Ding Lei commented on the development of AI.
In Ding Lei's understanding, this fire first illuminated games and education.
"Justice" is an example of NetEase's integration of AI technology with games. The functions of facial customization and intelligent NPCs in the game are supported by models such as Wenyant, Wenzhi, and Danqing.
Applying AI technology to games is not so much Ding Lei's wish as it is his responsibility as the head of a gaming company. These are not enough to help him gain respect, especially his own self-respect.
On the other hand, "Ziyue Large Model" has brought six major functions to NetEase's terminal products, including LLM translation, virtual spoken language coach, and AI essay guidance.
Ding Lei naturally has a sense of mission for education; otherwise, he would not have decided to donate 100 million yuan years ago after reading "This Screen Might Change Destiny," to support more schools in implementing online education, making "knowledge flow without class distinction, and every place in China is a school district."
This "large model view" permeated with grand narratives and personal self-esteem further guides NetEase's layout in this field, even before ChatGPT ignited AI.
In November 2021, NetEase initiated a project to develop a mining robot, transferring the technological capabilities accumulated in games to physical mining machines. This project was able to sprout because in the game "Endless Reincarnation," an AI-imitated learning was used to launch a super difficult man-machine battle robot. A year later, this world's first high-altitude mining robot had already started excavating soil in the unbearable cold wind of Litang.
At the WAIC conference this year, the "Loader" jointly developed by NetEase Fuxi and China Construction Eighth Engineering Division also made its official debut, capable of environmental perception and autonomous operation in unmanned driving situations. In fact, in 2021, the Fuxi Studio established a robot research department, which has begun to explore commercialization and open up cooperation with the industry's upstream and downstream.
In addition to "shifting from virtual to real" in the industrial route, Ding Lei and NetEase have also combined AI with social welfare. For example, NetEase has used its technology to create the first AI tool to restore the original voice of hearing-impaired people, which is currently open to hearing-impaired people nationwide for free.
In Ding Lei's grand plan for large models, there are maintaining achievements, innovation, products that cover mainstream values, and products integrated with the industry. It seems that Ding Lei is gradually finding his former self who galloped and acted decisively on the internet, and has rapidly completed the layout and implementation of large models while many peers are still searching for scenarios.
From the perspective of valuation performance, the market is full of expectations for NetEase's integration with large models. In the first half of this year, NetEase's stock price reached as high as HK$176.3 per share, with a maximum increase of over 50% during the year. Its market value quietly surpassed JD.com and Baidu, securing a place in the top 5 internet giants after Tencent, Alibaba, Pinduoduo, and Meituan.
03. Can the Non-Laid-Back Ding Lei Change His Fate with Large Models?
The ambitious Ding Lei is back, and NetEase's layout in the field of large models is also quite extensive. But this time, can he achieve the same level of success as in the early 21st century?
One reality is that today's large model arena is crowded with competitors, and each one possesses strategic foresight and execution capabilities that are no less than Ding Lei's.
As Baidu, which was the first to shout "All in AI," repeatedly emphasizes, AI is not just about access, but about the restructuring of existing businesses. Baidu's founder, Robin Li, has given his own conclusion on the current competition in large models: "Training large models is meaningless; the application opportunities are greater." The open-source "Wenxin Yiyuan," which has been made available to the entire society, has become a new toy for the national consumer market.
Led by Xaoyaozi, Alibaba Cloud has become the first domestic tech giant to open-source large models. After the open-source release of Tongyi Qianwen-7B, Alibaba Cloud's large-scale visual language model Qwen-VL was announced as open-source from the start.
Even Tencent, which has always been shouting "not in a hurry," has finally rushed to release its own general large model. Pony Ma, in response to how he views "large models" at a shareholders' meeting, expressed a viewpoint similar to Ding Lei's: "This is a once-in-a-hundred-years opportunity, similar to the industrial revolution of inventing electricity."
In addition to the fierce competition, large models also rely on first-mover advantages. The snowball effect of large models has already shown that whoever first forms a data flywheel can be the first to enter exponential growth. The "plan before acting" that Ding Lei repeatedly praised in the past may now become a fatal flaw.
The education large model track is a typical example.
In terms of functionality, although "Ziyue" claims to be the first education large model, both iFlytek and Baidu's general large models, as well as the specialized education large models on the market, can offer similar functionalities and compete with Ziyue.
In terms of performance, with the open availability of Wenxin Yiyuan, Xinghuo, and Tongyi Qianwen to society, the data collection battle between enterprises has entered a new stage. Model capabilities, represented by Chatbot, will once again see a significant improvement, and the risk of NetEase falling behind will also increase.
In terms of ecological layout, iFlytek, which already has a layout in the education field, has formed a closed-loop ecosystem of "model + application + ecology." While NetEase's large models have achieved results and cases in the education field, they still appear somewhat thin in comparison.
Finally, in terms of the breadth of scenarios, NetEase also has limitations.
Due to the "illusion" of large models, there is a misalignment between buyers and users. The reputation of learning large model products is therefore uncertain, as it is influenced by various factors that can interfere with learning achievements. In the current competition, channel advantages still outweigh technological advantages.
Therefore, DingTalk, which entered the education market during the pandemic, and iFlytek, which has accumulated many customers in the B-end and G-end, have both developed a complete AI system tailored to the campus scene.
In this dimension, NetEase, which already lacks experience in the B-end, is clearly unable to compete with the first two.
In the To B field, since 2015, NetEase has successively launched four major To B brands: NetEase Zhiqi, NetEase Shufan, NetEase Lingxi, and NetEase Fuxi, dedicated to enterprise services, big data business, collaborative office, and AI application and research. However, over the past eight years, unlike the clear strategies of other tech giants in the To B field, NetEase's cross-product concept and vague positioning strategy have relegated it to the "second tier" in the To B battle among the tech giants.
To some extent, Ding Lei's all-out attack in the field of large models can be seen as NetEase's "battle for legitimacy."
Turning the clock back to the day Ding Lei and Zhou Zhuolin founded NetEase, Ding Lei said the new company must be involved in the internet and must have the character "网," while Zhou Zhuolin insisted that the new company should make it easier for netizens to access the internet and must have the character "易."
The combination of their wishes gave birth to NetEase. The name NetEase embodies the spirit of that era. Today, the internet has already become widespread, and this name has gradually become only a "historical significance."
For Ding Lei and NetEase, who are no longer laid-back, how to find their position again in the new technological wave and solve some remaining issues still needs to be addressed. Just as Ding Lei himself said, "For the appearance of fire, some people are afraid of being burned by it, while others will use it to create everything. This truth must be clearly understood by policymakers, especially by our own company."
Whether they will be burned or create everything, for Ding Lei and NetEase, time is running out to answer this question.
References:
Industry Insider: Eight Years in To B, NetEase Has No Voice
Character: Ding Lei's Fate Theory
36Kr: NetEase Fuxi Robot: The First Unmanned Excavator Lands on a 4000-meter Plateau, Accelerating the Innovation of Traditional Productivity
"Boiling for Fifteen Years: China's Internet (1995-2009)"
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