Will ChatGPT and AI reignite China's metaverse?

With tech giants like Meta shuttering their metaverse divisions in favor of artificial intelligence (AI) efforts — despite arguing that the metaverse will remain its primary product — spectators are convinced that the previously feted virtual ecosystem has been knocked off its internet throne by the AI gold rush. The lucrative potential of AI has attracted a flurry of investors and adopters over the first half of this year. OpenAI’s ChatGPT set the record for the fastest growing user-base application in history, after reaching 100 million active users in January. Meanwhile, the artificial intelligence market is projected to see an annual growth rate of 37.3% from 2023 to 2030, climbing to a value of over 1.5 trillion, according to Forbes. “The AI discussion has been propelled to the mainstream through two very accessible tools: ChatGPT and Midjourney,” Olivier Moingeon, Chief Commercial Officer of Exclusible, tells Jing Daily. “They accelerated adoption and testing, allowing millions of people to play around with words and visuals. From there, it has been pretty easy to understand that AI would be an agnostic tech layer, capable of powering an infinite amount of B2B or B2C applications.” This uptick in AI attention has demoted the metaverse from a reigning hot topic to a benchwarmer, despite the estimated billions of dollars that have been pumped into the industry over the past five years. A tale of two technologies Between AI and the metaverse, there's one clear winner that has caught the fashion crowd's appeal. The visually charming elements of artificial intelligence have resonated heavily with fashion-conscious audiences, giving birth to a new breed of creatives harnessing the tools to both capture the zeitgeist and leverage their creativity. AI fashion design accounts, such as @ai_clothingdaily, have shot to fame as a result of their hyper-realistic creations. These artists are often inundated with fan bases asking how they can purchase the AI-generated pieces themselves, despite the items being purely imaginative and not made for real use. While AI fashion design has been heavily adopted, the same can’t be said for metaverse fashion. With the exception of breakout players like Roblox, companies are still struggling to make metaverse-centric pieces, such as AR-powered wearables and avatar wardrobes, crack mainstream appeal. A challenge fueled by the technology’s nascency, inaccessibility, and clunkiness is often difficult to rectify. Brands such as Vaquera, Levi’s and Casablanca are integrating AI into their strategies over metaverse activations for this reason. For cult labels like Vaquera and Casablanca — two new kids on the fashion block— AI offers a cheaper and less risky alternative to projects like NFTs, which often require bigger financial investments without guaranteed rewards. It’s also a fast track to gaining cultural exposure and taking their marketing campaigns to new dimensions. The end of the ‘Chinaverse’? With more organizations jumping ship to AI-focused activations, speculation as to whether the metaverse will prevail is at an all-time high. It’s a conversation that has overtaken China in particular. Baidu’s recent pivot away from metaverse activations to AI-generated content (such as its slated ChatGPT rival, Ernie) has led to a decreasing willingness to invest more resources in its metaverse business, leaving applications like XiRang at a cliff’s edge. China has seen countrywide closures of its metaverse-centric ventures this year, a shift that has mostly affected its digital fashion and collectibles platforms, such as Tencent’s Huanhe and Bytedance’s Pheagee. Subsequently, the metaverse market has found itself at a tipping point. It is estimated that 58% of companies across the landmass have already deployed AI, and 30% are considering integration. Spending across China's artificial intelligence industry is forecast to hit 14.75 billion in 2023, as the country races ahead to establish itself as an AI superhub. With China’s tech behemoths funneling billions of dollars into the segment, trends like digital collectibles are rapidly being replaced by increasingly popular AI-generated celebrities and KOLs. It is a craze that has accelerated so quickly that the country is now cracking down on the regulation of such content. A happy union The boom in artificial intelligence may have metaverse-centric companies concerned, but Justin Banon, co-founder of decentralized commerce layer Boson Protocol, believes they shouldn’t be. Banon explains that the use cases for both innovations are so distinct that their relationship is less competitive, but more a collaborative and mutually-beneficial one. "AI can create almost anything, but you don’t know if it’s real or not. What technology like the blockchain can then do is prove what is real and what is not. [But] in a completely AI-generated metaverse, you don't know whether the person you're buying from is genuine, whereas the metaverse brings these cryptographic assurances,” he tells Jing Daily. "AI can create almost anything, but you don’t know if it’s real or not. What technology like the blockchain can then do is prove what is real and what is not. [But] in a completely AI-generated metaverse, you don't know whether the person you're buying from is genuine, whereas the metaverse brings these cryptographic assurances." As metaverse attention flags, Banon believes that AI could in fact revitalize its appeal, rather than replace it. “I think those are the two very, very powerful forces — AI for its creativity and blockchain for its assurance — that I think [are] going to build this entire new world,” he continues. Apple, for example, has hinted that it will be implementing generative AI into its Vision Pro headset over time, a convergence which demonstrates how divisions can invest in both metaverse and AI tools to bolster their applications. Samuel Huber, CEO of LandVault, the largest real estate company in the metaverse, also believes that there is still a gap in the market for the metaverse, despite AI's domination. With a team of over 120 architects, designers, and developers, LandVault has built metaverse experiences for brands like Mastercard and L’Oréal, as well as Web3 projects like World of Women. “Despite the fact that AI is currently a hot topic on the internet, the metaverse still has a place in modern web culture. In fact, there are many ways in which the metaverse and AI can coexist and benefit one another,” Huber says. Huber argues that people should see AI as a catalyst to democratizing access to the metaverse — something the digital terrain has struggled with previously. “While AI is capable of producing content, it lacks the creativity and human touch that users bring to the metaverse. The metaverse enables people to demonstrate their talents and express themselves creatively,” he says. “This feature of user-generated content contributes to the metaverse's ongoing relevance in web culture by fostering its vibrant and dynamic nature.” As artificial intelligence continues to disrupt the internet status quo, its curb appeal could help buck the trend of the metaverse — and reignite its relevance in the process.

Will ChatGPT and AI reignite China's metaverse?

On this page

Published June 23, 2023

Sectors

Insights

Company

Will ChatGPT and AI reignite China's metaverse?