AI Company Emotibot Denies Full Shutdown, Will Optimize and Restructure Loss-Making Business

On February 22, in response to the news that the artificial intelligence company Emotibot was reported to have ‘partially suspended production for half a year,’ the company responded through its WeChat official account, stating that it is currently optimizing some loss-making businesses. This includes a work restructuring plan involving certain positions, with a few positions being suspended rather than a complete shutdown of operations.

In addition, Emotibot also emphasized that the company’s internal operations are normal, and will strengthen core products to ensure competitiveness in the AIGC field.

Emotibot informed employees via email that due to the difficult operating environment faced by the company and various unfavorable factors, starting from 2023, there has been a significant decrease in business demand, leading to serious cash flow pressure and challenges for the company.

The email mentioned that, in order to ensure long-term development, Emotibot will optimize the loss-making business lines. Some departments and positions will be suspended from work for 6 months starting from February 20, 2024. During the suspension period, the company will pay wages according to the minimum wage standard of Shanghai and continue to contribute social insurance and housing provident fund for employees according to relevant regulations in Shanghai.

An employee from Emotibot confirmed that some of the business operations are indeed in a state of suspension.

This AI company founded by Kenny Chien, former Vice President of Microsoft (Asia) Internet Engineering Institute, was established in 2015. Up to now, it has received 7 rounds of financing from investors including BOC International Investment, Hubble Capital, Cowos, Yunhui Capital etc., with the latest round D+ completed in February last year.

During his time at Microsoft (Asia) Internet Engineering Institute, Kenny Chien once promoted the landing of Microsoft Xiaobing in the communication application LINE in Japan. In the early stages of entrepreneurship, Kenny Chien, who had a relevant technical background, focused on natural language processing and emotion computing, aiming to develop emotional artificial intelligence robots by combining emotion recognition with brain-like conversation systems.

Intelligent customer service, enterprise assistant, multimodal emotional digital human are its main product lines, and customers are distributed in industries such as finance, internet, digital government/city, smart terminals/internet of things, energy, and operators.

The emergence of large language models is an important milestone for Emotibot, which is based on natural language processing technology. In early 2023, the company launched the large model fine-tuning training platform EmotiBrain, aiming to solve the ‘last mile problem’ of implementing large models in industries. From the cooperation information disclosed by them in 2023, it can also be seen that Emotibot’s strategic focus is on connecting foundational large models with downstream customers.

In March 2023, Emotibot announced the establishment of a strategic partnership with Sugon and Zhipu AI Company. By July, it officially signed a strategic cooperation agreement with Huawei Cloud to announce that the EmotiBrain Model Factory will fine-tune pre-trained models based on the PanguLM for enterprise customers to customize industry-specific large models.

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But it is not easy for large models to achieve commercial landing. The reduction of business demand and the increase in cash flow pressure faced by Emotibot are just a microcosm of the transformation pains of some NLP (Natural Language Processing) enterprises in the era of large models. How to better understand customer needs, and combine large language models to provide solutions that meet customer ROI (Return on Investment) expectations is the key to whether transformation can be successful.

A practitioner in the fields of NLP technology and e-commerce expressed that the excitement of ‘everything is worth redoing’ within the industry at the beginning of 2023 has subsided in the second and third quarters. Whether they are top-tier or mid-tier clients, overall, in 2023, they are all in a wait-and-see mode, continuously exploring where large model technology should be implemented.

The contradiction between customers’ trivial needs and the cost of large-scale deployment always exists. Which high-frequency scenarios can run ROI in what form of delivery is still a focus of industry attention.

‘At least from the perspective of 2023, there are still many scenarios where the actual ROI performance differs from customer expectations,’ said the above practitioner.

The person in charge of Emotibot once stated that the company’s new development work on digital human-related products is still ongoing.

As one of the early startups focusing on emotion computing, Emotibot still has certain technological accumulation in the field of digital human-related products. Institutions such as BOC International and CICC that have invested in this company also possess certain industry resources. However, after surviving a setback, whether this AI startup can turn the tide remains to be tested over time.