Low-Code Boom Extends to A-Shares

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December 16 has recently become a significant date in the backdrop of a burgeoning trend in low-code development platforms, which itself surged into the spotlight around 2018. This sector is now witnessing a resurgent interest, especially with the rapid advancements in AIGC, or artificial intelligence generated contentSome industry insiders regard low code as the next top-tier field following the explosive growth of AI search functionalities.

Recent reports highlight the explosive popularity of tools like Cursor, an AI programming assistant that has captured the hearts of many developers in Silicon ValleyIn one notable instance, an individual user managed to create an app in just an hour using Cursor, which subsequently topped the App Store's paid downloads listThe enthusiasm for low-code platforms has spilled over into China's A-share market, with companies like Baolande, KaiPu Cloud, and others actively communicating their involvement in the low-code sector, drawing significant interest from investors.

Interviews conducted by reporters reveal that low code is advancing at an accelerated pace, driven by a high demand for efficiency and cost reduction in enterprises

It appears that the technology is now entering an engineering-grade level, with the incorporation of AI promising to significantly enhance usabilityWhile the sector is optimistic about its potential to revolutionize production methods and reshape technical team dynamics, pressing concerns remain, including model hallucinations, high implementation costs, and data security challenges that need comprehensive resolutions.

The low-code landscape currently features numerous participants, raising questions about whether this segment can be classified as another hot AI domainOne company representative expressed that there are still relatively few players focused on vertical low-code modelsTheir extensive experience in low code, coupled with recent developments in large model capabilities, places them in a unique positionCurrently collaborating with Zhiyu, they are optimistic about integrating capabilities into their platform.

On this front, it was revealed that Jinxiandai recently disclosed its development of a specialized low-code large model based on the ChatGLM4 language model from Zhiyu

Similarly, PuYuan Information is tapping into the AI and low-code synergy, focusing on large and medium-sized clients in sectors including finance, energy, and advanced manufacturingThe company's representative indicated they are leveraging external large models as well as developing proprietary ones.

Low code, which simplifies application development through visual tools and less coding, is becoming a more grounded application based on generative AI technologyFor instance, Anysphere, a startup founded by four MIT undergraduates now valued at $2.5 billion, launched an AI code editor named Cursor this past August, gaining widespread acclaim as a revolutionary natural language programming assistantA user crafted an app called "Cat Light" utilizing Cursor, quickly achieving the top spot in the App Store's paid rankings – a testament to the ease and speed the platform offers.

This buzz has had a ripple effect in the secondary market, with shares in low-code companies seeing a notable surge

This trend hints at a broader interest that dates back to last year when the buzz surrounding ChatGPT sparked a wave of investment in low-code solutionsThe competitive scene now appears mature and intense, indicating that the sector is reaching a boiling point.

Historically, low code has roots tracing back to IBM’s rapid application development tools in 1980. The term was officially coined by the research firm Forrester in 2014. Since then, various global giants such as Salesforce, AWS, Google, Microsoft, and Oracle have entered the frayThe Chinese market has also begun to take notice, with offerings such as Tencent's Weida low-code, Feishu low-code platforms, DingTalk's Yida, and NetEase's CodeWave emerging as significant players.

Moreover, Tencent Cloud's development arm serves over three million mini-program developers with its suite of tools that includes "WeChat Cloud Development" and the low-code tool "Weida." Recently, Tencent introduced "Cloud Development Copilot," an AI-assisted development tool allowing developers to generate and modify applications using natural language, showcasing a glimpse into the future of low-code development fueled by AI.

In conversations with Tencent’s cloud development head, it was explained that the focus lies in leveraging large models to alter development experiences

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As developers' needs evolve, Tencent is exploring two routes: the first involves generating ready-to-deploy code via Cloud Development Copilot, which streamlines application building; the second integrates large models within mini-program development, providing developers direct access to cutting-edge AI capabilities.

Industry reports emphasize that companies in the AI code platform realm aspire to quickly carve out their niches by leveraging proprietary technology or specific industry knowledgeAs more players refine their products and explore new scenarios, the competition among developers intensifies.

The advent of applications such as Cat Light could symbolize a maturation of the AI-generated code landscapeYet, Tencent’s representative cautioned against premature conclusions regarding technology maturityHe observed that software solutions of this nature could indeed be developed through low-code approaches, and thus, the sudden emergence of one particular application doesn’t universally reflect a significant leap in technical capabilities.

Nevertheless, the demand for AI-generated code has grown significantly this year

Insights gathered suggest that mini-programs and internal management systems dominate current developer utilization in China, with a notable percentage easily supported by rapid development frameworks — aligning perfectly with the advantages low-code platforms promise.

Assessing shifts in the market and client budget constraints, Tencent’s cloud representative acknowledged that service providers must address cost issues, which, in turn, has heightened the demand for AI-generated solutionsHe shared that contractor expenses have notably decreased from an annual average of around $30,000-$50,000 two years ago to about $10,000-$20,000 currentlyAs cloud service and operational costs remain steady, the introduction of AI-assisted development tools plays a critical role in optimizing human capital costs.

Insightfully, under the pressure of an economic downturn, companies are increasingly keen to implement digital transformation strategies that emphasize cost-cutting efficiencies, thereby amplifying the value of low-code platforms

Compared to previous years, a growing number of users are proactively familiarizing themselves with the concepts and capabilities of low-code solutions, taking the initiative to push project approvals forwardAnalysts from IDC confirm that users are becoming increasingly knowledgeable about these technologies.

Amidst these advancements, it’s crucial to note that the Tencent lead further delineated between programming-level and engineering-level tools within AI code developmentEmphasizing engineering tools' capacity for driving significant changes in production applications, he illustrated the evolution from viewing low-code solutions as merely 'toys' to appreciating their potential roles in real-world engineering scenarios.

For the future, development strategies will require a keen focus on customizing AI solutions to enable production-ready applications rather than merely catering to consumer needs — a trend evidently echoed by industry heavyweights like Microsoft and Google.

The ongoing evolution towards widespread AI integration in code development raises larger questions about the industry's trajectory

Google’s CEO recently asserted that over 25% of new code generated internally at Google now relies on AISuch statements trigger discussions regarding the democratization of programming — will everyone eventually have the ability to program? Yet, the complexity inherent in technical knowledge continues to pose barriers for novices eager to dive into this field.

It is relevant to mention that the developer behind Cat Light did not begin completely from scratch; they had prior experience in product operations within the tech industry and had self-taught Python programmingResearch conducted indicates that it typically takes roughly a month for complete beginners to become proficient in utilizing low-code platforms efficiently.

Reflecting back on traditional low-code solutions prior to the AIGC wave, one legal tech product manager pointed out that while low code was quite popular for a few years, shifting needs and the extensive requirement for code alteration diminished their practical applicability — relying heavily on flexible human intervention in more complex scenarios.

Nevertheless, different application scenarios require careful consideration

Many low-code solutions have made significant strides, particularly in standardized enterprise applicationsA reliance on AI can minimize the necessity for in-depth understanding regarding data architecture or networking principles, streamlining the user experience.

Application development tools combining low-code and AI are poised to address flexibility challenges while improving data handling—an aspect keenly highlighted by Tencent's cloud development head, who anticipates that in the forthcoming years, we might witness the emergence of several 'phenomenal' products that reshape production methodologies.

Insights predict that the evolution of this sector will follow a three-stage trajectory: the initial phase focuses on lowering entry barriers and enhancing efficiency; within the next couple of years, the Copilot capabilities will mature further, leading to comprehensive and robust AI development assistants; and ultimately, transitioning towards advanced smart application platforms that amalgamate elements of low-code, traditional coding, and AI-driven functionalities.

As the integration of AIGC and low-code solutions continues to gather pace, challenges surrounding model hallucinations, elevated implementation costs, and data security concerns beg for meticulous exploration and resolution

Although such issues are persistent, solutions that enhance the efficacy of AI-assisted development tools can help mitigate associated risks.

Critically observing the budget and functional requirements, the Tencent cloud head has echoed the pervasive sentiment regarding the existence of large model hallucinations while also suggesting that engineering-grade tools can help sidestep accuracy issues to an extent through defined applications in smaller, specific contexts.

On the cost side, leveraging caching methodologies can effectively manage expenses associated with AI data generation, while careful planning might adjust expenditures concerning the deployment of supportive large models for low-code platforms.

As the tech landscape continues evolving, one thing is clear: the momentum from AI-driven low-code development represents a fascinating chapter in technological advancement, affecting how businesses approach digital transformation, cost efficiencies, and user accessibility