5Y Capital x Volcano Engine | Product Innovation and Business Transformation in the Era of Large Language Models

Recently, 5Y Capital led dozens of its portfolio companies on a visit to Volcano Engine. The event centered on in-depth discussions around "how companies can find their business positioning and application scenarios amid the large model wave to drive product innovation" and "opportunities in AI technology application and business transformation in the era of large model value creation."

The event also showcased ByteDance's extensive explorations and practical work in the large model space. Combined with Volcano Engine's competitive advantages in model performance and technical capabilities, the company has accumulated numerous application cases across different industries — which sparked lively interactive discussions among the guests on site.

At the event on product innovation and business transformation in the large model technology wave

01.

Panel Discussion: Concrete AI Applications and Business Opportunities

During the Volcano Engine × 5Y Capital dialogue session, Volcano Engine President Tan Dai and 5Y Capital Partner Kai Liu discussed specific application examples and business opportunities in the era of large models, analyzing application results across different domains and exploring future trends and potential commercial opportunities.

Volcano Engine President Tan Dai noted that large models hold very broad prospects for product innovation and potential business transformation across various fields, with profound implications for the software and SaaS industries. In the near term, no single industry has been dramatically disrupted by large models, mainly because large models don't completely replace human labor but rather assist in addressing unmet needs, making it easier for companies to expand their business scope. However, as large model costs and pricing continue to improve, they will help enterprises achieve greater efficiency and cost reduction, enabling more application scenarios to transform and take shape — gradually bringing new opportunities and challenges to every industry.

"The ability of large models to generate code will bring transformation to the software industry — the potential is enormous."

Tan Dai

President, Volcano Engine

5Y Capital Partner Kai Liu observed that compared to AI startups in China and the US, Chinese companies are catching up rapidly on the model front, while application-layer startups in both countries each have their own distinctive characteristics. Notably, unlike the mobile internet era, when users naturally tended to expect apps to be free, the large model era has made everyone aware of the high costs behind the technology — which to some extent favors commercial monetization. At the same time, the value of vertical industry model frameworks will become more prominent, as they can combine traditional open-source software approaches with targeted custom design. Going forward, enterprises in more sectors can leverage the continuous optimization of large model technology to build more innovative and differentiated products.

"We're not currently approaching this from an AGI perspective — expecting AGI to solve all problems in one fell swoop. Accordingly, the value of certain vertical industry model frameworks will become more prominent in the future. Alongside the diversification of business models, open-source models also hold significant importance."

Kai Liu

Partner, 5Y Capital

02.

How Enterprises Can Implement Large Models

As large models reshape our world and business models, how can enterprises accurately assess technology trends, formulate practical strategies, and avoid the many pitfalls and traps in the implementation process?

Ning Du, Senior Director of Industry Solutions at Volcano Engine, shared his expert perspective. Du believes enterprises need to take a multi-pronged approach to large model implementation. First, in selecting large models, they should comprehensively evaluate performance, prioritize benchmarking, and ensure security — mitigating risks through filing procedures, firewall sandboxing, and other measures. Second, when integrating large models with the enterprise, alignment with company knowledge is essential; depending on circumstances, choose fine-tuning, external knowledge bases, or a combination of both, and transform enterprise data into information and knowledge that large models can effectively comprehend. Third, at the strategic level of large model implementation, remain vigilant against ten major traps including layoffs, technology-driven approaches, process-orientation, and assumptions about knowledge/data abundance. Fourth, in actual implementation, business units should participate in co-creation to clarify boundaries between the enterprise and large models, plan implementation paths, build AI-native capabilities and talent reserves, and drive maturity development.

Shuyun Feng, Head of the Volcano Ark Solution at Volcano Engine, introduced the development journey of Volcano Engine's Doubao large model and related product services, focusing on concrete application cases across different industries to share practical experience. The Volcano Ark large model platform brings together mainstream large models on the market and provides a range of services and functionalities, enabling customers to easily select and access models. Among these, ByteDance's self-developed Doubao large model has attracted and served numerous B2B customers through its model performance, breadth of application, and competitive pricing. Doubao can generate natural language text, perform speech synthesis, and handle various other tasks, providing intelligent services and application support for users and enterprises.

On site, 5Y portfolio companies engaged one-on-one with Volcano Engine experts on topics including "structured output from Volcano models," "large model investment decisions and the development of B2B and B2C businesses," and "how to leverage large models to help customers increase profitability, improve efficiency, and reduce costs."

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