A powerful internet watchdog reportedly aims to create a system that would force companies to obtain a license before they can release generative artificial intelligence models. 

Citing people close to Chinese regulators, The Financial Times reported that the country's government is looking for balance. 

Earlier this year, China's cyberspace regulator released draft measures for managing AI services. 

The Cyberspace Administration of China regulations said firms must submit security assessments to authorities before public launches. 

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Providers would be responsible for the legitimacy of data used to train products and users must be required to submit real information. 

Content has to follow "core socialist values" in addition to laws, with those who don't follow the rules facing fines or even criminal investigation.

Providers would be fined, have their services suspended or possibly face criminal investigations if they fail to comply with the rules.

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If inappropriate content is generated by their platforms, companies must update the technology within three months to prevent similar content from being generated again, the administration said.

The Financial Times reported, according to people with knowledge of the move, that the licensing regime is part of regulations being finalized as soon as this month.

The administration's director said recently that it needed to ensure AI was "reliable and controllable."

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Two people close to the regulators told the Financial Times that companies in China like Baidu and Alibaba had been in contact with regulators over the past few months to make sure the tech did not breach the rules.

FOX Business' request for comment from an administration representative was not immediately returned. 

Reuters contributed to this report.