AI start-up decodes policies to predict next regulatory move

A Hong Kong start-up has made an analogy between a government and a computer program, saying its activities can be mapped, converted into structured data, and studied using computers – to the extent that its next move can be predicted.

Bilby, which bills itself as an artificial intelligence-powered decoder of government policy, uses machine learning to analyse the policies of several major economies, predominantly China. By processing voluminous data, it could generate insights about what governments might intend to do and predict regulatory changes ahead of the event, the company said.

“Governments are always telling everybody what to do or what they are doing because they have to communicate at some point with the public. And that is a very rich data source,” founder Ryan Manuel said.

“The more we can read those communications around the world, across different languages, across different cultures, the better off we will be.”

Bilby works by collecting millions of documents’ worth of publicly available data on government policy, ranging from official announcements at all levels of government to media coverage and information on over 100,000 listed and private companies.

It gathers this information in a centralised database, augments it with relationship maps and data on key individuals, labels it, and uses it to train its algorithms, including the ability to run sentiment analyses on documents and filter out propaganda-like language. It then turns the output into software programs, such as a ChatGPT-like function that users can query.

While initially focused on China, Bilby has since rolled out tools for India, the Middle East, and Nigeria, with others in the pipeline. The firm said it had predicted several notable regulatory changes ahead of their announcement, including China’s 2021 crackdown on the private tuition industry and a similar clampdown last year on the pharmaceutical sector.

Manuel, a data-analyst-and-consultant-turned policy adviser with stints as a China analyst for the Australian government and professor at the University of Hong Kong, launched Bilby in 2021.

He named the company after an Australian marsupial, a desert-dwelling, rodent-like creature with outsize ears that give it unusually good hearing, akin to the company’s mission of “picking up” regulatory signals that might otherwise be missed.

Bilby, one of the portfolio companies of venture capital and accelerator firm Brinc, was a finalist in the Global Scaleup Competition at last year’s Hong Kong FinTech Week, and is one of three Asian start-ups in the current cohort of Endless Frontier Labs, an accelerator program run by New York University’s business school. Its clients include investment banks and hedge funds.

While the commercial use of AI tools trained on massive amounts of data, such as OpenAI’s

ChatGPT, has soared, analysts have long flagged the quality of the data they are trained on as an area that warranted scrutiny.

As “a product of its methodology and circumstances”, data can be vulnerable to challenges like infrastructure limitations, structural biases, and ethical concerns, according to experts writing in an Asia-Pacific Economic Cooperation policy brief.

Any AI-based tools trained on data must “consider these limitations and, where necessary, correct for any methodological or structural bias”, they added.

While China had been putting out less statistical information, it was not alone, Manuel said, describing the drop in reliable data as a “worldwide problem”, citing Saudi Arabia and Nigeria, among others.

Statistical data was also different from the government activity – and statements about what it intended to do such as documents for consultation – tracked by Bilby, Manuel added.

Despite China’s reputation for opacity, “President Xi Jinping is not giving fewer speeches than he used to … There are constant WeChat posts, there’s official newspapers, there’s always information coming through”, Manuel said.

“There’s a decrease in reliable data, but governments still pump out a lot of narrative. The difference is AI allows a lot more interpretation of narrative at scale,” he said.

He added getting the timing of changes right was often harder than spotting the actual policy moves themselves.

Looking forward, China watchers could see crackdowns on healthcare and the financial sectors and stimulus through local government bonds and credit expansion, Manuel said.

“But the signal that everyone’s waiting for is a clear sign on real estate,” he said.

There’s a decrease in reliable data, but governments still pump out a lot of narrative RYAN MANUEL, FOUNDER, BILBY