Fu­ture of AI

High hopes still placed on AI in­dus­try but Chi­nese in­vestors are be­com­ing more ra­tio­nal

Global Times - - Front Page - By Zhang Dan

Ex­perts say China’s AI mar­ket has cooled off as in­vestors be­come more sober this year com­pared to 2016 and 2017

Sec­ond-tier cities hope to as­cend to top tier by de­vel­op­ing AI in­dus­try

The gov­ern­ment is striv­ing to de­velop AI through tal­ent schemes, AI ed­u­ca­tion

Huang Wei’s son sleeps ev­ery night with an AI robot de­vel­oped by Huang. The young boy plays with it ev­ery morn­ing when he wakes up, be­cause Huang and his wife are both very busy.

As the CEO of the Beijing-based artificial intelligence start-up Unisound, known in Chi­nese as Yun­zhisheng, Huang said the idea of de­vel­op­ing an AI robot for chil­dren came from his ex­pe­ri­ence as a fa­ther. The robot helps chil­dren prac­tice oral com­mu­ni­ca­tion skills and teaches them Chi­nese po­ems. Huang’s son now en­joys spend­ing a great amount of time with it.

China’s State Coun­cil un­der­stands the sig­nif­i­cance of AI ap­pli­ca­tions to decrease costs, em­power eco­nomic growth and even bring trans­for­ma­tion to in­dus­tries in the com­ing era. The coun­cil re­vealed its am­bi­tion in July 2017 to de­velop an AI in­dus­try worth 1 tril­lion yuan ($145.7 bil­lion) and be­come the world’s lead­ing AI in­no­va­tion hub by 2030.

The Chi­nese gov­ern­ment is pro­vid­ing sup­port­ive poli­cies and fund­ing to the in­dus­try, en­cour­ag­ing a great number of start-ups in the field. AI is be­com­ing a buzz­word that at­tracts cap­i­tal.

Al­though me­dia re­ports warns the AI in­dus­try is ex­pe­ri­enc­ing a bub­ble, ex­perts told the Global Times that the mar­ket is cool­ing down and in­vestors are more sober this year com­pared to 2016 and 2017, leav­ing the in­dus­try to de­velop in a nor­mal way.

Why China?

Search­ing “AI” on China’s Even­tbrite coun­ter­part Huodongjia, 515 con­fer­ences turn up in the re­sults. Af­ter the State Coun­cil an­nounced the strate­gic plan in July 2017 to de­velop the in­dus­try, gov­ern­ments at all lev­els are striv­ing to re­spond to the call.

In ad­di­tion to at­tract­ing top tech­nol­ogy tal­ent with en­tic­ing re­wards, many cities are hold­ing AI-re­lated con­fer­ences for pro­fes­sion­als, in­vestors and me­dia.

Zhang Yi­cong, a se­nior an­a­lyst at fi­nan­cial data ser­vice provider Jing­data, told the Global Times that some sec­ondtier cities hope to find op­por­tu­ni­ties to as­cend to the first-tier, with the as­sis­tance of ei­ther in­no­va­tive busi­ness mod­els, or tech­nol­ogy in­no­va­tion.

For in­stance, Hangzhou, a city in East China, is be­com­ing a top-tier city be­cause the head­quar­ters of Chi­nese dig­i­tal con­glom­er­ate Alibaba Group is lo­cated there, Zhang said.

Trans­form­ing to “smart cities” with the as­sis­tance of AI can take those cities to the “fast lane,” Zhang added, and of­fi­cials in mu­nic­i­pal gov­ern­ments are dar­ing to take a risk on de­vel­op­ing cut­ting-edge tech­nol­ogy in or­der to gain achieve­ments in their ca­reer records.

“Smart cities” are de­signed to run more ef­fi­ciently by us­ing a big data net­work and AI sys­tem. About 500 cities have pro­posed “smart cities” strate­gies so far, the Peo­ple’s Daily re­ported on Tues­day.

The craze for the city of the fu­ture comes from the huge mar­ket for AI. For ex­am­ple, China’s great vol­ume of data and vast use of CCTV cam­eras en­able AI ap­pli­ca­tions in the se­cu­rity field to flour­ish.

Equipped with 20 mil­lion CCTV cam­eras, China now has the largest mon­i­tor­ing net­work in the world, ac­cord­ing to Amaz­ing China, a six-episode doc­u­men­tary co-pro­duced by the Pub­lic­ity Depart­ment of the Com­mu­nist Party of China (CPC) Cen­tral Com­mit­tee and China Cen­tral Tele­vi­sion.

Be­cause of the great amount of data pro­duced by the large pop­u­la­tion, as well as weak data reg­u­la­tion in the coun­try,

“China has passed the worst pe­riod of AI bub­bles. Even though some in­flated val­ues re­main, the in­dus­try has tended to be more ra­tio­nal.” Huang Wei CEO of the Beijing-based artificial intelligence start-up Unisound

China is a promis­ing mar­ket for in­dus­tries that rely on fa­cial recog­ni­tion, Zhang said.

Fa­cial recog­ni­tion is not only for main­tain­ing so­cial se­cu­rity.

Zhe­jiang Univer­sity also uses it to al­low stu­dents to pay for meals at the cafe­te­ria, news site thep­a­per.cn re­ported in Fe­bru­ary.

The adop­tion of AI tech­nolo­gies in peo­ple’s daily life could help bring sta­bil­ity to so­ci­ety and con­ve­nience to peo­ple, ex­perts said.

Huang said that at present, AI ap­pli­ca­tions in the vis­ual field have a large mar­ket share.

He added that AI ap­pli­ca­tions in the voice field have more de­vel­op­ment po­ten­tial.

Al­though the de­mand to main­tain pub­lic se­cu­rity brings many or­ders to vis­ual AI com­pa­nies, Huang pre­dicted there will be a glut in the mar­ket.

“The gov­ern­ment is ‘pay­ing the bill’ for vis­ual AI com­pa­nies, but I don’t think you can put a hun­dred cam­eras in one room,” he said.

Less frothy

A 2018 CB In­sights study shows that the fund­ing for China’s AI start-ups sur­passed that in the US for the first time in 2017. Some $15.2 bil­lion went to AI start-ups last year and 48 per­cent of the fund­ing was for Chi­nese firms.

Liu Duo, pres­i­dent of the China Academy of In­for­ma­tion and Com­mu­ni­ca­tions Tech­nol­ogy (CAICT), and also sec­re­tary gen­eral of the Artificial Intelligence In­dus­try Al­liance (AIIA), said at the China Artificial Intelligence Sum­mit in Nan­jing re­cently that ac­cord­ing to in­com­plete sta­tis­tics, there were 848 AI com­pa­nies in China by 2017, which held a mar­ket size of 21.7 bil­lion yuan.

How­ever, a large amount of cap­i­tal go­ing to AI in­dus­tries may lead to an in­vest­ment bub­ble that quickly col­lapses.

Xiong Weim­ing, a part­ner of China Growth Cap­i­tal, told news por­tal Jiemian re­cently that the AI in­dus­try is rem­i­nis­cent of the Groupon craze in pre­vi­ous years.

The vast herd of in­vestors and gov­ern­ment funds are very pas­sion­ate, while first-tier in­vestors are cau­tious. The suc­cess of lead­ing AI com­pa­nies has led to many start-ups fol­low­ing the trend.

Huang said China has passed the worst pe­riod of AI bub­bles. Even though some in­flated val­ues re­main, the in­dus­try has tended to be more ra­tio­nal. He also said ca­pa­ble teams will run fur­ther and faster since AI is dif­fer­ent from other in­dus­tries: you can­not over­take oth­ers at a cor­ner.

Talk­ing about whether China’s AI in­dus­try is over­heated, An­drew Ng, co­founder of Cours­era, and for­mer head of Baidu AI Group and Google Brain, told the Global Times that we can­not judge whether the in­dus­try is over­heated or not since some start-ups have suc­ceeded, and some have not.

He men­tioned Gart­ner’s hype cy­cle, which sug­gests that AI tech­nolo­gies will be­come avail­able to the masses – the so­called “de­moc­ra­tized AI.”

Gart­ner’s hype cy­cle rep­re­sents how cut­ting-edge tech­nol­ogy goes from con­cep­tion to ma­tu­rity and ap­pli­ca­tion.

Ac­cord­ing to Gart­ner’s 2018 hype cy­cle anal­y­sis, most AI-re­lated tech­nolo­gies are at the high spot, which means high ex­pec­ta­tions are placed on the in­dus­try. Zhang said this is why AI seems to gain more fame than is war­ranted. Cur­rently, AI helps com­pa­nies decrease costs, but it seem­ingly lacks the abil­ity to cre­ate some­thing new.

Ng be­lieves that AI could em­power busi­ness greatly if the com­pa­nies choose a core field and spe­cific tech­no­log­i­cal bar­rier to over­come.

He ad­vised start-ups not to com­pete with AI gi­ants such as Google or Baidu. In­stead, he said de­vel­op­ing an area in which the com­pa­nies spe­cial­ize in is more im­por­tant.

Tal­ent short­age

The de­cid­ing fac­tor in the AI com­pe­ti­tion be­tween China and the US will be tal­ented peo­ple.

In ad­di­tion to gov­ern­ment fund­ing to firms, China is now at­tract­ing more AI tal­ent to work in the coun­try with de­cent pay and good ben­e­fits, such as hous­ing and bonuses.

For ex­am­ple, na­tional schemes like the Thou­sand Tal­ents Plan and the Yangtze River Scholar Award are both at­tract­ing AI tal­ent.

In April, the Min­istry of Ed­u­ca­tion re­leased an AI in­no­va­tion ac­tion plan for uni­ver­si­ties to train more tal­ent to re­spond to the 2030 goal, en­cour­ag­ing more AI teach­ing and re­search in uni­ver­si­ties and re­search in­sti­tutes.

Ng en­cour­aged more ed­u­ca­tion in the AI field and ap­plauded China for do­ing a good job. He also pro­posed that more on­line AI re­sources could be of­fered to tal­ent both in the US and China. This could help train skilled work­ers for the whole AI in­dus­try.

Xu Tao, direc­tor of the In­ter­na­tional Co­op­er­a­tion and Ex­changes Depart­ment at the Min­istry of Ed­u­ca­tion, told the China Daily in April that 10 Chi­nese uni­ver­si­ties have set up AI-re­lated ma­jors. And the min­istry said in March that 283 uni­ver­si­ties are li­censed to of­fer data sci­ence pro­grams.

In July, 26 uni­ver­si­ties ap­plied jointly for set­ting up AI ma­jors in un­der­grad­u­ate ed­u­ca­tion, mak­ing it eas­ier for younger Chi­nese stu­dents to study AI.

Pho­tos: VCG

Prod­ucts of AI tech­nolo­gies and big data, in­clud­ing fa­cial recog­ni­tion, drones and an AI robot driv­ing coach, are dis­played at an ex­hi­bi­tion in Nan­jing, East China’s Jiangsu Prov­ince on Au­gust 10. Top: A girl from He­fei, East China’s An­hui Prov­ince plays with an AI robot on July 22.

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