The Chinese AI expansion
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talkpoliticsAfter long years of digital neglect, last year the EU finally introduced a new set of standards for personal data protection, thus beating the Silicon Valley in terms of regulation. With the advance of AI-based apps, the Chinese companies are also striving for a leadership in this domain.
The Chinese AI startups needed about 7 years to evolve from merely riding the wave of this new trend to actually stepping firmly on the global markets. Now they're actively targeting the countries from the New Silk Road project.
For example, in Malaysia the world's most valuable AI startup, SenseTime, is part of the ongoing development of a technological park worth $ 1 bn in Kuala Lumpur, while also upgrading the government's surveillance capabilities. In Paistan, Megvii (which has applied for the Hong Kong stocks listing) is creating systems for face recognition around the country's power stations, and running new projects for smart factories in Japan and South Korea. In Africa, CloudWalk, a company that's building the software for a large-scale face-recognition project for the government of Zimbabwe, is getting access to the personal database of millions of people.
What all these companies have in common is that they've all received support by the New Silk Road initiative, a huge investment program in digital infrastructure worth $ 200 bn, which China started in 2017 in attempt to digitally connect the economies of Asia, Africa and parts of Europe. Under China's umbrella, of course.
In the meantime, the Chinese AI startup companies are much better funded than their European counterparts. A CB Insights analysis shows that the Chinese startup companies have ensured more investments in 2017 than the European ones for the last 3 years. Furthermore, they're using government support. China's big four in the AI domain (SenseTime, CloudWalk, Megvii and Yitu) have signed commissions with the Chinese government. And not least importantly, they get access to more data, part of which is needed for developing working AI algorithms, and this is mostly because in China a larger number of smart devides are connected than anywhere else in the world.
But that's just one part of the story. The Chinese AI leaders are blessed not just with solid government support and access to data. Although China is still lagging behind Europe and the US in terms of expert resource. A report by the US Center for Innovation from earlier this year shows that the US and Europe have 5 times more scientists in AI than China. The US also remains the world's leader in the production of hardware and AI-related microchip production.
Still, China is now being perceived in the Western media as a unstoppable force that's advancing fast into the field of AI. The experience in the AI sphere is unique and has the potential to play a key role for the success of this concept overall, so China is working hard in that direction.
Take DeepBlue Technology for example, a former trader of powdered milk, based in Shanghai. The company changed its name back in 2017, and transformed its business portfolio, and is now developing AI systems for cleaning airports, railway stations and hospitals.
Similarly to its competitors, DeepBlue Technology quickly managed to accumulate huge capital, earning hundreds of millions of dollars between 2017 and 2018 from dealing with investors such as Tsinghua X-lab, CBS holdings, YF Capital, Desun Group, Meridian Capital, Greenland, as well as the CICC investment bank that's related to the Chinese government. The company is developing an ambitious plan for expansion, and is planning to enter Thailand and go to Europe, where it wants to offer its leading product, the smart autonomous Panda bus.
Yet, there are some uncertainties around the company, one of them the unclear number of AI specialists that it employs. The company claims it had "over 100 PhD experts at the end of 2018, compared to 30 just half a year earlier". There's no official information about the detailed profiles of the leading engineers and scientists at DeepBlue, though. Another interesting thing is the fact that the company claims it now operates in more than 200 cities in China, and 500 around the world. But FT claims the Panda bus has only been tested in 10 Chinese cities, and is expected to be launched in another 10 by the end of 2019.
Last year in Luxembourg the company started three joint labs near the LHoFT (the finance technology hub), which are said to be focusing on the fintech trends, smart factories and autonomous cars. Earlier this year DeepBlue started cooperating with Fondazione Magna Grecia in Italy, aiming to accelerate the digital transformation of the major Italian cities through developing AI systems, while "striving to adhere to all European privacy requirements". The company also launched a Chinese-Italian investment fund for European startups.
And last June in Athens they organised a summit where they presented the last achievements in AI development, which are aiming to radically transform public transport, payment methods, and everyday trade, while creating new jobs and transferring technologies between the related markets.
So, sooner or later the Chinese AI ambitions will yield results. As China's influence on government institutional control, and the standardisation of AI grows, China is paving its way towards the smooth acceptance of its economic projects around the world. Meanwhile, the absence of major European players on the field is also allowing them to make huge inroads relatively easily, and taking over the game.
Despite the obvious slump in the recent couple of years, gradually, the Chinese companies are increasing their significance for Europe's digital infrastructure. MERICS Huawei has already created 23 development centres around the EU. The Chinese juggernaut has signed 28 contracts with local telecoms, granting themselves long-term commitments for partnership with those governments in the 5G network development.
Alibaba, now aware of the exponential advancement of AI into the market, and the huge need for storage and data processing capabilities that goes with it, is upgrading its cloud capacity around the continent by launching two new data centres near London. In the meantime, the Chinese investors are showing increasing appetite for investing into European startups both in the AI sphere and the fintech industry. The German digital bank N26 for instance has accumulated $ 160 mn from funds originating from the Chinese giant Tencent and the German insurer Allianz. And the London-based fintech company 10X Future Technologies, which helps banks optimise their internal processes, has received J 35 mn worth of investments from the Chinese insurer Ping An.
China is coming, and it's coming fast into the newest, and fastest developing industry. It's scrambling to take over the future, and because the other competitors are still lagging behind, it's about to achieve that with ease.
The Chinese AI startups needed about 7 years to evolve from merely riding the wave of this new trend to actually stepping firmly on the global markets. Now they're actively targeting the countries from the New Silk Road project.
For example, in Malaysia the world's most valuable AI startup, SenseTime, is part of the ongoing development of a technological park worth $ 1 bn in Kuala Lumpur, while also upgrading the government's surveillance capabilities. In Paistan, Megvii (which has applied for the Hong Kong stocks listing) is creating systems for face recognition around the country's power stations, and running new projects for smart factories in Japan and South Korea. In Africa, CloudWalk, a company that's building the software for a large-scale face-recognition project for the government of Zimbabwe, is getting access to the personal database of millions of people.
What all these companies have in common is that they've all received support by the New Silk Road initiative, a huge investment program in digital infrastructure worth $ 200 bn, which China started in 2017 in attempt to digitally connect the economies of Asia, Africa and parts of Europe. Under China's umbrella, of course.
In the meantime, the Chinese AI startup companies are much better funded than their European counterparts. A CB Insights analysis shows that the Chinese startup companies have ensured more investments in 2017 than the European ones for the last 3 years. Furthermore, they're using government support. China's big four in the AI domain (SenseTime, CloudWalk, Megvii and Yitu) have signed commissions with the Chinese government. And not least importantly, they get access to more data, part of which is needed for developing working AI algorithms, and this is mostly because in China a larger number of smart devides are connected than anywhere else in the world.
But that's just one part of the story. The Chinese AI leaders are blessed not just with solid government support and access to data. Although China is still lagging behind Europe and the US in terms of expert resource. A report by the US Center for Innovation from earlier this year shows that the US and Europe have 5 times more scientists in AI than China. The US also remains the world's leader in the production of hardware and AI-related microchip production.
Still, China is now being perceived in the Western media as a unstoppable force that's advancing fast into the field of AI. The experience in the AI sphere is unique and has the potential to play a key role for the success of this concept overall, so China is working hard in that direction.
Take DeepBlue Technology for example, a former trader of powdered milk, based in Shanghai. The company changed its name back in 2017, and transformed its business portfolio, and is now developing AI systems for cleaning airports, railway stations and hospitals.
Similarly to its competitors, DeepBlue Technology quickly managed to accumulate huge capital, earning hundreds of millions of dollars between 2017 and 2018 from dealing with investors such as Tsinghua X-lab, CBS holdings, YF Capital, Desun Group, Meridian Capital, Greenland, as well as the CICC investment bank that's related to the Chinese government. The company is developing an ambitious plan for expansion, and is planning to enter Thailand and go to Europe, where it wants to offer its leading product, the smart autonomous Panda bus.
Yet, there are some uncertainties around the company, one of them the unclear number of AI specialists that it employs. The company claims it had "over 100 PhD experts at the end of 2018, compared to 30 just half a year earlier". There's no official information about the detailed profiles of the leading engineers and scientists at DeepBlue, though. Another interesting thing is the fact that the company claims it now operates in more than 200 cities in China, and 500 around the world. But FT claims the Panda bus has only been tested in 10 Chinese cities, and is expected to be launched in another 10 by the end of 2019.
Last year in Luxembourg the company started three joint labs near the LHoFT (the finance technology hub), which are said to be focusing on the fintech trends, smart factories and autonomous cars. Earlier this year DeepBlue started cooperating with Fondazione Magna Grecia in Italy, aiming to accelerate the digital transformation of the major Italian cities through developing AI systems, while "striving to adhere to all European privacy requirements". The company also launched a Chinese-Italian investment fund for European startups.
And last June in Athens they organised a summit where they presented the last achievements in AI development, which are aiming to radically transform public transport, payment methods, and everyday trade, while creating new jobs and transferring technologies between the related markets.
So, sooner or later the Chinese AI ambitions will yield results. As China's influence on government institutional control, and the standardisation of AI grows, China is paving its way towards the smooth acceptance of its economic projects around the world. Meanwhile, the absence of major European players on the field is also allowing them to make huge inroads relatively easily, and taking over the game.
Despite the obvious slump in the recent couple of years, gradually, the Chinese companies are increasing their significance for Europe's digital infrastructure. MERICS Huawei has already created 23 development centres around the EU. The Chinese juggernaut has signed 28 contracts with local telecoms, granting themselves long-term commitments for partnership with those governments in the 5G network development.
Alibaba, now aware of the exponential advancement of AI into the market, and the huge need for storage and data processing capabilities that goes with it, is upgrading its cloud capacity around the continent by launching two new data centres near London. In the meantime, the Chinese investors are showing increasing appetite for investing into European startups both in the AI sphere and the fintech industry. The German digital bank N26 for instance has accumulated $ 160 mn from funds originating from the Chinese giant Tencent and the German insurer Allianz. And the London-based fintech company 10X Future Technologies, which helps banks optimise their internal processes, has received J 35 mn worth of investments from the Chinese insurer Ping An.
China is coming, and it's coming fast into the newest, and fastest developing industry. It's scrambling to take over the future, and because the other competitors are still lagging behind, it's about to achieve that with ease.
