AI in China: Key players, focus areas and funding - Business Finland China
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AI in China: Key players, focus areas and funding Business Finland China
Executive summary
China aims to build a 1 trillion yuan (€126.4 billion) AI core business by 2030, which
will potentially stimulate as much as 10 trillion yuan (€1.26 trillion) in related business.
Investors poured $4.5 billion into more than 200 Chinese A.I. companies between 2012
and 2017 and half of the AI investments world wide went to China in 2017
In November 2017, the Chinese government announced that it plans to build four
national AI open innovation platforms by relying respectively on Alibaba’s smart city
technologies, Baidu’s self-driving technologies, Tencent’s AI-enabled medical
treatments, and iFlytek’s voice-recognition technologies.
On education, health, transportation and manufacturing, Chinese players have being
moving to create their own ecosystems and platforms for AI application. At the current
stage, AI+education appears more fragmented than the other three fields.
Successful AI start-ups from China have secured record-setting levels of financing,
backed by both government and corporate actors. Government-backed/managed funds
focusing on AI are being established on both national and local levels as well.
Despite the policy and investment support, presently China still needs to catch up with
top AI countries on its capacities in hardware, research and commercialization.
22.8.2018 2
The ”BAT battle”
BAT (Baidu-Alibaba-Tencent) led “national team” has
been tasked with building 4 open innovation platforms
- AI assistant/platform DuerOS
- Self-driving platform Apollo
- Deep learning platform Paddle Paddle
- Platform of Artificial Intelligence (PAI
2.0)
- Tmall Genie voice assistant
- Customer service chatbot Dian Xiaomi
- Tencent-developed cloud service
- Open-source computing platform Angel
- WeChat AI
- Robot journalist Dreamwriter
- iFlytek Open Platform
22.8.2018 4Regulations loosening for autonomous vehicle
testing - Baidu currently leading but other big
players follow closely
Baidu has been offering its autonomous driving
software platform, Apollo, to companies for free.
China’s Ministry of Industry and Baidu hopes to collect data from usage of the
Information Technology (MIIT) Apollo platform by its partners, including car
has released national guidelines makers like Ford, car-component makers like
for smart internet connected Continental, and chip makers like Nvidia.
cars, which allows local In addition to Baidu, both Alibaba and Tencent
authorities to arrange road tests have been conducting tests of self-driving cars.
based on their specific In April 2018, reports said that Alibaba had been
conditions and coordinate all running road tests of autonomous cars on a regular
basis, and was looking to hire 50 more self-driving
parties more conveniently. specialists for its AI research lab.
In May 2018, it was reported that Tencent obtained a
license plate for its self-driving car from the
Shenzhen Transport Bureau, which gives it
permission to conduct relevant testing in the streets
of Shenzhen.
22.8.2018 5Alibaba’s data-hungry AI is controlling
(and watching) cities in China
City Brain monitors every vehicle in Hangzhou, and
Alibaba has reported that it have helped reduce traffic
Alibaba have announced that they jams by 15 per cent
will invest 15B USD (until 2020) in City Brain works by letting artificial intelligence (AI)
seven research labs (Beijing,
Hangzhou, San Mateo, Bellevue, control a city. Large amounts of data are gathered,
Moscow, Tel Aviv and Singapore) processed by algorithms in supercomputers, then feed
that will focus on AI, machine it back into systems around the city
learning, network security, natural
language processing and more. The goal is to make decisions in areas such as road
planning, bus routes and frequency, and the length of
time a particular red traffic light should be on, to
increase traffic efficiency
Macau and Malayisia’s Kuala Lumpur as next
implementations in the pipeline
22.8.2018 6Tencent aggressively investing in AI for
healthcare, teaming up with start-ups with
expertise
We Doctor, the Tencent-backed Chinese online
healthcare services firm, has completed internal
business integration and scaled up its four verticals –
It is estimated that Tencent has medical cloud, healthcare, medicine, and insurance.
The company has raised €428 million pre-IPO
invested €2.57 billion into 33 investment, the biggest for health tech companies in
health-related start-ups at China. This puts the valuation for We Doctor at €4.71
home and abroad since 2014. billion.
In China, the company is also
opening clinics and an artificial UK start-up Babylon is partnering with Chinese tech
intelligence-powered laboratory. giant Tencent in an attempt to take on the Chinese
market. Babylon has an AI healthcare mobile app that
allows patients to self-assess their symptoms prior to
contacting a physician. Now it is teaming up with
Tencent to deploy its AI app on WeChat.
22.8.2018 7AI Development in other areas
AI is used to deliver more effective teaching to
the masses, and speed up evaluation
Liulishuo, an AI-enabled English learning app, has
launched their AI English teacher, who has been proven
to triple the learning efficiency compared to human
Chinese tech firms have been teachers by CEFR (Common European Framework of
using AI to drastically improve the Reference for Language). Liulishuo now has over 70
efficiency of education content million users, covering 379 cities in China and 175
countries around the world.
delivery and ”diagnosis” of
students’ response to test
questions. Master Learner, an online education start-up, has been
developing an AI-enabled platform to review students’
reponses to test questions. This AI-powered system
was trained using a large numbers of math, physics
and chemistry questions asked by Chinese middle
school students on a daily basis.
22.8.2018 9Face/voice recognition is deployed to collect
data used to improve the learning process
Hujiang, one of the largest online education sites in China, is working to utilize
image recognition and voice recognition to capture students’ facial expression
and feedback to improve the interaction between pupils and teachers in online
classes.
TAL Education, a NYSE-listed company offering tutoring services, is working
with Stanford University in the US to further advance the use of AI in its online
tutoring programme. TAL and Stanford formed an alliance in early 2018 to
explore applications of AI in assessing students’ comprehension during the
learning process. TAL’s online platform has been capturing data on students’
level of understanding by using facial and voice recognition technologies. Its
team can use the data to give tuition support after class, or deliver more
personalised education content to users.
22.8.2018 10Haier cultivating an AI-enabled ecosystem
for intelligent manufacturing
Haier’s COSMOPlat industrial internet
platform creates an ecosystem that
allows customers to create
personalized orders for products by
Haier
In 2017, COSMOPlat became the
world’s largest mass customized
solution platform with total transaction
reaching 313.3 billion yuan (41.79
billion EUR) and 4.12 million orders.
In February 2018, this platform became
China’s first national-class industrial
internet platform approved by the
National Development and Reform
Commission (NDRC).
22.8.2018 11AI Funding, Research and Conclusions
Funds focusing on AI have been established in
China on different levels
National Regional Others
Shanghai
The Fund for Industrial Restructuring In November 2017, it was reported that In December 2017, China-based accelerator
and Upgrading is a new central the local government in Shanghai firm COMB+ announced that it was planning
unveiled guidelines to develop the AI to launch a €65 million fund aimed at helping
budgetary scheme started in 2016 and sector by granting special funds and promising international AI firms enter the
managed by MIIT and MOF, with the enhancing support. The Shanghai local China market.
goal of supporting industrial government has not yet disclosed how
restructuring and technology upgrades much funding will be granted to the
in line with the Made in China 2025 industry. The fund was reportedly backed by
roadmap for manufacturing. government funds, government institutions,
private enterprises and big corporates most
While the full scale of this support is of which are from China. The fund is
unknown, in 2016, this budgetary Hangzhou looking for startups with a proven business
scheme allocated 2.783 billion RMB (370 model in local market who would like to go
million EUR) to projects in “smart Sinovation Ventures announced in to the Chinese market, and can help them
manufacturing standardization and new November 2017 that the company will further develop and upgrade their tech so
model applications” alone. This fund did establish a 4 billion RMB (530 million that they can apply it to the Chinese
not exist prior to 2016. EUR) fund in Hangzhou, focusing on AI. market.
As of April 2018, a RMB 10 billion For deals, COMB+ will be looking to provide
The Chinese National Venture Capital (1.33billion EUR) government-backed €1-2 million typically, with follow-on capital
Fund is a 200 billion yuan (26.68 billion blockchain fund called Xiong An Global available. Individual investments will not
EUR) state-controlled fund set up in Blockchain Innovation Fund, has been top €5 million per deal, according to the
2016 to invest in China’s start-ups. It launched in Hangzhou to invest in CEO.
led the high profile financing of AI firm innovative firms using blockchain
Face++. technology.
22.8.2018 13Emerging AI “unicorns” work in voice/face
recognition, robotics, education and media
Financing Valuation HQ
Name Sector Key Investors
Total (USD) (USD) Location
Toutiao 今日头条 news $3,150 M $35B General Atlantic, Sequoia Capital, CCB International, Beijing
Ubtech 优必选 robotics $942 M $5B Tencent, CDH Investments Shenzhen
SenseTime 商汤科技 face recognition $720 M $4.5B Alibaba Beijing
China State-Owned Capital Venture Capital Fund, Ant Financial,
Face++ 旷视科技 face recognition $460 M $2B Foxconn Beijing
Mobvoi 出门问问 voice recognition $255 M unknown Volkswagen, Google, Sequoia Capital Beijing
iCarbonX 碳云智能 healthcare $255 M $1B Tencent, Zhongyuan Union Stem Cell Bioengineering Shenzhen
Unisound 云知声 voice recognition $230 M $1B CLP Health Fund, 360 Beijing
Cloudminds 达闼科技 robotics $130 M unknown Softbank Group, Foxconn Beijing
Roobo 北京智能管家科技 robotics $100 M unknown iFlytek Beijing
Liulishuo 英语流利说 education $100 M unknown CMC, Wu Capital Shanghai
Appier 沛星互动科技 marketing $82.5 M unknown Softbank Group, Line Group, Naver Group Taipei
Aispeech 思必驰 voice recognition $45 M unknown undisclosed Beijing
22.8.2018 14China has unparalleled access to data for its AI
development, but is still lagging in other areas
An Oxford study showed that China BATs are collaborating with Chinese
trails the US in every driver of AI universities to boost joint research
development (hardware, research capacity and domestic talent pool
and algorithm, and In February 2018, iFlytek established an
commercialization) expect for “access AI school at the Chongqing University of
to data” Posts and Telecommunications
China’s AI research capacity still suffers In April 2018, Alibaba and Tsinghua
from a lack of experienced AI University launched a joint lab focusing
researchers and fundamental innovation on human-computer interaction
in algorithm development technologies
Processor and chip development may be In April 2018, Tencent Cloud and
the biggest challenge for China’s AI plan, Shangdong University of Science and
due to high initial costs and long creation Technology jointly established a school
cycle for AI teaching and research at the
University
22.8.2018 15Conclusions
China wishes to become one of the leading global hubs of AI development,
with the help of strong policy support and significant investment in the area
China’s tech giants (especially BAT-companies) are given a national task and
are investing in AI platforms in autonomous driving, healthcare, smart cities,
intelligent manufacturing and voice recognition & intelligence (often applied
for education), which opens up potential cooperation opportunities for Finnish
companies in these areas.
China is currently trying to catch up on its capacity to conduct research and
innovation and supply core hardware for AI development, and the gap (to US)
is closing as more investments are poured into these areas
22.8.2018 16THANK YOU Arto Mustikkaniemi Head of Innovation, Business Finland China arto.mustikkaniemi@businessfinland.fi Luke Li Advisor, Business Finland China luke.li@businessfinland.fi
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