China is betting big on AI

China is planning to invest tens of billions of dollars in the next few years to master artificial intelligence. A large part of Alibaba’s planned $15 billion per year in research and another $10 billion investment by 2020 in an AI center and other investments. China’s government is planning invest in coming years, and companies are investing heavily in nurturing and developing AI talent.
If this country-­wide effort succeeds—and there are many signs it will—China could emerge as a leading force in AI, improving the productivity of its industries and helping it become leader in creating new businesses that leverage the technology. And if, as many believe, AI is the key to future growth, China’s prowess in the field will help fortify its position as the dominant economic power in the world.
China’s political and business leaders are betting that AI can jump-start its economy. In recent decades, a booming manufacturing sector—and market reforms encouraging foreign trade and investment—have helped bring hundreds of millions of people out of poverty, creating business empires and transforming Chinese society. But manufacturing growth is slowing, and the country is looking toward a future built around advanced technology.
The plan calls for homegrown AI to match that developed in the West within three years, for China’s researchers to be making “major breakthroughs” by 2025, and for Chinese AI to be the envy of the world by 2030.
China’s tech companies, led by the Internet giants Baidu, Alibaba, and Tencent, are hiring scores of AI experts, building new research centers, and investing in data centers that rival anything operated by Amazon, Google, or Microsoft. Money is also pouring into countless startups as Chinese entrepreneurs and investors spy a huge opportunity to harness AI in different industries.
Kai-Fu Lee, a well-known Chinese AI expert and investor and one of the organizers of the Hainan (AI poker) tournament, has come to recruit students for a new AI institute that his company, Sinovation Ventures, is building in Beijing.
China has some big AI startups.
One of the AI startups is SenseTime, which was founded in 2014 and is already among the world’s most valuable AI startups. Launched by researchers from the Chinese University of Hong Kong, SenseTime provides computer-vision technology to big Chinese companies, including the state-owned cellular provider China Mobile and the online retail giant The company is now studying markets such as automotive systems. This July, ­SenseTime raised $410 million in funding, giving it a valuation of $1.5 billion. The entrance to SenseTime’s office features several large screens fitted with cameras. One can automatically add augmented-reality effects to a person’s face. Snapchat and Instagram offer similar gimmicks, but this one can also add effects in response to hand and body movements as well as smiles or winks.
Qing Luan, director of SenseTime’s augmented-reality group, previously developed office apps for Microsoft in Redmond, Washington. She says she returned to China because the opportunities just seemed much bigger. “We were struggling to get a thousand users; then I talked with my friend who was working at a startup in China, and she said, ‘Oh, a million users is nothing—we get that in several days,’” she recalls.
Tencent’s AI goals may in fact be more practical. The company has an amazing amount of conversation data thanks to WeChat and another messaging platform, called QQ. This data might be used to train machine-learning systems to hold more meaningful conversations.