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Future Watch: China's Digital Landscape and Rising Disruptors - Module 2.6 Artificial Intelligence

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  2. 2. AUTHORS Dr. Edward Tse Founder and CEO Team Finland Future Watch Report, August 20172 Mr. Bill Russo Managing Director and Auto Practice Lead Mr. Alan Chan Senior Consultant
  4. 4. Artificial Intelligence How to define intelligence? Can machines be intelligent? Team Finland Future Watch Report, August 20174 WHAT IS AI? (1/2) Source: Literature research, Gao Feng analysis Artificial General Intelligence (Strong AI) Human-level intelligence across the board A machines that can perform any intellectual task that human can Ability to reason, plan, solve problems, think abstractly, comprehend complex ideas, learn quickly, and learn from experience Artificial Super Intelligence (ASI) An intellect that is much smarter than the best human brains in practically every field, including scientific creativity, general wisdom and social skills. Independent world view and values Artificial Narrow Intelligence (Weak AI) Specializes in narrow applications only First definition of AI By John McCarthy, Professor, Dartmouth College, 1956 Every aspect of learning or any other feature of intelligence can in principle be so precisely described that a machine can be made to simulate it Modern definition The science and engineering of "intelligent agents - any device that perceives its environment and takes actions that maximize its chance of success at some goal Path to Artificial Super Intelligence Defining AI Singularity? What AI can/cant do?
  5. 5. Artificial Intelligence Team Finland Future Watch Report, August 20175 WHAT IS AI? (2/2) Source: Waitbutwhy, Rapidminer, Literature research, Gao Feng analysis Artificial Intelligence Any technique which enables computers to mimic human behavior Machine Learning Subset of AI techniques which use statistical methods to enable machines to recognize patterns and improve with experiences Deep Learning Subset of ML which uses complex neural networks to make the computation of multi- layer neural networks feasible Understanding the key terminologiesThree key layers of AI Applications Industrial robots, chat bots, fintech, smart healthcare, autonomous driving, smart home appliances, etc. Core Technologies Computer vision, speech recognition, natural language processing, machine learning, deep learning, etc. Infrastructure Data, sensors, biometrics, graphics processor chips, cloud computing What does it mean to your industry?
  6. 6. Artificial Intelligence Team Finland Future Watch Report, August 20176 AI IS DISRUPTING INDUSTRY BY INDUSTRY Source: Gao Feng analysis Go game Texas Holdem Poker Automotive Healthcare FinTech Many more AI will transform industries just as electricity transformed almost everything 100 years ago Andrew Ng, Former chief scientist at Baidu, founder of Coursera and Google Brain AI is not a futuristic concept and many practical AI applications are already available today, such as Facebook newsfeed, Google search results, Amazon product recommendations, LinkedIn Ads, iPhone siri, photo-editing/tagging etc.
  7. 7. Artificial Intelligence Team Finland Future Watch Report, August 20177 AI HAS A LONG HISTORY OF BEING THE NEXT BIG THING Augmented Reality (AR) Source: Literature review, Gao Feng analysis 1950 1956 1974 19931980 1987 Time Birth Inflated Hype AI winter I New Hopes AI winter II Explosive Growth Popularity Timeline of AI Development 1950s-1960s: First AI boom - the age of reasoning, prototype AI developed 1970s: AI winter I 1980s-1990s: Second AI boom: the age of Knowledge representation (appearance of expert systems capable of reproducing human decision-making) 1990s: AI winter II 1997: Deep Blue beats Gary Kasparov 2006: University of Toronto develops Deep Learning 2011: IBMs Watson won Jeopardy 2016: Go software based on Deep Learning beats worlds champions
  8. 8. Artificial Intelligence Team Finland Future Watch Report, August 20178 ... BUT THIS TIME IS DIFFERENT Augmented Reality (AR) Source: Wired, Gao Feng analysis 1. Cost-effective High Performance Computing Graphics Processing Units (GPUs) (and Tensor Processing Units): Discovery of using GPUs (originally used for generating computer graphics in video games) to build and run parallel neural networks, the primary architecture of AI software 2. Better Algorithms Breakthrough developments in Artificial Neural Networks (ANN) to model the network of nerve cells in a human brain on a computer 3. Abundance of Data Massive databases, self- tracking, web cookies, online footprints, terabytes of storage, decades of search results, Wikipedia, etc. as raw materials to train learning machines
  9. 9. Artificial Intelligence Team Finland Future Watch Report, August 20179 YET, THERE ARE MIXED VIEWS TOWARDS THE FUTURE OF AI Source: Literature research, Gao Feng analysis "The development of full artificial intelligence could spell the end of the human race." -- Stephen Hawking I think we should be very careful about AI. If I had to guess at what our biggest existential threat is, its probably that. -- Elon Musk There could be a race of killer robots in the far future, but I dont work on not turning AI evil today for the same reason I don't worry about the problem of overpopulation on the planet Mars -- Andrew Ng All new technologies present the possibility for misuse. AI is no different. And even technologies that are a clear net positive for humanity have negative side effects that should be understood and dealt with thoughtfully. -- Astro Teller It seems probable that once the machine thinking method had started, it would not take long to outstrip our feeble powers They would be able to converse with each other to sharpen their wits. At some stage therefore, we should have to expect the machines to take control. -- Alan Turing Neither hyped nor alarmed, we should carefully examine the new economic opportunities and the threats brought by AI; the development of AI must address the risk of potential misuse and widening inequalities
  11. 11. Artificial Intelligence Team Finland Future Watch Report, August 201711 CHINA WILL BECOME A MAJOR DRIVING FORCE OF THE NEXT AI REVOLUTION Augmented Reality (AR) Source: 36Kr, iiMedia, Gao Feng analysis 10.2 6.3 3.7 2.1 1.1 63% 69% 94% 108% 0 5 10 15 20 25 30 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 202220212018 2019 77% 2020 YoY Growth Rate Market Size China AI Market Size 2018E-2022E, USD BnUSD Bn % 83 132 136 160 173 228 233 366 709 2,905 Switzerland Spain France UK China US Germany Israel Canada India Total Number of AI companies Unit: Thousands, 2016
  12. 12. Artificial Intelligence Team Finland Future Watch Report, August 201712 CHINA HAS THREE UNIQUE ADVANTAGES TO BECOME A GLOBAL LEADER IN AI Augmented Reality (AR) Source: Literature research, Gao Feng analysis AI-related policies: 13th Five-year Plan (March 2015), Internet Plus, Made in China 2025 (May 2016), Robotics industry Development Plan (April 2016), Three-year Guidance for Internet Plus AI Plan (May 2016) March 2017 Chinas highest national meeting included AI in the Government Work Report for the first time Vast data gold mine from over 730M of online population Tencents WeChat has almost 940 million users worldwide and Alibaba Group has more than 420 million active buyers on Taobao Chinese patent applications in the AI segment grew to 8,410 between 2010 and 2014, a 186% increase from the previous 5-year period between 2005 and 2009 China has a large pool of young mathematics, science and engineering graduates Abundance of funding Big data Innovation Ecosystem Government Push
  13. 13. Artificial Intelligence Team Finland Future Watch Report, August 201713 CHINA HAS LEAPFROGGING DEVELOPMENT IN TERMS OF AI RESEARCH AND DEVELOPMENT Source: 36Kr, SCImago Journal Rank 2015, Vertex, Washington Post, Wuzhen Institute, Gao Feng analysis Global AI citation ranking By number of AI publications cited 2015 637 692 388 424 444 200 237 267199 1,487 504 UKChina 2,124 Spain 588 India 643 US 1,116 Self-citations Other citations Journal articles cited at least once, mentioning deep learning or deep neural network 2015 The no. of academic research papers published in China in the field of deep learning exceeded the US China is ranked first for absolute AI citations and third based on publication influence
  14. 14. Artificial Intelligence Team Finland Future Watch Report, August 201714 AI DEVELOPMENT IN CHINA IS CURRENTLY FOCUSING ON A FEW MAJOR PRACTICAL APPLICATIONS Augmented Reality (AR) Source: 36Kr, Gao Feng analysis Others 6% Data services 3% Vertical applications 3%E-commerce 3%Fintech 4% Smart Education 4% Personal Assistant 4% Smart Home 5% Machine Learning 6% Smart Driving 6% Smart Health 7% Natural Language Processing 11% Service Robotics 20% Computer Vision 21% Distribution of China AI Start-ups, 2017 Investment received in China by segment Accumulated sum, 2017 Jan, RMB Bn 0.6 0.7 0.8 1.6 2.0 2.8 Smart Driving Smart Security Smart Home Computer Vision RoboticsNatural Language Processing Chinas AI start-ups are focusing on a few key applications Chinas AIrelated investments are also very focused on a few areas of specialization
  15. 15. Artificial Intelligence Team Finland Future Watch Report, August 201715 AS A DIGITAL-SAVVY SOCIETY, THERE IS A RELATIVE HIGH CONSUMER AWARENESS OF AI IN CHINA Augmented Reality (AR) Source: iiMedia Consumer Survey, Gao Feng analysis 47% "So-so" "Never heard of AI" "Know little" 6% 20% "Know AI well" 24% "Know AI very well" 5% How well do you know AI? Where do you get to know AI? 4% 7% 13% 29% 41% 75%Online media Traditional media Literatures Cultural products Others Institutional reports Majority of Chinese consumers are aware of AI Chinese consumers learn about the concepts of AI mostly from online sources
  16. 16. Artificial Intelligence Team Finland Future Watch Report, August 201716 CHINESE CONSUMERS ARE OPTIMISTIC ABOUT THE FUTURE OF AI AND ARE AWARE OF THE NEED TO NURTURE AND ATTRACT MORE AI TALENTS Augmented Reality (AR) Source: iiMedia Consumer Survey, Gao Feng analysis Do you think AI has more advantages or disadvantages? 59% "More advantages" "No advantages" "Equal" 2%2% "More disadvantages" 31% "No disadvantages" 18% Chinese consumers are in general very optimistic about the future of AI 47% "Necessary" "Not that necessary" "No need" 2%2% "Very necessary" 31% "No clear view" 18% Is it necessary to provide more education on AI? Chinese consumers are aware of the AI talent gap
  17. 17. Artificial Intelligence Team Finland Future Watch Report, August 201717 CHINAS AI MARKET LANDSCAPE Source: iiMedia Research, Gao Feng analysis Sensors Chips Industry Data Data Services Biometrics Cloud Computing Infrastructure Layer Core Technology Layer Machine Learning Natural Language Processing Computer Vision Application layer Industrial Robots Service Robots Smart Health Care Internet Finance Personal Assistant Smart Security Smart Home Wearables Precise Marketing Autonomous vehicle Logistics Vertical applications NOT EXHAUSTIVE
  18. 18. Artificial Intelligence Team Finland Future Watch Report, August 201718 THERE IS AN EXPANDING POOL OF AI TALENTS IN CHINA Augmented Reality (AR) Source: Literature research, Gao Feng analysis Lu Qi Group President and COO, Baidu Former Microsoft EVP In general, Chinese AI scholars are more focused on the pragmatic applications and use cases of AI while their counterparts in the US focus on fundamental research Zhang Tong Executive Director, Tencent AI lab Former head of Baidu Big Data Lab Wang Gang Chief Scientist, Alibaba AI Lab Wang Jun Founder, iCarbonX Former CEO, Beijing Genomics Institute Li Hang Huawei Noah Ark Lab Zhao Feng CTO and VP for advanced R&D and smart home Haier Sun Jian Chief Scientist, Megvii Former Partner Research Manager, Microsoft Yang Qiang Chair Professor, Dept Head of Computer Science & Engineering, HKUST Wang Haifeng Head of AI Group, Baidu Zhou Jingren Chief Scientist and Vice President of Alibaba Cloud Ye Jieping President, Didi Research Yu Kai Founder & CEO, Horizon Robotics NOT EXHAUSTIVE
  19. 19. Artificial Intelligence Team Finland Future Watch Report, August 201719 CHINESE TECH GIANTS ARE MAKING BIG BETS TO TAKE LEAD IN THE AI RACE Source: Literature research, Gao Feng analysis Baidu Brain, an AI platform with over 60 different AI-enabled services DuerOS: natural language-based, conversational-based human computing platform, penetrating over 100 home appliance brands Apollo: open platform for self-driving car solutions Deep Interest Network: Advanced personalized recommendation engine DT PAI (Platform of Artificial Intelligence) launched in August 2015 Ali Xiaomi: a virtual personal secretary for shopping and O2O services Alibaba City Brain: leverage Ali Cloud big data and deep- learning technologies to build 'city brains' in cooperation with Hangzhou and Macau governments Tencent AI lab: 50 world- class AI scientists, researchers and experts WeChat-HKUST Joint Lab for pioneering research based on WeChat data Fine Art AI: developed by 13 Tencent engineers, defeated high- ranking Japanese Go player Ryo Ichiriki this year Launched DiDi Labs primarily focusing on AI- based security, advanced service dispatch algorithm, intelligent driving technologies Huawei Noahs Ark Laboratory and Berkeley Artificial Intelligence Research (BAIR) formed partnership on development of machine learning, AI and data mining CASE EXAMPLES
  20. 20. Artificial Intelligence Team Finland Future Watch Report, August 201720 MOBVOI IS A LEADING AI START-UP FOCUSING ON VOICE RECOGNITION AND NATURAL LANGUAGE PROCESSING IN CHINESE CONTEXT Augmented Reality (AR) CASE EXAMPLE Company mission: To define the next generation of human- machine interaction (HMI) through advanced AI technologies Ticwatch (Smart Watch) Ticmirror (In-vehicle Robot) Tichome (AI Speaker) Chinese language recognition Accurate vertical search engine Real-time proactive search Semantic analysis Text-to-speech technology Services (Applications) Software (AI Technology) Hardware (Products) POI recommendation Real-time traffic alert Movie ticket booking Restaurant reservation Food delivery Health monitor Use cases Key enablers User experiences Source: Mobvoi official website, Crunchbase, Gao Feng analysis Business model Company Facts Founded in October 2012 Raised USD 252M from ZhenFund, Sequoia Capital, SIG China, Google, and Volkswagen Group Founded by Li Zhifei Li, former research scientist at Google and a world-class natural language processing expert In Apr. 2017, Volkswagen Group China and Mobvoi announced a strategic partnership and a 50:50 JV to develop AI applications for future connected cars
  21. 21. Artificial Intelligence Team Finland Future Watch Report, August 201721 TOUTIAO IS A NEW UNICORN PROVIDING CURATED NEWS AND CONTENT Augmented Reality (AR) Source: Toutiao, Financial Times, Literature research, Gao Feng analysis Competitive advantages in content generation, distribution and monetization Toutiaos exponential growth Basic facts: By analyzing the features of content, users and users interaction with content, Toutiaos AI-powered algorithm models generate a tailored feed list of content for each individual user Now valued at USD 20Bn (from USD 500M in 2014) Launched in August 2012 based in Beijing Founder: Zhang Yiming 100M daily active users in 2017Q1 Average daily usage time: 76 mins Hired Ma Wei-Ying, former assistant managing director of Microsoft Research Asia, to lead its AI Lab User-generated and professional-generated content in various media forms: text, short videos, Q&As Provide incubator and media lab services for curated content makers AI-generated content live feed Understand users emotions and behavioral characteristics through machine learning, analyze and predict users profile Personalized news content Thousand people, thousand interfaces Technology barrier: Leverage big data to accumulate user understanding overtime 11 46 335 107 141 507 2016H22015H2 Total length of read (Billion mins) Total no. of read (Billion) No. of articles (Million) Content Generation Content Distribution Content Monetization Business model: Personalized newsfeed ads, re-direct traffic to E-commerce sites Earned USD 869M in 2016 from in-app ads with the goal to reach USD 10Bn by 2020 CASE EXAMPLE
  22. 22. Artificial Intelligence Team Finland Future Watch Report, August 201722 MEGVII (FACE++) IS A FAST-GROWING COMPUTER VISION START-UP THAT HAVE PENETRATED INTO A WIDE RANGE OF USE CASES Source: Megvii official website, Gao Feng analysis Company Background Founded in 2011, Megvii is a computer vision firm that aims to power human with AI. It has developed leading technologies in facial recognition, body recognition, and object recognition Megvii raised USD 147M in 4 rounds from 6 investors, including Sinovation Ventures, Qiming Venture Partners, and Foxteq Holdings Megvii focuses on commercializing its facial recognition technology in Internet finance, banking, ride hailing sectors, and also its body and object recognition technologies in intelligent real state and intelligent security areas Ranked 11th in the 50 Smartest Companies of 2017 of MIT Technology Review CASE EXAMPLE Face Comparing Face Attributes Emotion recognition Face Detection Face Landmarks Gaze estimation Face Searching Beauty score Body Detection Gesture Recognition Body Attributes Body Outlining Key technologies Key customers (examples) User authentication Smile to Pay Driver verification for ride hailing service Photo beautification with automatic makeup and beauty effect User authentication for self banking services
  23. 23. Artificial Intelligence Team Finland Future Watch Report, August 201723 IFLYTEK IS A LONG-ESTABLISHED AI COMPANY SPECIALIZED IN SPEECH AND LANGUAGE PROCESSING TECHNOLOGIES Augmented Reality (AR) *As of August 17 2017 Source: iFLYTEK official website, 36Kr, Gao Feng analysis Company Background Founded in 1999, iFLYTEK is the leader in intelligent speech and language processing technologies in China Listed in Shenzhen Stock Exchange in 2008, and now with a market cap of ~USD 12B* Achieved international advanced technologies in many areas including speech recognition, speech synthesis, natural language processing, oral language evaluation, voiceprint recognition, and handwriting recognition Ranked sixth in the 50 Smartest Companies of 2017 of MIT Technology Review and first among all Chinese companies in the list including Alibaba and Baidu easy trans 600 CASE EXAMPLE Smart Education Smart Home Smart City Smart Vehicle Smart Health Care Key application industriesKey products Key customers Voice Assistant iFLYTEK input One-stop HMI solution platform Bilingual education products
  24. 24. Artificial Intelligence Team Finland Future Watch Report, August 201724 THERE IS A MYRIAD OF EMERGING CHINESE AI START-UPS FOCUSING ON HEALTHCARE, ROBOTICS, AUTONOMOUS DRIVING AND OTHERS Source: Company official websites, Crunchbase, Gao Feng analysis Founded in 2015 and raised USD 200M in 2 rounds from 3 investors, including Tencent and China Bridge Capital In Feb.2017, iCarbonX was selected by Fortune as one of the 50 Companies Leading the AI Revolution Founded in 2014 and received USD 410M series B funding in Aug. 2017 with a valuation of USD 1.1B Computer vision and deep learning solution provider Ranked fifth in China Money Network's China AI Top 10 Ranking in 2017 Founded in 2015, focusing on commercialized autonomous truck technology solution Facilities in both Beijing and San Diego Received USD 20M investment from NVIDIA and Sina Founded by Wu Gansha, former chief engineer at Intel Labs China, in 2016 Building commercialized solutions for self-driving technologies, products and services Turing Robot is the most intelligent robot brain tailored for the Chinese language context Building the most leading AI robot operating system in China and globally Founded in 2007 and raised USD 45M in 3 rounds from 3 investors, including Legend Star and TusPark Ventures AISpeech has 7 national qualifications, 25 patents, and 23 software copyrights Digital health ecosystem Speech recognition and analysis Deep learning AI robotics Autonomous Driving Autonomous Driving To compete with tech giants, AI start-ups must tailor their technologies and solutions to focus on specific use cases and build big data capabilities as competitive advantages CASE EXAMPLES
  26. 26. Artificial Intelligence Team Finland Future Watch Report, August 201726 FINLAND HAS PUT AI AS ONE OF THE TOP NATIONAL STRATEGIC PRIORITIES Augmented Reality (AR) Source: Gao Feng analysis Prime Minister Juha Sipil Making Finland the world leader in artificial intelligence Called for a common national vision to make effective use of AI in society Using AI to boost wellbeing will require not only new competences but also novel approaches, forward-thinking decisions and frameworks, and an adaptive labor market Minister of Economic Affairs Mika Lintil To make Finland the best in the world in applying AI and renewing ways of working Established an AI-focused steering group in May 2017, program ready by September Finnish companies and Finnish society have an excellent basis to turn the challenges and opportunities brought about by AI into accelerators of sustainable growth Director General National Agency for Education Olli-Pekka Heinonen Important to take AI into account in education AI applications could for example be used to create more efficient ways to identify and help students at risk of dropping out
  27. 27. Artificial Intelligence IBM opened The IBM Watson Health Center in Helsinki, Finland A hub for the collaborative future development of data-driven cognitive and artificial intelligence applications and solutions for Finnish healthcare Team Finland Future Watch Report, August 201727 THERE IS AN INCREASING AMOUNT OF AI START-UPS AND AI-ORIENTED INITIATIVES IN FINLAND Augmented Reality (AR) Source: Literature research, Tekes, Gao Feng analysis Claned Leverage AI and education psychology to enhance personal learning Personalizes learning to each individual optimizing study motivation and improving learning results Curious AI Founded 2015 as a spin-off from Aalto's Deep Learning Research Group Specialized in the fundamental research on unsupervised AI Zen Robotics Specialized in AI- controlled robotic systems Next Generation Recycling leader in robotic waste separation IBM and Tekes Blueprint Genetics Addresses the main bottleneck of genetic testing through next-generation sequencing (NGS) powered by AI Received EURO 14M in July 2017 "I am positive that Watson cognitive capabilities will further boost innovation in Finland and put us at the forefront of game- changing health transformation, at the European level and in the global marketplace. - Pekka Soini, Director General of Tekes CASE EXAMPLES
  28. 28. Artificial Intelligence Team Finland Future Watch Report, August 201728 TO MAXIMIZIE ITS FULL POTENTIAL IN AI, FINLAND HAS EXISTING COMPETITIVE ADVANTAGES TO LEVERAGE AS WELL AS GAPS TO CLOSE Augmented Reality (AR) Source: Gao Feng analysis Competitive advantages of AI in Finland High level of technology-related education and skills Strong collaboration between companies and universities (VTT) Innovation ecosystem that allows a trial-and-error Legacy in applied and fundamental AI research with legends such as Teuvo Kohonen and Erkki Oja Gaps to close Talent gaps technical and business leaders who understand both sides Getting ready for AI businesses to begin data acquisition and investigate the future benefits of AI in driving productivity and reducing costs National strategy to set national priorities and leverage AI as a economic multiplier to accelerate AI transformation
  29. 29. Artificial Intelligence Team Finland Future Watch Report, August 201729 FINLAND SHOULD TAKE IMMEDIATE ACTIONS TO CAPTURE THE EXPOLSIVE OPPORTUNITIES IN AI Augmented Reality (AR) Source: Gao Feng analysis Potential actions Education Offer AI-specific curriculum at the top local universities and STEM education in high schools Hold public events for mass to understand and discuss the basic concepts, benefits and risks of AI Openly engage with consumers and understand needs and pain points that can be potentially addressed by AI technologies R&D Call for more novel applications and research on AI Set up AI-specific funds and incubators to accelerate the development of Finnish AI ecosystem Businesses Leverage Finlands traditional industries including the clean energy, forestry, industrial machinery and processes, medical and ICT, and empower their AI transformation Provide continuing education on AI-related courses for all kinds of workforces To explore new applications of AI and identify potential use cases and profit potentials Global ecosystem collaboration Establish cross-border linkages to encourage global knowledge transfer and benchmark global best practices; set up overseas AI labs to attract high-skilled talents More detailed national strategy on AI and government funding for quality AI research and start-ups
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