This article was originally posted on Linkedin. See the original here.
By Brandon Hughes and Tong Wu
Artificial Intelligence (AI) has been a growing industry in recent years stirring up a wide range of discussion from the disconnect of humanity to national security implications. Integrating all types of industries, the use of AI and AI enabled technologies is enabling the advancement of companies and society. When one thinks AI, they might thing Silicon Valley. However, Chinese companies are building AI solutions at an outstanding rate offering unique solutions to many industry problems. According to the report titled, Artificial Intelligence Development in China 2018, released by the China Institute for Science and Technology Policy at Tsinghua University (Asia’s #1), China ranks first in the world for the total number of papers published on AI and the number of AI patents.
China also has the second largest number of AI companies in the world. In 2017, the total scale of global AI investment and financing reached $39.5 billion US dollars, and China’s total investment and financing accounted for 70%, making it the world’s most profitable country in the field.
The growing use of AI was prominently on display at every one of the conferences and trade fairs FAO Global associates attended this year, both in China and the United States. By speaking with more than 100 companies who claim AI integration or are involved from an investment side, we want to highlight 5 key trends that we see being more prominent in the coming years. Companies from around the world are building AI solutions for a wide variety of use cases, but many worry about privacy from such an interconnected and autonomous world.
Below we briefly examine a few trends that may provide insight into the applications and uses for AI.
Trend 1: Increased Use in Government Surveillance
There is an expansion in systematic government access of personal data for national security, regulatory and law enforcement purposes. The national laws on surveillance provide a legal foundation for large-scale government access to private-sector databases or networks such as telephone and internet data. Chinese observers are concerned that AI will be abused to monitor and control all aspects of citizens lives, more so for minority groups or political dissidents, which sparks concern over the potential for human rights abuses.
China also plans to adopt a credit scoring system to strengthen regulatory compliance by 2020. This type of system is already being utilized to regulate and change pedestrian behavior. For example, jaywalking captured by traffic cameras could affect a person’s “social score.” In the Shandong Province, large screens were put up on intersections to target jaywalking pedestrians. Pedestrians who did not follow the traffic laws would be captured by the road camera and their face would be projected onto the screens culminating a public shaming event.
As previously mentioned, AI can be used to monitor dissidents and stifle political action. In China’s Xinjiang Province, surveillance is deployed extensively due to ethnic and historical tensions between the indigenous Uighur population and the Han majority. Integrating AI solutions into these systems will likely add to their effectiveness, but also draw increased condemnation from human rights groups who are concerned with an increasingly controlled population. It should be noted that AI in surveillance systems is being pursued by major firms in the United States as well as China, which was prominently on display at the 2019 Consumer Electronic Show in Las Vegas.
Trend 2: Smart City Solutions and IoT
A less controversial use of AI is seen in the emergence of Smart City solutions promising more efficient city management, transportation, and infrastructure solutions, and distribution of government services. Hundreds of cities in China, including 95% of provincial capitals, are working toward full smart city status. They are using the technology of Alibaba’s City Brain and the rival project Huawei’s Smart City to collect and collate data in completely new ways.
City Brain is one of the leading initiatives in China combining big data with AI to collect, monitor, and analyze information from a plethora of sources, linking them together as part of a far-reaching “smart city” network. Another initiative is the the Intelligent Transport System (ITS) solution in Langfang. Provided by Huawei’s Smart City, the initiative facilitates traffic infrastructures by combining both centralized systems and field equipment for monitoring traffic lights, as well as GPS tracking for police officers and patrol cars.
Smart cities are becoming a crucial part of public infrastructure to support sustainable development and will be adapted in areas other than traffic control, including smart Olympics, mobile services, and economic analysis.
Benefits of Smart City include more effective traffic control, better information flow in law enforcement, and more efficient infrastructure management. However, since Alibaba and Huawei’s smart city projects are in collaboration with the Chinese government, local governments using the technology to collect and analyze the citizens facilitates potential nefarious surveillance activities.
Trend 3: AI Transforming Business Models
Big data is transforming industries across China. The latest AI technologies are solving challenges in almost all walks of life, from improving road safety to effectively identifying health-related risks in healthcare. Revenues generated by AI across all industries are huge. Businesses in China have shown the willingness to take advantage of the most cutting-edge technologies as well as the risks involved. Many Chinese companies have adapted AI in their business strategies, using AI to create value for investors and customers, differentiate their products and services, and tap into new business models and markets. It should be noted that just as many companies claim to use AI, few use more than a unique algorithm or sometimes, nothing unique at all.
An interesting phenomenon to observe is that AI is widely used in the service and retail sectors in China. A restaurant that uses AI to help customers order food and deliver food to people can attract a lot of attention and traffic in China. JD.com, the e-commerce giant, is using AI algorithm based robots to deliver the items sold on the eCommerce website to improve delivery efficiency. In addition, Eleme, the leading food delivery company, operates commercial drones for food delivery in Shanghai. Alibaba is also opening a “future hotel” staffed by robots. All of these can expect to integrate some form of AI into the logistics process.
AI is also transforming agriculture management in China. Through the IoTs, cloud computing, big data, modern equipment and other information technology, agriculture can integrate intelligent information processing and quantitative analysis into decision-making and production. AI can intelligently control when to water plants, what nutrients to add, and standardize factory production. In addition, AI has enabled remote control and disease diagnosis available for large scale farming operations so they can respond quickly in certain situations.
Trend 4: The Mass Personalization of Services
E-commerce giants in China are not missing out on using AI to boost their sales of products and services. Personalization is widely used in all sorts of recommendation systems. Systems recommend products and services based on individuals’ preferences, need, personality traits. WeChat, has already personalized the ads for its users. Taobao.com and JD.com also recommend relevant personalized products to its users by using algorithms to target specific audiences.
At the Boao Forum for Asia Annual Conference last year, the idea of “everybody will have a personalized AI in the future” was brought up by the CEO of a Chinese technology company called iflytek, indicating that AI will be more capable of recognizing the need of the users and satisfy individual’s unique needs. “Developing AI’s EQ as well as IQ and making AI more emotional intelligent” is likely to become the next trend in China’s AI development.
Industries may respond to this trend with more personalized products by using machine learning. As the market keeps expanding, when western companies take advantage of their relatively higher artificial intelligence technologies, it is important to be aware of the language barriers in customized artificial intelligence.
Trend 5: Integration of More Human Operators
AI makes data collection and analysis easier and more convenient, but we rely more on human intelligence to interpret information and make the best judgement by using intuition and knowledge in ways that machines cannot. For example, human judgement is needed for medical treatment solutions when early-stage treatable diseases are detected in the healthcare industry in China.
With more AI integration, there will be a visible organizational and culture change. Human intelligence will once again become a valuable asset of a company other than inventory, infrastructure, IT systems. Companies will increasingly value expertise in data analysis, UX design, algorithm and applications development. Additionally, there will likely be more need for human inputs from talents who have a wealth of knowledge on a specific field. However, AI will likely be used to automate and replace many positions, forcing workforce changes.
About the Authors
Tong Wu: Tong Wu is a volunteer contributor and Georgetown graduate student who writes on U.S.-China business issues. She has experience as a field study consultant with PwC, communications & marketing at Georgetown University, and has previously worked as a freelance writer.
Brandon Hughes: Brandon is the Senior Analyst and Founder of FAO Global. He served as a government adviser and led military teams in Afghanistan, supported peace keeping operations in Europe, led corporate security teams in Las Vegas, and conducted strategic U.S.-China focused research for the prestigious Carnegie Endowment & Asia Society. Brandon leads FAO Global to conduct cross-border international business ventures between the U.S., China, and emerging markets in Asia.
About FAO Global
FAO Global (Foreign Analytics & Operations), is a competitive intelligence & strategy consulting firm with expertise supporting initiatives in China, Southeast Asia, and emerging markets. Based in the Washington, DC Metro Area, the boutique firm leverages the capital’s unique talent pool with access to the world’s political and business elite.
FAO Global provides tailored market and business intelligence solutions to Multinational Corporations (MNCs), Small & Medium Sized Enterprises (SMEs), and non-government organizations (NGOs) that demand on-ground clarity of the operating environment and market dynamics at home and abroad. FAO GLOBAL will conduct initial market research, develop business networks, plan your strategic communications campaign, and work hand in hand to develop mutually beneficial solutions to your work in foreign countries or with foreign partners.
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