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China catches up with US in applications as funding floods its AI sector

With the development of artificial intelligence (AI) in overdrive, China has become a key contender in the field and is catching up with the US, the current market leader in AI.

Several reports published by research institutions show a flood of funds into China’s AI industry, with financing by Chinese firms already approaching that of their American counterparts in areas that combine AI with industrial applications.

Domestic firms are also splurging to compete for talent and encroaching into core technological fields after achieving parity with the US in applications.

Internet heavyweights, venture capital firms and private equity groups are all ramping up their investments in China’s AI industry. Between early 2010 and May this year, 2,218 investments worth CNY66.85 billion lodged in the country’s AI sector, according to pedata.cn, an investment Big Data platform owned by Zero2IPO Group.

The gap in fund-raising between Chinese and American AI firms mainly lies at the technological level such as chips, Yu Dian, a researcher at Tencent Research Institute, told Yicai Global. “At the level of applications, China is moving closer to the US in fund-raising and Chinese companies are doing very well in AI application scenarios.”

“Only China and the US have such a huge amount of data and so many large-scale computing and application scenarios. They are beginning at the same starting line at the level of applications,” Yu Kai, founder and chief executive of Beijing Horizon Robotics Technology Co., told Yicai Global.

China has the world’s largest Internet firm and good application scenarios such as search, social media, e-commerce and Internet finance, Yu believes. “Large-scale computing platforms require large-scale application scenarios. We can’t do it in small labs. Young people get continually trained in such a working environment.”

“China’s biggest advantage is its population, and this is reflected in three respects. First, a large population means a large market, giving firms greater incentives to do their jobs well. Second, the provision of social services requires lots of data. Third, top talent is more likely to emerge when the talent base is big,” Dai Wenyuan, founder and chief executive of machine-learning startup 4Paradigm, told Yicai Global.

China not only has the foundation to develop AI, but also is strongly motivated to do so due to the country’s industrial needs. “Many unreasonable and inefficient elements remain in China’s economic structure. The AI wave will lead to new-style competition,” Yang Qiang, an internationally renowned AI expert and director of Hong Kong University of Science and Technology’s Computer Department, told Yicai Global.


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