3 min read
Dr. Kai-fu Lee Talks About How AI Will Change Transportation and Finance Sector
Dr. Kai-fu Lee, one of the most influential figures on China’s tech scene with over fifty million followers on Weibo talked about how AI will change transportation and finance sector at TechCrunch Beijing 2016.
Sinovation Ventures recently raised $675 million USD in total across a Chinese and US fund, with a focus on early stage, as they started off as an incubator.
“We also invest in series B stage companies, and can throw $15 million per company,” Kai-fu Lee, Chairman and CEO of Sinovation Ventures says.
Founded in 2009 in Beijing, Sinovation Ventures raised 1.2 billion investment and invested in over 300 startups so far. Artificial Intelligence is the biggest area that the firm currently focuses on. Apart from autonomous vehicles, the firm also invested in Face++, a face recognition company, and Horizon Robotics. He sees that the areas that can adopt AI are: finance and transportation.
“Financial services is the fourth paradigm. Half of our funds are invested there,” he said. “AI powered financial services will be able to analyze a large amount of financial data. You will throw the data and AI will tell us which companies to buy and sell. AI will not only take account of technical analysis, but also news, discussions on social media, and expert’s comments.”
Another area that AI will create value is transportation. “About 9% of mankind spend time in driving and that will be replaced by machines. Driving highway is the easiest thing that can be replaced by robotics,” he says.
AI replacing jobs has bright sides too
With the development of AI, many jobs being replaced by robots can be seen as a challenge, but there are positive, optimistic things that we look forward to, Kai-fu Lee says.
“Robots work very hard, don’t get tired, and are cheap. We will probably be able to take care of everyone, thanks to AI,” he says. “As for human mankind, we are probably not here on earth to perform repetitive and non-productive tasks.”
“Thanks to AI, taking care of all the basic stuff, we can go and figure out why we exist and think more deeply, do more challenging things and follow our passion in arts and philosophy to push ourselves.”
Sinovation Ventures also invested in entertainment and content companies like Baozou Comics, and SNH48. In U.S., the firm makes smaller investments, and has invested in a company that makes hardware chip for deep learning and a toy company.
US Companies should study Chinese companies
Kai-fu Lee says American companies should study Chinese companies in order to be continuously competitive than Chinese counterparts.
“Chinese companies study Chinese companies and American companies. But, American companies don’t study Chinese companies,” he says. “They should study China’s successful product, and the reason why they became successful. Even though you don’t target China, there will be similar user trends when targeting other developing countries like India, Brazil and so on.”
Facebook is also trying to learn from WeChat and starting copy its elements. In April, Facebook allowed its users to buy goods directly within the social network’s app.
“Facebook’s execution of adopting WeChat features is much slower than Chinese companies adopting American companies’ key features,” Mr. Lee says.
In international companies’ expansion to China, he says it will be tough for companies like Facebook and Google to enter China.
“Companies like Facebook and Google can take their brand new innovative products that may not have Chinese equivalent or brand,” the previous vice president of Google in Greater China says. “Facebook has Oculus and Google also has technology that isn’t matched by Chinese competitors. They can try to launch them in China and gradually move in.”
Chinese companies’ expansion to overseas
“I think the consumer mobile internet is more advanced in China than in the U.S. China is leading in mobile payment, mobile gaming, and mobile communication like WeChat,” Kai-fu Lee says.
He gave example of mobile payment in China. China’s credit card payment was behind in China, which made Alipay and WeChat pay to develop the market. That’s how Chinese users could jump directly from cash to mobile payment, he explains.
“Chinese users were more behind, and they are now leaping forward and bypassing others,” he says.
In terms of Chinese companies expanding abroad, there is user, culture and the market issue for Chinese companies. For example, WhatsApp is dominant in U.S. market, so it’s difficult for Chinese company to enter that space.
“I wouldn’t bet on Chinese companies being very successful outside of the China over the next few years. In the long term, it’s possible,” he says.
Image Credit: TechNode