Date
20 September 2017
There were nearly 70,000 newly installed robots in China in 2015, and UBS expects the number to reach 160,000 by 2019, more than the combined units in North America, Europe and Japan. Photo: UBS
There were nearly 70,000 newly installed robots in China in 2015, and UBS expects the number to reach 160,000 by 2019, more than the combined units in North America, Europe and Japan. Photo: UBS

China expected to be a key AI player in five years: UBS

China is considered a laggard by the western world when it comes to artificial intelligence-based innovation.

But actually the Chinese internet giants are “clearly ahead of their Asian counterparts and narrowing the gap with US counterparts on key AI technology”, said Sundeep Gantori, an equity analyst at UBS Wealth Management’s Chief Investment Office.

Artificial intelligence (AI) is an umbrella term to cover a confluence of multiple technologies such as machine learning, cognitive computing, natural language processing, neural networks, etc. Major application areas range from self-driving cars to speech and image recognition to personal assistant.

That China has a population of 1.4 billion contributes to the nation’s AI development. “[For voice recognition technology] you need somebody to say something over the phone and capture it straight away: that’s one area we think China is leading,” Gantori told EJ Insight in an interview.

Chinese internet giants’ supremacy also covers autonomous driving, an area hailed as “the mother of all AI projects” by Apple chief executive Tim Cook.

“It is very difficult for a global company to enter [China's self-driving industry],” Gantori said. “[Global companies] already have the language barrier, but [to succeed] you need to follow the regulation, you need the partnership with local traffic police, access to extensive local mapping data.”

As such, Chinese technology companies would definitely have the edge over their foreign rivals.

Chinese search engine Baidu, which is at the forefront of efforts to develop AI technology in the country, plans to mass-produce its own autonomous “Apollo” car by 2021.

Several conditions are required for autonomous driving to become prevalent, Gantori said. “After 5G connection has prevailed and the cost of processing chips and underlying infrastructure has come down, both central and local authorities will get a better clarity on the regulation.” He believes the technology will not become mainstream in three years.

China said it would invest heavily in AI to ensure its companies, government and military dominate the field by 2030 in line with its 10-year plan called “Made in China 2025″.

Two years ago, there were nearly 70,000 newly installed robots across the country. UBS expects the number to reach 160,000 by 2019, more than the combined units in North America, Europe and Japan.

“China is actually narrowing the gap,” Gantori said. “The Chinese internet companies are investing massively in AI-related talent in the country.”

There were 20,000 AI-related talents in China as of 2015, compared with 65,000 across the United States, according to industry research firm Zinno. 

But the firm projects that by 2025, AI-based talents in China would reach 85,000, compared with 110,000 in the US.

Gantori expects that China would be one of the key AI players in five years, “but whether it would be the ‘sole leader’ is hard to tell”.

He added there is a more established AI ecosystem in the US market. As of October 2016, there were about 2,000 startups in the global AI industry, with more than half of them (1,170) based in the US, Zinnov said. China only had 55.

“That’s probably one of the reasons why the US AI industry is developing faster: it currently has a better ecosystem.”

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BN/RT/CG

EJ Insight writer

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