Major breakthroughs may lead to monopoly positions
Major domestic companies are investing big money in the artificial intelligence (AI) sector, hoping to become the first to profit.
For example, on Monday, e-commerce giant Alibaba Group Holding led a $600 million funding in Beijing-based SenseTime, which set a new record for venture capital funding round in the AI sector. E-commerce company Suning Holdings Group also participated in the funding.
Joe Tsai, executive vice chairman of Alibaba Group, told the Global Times on Monday that Alibaba is "already seeing tangible benefits" from investment in the AI sector, and that the company is committed to further investment in the sector.
SenseTime said that the funding will "provide important impetus" to the development of its AI platform while "opening up new business opportunities," according to a statement SenseTime sent to the Global Times on Monday.
SenseTime develops applications for facial recognition, video analysis and other areas including autonomous driving. It has also worked with more than 400 domestic and overseas companies in the areas of security, fintech, automobiles, retail, smartphones, mobile internet and robotics, the statement said.
SenseTime is now valued at $3 billion, making it the most valuable AI start-up in the world, Bloomberg News reported on Monday.
A technology employee at Alibaba told the Global Times on condition of anonymity on Monday that SenseTime is particularly strong in "image recognition" technology, which makes it a target for investment capital.
"Many companies are lining up to give SenseTime money. As regards its partnership with Alibaba, Alibaba has been very active and keen on achieving cooperation," he told the Global Times.
According to the source, global competition in image recognition technology is fierce and many fear that companies like Google might make a breakthrough that could give them a monopoly.
He said that Alibaba is still lagging behind in this technology, more so than in the case of its language recognition technology.
"No high-tech companies look just at the present. If they don't prepare for the future, they will lose the future," the source noted.
Apart from Alibaba, other big domestic companies are also investing in AI. Baidu Inc, for example, set up a venture capital firm in September 2016 specializing in investing in AI and other scientific projects.
Developer Evergrande Group plans to invest about 100 billion yuan ($15.85 billion) in areas including AI, new energy and robotics, the Beijing News reported on Monday.
A report from the Financial Times in February said that in 2017, almost half of the global investment into AI start-ups went to China.
China also plans to build a 13.8 billion yuan technology park to develop AI in Beijing's Mentougou district, the Xinhua News Agency reported in January. The park is expected to be home to 400 businesses, according to the report.
Liu Dingding, a veteran internet analyst, said that although China's technical reserves in the AI sector are not the best in the world, it has been the best in AI technology application in recent years. He cited areas such as facial recognition services at railway stations, robot products and cloud services.
"I think this is a result of mixed factors such as policies and China's environment, where large volume of public data can be collected for technical analysis," he told the Global Times on Monday.
According to Liu, although all AI investment will not necessarily yield high good returns, no companies in any industry can afford to neglect this sector.
