Why AI is a top investment for entrepreneurs in China
When it comes to investing, technology is king, and no more so than in the pivotal innovation sector of artificial intelligence (AI).
In fact, a new 2019 BNP Paribas Global Entrepreneur Report finds that 55% of elite entrepreneurs invest in technology companies worldwide, more than any other sector.
Why is investment in AI technology a major focus for entrepreneurs? In a word, competition. Some 54% of entrepreneurs in China are already working with businesses driven by AI, according to the BNP Paribas Global Entrepreneur Report. And roughly a third work with the country’s top pioneers in the field.
For many companies, AI has sped-up processes and streamlined operations. It also has the potential to accelerate product development, improve business intelligence and enhance customer experience – improving the bottom line for companies of all sizes. By 2030, AI alone could add $15.7 trillion to global GDP, according to PwC estimates.
An increasing number of forward-thinking business leaders are looking to the future by exploring the myriad possibilities offered by AI. In Asia, these have included supply chain manufacturing in Taiwan and China, IT services in India and across the region, e-commerce, and automation.Is AI the new electricity?
China is making huge strides in AI, according to Kai-Fu Lee. Lee is a prominent AI expert who founded Sinovation, a Chinese-U.S. fund that has raised its fourth fund worth $1 billion earlier this year.
“Coming from way behind, now [China] is actually ahead of the U.S. in AI implementation,” Lee said recently at TechCrunch Disrupt San Francisco.
“We should look at AI as electricity. Think of Thomas Edison. The inventors of AI deep learning were American — they invented this stuff and then they generously shared it.
“Now, China, as the largest marketplace with the largest amount of data, is really using AI to find every way to add value to traditional businesses, to internet, to all kinds of spaces. The Chinese entrepreneurial ecosystem is so huge today that the most valuable AI companies in computer vision, speech recognition, drones are all based in China,” Lee added.How big will the AI market become?
It makes sense that entrepreneurs in China should be investing in AI and other cutting-edge technologies. As mentioned in a recent blog post, with over 1.3 billion in population, China’s middle-class is growing rapidly, and technology is critically needed to help hundreds of millions of people transition to a new, wealthier lifestyle. Any tech product developed for that market immediately has a huge user base. At the same time, product quality has improved significantly over the last several years.
Chinese AI firms generate more sales. In fact, China accounts for nearly half of all VC investments and 43% of all AI startups, according to Tech Crunch. A report titled “China’s AI Development Report 2018” released by Tsinghua University states: “The market value of China’s artificial intelligence (AI) industry reached 23.7 billion yuan (about 3.5 billion U.S. dollars) in 2017, with the growth rate expected to reach 75% in 2018.”
China’s rich ecosystem includes innovators, investors, a tech-friendly attitude among government regulators, and a massive consumer market. AI is leading the digital growth in a country that embraces 731 million Internet users, more than those in the European Union and the U.S. combined, says the World Economic Forum.