China Leads the AI Industry with Second Most AI Enterprises

Railway stations in Beijing, Shanghai, Nanchang and other cities adopted facial recognition systems that identify each passenger in three seconds. Shenzhen Railway Police formed a robot police team for the Spring Festival. China’s train-ticketing website developed Graphics Verification Code security to prevent ticket scalpers. During the Spring Festival, AI has become a key component, boosting China’s image in the smart technology front.

In recent years, the new round of technology and industrial revolution with AI at the core has started in China. AI has created new products and services, promoted transformation and upgrade of traditional industries, and has become the key aspect of supply-side structural reform and high-quality development. How far has AI gone in China? What are the main features? What trends will evolve? Experts gave their insights into China’s AI capabilities.

In 2016, the number of AI-related patents was 30,115, nearly 20 years of sustained growth.

As of June 30, 2017, Chinese AI enterprises have raised 63.5 billion yuan ($10 billion), ranking second in the world.

As of June 30, 2017, there were 592 Chinese AI enterprises, ranking second in the world.

The number of AI roles in China ranks seventh in the world, and shortage of future talent is expected to exceed 5 million people.

1. Among the best AI countries in the world.

Recently, the Malaysian Digital Economic Development Agency and the Kuala Lumpur City Hall announced a partnership with Alibaba Cloud to apply AI in solving urban problems such as traffic management, urban planning and environmental protection.

Malaysia is equipped with China’s “urban brain”, and is one of the many areas that Chinese AI technology has reached abroad. Chinese AI has been applied in Japan, Singapore, Australia and other countries.

“At present, the development of AI in China is among the most advanced in the world, and it covers most subdivisions in scientific research. China also works a lot in the application and industrialization of AI,” said Tao Jianhua, deputy director of National Laboratory of Pattern Recognition, CASIA. Tao said that although China started AI development later than others, the overall progress has kept pace with the European and American countries since 2000.

As of June 2017, there was a total of 2,542 AI enterprises in the world, including 1,078 in the United States, accounting for 42.4 percent of global AI enterprises; and 592 in China, accounting for 23.3 percent and ranking second. The remaining 872 companies are located in Sweden, Singapore and other countries. The number of patent applications related to AI in China has also continued to grow in the last 20 years. In 2016, there were 30,115 AI-related patents in China.

2. AI+ becomes a new trend.

Today, China’s AI market is growing at a rapid rate of nearly 50 percent per year. China’s AI industry is expected to grow 51.2 percent in 2017, with an industry scale of 15.21 billion yuan ($2.4 billion), according to iiMedia Research, a market research and third-party data mining company.

According to Tao Jianhua, China is the world’s largest AI market, which contributes to the great potential of “AI+” (future of AI) in China. “The AI market is divided into two major parts. One is the combination of AI, computers, networks and big data, such as facial recognition, public opinion analysis, speech recognition, and image filtration. The other part is the integration, transformation and upgrade between AI and traditional industries (especially the manufacturing industry). In fact, China’s development potential in the latter is the largest in the world,” said Tao.

AI+ has huge potential for development in China. The 19th CPC National Congress Report promoted in-depth integration between the internet, large data, AI and the real economy. Supply-side structural reform, rapid development of advanced manufacturing, and high-quality development provide a broad stage for development of AI in China.

On February 3, 2018, smart robots offered services at the Qingdao North Railway Station during the Spring Festival.

3. AI progress may face realignment period

AI has become a hot subject for Chinese entrepreneurship and investment due to China’s improved scientific research and large market size. As of June 30, 2017, China’s AI enterprises raised 63.5 billion yuan ($10 billion), accounting for 33.18 percent of global AI financing, ranking second after the US. However, behind the appearance of prosperity, there are also worries about “bubbles”. Experts and industry insiders pointed out that in 2018, China’s AI industry will face an adjustment or realignment period before it can achieve next stages of development.

Tao thinks three kinds of AI enterprises may fail: first, enterprises that abuse and hype the concept of AI will ultimately become bankrupt. Second, enterprises that expect too much and invest too much in new AI technology, but can not implement the technology in the short term will ultimately also become bankrupt. Third, enterprises that fail in the increasingly fierce AI market will be forced to give way.

4. Driving the trillion-yuan economy.

How much future impact will AI have on China? The journal Science predicts that by 2045, AI will replace 50 percent of employment in the world and 77 percent in China. How big will China’s AI market be? As a new element of production, AI will boost China’s labor productivity by 27 percent by 2035 and is expected to raise its total economic value by $7.1 trillion, according to a report by Accenture, a marketing consultancy.

According to the new generation of AI development plan issued by China’s State Council, by 2030, the core AI industry will exceed 1 trillion yuan ($157 billion), and drive related industries to more than 10 trillion yuan ($1.57 trillion). The plan also shows that by 2030, China’s AI theory, technology and application will reach a global advanced level and China will become the world’s main AI innovation center.

In order to achieve this goal, Tao Jianhua said that the key lies in talent training.

On August 13, 2017, the 2017 Youth AI Design Competition was held in Suzhou, Jiangsu. A young player debugged before the match.

Tao thinks that China needs to strengthen AI talent training from three perspectives. First, expand the existing talent training methods and improve discipline and talent training system. Second, innovate in talent cultivation and technology application. Third, strengthen international talent search and attract more international talent.

“It is how much talent you have that decides who will persevere the furthest,” Tao Jianhua said.

This article originally appeared in and was translated by Pandaily.