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Last week, Eric Schmidt, chairman of Alphabet, predicted that China will rapidly overtake the US in artificial intelligence…in as little as five years.
Last month, China announced plans to open a $10 billion quantum computing research center in 2020.
Bottom line, China is aggressively investing in exponential technologies, pursuing a bold goal of becoming the global AI superpower by 2030.
Based on what I’ve observed from China’s entrepreneurial scene, I believe they have a real shot of hitting that goal.
As I described in a previous tech blog, I recently traveled to China with a group of my Abundance 360 members, where I was hosted by my friend Kai-Fu Lee, the founder, chairman, and CEO of Sinovation Ventures.
On one of our first nights, Kai-Fu invited us to a special dinner at Da Dong Roast, which specializes in Peking duck, where we shared an 18-course meal.
The meal was amazing, and Kai-Fu’s dinner conversation provided us priceless insights on Chinese entrepreneurs.
Three topics opened my eyes. Here’s the wisdom I’d like to share with you.
1. The Entrepreneurial Culture in China
Chinese entrepreneurship has exploded onto the scene and changed significantly over the past 10 years.
In my opinion, one significant way that Chinese entrepreneurs vary from their American counterparts is in work ethic. The mantra I found in the startups I visited in Beijing and Shanghai was “9-9-6”—meaning the employees only needed to work from 9 am to 9 pm, 6 days a week.
Another concept Kai-Fu shared over dinner was the almost ‘dictatorial’ leadership of the founder/CEO. In China, it’s not uncommon for the Founder/CEO to own the majority of the company, or at least 30–40 percent. It’s also the case that what the CEO says is gospel. Period, no debate. There is no minority or dissenting opinion. When the CEO says “march,” the company asks, “which way?”
When Kai-Fu started Sinovation (his $1 billion+ venture fund), there were few active angel investors. Today, China has a rich ecosystem of angel, venture capital, and government-funded innovation parks.
As venture capital in China has evolved, so too has the mindset of the entrepreneur.
Kai -Fu recalled an early investment he made in which, after an unfortunate streak, the entrepreneur came to him, almost in tears, apologizing for losing his money and promising he would earn it back for him in another way. Kai-Fu comforted the entrepreneur and said there was no such need.
Only a few years later, the situation was vastly different. An entrepreneur who was going through a similar unfortunate streak came to Kai Fu and told him he only had $2 million left of his initial $12 million investment. He informed him he saw no value in returning the money and instead was going to take the last $2 million and use it as a final push to see if the company could succeed. He then promised Kai-Fu if he failed, he would remember what Kai-Fu did for him and, as such, possibly give Sinovation an opportunity to invest in him with his next company.
2. Chinese Companies Are No Longer Just ‘Copycats’
During dinner, Kai-Fu lamented that 10 years ago, it would be fair to call Chinese companies copycats of American companies. Five years ago, the claim would be controversial. Today, however, Kai-Fu is clear that claim is entirely false.
While smart Chinese startups will still look at what American companies are doing and build on trends, today it’s becoming a wise business practice for American tech giants to analyze Chinese companies. If you look at many new features of Facebook’s Messenger, it seems to very closely mirror TenCent’s WeChat.
Interestingly, tight government controls in China have actually spurred innovation. Take TV, for example, a highly regulated industry. Because of this regulation, most entertainment in China is consumed on the internet or by phone. Game shows, reality shows, and more will be entirely centered online.
Kai-Fu told us about one of his investments in a company that helps create Chinese singing sensations. They take girls in from a young age, school them, and regardless of talent, help build their presence and brand as singers. Once ready, these singers are pushed across all the available platforms, and superstars are born. The company recognizes its role in this superstar status, though, which is why it takes a 50 percent cut of all earnings.
This company is just one example of how Chinese entrepreneurs take advantage of China’s unique position, market, and culture.
3. China’s Artificial Intelligence Play
Kai-Fu wrapped up his talk with a brief introduction into the expansive AI industry in China. I previously discussed Face++, a Sinovation investment, which is creating radically efficient facial recognition technology. Face++ is light years ahead of anyone else globally at recognition in live videos. However, Face++ is just one of the incredible advances in AI coming out of China.
Baidu, one of China’s most valuable tech companies, started out as just a search company. However, they now run one of the country’s leading self-driving car programs.
Baidu’s goal is to create a software suite atop existing hardware that will control all self-driving aspects of a vehicle but also be able to provide additional services such as HD mapping and more.
Another interesting application came from another of Sinovation’s investments, Smart Finance Group (SFG). Given most payments are mobile (through WeChat or Alipay), only ~20 percent of the population in China have a credit history. This makes it very difficult for individuals in China to acquire a loan.
SFG’s mobile application takes in user data (as much as the user allows) and, based on the information provided, uses an AI agent to create a financial profile with the power to offer an instant loan. This loan can be deposited directly into their WeChat or Alipay account and is typically approved in minutes. Unlike American loan companies, they avoid default and long-term debt by only providing a one-month loan with 10% interest. Borrow $200, and you pay back $220 by the following month.
Artificial intelligence is exploding in China, and Kai-Fu believes it will touch every single industry.
The only constant is change, and the rate of change is constantly increasing.
In the next 10 years, we’ll see tremendous changes on the geopolitical front and the global entrepreneurial scene caused by technological empowerment.
China is an entrepreneurial hotbed that cannot be ignored. I’m monitoring it closely. Are you?
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Does creativity make human intelligence special?
It may appear so at first glance. Though machines can calculate, analyze, and even perceive, creativity may seem far out of reach. Perhaps this is because we find it mysterious, even in ourselves. How can the output of a machine be anything more than that which is determined by its programmers?
Increasingly, however, artificial intelligence is moving into creativity’s hallowed domain, from art to industry. And though much is already possible, the future is sure to bring ever more creative machines.
What Is Machine Creativity?
Robotic art is just one example of machine creativity, a rapidly growing sub-field that sits somewhere between the study of artificial intelligence and human psychology.
The winning paintings from the 2017 Robot Art Competition are strikingly reminiscent of those showcased each spring at university exhibitions for graduating art students. Like the works produced by skilled artists, the compositions dreamed up by the competition’s robotic painters are aesthetically ambitious. One robot-made painting features a man’s bearded face gazing intently out from the canvas, his eyes locking with the viewer’s. Another abstract painting, “inspired” by data from EEG signals, visually depicts the human emotion of misery with jagged, gloomy stripes of black and purple.
More broadly, a creative machine is software (sometimes encased in a robotic body) that synthesizes inputs to generate new and valuable ideas, solutions to complex scientific problems, or original works of art. In a process similar to that followed by a human artist or scientist, a creative machine begins its work by framing a problem. Next, its software specifies the requirements the solution should have before generating “answers” in the form of original designs, patterns, or some other form of output.
Although the notion of machine creativity sounds a bit like science fiction, the basic concept is one that has been slowly developing for decades.
Nearly 50 years ago while a high school student, inventor and futurist Ray Kurzweil created software that could analyze the patterns in musical compositions and then compose new melodies in a similar style. Aaron, one of the world’s most famous painting robots, has been hard at work since the 1970s.
Industrial designers have used an automated, algorithm-driven process for decades to design computer chips (or machine parts) whose layout (or form) is optimized for a particular function or environment. Emily Howell, a computer program created by David Cope, writes original works in the style of classical composers, some of which have been performed by human orchestras to live audiences.
What’s different about today’s new and emerging generation of robotic artists, scientists, composers, authors, and product designers is their ubiquity and power.
“The recent explosion of artificial creativity has been enabled by the rapid maturation of the same exponential technologies that have already re-drawn our daily lives.”
I’ve already mentioned the rapidly advancing fields of robotic art and music. In the realm of scientific research, so-called “robotic scientists” such as Eureqa and Adam and Eve develop new scientific hypotheses; their “insights” have contributed to breakthroughs that are cited by hundreds of academic research papers. In the medical industry, creative machines are hard at work creating chemical compounds for new pharmaceuticals. After it read over seven million words of 20th century English poetry, a neural network developed by researcher Jack Hopkins learned to write passable poetry in a number of different styles and meters.
The recent explosion of artificial creativity has been enabled by the rapid maturation of the same exponential technologies that have already re-drawn our daily lives, including faster processors, ubiquitous sensors and wireless networks, and better algorithms.
As they continue to improve, creative machines—like humans—will perform a broad range of creative activities, ranging from everyday problem solving (sometimes known as “Little C” creativity) to producing once-in-a-century masterpieces (“Big C” creativity). A creative machine’s outputs could range from a design for a cast for a marble sculpture to a schematic blueprint for a clever new gadget for opening bottles of wine.
In the coming decades, by automating the process of solving complex problems, creative machines will again transform our world. Creative machines will serve as a versatile source of on-demand talent.
In the battle to recruit a workforce that can solve complex problems, creative machines will put small businesses on equal footing with large corporations. Art and music lovers will enjoy fresh creative works that re-interpret the style of ancient disciplines. People with a health condition will benefit from individualized medical treatments, and low-income people will receive top-notch legal advice, to name but a few potentially beneficial applications.
How Can We Make Creative Machines, Unless We Understand Our Own Creativity?
One of the most intriguing—yet unsettling—aspects of watching robotic arms skillfully oil paint is that we humans still do not understand our own creative process. Over the centuries, several different civilizations have devised a variety of models to explain creativity.
The ancient Greeks believed that poets drew inspiration from a transcendent realm parallel to the material world where ideas could take root and flourish. In the Middle Ages, philosophers and poets attributed our peculiarly human ability to “make something of nothing” to an external source, namely divine inspiration. Modern academic study of human creativity has generated vast reams of scholarship, but despite the value of these insights, the human imagination remains a great mystery, second only to that of consciousness.
Today, the rise of machine creativity demonstrates (once again), that we do not have to fully understand a biological process in order to emulate it with advanced technology.
Past experience has shown that jet planes can fly higher and faster than birds by using the forward thrust of an engine rather than wings. Submarines propel themselves forward underwater without fins or a tail. Deep learning neural networks identify objects in randomly-selected photographs with super-human accuracy. Similarly, using a fairly straightforward software architecture, creative software (sometimes paired with a robotic body) can paint, write, hypothesize, or design with impressive originality, skill, and boldness.
At the heart of machine creativity is simple iteration. No matter what sort of output they produce, creative machines fall into one of three categories depending on their internal architecture.
Briefly, the first group consists of software programs that use traditional rule-based, or symbolic AI, the second group uses evolutionary algorithms, and the third group uses a variation of a form of machine learning called deep learning that has already revolutionized voice and facial recognition software.
1) Symbolic creative machines are the oldest artificial artists and musicians. In this approach—also known as “good old-fashioned AI (GOFAI) or symbolic AI—the human programmer plays a key role by writing a set of step-by-step instructions to guide the computer through a task. Despite the fact that symbolic AI is limited in its ability to adapt to environmental changes, it’s still possible for a robotic artist programmed this way to create an impressively wide variety of different outputs.
2) Evolutionary algorithms (EA) have been in use for several decades and remain powerful tools for design. In this approach, potential solutions “compete” in a software simulator in a Darwinian process reminiscent of biological evolution. The human programmer specifies a “fitness criterion” that will be used to score and rank the solutions generated by the software. The software then generates a “first generation” population of random solutions (which typically are pretty poor in quality), scores this first generation of solutions, and selects the top 50% (those random solutions deemed to be the best “fit”). The software then takes another pass and recombines the “winning” solutions to create the next generation and repeats this process for thousands (and sometimes millions) of generations.
3) Generative deep learning (DL) neural networks represent the newest software architecture of the three, since DL is data-dependent and resource-intensive. First, a human programmer “trains” a DL neural network to recognize a particular feature in a dataset, for example, an image of a dog in a stream of digital images. Next, the standard “feed forward” process is reversed and the DL neural network begins to generate the feature, for example, eventually producing new and sometimes original images of (or poetry about) dogs. Generative DL networks have tremendous and unexplored creative potential and are able to produce a broad range of original outputs, from paintings to music to poetry.
The Coming Explosion of Machine Creativity
In the near future as Moore’s Law continues its work, we will see sophisticated combinations of these three basic architectures. Since the 1950s, artificial intelligence has steadily mastered one human ability after another, and in the process of doing so, has reduced the cost of calculation, analysis, and most recently, perception. When creative software becomes as inexpensive and ubiquitous as analytical software is today, humans will no longer be the only intelligent beings capable of creative work.
This is why I have to bite my tongue when I hear the well-intended (but shortsighted) advice frequently dispensed to young people that they should pursue work that demands creativity to help them “AI-proof” their futures.
Instead, students should gain skills to harness the power of creative machines.
There are two skills in which humans excel that will enable us to remain useful in a world of ever-advancing artificial intelligence. One, the ability to frame and define a complex problem so that it can be handed off to a creative machine to solve. And two, the ability to communicate the value of both the framework and the proposed solution to the other humans involved.
What will happen to people when creative machines begin to capably tread on intellectual ground that was once considered the sole domain of the human mind, and before that, the product of divine inspiration? While machines engaging in Big C creativity—e.g., oil painting and composing new symphonies—tend to garner controversy and make the headlines, I suspect the real world-changing application of machine creativity will be in the realm of everyday problem solving, or Little C. The mainstream emergence of powerful problem-solving tools will help people create abundance where there was once scarcity.
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