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#431543 China Is an Entrepreneurial Hotbed That ...
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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#431243 Does Our Survival Depend on Relentless ...
Malthus had a fever dream in the 1790s. While the world was marveling in the first manifestations of modern science and technology and the industrial revolution that was just beginning, he was concerned. He saw the exponential growth in the human population as a terrible problem for the species—an existential threat. He was afraid the human population would overshoot the availability of resources, and then things would really hit the fan.
“Famine seems to be the last, the most dreadful resource of nature. The power of population is so superior to the power of the earth to produce subsistence for man, that premature death must in some shape or other visit the human race. The vices of mankind are active and able ministers of depopulation.”
So Malthus wrote in his famous text, an essay on the principles of population.
But Malthus was wrong. Not just in his proposed solution, which was to stop giving aid and food to the poor so that they wouldn’t explode in population. His prediction was also wrong: there was no great, overwhelming famine that caused the population to stay at the levels of the 1790s. Instead, the world population—with a few dips—has continued to grow exponentially ever since. And it’s still growing.
There have concurrently been developments in agriculture and medicine and, in the 20th century, the Green Revolution, in which Norman Borlaug ensured that countries adopted high-yield varieties of crops—the first precursors to modern ideas of genetically engineering food to produce better crops and more growth. The world was able to produce an astonishing amount of food—enough, in the modern era, for ten billion people. It is only a grave injustice in the way that food is distributed that means 12 percent of the world goes hungry, and we still have starvation. But, aside from that, we were saved by the majesty of another kind of exponential growth; the population grew, but the ability to produce food grew faster.
In so much of the world around us today, there’s the same old story. Take exploitation of fossil fuels: here, there is another exponential race. The exponential growth of our ability to mine coal, extract natural gas, refine oil from ever more complex hydrocarbons: this is pitted against our growing appetite. The stock market is built on exponential growth; you cannot provide compound interest unless the economy grows by a certain percentage a year.
“This relentless and ruthless expectation—that technology will continue to improve in ways we can’t foresee—is not just baked into share prices, but into the very survival of our species.”
When the economy fails to grow exponentially, it’s considered a crisis: a financial catastrophe. This expectation penetrates down to individual investors. In the cryptocurrency markets—hardly immune from bubbles, the bull-and-bear cycle of economics—the traders’ saying is “Buy the hype, sell the news.” Before an announcement is made, the expectation of growth, of a boost—the psychological shift—is almost invariably worth more than whatever the major announcement turns out to be. The idea of growth is baked into the share price, to the extent that even good news can often cause the price to dip when it’s delivered.
In the same way, this relentless and ruthless expectation—that technology will continue to improve in ways we can’t foresee—is not just baked into share prices, but into the very survival of our species. A third of Earth’s soil has been acutely degraded due to agriculture; we are looming on the brink of a topsoil crisis. In less relentless times, we may have tried to solve the problem by letting the fields lie fallow for a few years. But that’s no longer an option: if we do so, people will starve. Instead, we look to a second Green Revolution—genetically modified crops, or hydroponics—to save us.
Climate change is considered by many to be an existential threat. The Intergovernmental Panel on Climate Change has already put their faith in the exponential growth of technology. Many of the scenarios where they can successfully imagine the human race dealing with the climate crisis involve the development and widespread deployment of carbon capture and storage technology. Our hope for the future already has built-in expectations of exponential growth in our technology in this field. Alongside this, to reduce carbon emissions to zero on the timescales we need to, we will surely require new technologies in renewable energy, energy efficiency, and electrification of the transport system.
Without exponential growth in technology continuing, then, we are doomed. Humanity finds itself on a treadmill that’s rapidly accelerating, with the risk of plunging into the abyss if we can’t keep up the pace. Yet this very acceleration could also pose an existential threat. As our global system becomes more interconnected and complex, chaos theory takes over: the economics of a town in Macedonia can influence a US presidential election; critical infrastructure can be brought down by cybercriminals.
New threats, such as biotechnology, nanotechnology, or a generalized artificial intelligence, could put incredible power—power over the entire species—into the hands of a small number of people. We are faced with a paradox: the continued existence of our system depends on the exponential growth of our capacities outpacing the exponential growth of our needs and desires. Yet this very growth will create threats that are unimaginably larger than any humans have faced before in history.
“It is necessary that we understand the consequences and prospects for exponential growth: that we understand the nature of the race that we’re in.”
Neo-Luddites may find satisfaction in rejecting the ill-effects of technology, but they will still live in a society where technology is the lifeblood that keeps the whole system pumping. Now, more than ever, it is necessary that we understand the consequences and prospects for exponential growth: that we understand the nature of the race that we’re in.
If we decide that limitless exponential growth on a finite planet is unsustainable, we need to plan for the transition to a new way of living before our ability to accelerate runs out. If we require new technologies or fields of study to enable this growth to continue, we must focus our efforts on these before anything else. If we want to survive the 21st century without major catastrophe, we don’t have a choice but to understand it. Almost by default, we’re all accelerationists now.
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#431155 What It Will Take for Quantum Computers ...
Quantum computers could give the machine learning algorithms at the heart of modern artificial intelligence a dramatic speed up, but how far off are we? An international group of researchers has outlined the barriers that still need to be overcome.
This year has seen a surge of interest in quantum computing, driven in part by Google’s announcement that it will demonstrate “quantum supremacy” by the end of 2017. That means solving a problem beyond the capabilities of normal computers, which the company predicts will take 49 qubits—the quantum computing equivalent of bits.
As impressive as such a feat would be, the demonstration is likely to be on an esoteric problem that stacks the odds heavily in the quantum processor’s favor, and getting quantum computers to carry out practically useful calculations will take a lot more work.
But these devices hold great promise for solving problems in fields as diverse as cryptography or weather forecasting. One application people are particularly excited about is whether they could be used to supercharge the machine learning algorithms already transforming the modern world.
The potential is summarized in a recent review paper in the journal Nature written by a group of experts from the emerging field of quantum machine learning.
“Classical machine learning methods such as deep neural networks frequently have the feature that they can both recognize statistical patterns in data and produce data that possess the same statistical patterns: they recognize the patterns that they produce,” they write.
“This observation suggests the following hope. If small quantum information processors can produce statistical patterns that are computationally difficult for a classical computer to produce, then perhaps they can also recognize patterns that are equally difficult to recognize classically.”
Because of the way quantum computers work—taking advantage of strange quantum mechanical effects like entanglement and superposition—algorithms running on them should in principle be able to solve problems much faster than the best known classical algorithms, a phenomenon known as quantum speedup.
Designing these algorithms is tricky work, but the authors of the review note that there has been significant progress in recent years. They highlight multiple quantum algorithms exhibiting quantum speedup that could act as subroutines, or building blocks, for quantum machine learning programs.
We still don’t have the hardware to implement these algorithms, but according to the researchers the challenge is a technical one and clear paths to overcoming them exist. More challenging, they say, are four fundamental conceptual problems that could limit the applicability of quantum machine learning.
The first two are the input and output problems. Quantum computers, unsurprisingly, deal with quantum data, but the majority of the problems humans want to solve relate to the classical world. Translating significant amounts of classical data into the quantum systems can take so much time it can cancel out the benefits of the faster processing speeds, and the same is true of reading out the solution at the end.
The input problem could be mitigated to some extent by the development of quantum random access memory (qRAM)—the equivalent to RAM in a conventional computer used to provide the machine with quick access to its working memory. A qRAM can be configured to store classical data but allow the quantum computers to access all that information simultaneously as a superposition, which is required for a variety of quantum algorithms. But the authors note this is still a considerable engineering challenge and may not be sustainable for big data problems.
Closely related to the input/output problem is the costing problem. At present, the authors say very little is known about how many gates—or operations—a quantum machine learning algorithm will require to solve a given problem when operated on real-world devices. It’s expected that on highly complex problems they will offer considerable improvements over classical computers, but it’s not clear how big problems have to be before this becomes apparent.
Finally, whether or when these advantages kick in may be hard to prove, something the authors call the benchmarking problem. Claiming that a quantum algorithm can outperform any classical machine learning approach requires extensive testing against these other techniques that may not be feasible.
They suggest that this could be sidestepped by lowering the standards quantum machine learning algorithms are currently held to. This makes sense, as it doesn’t really matter whether an algorithm is intrinsically faster than all possible classical ones, as long as it’s faster than all the existing ones.
Another way of avoiding some of these problems is to apply these techniques directly to quantum data, the actual states generated by quantum systems and processes. The authors say this is probably the most promising near-term application for quantum machine learning and has the added benefit that any insights can be fed back into the design of better hardware.
“This would enable a virtuous cycle of innovation similar to that which occurred in classical computing, wherein each generation of processors is then leveraged to design the next-generation processors,” they conclude.
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#431142 Will Privacy Survive the Future?
Technological progress has radically transformed our concept of privacy. How we share information and display our identities has changed as we’ve migrated to the digital world.
As the Guardian states, “We now carry with us everywhere devices that give us access to all the world’s information, but they can also offer almost all the world vast quantities of information about us.” We are all leaving digital footprints as we navigate through the internet. While sometimes this information can be harmless, it’s often valuable to various stakeholders, including governments, corporations, marketers, and criminals.
The ethical debate around privacy is complex. The reality is that our definition and standards for privacy have evolved over time, and will continue to do so in the next few decades.
Implications of Emerging Technologies
Protecting privacy will only become more challenging as we experience the emergence of technologies such as virtual reality, the Internet of Things, brain-machine interfaces, and much more.
Virtual reality headsets are already gathering information about users’ locations and physical movements. In the future all of our emotional experiences, reactions, and interactions in the virtual world will be able to be accessed and analyzed. As virtual reality becomes more immersive and indistinguishable from physical reality, technology companies will be able to gather an unprecedented amount of data.
It doesn’t end there. The Internet of Things will be able to gather live data from our homes, cities and institutions. Drones may be able to spy on us as we live our everyday lives. As the amount of genetic data gathered increases, the privacy of our genes, too, may be compromised.
It gets even more concerning when we look farther into the future. As companies like Neuralink attempt to merge the human brain with machines, we are left with powerful implications for privacy. Brain-machine interfaces by nature operate by extracting information from the brain and manipulating it in order to accomplish goals. There are many parties that can benefit and take advantage of the information from the interface.
Marketing companies, for instance, would take an interest in better understanding how consumers think and consequently have their thoughts modified. Employers could use the information to find new ways to improve productivity or even monitor their employees. There will notably be risks of “brain hacking,” which we must take extreme precaution against. However, it is important to note that lesser versions of these risks currently exist, i.e., by phone hacking, identify fraud, and the like.
A New Much-Needed Definition of Privacy
In many ways we are already cyborgs interfacing with technology. According to theories like the extended mind hypothesis, our technological devices are an extension of our identities. We use our phones to store memories, retrieve information, and communicate. We use powerful tools like the Hubble Telescope to extend our sense of sight. In parallel, one can argue that the digital world has become an extension of the physical world.
These technological tools are a part of who we are. This has led to many ethical and societal implications. Our Facebook profiles can be processed to infer secondary information about us, such as sexual orientation, political and religious views, race, substance use, intelligence, and personality. Some argue that many of our devices may be mapping our every move. Your browsing history could be spied on and even sold in the open market.
While the argument to protect privacy and individuals’ information is valid to a certain extent, we may also have to accept the possibility that privacy will become obsolete in the future. We have inherently become more open as a society in the digital world, voluntarily sharing our identities, interests, views, and personalities.
“The question we are left with is, at what point does the tradeoff between transparency and privacy become detrimental?”
There also seems to be a contradiction with the positive trend towards mass transparency and the need to protect privacy. Many advocate for a massive decentralization and openness of information through mechanisms like blockchain.
The question we are left with is, at what point does the tradeoff between transparency and privacy become detrimental? We want to live in a world of fewer secrets, but also don’t want to live in a world where our every move is followed (not to mention our every feeling, thought and interaction). So, how do we find a balance?
Traditionally, privacy is used synonymously with secrecy. Many are led to believe that if you keep your personal information secret, then you’ve accomplished privacy. Danny Weitzner, director of the MIT Internet Policy Research Initiative, rejects this notion and argues that this old definition of privacy is dead.
From Witzner’s perspective, protecting privacy in the digital age means creating rules that require governments and businesses to be transparent about how they use our information. In other terms, we can’t bring the business of data to an end, but we can do a better job of controlling it. If these stakeholders spy on our personal information, then we should have the right to spy on how they spy on us.
The Role of Policy and Discourse
Almost always, policy has been too slow to adapt to the societal and ethical implications of technological progress. And sometimes the wrong laws can do more harm than good. For instance, in March, the US House of Representatives voted to allow internet service providers to sell your web browsing history on the open market.
More often than not, the bureaucratic nature of governance can’t keep up with exponential growth. New technologies are emerging every day and transforming society. Can we confidently claim that our world leaders, politicians, and local representatives are having these conversations and debates? Are they putting a focus on the ethical and societal implications of emerging technologies? Probably not.
We also can’t underestimate the role of public awareness and digital activism. There needs to be an emphasis on educating and engaging the general public about the complexities of these issues and the potential solutions available. The current solution may not be robust or clear, but having these discussions will get us there.
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#431000 Japan’s SoftBank Is Investing Billions ...
Remember the 1980s movie Brewster’s Millions, in which a minor league baseball pitcher (played by Richard Pryor) must spend $30 million in 30 days to inherit $300 million? Pryor goes on an epic spending spree for a bigger payoff down the road.
One of the world’s biggest public companies is making that film look like a weekend in the Hamptons. Japan’s SoftBank Group, led by its indefatigable CEO Masayoshi Son, is shooting to invest $100 billion over the next five years toward what the company calls the information revolution.
The newly-created SoftBank Vision Fund, with a handful of key investors, appears ready to almost single-handedly hack the technology revolution. Announced only last year, the fund had its first major close in May with $93 billion in committed capital. The rest of the money is expected to be raised this year.
The fund is unprecedented. Data firm CB Insights notes that the SoftBank Vision Fund, if and when it hits the $100 billion mark, will equal the total amount that VC-backed companies received in all of 2016—$100.8 billion across 8,372 deals globally.
The money will go toward both billion-dollar corporations and startups, with a minimum $100 million buy-in. The focus is on core technologies like artificial intelligence, robotics and the Internet of Things.
Aside from being Japan’s richest man, Son is also a futurist who has predicted the singularity, the moment in time when machines will become smarter than humans and technology will progress exponentially. Son pegs the date as 2047. He appears to be hedging that bet in the biggest way possible.
Show Me the Money
Ostensibly a telecommunications company, SoftBank Group was founded in 1981 and started investing in internet technologies by the mid-1990s. Son infamously lost about $70 billion of his own fortune after the dot-com bubble burst around 2001. The company itself has a market cap of nearly $90 billion today, about half of where it was during the heydays of the internet boom.
The ups and downs did nothing to slake the company’s thirst for technology. It has made nine acquisitions and more than 130 investments since 1995. In 2017 alone, SoftBank has poured billions into nearly 30 companies and acquired three others. Some of those investments are being transferred to the massive SoftBank Vision Fund.
SoftBank is not going it alone with the new fund. More than half of the money—$60 billion—comes via the Middle East through Saudi Arabia’s Public Investment Fund ($45 billion) and Abu Dhabi’s Mubadala Investment Company ($15 billion). Other players at the table include Apple, Qualcomm, Sharp, Foxconn, and Oracle.
During a company conference in August, Son notes the SoftBank Vision Fund is not just about making money. “We don’t just want to be an investor just for the money game,” he says through a translator. “We want to make the information revolution. To do the information revolution, you can’t do it by yourself; you need a lot of synergy.”
Off to the Races
The fund has wasted little time creating that synergy. In July, its first official investment, not surprisingly, went to a company that specializes in artificial intelligence for robots—Brain Corp. The San Diego-based startup uses AI to turn manual machines into self-driving robots that navigate their environments autonomously. The first commercial application appears to be a really smart commercial-grade version that crosses a Roomba and Zamboni.
A second investment in July was a bit more surprising. SoftBank and its fund partners led a $200 million mega-round for Plenty, an agricultural tech company that promises to reshape farming by going vertical. Using IoT sensors and machine learning, Plenty claims its urban vertical farms can produce 350 times more vegetables than a conventional farm using 1 percent of the water.
Round Two
The spending spree continued into August.
The SoftBank Vision Fund led a $1.1 billion investment into a little-known biotechnology company called Roivant Sciences that goes dumpster diving for abandoned drugs and then creates subsidiaries around each therapy. For example, Axovant Sciences is devoted to neurology while Urovant focuses on urology. TechCrunch reports that Roivant is also creating a tech-focused subsidiary, called Datavant, that will use AI for drug discovery and other healthcare initiatives, such as designing clinical trials.
The AI angle may partly explain SoftBank’s interest in backing the biggest private placement in healthcare to date.
Also in August, SoftBank Vision Fund led a mix of $2.5 billion in primary and secondary capital investments into India’s largest private company in what was touted as the largest single investment in a private Indian company. Flipkart is an e-commerce company in the mold of Amazon.
The fund tacked on a $250 million investment round in August to Kabbage, an Atlanta-based startup in the alt-lending sector for small businesses. It ended big with a $4.4 billion investment into a co-working company called WeWork.
Betterment of Humanity
And those investments only include companies that SoftBank Vision Fund has backed directly.
SoftBank the company will offer—or has already turned over—previous investments to the Vision Fund in more than a half-dozen companies. Those assets include its shares in Nvidia, which produces chips for AI applications, and its first serious foray into autonomous driving with Nauto, a California startup that uses AI and high-tech cameras to retrofit vehicles to improve driving safety. The more miles the AI logs, the more it learns about safe and unsafe driving behaviors.
Other recent acquisitions, such as Boston Dynamics, a well-known US robotics company owned briefly by Google’s parent company Alphabet, will remain under the SoftBank Group umbrella for now.
This spending spree begs the question: What is the overall vision behind the SoftBank’s relentless pursuit of technology companies? A spokesperson for SoftBank told Singularity Hub that the “common thread among all of these companies is that they are creating the foundational platforms for the next stage of the information revolution.All of the companies, he adds, share SoftBank’s criteria of working toward “the betterment of humanity.”
While the SoftBank portfolio is diverse, from agtech to fintech to biotech, it’s obvious that SoftBank is betting on technologies that will connect the world in new and amazing ways. For instance, it wrote a $1 billion check last year in support of OneWeb, which aims to launch 900 satellites to bring internet to everyone on the planet. (It will also be turned over to the SoftBank Vision Fund.)
SoftBank also led a half-billion equity investment round earlier this year in a UK company called Improbable, which employs cloud-based distributed computing to create virtual worlds for gaming. The next step for the company is massive simulations of the real world that supports simultaneous users who can experience the same environment together(and another candidate for the SoftBank Vision Fund.)
Even something as seemingly low-tech as WeWork, which provides a desk or office in locations around the world, points toward a more connected planet.
In the end, the singularity is about bringing humanity together through technology. No one said it would be easy—or cheap.
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