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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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#431159 How Close Is Turing’s Dream of ...
The quest for conversational artificial intelligence has been a long one.
When Alan Turing, the father of modern computing, racked his considerable brains for a test that would truly indicate that a computer program was intelligent, he landed on this area. If a computer could convince a panel of human judges that they were talking to a human—if it could hold a convincing conversation—then it would indicate that artificial intelligence had advanced to the point where it was indistinguishable from human intelligence.
This gauntlet was thrown down in 1950 and, so far, no computer program has managed to pass the Turing test.
There have been some very notable failures, however: Joseph Weizenbaum, as early as 1966—when computers were still programmed with large punch-cards—developed a piece of natural language processing software called ELIZA. ELIZA was a machine intended to respond to human conversation by pretending to be a psychotherapist; you can still talk to her today.
Talking to ELIZA is a little strange. She’ll often rephrase things you’ve said back at you: so, for example, if you say “I’m feeling depressed,” she might say “Did you come to me because you are feeling depressed?” When she’s unsure about what you’ve said, ELIZA will usually respond with “I see,” or perhaps “Tell me more.”
For the first few lines of dialogue, especially if you treat her as your therapist, ELIZA can be convincingly human. This was something Weizenbaum noticed and was slightly alarmed by: people were willing to treat the algorithm as more human than it really was. Before long, even though some of the test subjects knew ELIZA was just a machine, they were opening up with some of their deepest feelings and secrets. They were pouring out their hearts to a machine. When Weizenbaum’s secretary spoke to ELIZA, even though she knew it was a fairly simple computer program, she still insisted Weizenbaum leave the room.
Part of the unexpected reaction ELIZA generated may be because people are more willing to open up to a machine, feeling they won’t be judged, even if the machine is ultimately powerless to do or say anything to really help. The ELIZA effect was named for this computer program: the tendency of humans to anthropomorphize machines, or think of them as human.
Weizenbaum himself, who later became deeply suspicious of the influence of computers and artificial intelligence in human life, was astonished that people were so willing to believe his script was human. He wrote, “I had not realized…that extremely short exposures to a relatively simple computer program could induce powerful delusional thinking in quite normal people.”
“Consciously, you know you’re talking to a big block of code stored somewhere out there in the ether. But subconsciously, you might feel like you’re interacting with a human.”
The ELIZA effect may have disturbed Weizenbaum, but it has intrigued and fascinated others for decades. Perhaps you’ve noticed it in yourself, when talking to an AI like Siri, Alexa, or Google Assistant—the occasional response can seem almost too real. Consciously, you know you’re talking to a big block of code stored somewhere out there in the ether. But subconsciously, you might feel like you’re interacting with a human.
Yet the ELIZA effect, as enticing as it is, has proved a source of frustration for people who are trying to create conversational machines. Natural language processing has proceeded in leaps and bounds since the 1960s. Now you can find friendly chatbots like Mitsuku—which has frequently won the Loebner Prize, awarded to the machines that come closest to passing the Turing test—that aim to have a response to everything you might say.
In the commercial sphere, Facebook has opened up its Messenger program and provided software for people and companies to design their own chatbots. The idea is simple: why have an app for, say, ordering pizza when you can just chatter to a robot through your favorite messenger app and make the order in natural language, as if you were telling your friend to get it for you?
Startups like Semantic Machines hope their AI assistant will be able to interact with you just like a secretary or PA would, but with an unparalleled ability to retrieve information from the internet. They may soon be there.
But people who engineer chatbots—both in the social and commercial realm—encounter a common problem: the users, perhaps subconsciously, assume the chatbots are human and become disappointed when they’re not able to have a normal conversation. Frustration with miscommunication can often stem from raised initial expectations.
So far, no machine has really been able to crack the problem of context retention—understanding what’s been said before, referring back to it, and crafting responses based on the point the conversation has reached. Even Mitsuku will often struggle to remember the topic of conversation beyond a few lines of dialogue.
“For everything you say, there could be hundreds of responses that would make sense. When you travel a layer deeper into the conversation, those factors multiply until you end up with vast numbers of potential conversations.”
This is, of course, understandable. Conversation can be almost unimaginably complex. For everything you say, there could be hundreds of responses that would make sense. When you travel a layer deeper into the conversation, those factors multiply until—like possible games of Go or chess—you end up with vast numbers of potential conversations.
But that hasn’t deterred people from trying, most recently, tech giant Amazon, in an effort to make their AI voice assistant, Alexa, friendlier. They have been running the Alexa Prize competition, which offers a cool $500,000 to the winning AI—and a bonus of a million dollars to any team that can create a ‘socialbot’ capable of sustaining a conversation with human users for 20 minutes on a variety of themes.
Topics Alexa likes to chat about include science and technology, politics, sports, and celebrity gossip. The finalists were recently announced: chatbots from universities in Prague, Edinburgh, and Seattle. Finalists were chosen according to the ratings from Alexa users, who could trigger the socialbots into conversation by saying “Hey Alexa, let’s chat,” although the reviews for the socialbots weren’t always complimentary.
By narrowing down the fields of conversation to a specific range of topics, the Alexa Prize has cleverly started to get around the problem of context—just as commercially available chatbots hope to do. It’s much easier to model an interaction that goes a few layers into the conversational topic if you’re limiting those topics to a specific field.
Developing a machine that can hold almost any conversation with a human interlocutor convincingly might be difficult. It might even be a problem that requires artificial general intelligence to truly solve, rather than the previously-employed approaches of scripted answers or neural networks that associate inputs with responses.
But a machine that can have meaningful interactions that people might value and enjoy could be just around the corner. The Alexa Prize winner is announced in November. The ELIZA effect might mean we will relate to machines sooner than we’d thought.
So, go well, little socialbots. If you ever want to discuss the weather or what the world will be like once you guys take over, I’ll be around. Just don’t start a therapy session.
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