Since the symbolic artificial Go player AlphaGo defeated a 9th Dan human player Lee Sedol of South Korea last year, the world has been immersed in a wave of smart-tech innovation. However, the exponential growth may result in alarming domestic bubbles, some experts warned recently.
A market with infinite possibilities
According to the “Report on China's Artificial Intelligence (AI) Development” issued recently by Al Era, a national think tank studying the vertical social network for smart technologies, AI may serve as a critical factor in the development and application of smart technologies over the next 10 years.
Venture capital has begun to penetrate the industry seeking strategic acquisitions, as exemplified by Google's takeover of 10 smart technological firms under its Alphabet program, among which the most compelling purchase was the tech magnate's US$ 5-million deal with DeepMind.
Amid a tide of smart-tech innovation, China has also kept pace with the cutting-edge industry, which many see as demonstrating the rapid growth momentum.
“China provides very fertile soil for AI to boom,” said Kai-Fu Lee, Chairman and CEO of Sinovation Ventures that is involved in financing aspirational start-ups. According to Lee, China can soon build a large team trained and dedicated to AI development with the support of preferential policies.
Wang Xiaochuan, CEO of SOHU.com Inc., said that it was likely that AI would bring about a huge transformation similar to the inception of the internet and online commerce. He was speaking at this year's Boao Forum for Asia, a non-profit organization for the visionary exchanges among world's prominent figures.
Spearheading the booming industry, Baidu.com, a top mainland search engine, has focused on the algorithm applied to unmanned vehicles, Augmented Reality (AR) and intelligent medical care.
Another domestic tech guru,Tencent, meantime, has concentrated on AI in linguistic and learning processes with its Ailab program.
“The immense interest of AI is a result of the industry's infinite scope for imagination, such as use of brain waves and voice to break up the conventional communication between people and machines,” said Zhao Shuai, a start-up founder and the former senior product manager of Microsoft Xiaoice.
Cautions about bubbles
According to a recent analytical report by Shanghai Shenyin & Wanguo Securities, the AI market is in waiting period for real explosive growth.
In spite of some major breakthroughs in biological cognitive techniques initiated by a number of companies, most of the AI development remains at the nascent stage, the report stated.
With lackluster achievements and overheated involvement, AI faces the danger of its capacities being overestimated.
“Don't exaggerate the industry, otherwise, bubbles will probably emerge,” Lee warned.
Homogeneous competition, such as, the conversation between humans and machines, involving at least 10 companies in the domestic market in 2014, may lead to bursting bubbles, Zhao added.
“The real demand, represented by wearable intelligence and unmanned vehicles, remains low and most AI techniques concentrating on business-to-business models only enable companies to cut labor costs and increase efficiency by resorting to big data,” Zhao explained.
Transformations and hopes
Despite the possibility of bubbles, experts believe the search for AI applications will continue.
For example, Baidu.com is researching the technologies for facial recognition to be used for the issuance of train tickets in Wuzhen, the perennial venue of the World Internet Conference.
“The algorithm works endlessly, and it can only be improved with continuous efforts when being applied for commercial use,” said Lu Qiuhong, CEO of Shanghai HRSTEK Co. Ltd.
“The market value of the products holds the key to the major technological breakthroughs initiated by market entities, while equal attention should be paid to sustaining a fundamental balance, technological innovation and market exploration,” she added.
According to Wang, the bubbles of the national industry which may burst and lead to bankruptcies will eventually stimulate the industry to create substantially-increasing value in the global market.