In unmanned supermarkets, which are part of the new retail concept, visual technology can help capture and analyze consumer behavior, through which, companies can improve their store's setting and displays to attract more buyers. Adopting a facial recognition system could also prevent shoplifting and help analyze consumer data.
With market players deeming those technologies as promising, they have in turn pumped up the number of start-ups in the sector. Currently, there are 146 visual AI technology companies in China, the biggest number of any type of AI firm across the country, the news report by sohu.com showed.
But analysts do not expect all those start-ups to thrive.
"I think an industry reshuffle will take place next year… the clock is ticking and visual AI start-ups that focus on researching basic algorithms should scramble to find applications, otherwise their capital pool will dry out in 2019," Yang noted.
M&A in Europe
Taking into account the abovementioned scenarios and China's large amount of data, the nation has an edge over US rivals in terms of AI visual technology application. However, in terms of the industry's foundation, such as basic theory and algorithms, domestic companies are still catching up with the standards set by foreign competitors, Lu noted.
But recent mergers and acquisitions (M&A) inked between Thundersoft and European peers may offer some insight into Chinese companies that are aiming to introduce cutting-edged AI technologies.
Thundersoft, for example, announced on Thursday that it has acquired Bulgarian software provider MM Solutions AD (MMS) in a deal worth 31 million euros (.16 million).
"Acquiring MMS will largely reduce the time we take to achieve new technological breakthroughs, which in turn will elevate our technological competitiveness… It's like strengthening our innovation ability through external dynamics," Zhao Hongfei, CEO of Thundersoft, said.
In a similar move, Thundersoft also acquired Finnish auto software maker Rightward for million in December 2016.
Asked why Thundersoft has been eyeing European firms recently, Yang explained that compared with the U.S., European AI start-ups can be seen as "unexploited gold mines" with long-term business prospects and market competitive M&A prices.
"Most European firms have rich experiences in developing technology, they also have a very strict system when training talents," Yang said.
By this, Yang was referring to the fact that it can take about 18 months for MMS to fully train a visual technology engineer. In contrast, the training period is generally six months in China. Yang also noted that after the MMS deal was completed, he would send some employees from Thundersoft to MMS for further training.
Furthermore, the European capital market has not been developing as fast as either market in China or the US, meaning it is usually a great bargain when Chinese investors acquire European tech peers.
"We bought the two European tech firms at a price that was less than ten times their price-earnings (PE) ratio. The price has to be at least twenty times the PE ratio here in China," he added.