Artificial Intelligence (AI) has become the most critical technology of the 21st century. 2016, in particular, is more deeply involved in business and people’s lives than ever before. Perhaps it was the explosion of AlphaGo’s victory over Lee Sedol in Go, or perhaps the capital frenzy of the first half of the year that propelled ai to the center of the next wave of tech competition.

According to CB Insights, there were only 70 AI start-ups in 2011, but more than 400 in 2015, an increase of nearly six times. According to venture capital funding in the first quarter of 2016, more than 200 AI-related startups have raised more than $1.5 billion, a new high; Iresearch estimates that the global AI market size will reach 119 billion yuan in 2020, with a compound annual growth rate of about 19.70%, while China’s AI market size will reach 9.1 billion yuan in the same period, with a compound annual growth rate of more than 50%. In terms of entrepreneurship, investment and market size, the sector is growing in popularity.



Giiso Information, founded in 2013, is a leading technology provider in the field of “artificial intelligence + information” in China, with top technologies in big data mining, intelligent semantics, knowledge mapping and other fields. At the same time, its research and development products include editing robots, writing robots and other artificial intelligence products! With its strong technical strength, the company has received angel round investment at the beginning of its establishment, and received pre-A round investment of $5 million from GSR Venture Capital in August 2015.

But at the same time, as we’ve seen, there’s always a big, nice bubble in an industry or technology that’s on the cusp. O2O, P2P, VR, of course, artificial intelligence is no exception. The rise of artificial intelligence has promoted the development of software, and it has broad application prospects in many industries. However, it has not reached the mature stage after all. At the present stage, capital mania and entrepreneurs rush in, making this technology and science face more severe challenges.

1. Capital bubble

The formation of a tuyere is not without the impetus of backside capital force. Investment in ARTIFICIAL intelligence is now almost the hottest in the world. According to a January 2016 report by iResearch, there are nearly 100 startups in China’s AI sector, about 65 of which have received investment totaling 2.91 billion yuan ($448 million). Innovation Works, for example, has invested in more than 25 ai startups in 2015. More than 4.5 billion yuan was raised in September, mainly to invest in black technology and artificial intelligence. Soon after, Lee announced that Innovation Works would establish an artificial intelligence engineering institute. And darchen Venture Capital, Kunzhong Capital, Gao Rong Capital, GGV, Kai Fu Capital, IDG, Zhenge Fund and other investment institutions, or before or after the race in artificial intelligence race.

Artificial intelligence seems to be having the best of entrepreneurial times. However, the more to this time, the more cautious entrepreneurs. The interest of capital has accelerated the industry, but the most important thing for players is to keep pace. Liu Ye, CEO of Homework Box, said the AI field “has too much capital and too many concepts, but not enough entrepreneurs.” In his opinion, the entrepreneurs who really have a scene, a product, can cut into the scene, or the entrepreneurs who really have data are relatively few.

Technology bubble

Artificial intelligence is not a specific industry or industry, but a branch of computer science, is the research, development for simulation, extension and extension of people’s intelligence theory, method, technology, and application system of a new technical science. According to the famous definition of Professor Winston of Massachusetts Institute of Technology, “ARTIFICIAL intelligence is the study of how to make computers do intelligent work that only human beings can do in the past”, artificial intelligence almost covers everything.

Such a field with high academic relevance, to apply to some industries or industries, cannot simply rely on ordinary business thinking to open up. “Scientific research, then technology is one step, technology to product is another step, and then the product has a chance to become a commodity, you have to sell and have a certain amount, you really have a chance of success. It’s not that what we’re investing in is commodities.” Said Wang Huai, founder of linear capital.

Now, between industry and technology, there is a barrier that needs to be broken — talent. According to Dr. Greg S. Corrado, Google’s senior researcher in the field of ARTIFICIAL intelligence and machine learning, talent is the biggest bottleneck in the development of ARTIFICIAL intelligence. The other is people with innovative and business acumen who can effectively apply AI to a wider range of applications. The research and application of artificial intelligence is a cross-cutting and highly comprehensive process. In view of the professional threshold, talents who truly understand both technology and industry are still scarce.

Business bubble

The rush of capital and entrepreneurs is nothing but optimistic about the commercialization of artificial intelligence in the future. However, at present, most ai enterprises do not know how to use data resources to serve customers and create companies with commercial value. He Yunyue, founding partner of Puhe Capital, said, “I came into contact with an Internet company, which has over 100 million registered users and over 10 million daily active users. The company controls the daily online data of these users, including playing games, watching movies and other activities. But the company didn’t know how to use that data to design products that were commercially valuable.”

Zhou Hongyi also said, “Today’s ARTIFICIAL intelligence is just a new bottle of wine, I think the future needs at least 5-10 years gestation period.” At present, pure AI lacks a business model, and technology needs to serve business and bring progress to society to realize its ultimate value.

4. Valuation bubbles

Inflated valuations of AI startups are also creating bubbles as capital booms. According to a survey of 100 AI startups conducted by Xinzhiyuan, 98 companies reported a total valuation of 101.4 billion yuan, with an average value of about 1 billion yuan.

Ren Junzhao, chief investment officer of Darchen Venture Capital, said, “The bubble is very big and seriously overvalued. At present, ARTIFICIAL intelligence is in the stage of technology tool, which is far from platform and product transformation. Some enterprises are even valued at 1 billion YUAN when they have no revenue at the initial stage.

He yunyue also admitted that some companies in the industry are overvalued, including a company that makes humanoid robots that quoted 500 million yuan for a prototype as soon as it was developed. “If a company asks for Rmb1bn, we won’t invest unless we think it will be enough to support a market capitalisation of more than Rmb5bn in the future.”

Lei Ming, founder of Kuwo Music, pointed out that few AI companies are valued at more than $500 million in the United States, and it is not advisable to promote the industry in China.



conclusion

For now, there is quite a bit of froth in the red-hot AI sector, and the index is still rising. Of course, there are bubbles in any field. If an industry or industry wants to make a breakthrough, it is inevitable to be surrounded by bubbles in the early stage, which may only be a stage performance. “Don’t be too afraid of bubbles,” said Li Wei, founding partner of Songhe Capital. There are not enough bubbles and the industry cannot develop, and there are too many bubbles and the industry is not healthy.” Now, the enthusiasm of capital and entrepreneurs may be more for the future.

Moreover, although artificial intelligence has made some progress and breakthroughs, it will take some time before it can truly enter human life. Let alone gaming human intelligence. Rui Yong, executive vice president of Microsoft Asia Research Institute, believes that it will take about 500 years to achieve real artificial intelligence. “If you want me to add another 0 after that, I don’t object.”

Giiso information, founded in 2013, is the first domestic high-tech enterprise focusing on the research and development of intelligent information processing technology and the development and operation of core software for writing robots. At the beginning of its establishment, the company received angel round investment, and in August 2015, GSR Venture Capital received $5 million pre-A round of investment.

“Almost all of today’s AI comes from big data from the human past,” he said. “There is no single area of ability that comes from self-awareness. Computers learn from the human past, whether it’s chess or Go. Other fields are similar. When computers do image recognition, they also learn a large number of pictures from the existing big data of human beings. Computers are clueless when faced with problems that humans have never taught. If AlphaGo were to play checkers, it would be completely stupid. Even a slight change to go’s board, from a 19-by-19 grid to a 21-by-21 grid, would have made AlphaGo vulnerable, but humans would have no problem. AlphaGo can beat Lee Sedol, who is in his thirties, but it can’t learn as well as a five-year-old child. There is a big difference between weak AI and strong AI.”