Since China embraced the Internet era, it has spawned three big Internet companies that dominate the country’s tech scene: Baidu, Alibaba and Tencent, also known as BAT. Founded in the late 20th century, the triumvirate has expanded well beyond their core businesses of search engines, e-commerce and social networking, respectively, to cover almost everything from digital payments to cloud computing. They are investing globally, moving from copying to innovation and increasingly challenging global tech giants such as Google, Amazon and Facebook.
But now, China is witnessing the rise of the next generation of tech giants — born in the mobile age, powered by artificial intelligence and the sharing economy, and dedicated to updating and iterating online services. The world’s most valuable emerging technology companies now include three Chinese companies less than a decade old: news app Toutiao, group-buying service Meituan-Dianping, and ride-hailing company Didi Chuxing. The three “unicorns”, also known as TMD, are the strongest contenders to become BAT. The rise of these companies gives consumers more choice in a life dominated by smartphones and poses a challenge to BAT, perhaps for the first time since its respective dominance.
“For BAT, it will force them to consider……,” said Xue Yu, a senior analyst at market research firm IDC How to innovate to create a competitive advantage, either by adopting emerging technologies or creating a better user experience.” “Competition in China’s Internet industry has escalated,” he said.
Forget BAT, TMD has risen
Today’s headline
Toutiao is a news app based on machine learning algorithms, and its users are growing rapidly. It had 120 million daily active users at the end of July 2017.
Toutiao uses machine learning algorithms to monitor users’ reading habits and adjust recommendations (including articles, videos and advertisements) based on their preferences. While Facebook and Twitter are also using machine learning to improve recommendations, their news feeds rely more on social relationships and feature mainly mainstream media. Toutiao, by contrast, has more than 1.2 million accounts producing content from traditional media, government agencies, businesses and bloggers, from celebrity tidbits to parenting information.
Behind the AI-powered news aggregator is Beijing-based Bytedance Technology Co LTD, whose latest funding round valued it at more than $20 billion. Founder Zhang Yiming is a 34-year-old software engineer who has been described as a “robot” in The Chinese media. In a 2016 interview, he said he intended to build the company into “the world’s largest platform for information creation and distribution.”
BAT and some established news portals are investing in machine learning to tailor news streams to their news users, but toutiao has a “first-mover advantage”, according to one company executive. In the five years since its launch, Toutiao has accumulated enough data to gain a more nuanced understanding of the needs of Its Chinese readers. Headlines now have their fair share of detractors.
Toutiao has thousands of censors to ensure its content complies with laws and regulations. The company, which has 4,000 content monitors, plans to expand its review and editing staff to 10,000 after it was recently punished for “negatively influencing online public opinion” and its key channels suspended updates.
Toutiao has expanded beyond China, acquiring Flipagram and Muscial.ly, two popular short video apps in the United States. It also runs a toutiao-like English-language news app called TopBuzz. In India, it led a $25m investment in Daily Hunt, an Indian news aggregator, in 2016.
Meituan review
Meituan Dianping is China’s largest Internet + lifestyle service platform. It is an all-in-one app that offers food delivery, movie tickets, restaurant reviews, group discounts and more, and has nearly 300 million Chinese users. The Beijing-based company, led by Mr Wang, was valued at $30bn in its latest fundraising round. This is due to the 2015 merger of two major rivals, Meituan Dianping and Dianping, which are backed by Tencent and Alibaba respectively.
Tencent has since become the new combined company’s main backer, while Alibaba has reduced its stake in Meituan Dianping and invested $1bn in meituan rival Ele. me last May. ‘The competition between Meituan-Dianping and Ele. me will continue for a long time,’ Mr. Wang said in an interview. ‘Neither side wants to dominate the market in the short term.’
Wang Xing is a 38-year-old entrepreneur with a track record of business failures. In 2005, he founded xiaonei, the first Chinese version of Facebook, but was forced to sell the business less than a year later. In 2007, he launched a Chinese version of Twitter, Fanfu, which was later shut down. In 2010, he founded Meituan, a group buying website. To be sure, the story is very different this time.
“Let everyone eat better and live better” is the slogan Wang created for Meituan. He said the company will continue to expand its business to achieve that mission. “I don’t believe in putting limits on myself,” he said.
Meituan is currently developing artificial intelligence and drone delivery technology, and is also looking to launch its own offline retail store and ride-hailing service — a surprising move given Didi’s dominance in China’s ride-sharing market. Reuters reported in November that Meituan was considering a U.S. IPO worth at least $3 billion in the first half of this year, but Wang later denied the report.
Drops travel
Didi Chuxing is also gearing up. It is a ride-sharing platform that covers taxi, private car, express car, hitch ride, price and bus services. It was renamed from Didi Dache in September 2015. This follows a merger between Didi and Kuaidi in February, a deal similar to Meituan and Dianping. The combined company has been locked in a bitter subsidy battle with Uber. In August 2016, Didi Chuxing announced that it had reached a strategic agreement with Uber Global, in which Didi Chuxing would acquire all the assets of Uber China, including its brand, business and data, to operate in the Chinese mainland. Last year, Didi raised nearly $10 billion in two rounds of funding, making it the world’s second-most valuable startup after Uber.
But Didi doesn’t stop there. In China, Didi is steadily expanding into car rental, electric vehicles and bike-sharing. Didi recently launched its own brand, Qingju, in Chengdu and launched its bike-sharing platform. Currently, chengdu users can ride Qingju, Xiaolan and Xiahuang bikes through didi’s platform, with the former two supporting deposit-free riding. Food delivery is another area didi is working on. Didi and Meituan are eyeing each other’s territory.
Didi chuxing will continue to compete with Uber on the international battlefield. Didi chuxing recently announced it would acquire 99, Brazil’s largest ride-sharing company. In its announcement, Didi did not disclose the exact amount of the acquisition. Didi could invest as much as $1 billion, according to several local media reports.
That would help it compete with Uber. But Cheng Wei, Didi’s chief executive, has an even more ambitious goal: to take on Google and Tesla in autonomous driving. On January 26, Didi Chuxing announced the establishment of AILabs (Artificial Intelligence Laboratory) at its headquarters, which will mainly explore the frontiers of AI technology and promote more applications and innovation and optimization of AI technology in intelligent travel scenarios.
With the big monopoly, someone wants to take it
According to a recent article in The Economist, “How to Tame the Tech Giants”, the triumvirate of Google, Microsoft and Facebook is bad for consumers and bad for competition itself.
Of course, the presumption that big business must be evil is wrong. But big technology platforms, notably Facebook, Google and Amazon, do raise concerns about fair competition. This is partly because they often benefit from legal exemptions. Unlike publishers, Facebook and Google are rarely accountable for what users do on their platforms. For years, the majority of Amazon buyers in the United States did not pay sales tax. The giants don’t just compete in the marketplace. Increasingly, they are markets themselves, providing the infrastructure (or “platform”) for much of the digital economy. Many of their services seem to be free, but users provide data to the platform, which becomes how they “pay” for it. So there is reason to worry that tech giants will use their power to protect and extend their dominance to the detriment of consumers.
And the giant’s eyes are all focused on AI. In 2016, Google announced its “AI First” strategy. Artificial intelligence is a big part of Zuckerberg’s 10-year plan for Facebook. Amazon, from Alexa to AWS, is also investing heavily in AI.
In China, BAT also has a comprehensive and high-profile AI layout. Baidu was the first high-profile company to declare “All in AI”, while Tencent took the opposite approach with “AI in All”. Jack Ma launched the NASA plan at the beginning of 2017. In the second half of this year, he decided to invest 100 billion yuan in Dharma Institute. Ali Cloud began to lay out “industrial AI”. Before that, half of the mobile Internet was occupied by BAT. Now, “artificial intelligence” is becoming BAT’s new main investment target. Among them, Baidu regards AI as the core driving force, Alibaba focuses on the application of AI in the business scene, and Tencent, which has always been planning and moving, regards AI as a long-term investment with strategic significance, investing in infrastructure and applying it to the business scene.
Goldman Sachs recently released the “Rise of Artificial Intelligence in China” AI research report, let the AI layout of more enterprises outside BAT surface.
Besides BAT, China’s Internet has formed a group of small giants, such as Meituan-Dianping, Didi and Toutiao, who are gradually building their own ecological empire through business expansion and investment and merger. AI, a vital technology for the future of the Internet, will not be absent.
The most typical EXAMPLE of Meituan-Dianping’s AI application is the “O2O real-time logistics scheduling system,” which dispatch20 million daily orders for Meituan-Dianping. It mainly applies machine learning technology in data processing and prediction modeling, and can complete hundreds of millions of operations in 5 seconds for real-time scheduling. Meanwhile, it can predict related changes and give more intelligent scheduling results.
The amount of data didi needs to process every day is also 20 million, and it handles a total of 4,500 TERabytes of 20 billion travel routes. As early as 2015, Didi established the Didi Machine Learning Research Institute, which focuses on the research of underlying AI technologies such as deep learning, human-computer interaction, computer vision and intelligent driving technology. In 2016, “Machine Learning Research Institute” was upgraded to “Didi Research Institute”, and hunted high-end technical talents worldwide. The research scope introduced big data modeling and other technical areas, and hired researcher He Xiaofei from Yahoo Research Institute as the president. In 2017, Didi set up a research institute in the United States. Recently, Didi Chuxing announced the establishment of AILabs (Artificial Intelligence Laboratory) in the company headquarters, which will mainly explore the frontiers of AI technology and promote the application and innovation and optimization of AI technology in intelligent travel scenarios.
In 2012, Toutiao applied AI algorithm for content distribution from the very first day of its birth, popularized the personalized information acquisition method of “thousands of faces” in China. At present, information distribution through AI algorithm has become the common choice of traditional news clients, search engines, browsers and weibo. AI algorithm is mainly used by Toutiao to learn users’ content consumption habits, so as to obtain their interests for better content recommendation and advertising distribution. Personalized reading and information flow advertising is also one of the most classic application scenarios of AI. In addition, AI technology is also being applied to articles review, plagiarism prevention and video authentication.
In addition, emerging startups have also joined in the battle of “grabbing food from the jaws of a tiger”. In 2017, hot financing gave birth to the ARTIFICIAL intelligence bubble, but also reflected the strong attention of all sectors of society on AI. Talents poured in madly, capital helped many startups rise, and their valuation approached the level of unicorns. Behind the turnover tide in the industry is the establishment of start-up companies in each and every subdivision of the field. The speed of the establishment of the bureau is amazing. Many technical masters have independent portals, and dance with the giants with the posture of high transfer.
The original post was published on January 29, 2018
Author: Pei Qi Francis Xiaoqin
This article is from xinzhiyuan, a partner of the cloud community. For relevant information, you can follow the wechat public account “AI_era”
China’s new tech giant TMD is taking advantage of AI’s rise