China: Increasing Investments in AI, Big Data and Digital Health

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Gartner Hype Cycle for ICT in China, 2016

Gartner:

Despite the slowdown in GDP growth to 6.9 percent in 2015, China is still making aggressive investments to drive the adoption of high technology by local enterprises and organizations, according to Gartner, Inc…

The massive consumer base and the number of internet users in China (estimated at 650 million internet and 980 million mobile internet users in 2016) present the most-promising big data opportunities. Led by hyperscale internet companies such as Baidu (internet traffic data), Alibaba (supply chain and transaction data) and Tencent (social data), approximately 25 percent of businesses have been pursuing the value of big data.

“The government-sponsored strategy ‘Internet Plus’ is targeted at boosting economic growth through digital transformation,” said Jie Zhang, research director at Gartner. “It has issued a detailed action plan for 11 key industries in 2015, mandating the necessity of digital business transformation by leveraging big data and cloud technologies.”

Wall Street Journal:

The biggest buzz in China’s internet industry isn’t about besting global tech giants by better adapting existing business models for the Chinese market. Rather, it’s about competing head-to-head with the U.S. and other tech powerhouses in the hottest area of technological innovation: artificial intelligence.

Venture capitalists have been pouring money into startups focused on AI, which broadly refers to efforts to make computers emulate human cognitive functions such as recognizing speech or images. Chinese tech companies such as search giant Baidu have been investing heavily in the technology, and poaching high-level talent from foreign rivals.

Enthusiasts of the technology in China say those resources, along with some particular advantages in China, such as the sheer volume of data generated by its enormous population of internet users, makes this an area where China can excel.

“China is poised to be a leader in AI because of its great reserve in AI talent, excellent engineering education and massive market for AI adoption,” says Kai-Fu Lee, a former Microsoft and Google executive who is now chief executive of Sinovation Ventures. The firm, formerly known as China’s Innovation Works, has invested $100 million in 25 AI-related startups in the U.S. and China in the past three years.

CBInsights_chinadigitalhealth

CB Insights:

In total, over $1.1B has been deployed across 21 deals to Chinese digital health companies in the first six months of the year. It’s worth noting, though, that three investments each totaled over $100M in financing over the period including Ping An Insurance-backed medical services app Ping An Good Doctor, Beijing-based mobile healthcare app maker Spring Rain Software, and health data mining startup iCarbonX.

The chart above highlights how mega-rounds have propelled China’s digital health investment since 2012. Deal activity in the first half of 2016 was nearly equivalent with that of all of 2015.

 

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Give Me ‘Disruptive’

Disruptive

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Robotics: From Tesla in 1898 to Exits in 2011-2016

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Submerged version of Nikola Tesla's remote-controlled boat

Submerged version of Nikola Tesla’s remote-controlled boat

PBS:

[Nikola] Tesla wanted an extraordinary way to demonstrate the potential of his system for wireless transmission of energy [radio]. In 1898, at an electrical exhibition in the recently completed Madison Square Garden, he made a demonstration of the world’s first radio-controlled vessel. Everyone expected surprises from Tesla, but few were prepared for the sight of a small, odd-looking, iron-hulled boat scooting across an indoor pond (specially built for the display). The boat was equipped with, as Tesla described, “a borrowed mind.”

“When first shown… it created a sensation such as no other invention of mine has ever produced,” wrote Tesla. As happened fairly often with his inventions, many of those present were unsure how to react, whether to laugh or take flight. He had cleverly devised a means of putting the audience at ease, encouraging onlookers to ask questions of the boat. For instance, in response to the question “What is the cube root of 64?” lights on the boat flashed four times. In an era when only a handful of people knew about radio waves, some thought that Tesla was controlling the small ship with his mind. In actuality, he was sending signals to the mechanism using a small box with control levers on the side.

Tesla’s U.S. patent number 613,809 describes the first device anywhere for wireless remote control. The working model, or “teleautomaton,” responded to radio signals and was powered with an internal battery.

Tesla did not limit his method to boats, but generalized the invention’s potential to include vehicles of any sort and mechanisms to be actuated for any purpose. He envisioned one operator or several operators simultaneously directing fifty or a hundred vessels or machines through differently tuned radio transmitters and receivers.

When a New York Times writer suggested that Tesla could make the boat submerge and carry dynamite as a weapon of war, the inventor himself exploded. Tesla quickly corrected the reporter: “You do not see there a wireless torpedo, you see there the first of a race of robots, mechanical men which will do the laborious work of the human race.”

Tesla’s device was literally the birth of robotics, though he is seldom recognized for this accomplishment. The inventor was trained in electrical and mechanical engineering, and these skills merged beautifully in this remote-controlled boat. Unfortunately, the invention was so far ahead of its time that those who observed it could not imagine its practical applications.

Smithsonian.com

[Nikola] Tesla’s work in robotics began in the late 1890s when he patented his remote-controlled boat, an invention that absolutely stunned onlookers at the 1898 Electrical Exhibition at Madison Square Garden. [Tesla said in 1935:]

At present we suffer from the derangement of our civilization because we have not yet completely adjusted ourselves to the machine age. The solution of our problems does not lie in destroying but in mastering the machine.

Innumerable activities still performed by human hands today will be performed by automatons. At this very moment scientists working in the laboratories of American universities are attempting to create what has been described as a ” thinking machine.” I anticipated this development.

I actually constructed ” robots.” Today the robot is an accepted fact, but the principle has not been pushed far enough. In the twenty-first century the robot will take the place which slave labor occupied in ancient civilization. There is no reason at all why most of this should not come to pass in less than a century, freeing mankind to pursue its higher aspirations.

CB Insights:

Last year was the busiest year for robotics M&A activity, with the industry seeing nearly 15 acquisitions of private companies (we excluded reverse mergers and unit acquisitions). This year there have been three M&A deals involving private robotics companies year-to-date.

  • Around 50% of acquisitions were in industrial robotics: A majority of the acquisitions in the last 5 years have been in the industrial robotics sector. A notable deal was Teradyne’s acquisition of Denmark-based Universal Robotics in Q2’15. The startup, with subsidiaries in countries including China and Singapore, makes robotics arms for application in a variety of industries including electronics, agriculture, and pharmaceuticals.
  • VC-backed acquisitions: US-based Segway, backed by investors including smart money VC Kleiner Perkins Caufield & Byers, was acquired in 2013 by Summit Strategic Investments, and later acquired by China-based personal transportation startup Ninebot in 2015. Other VC-backed startups that were acquired include Aldebaran Robotics and VGo Communications.
  • Canada-based acquirers: This year, Ontario-based medical device and robotics corporation, Bionik Laboratories, acquired Massachusetts-based Interactive Motion Technologies, a startup providing robotic technology for neuro-rehabilitation. Two other Ontario-based corporations, Great Rock Development and Ross Video, acquired autonomous robotic startup Cyberworks and robotic camera startup FX-Motion, respectively.
  • Google dominates 2013: Google acquired 7 robotics startups in 2013 — including US Department of Defense grantee Boston Dynamics, Japan-based SCHAFT, and robotics motion control startup Bot & Dolly — as part of an ambitious plan to boost its robotics division. But Google has now put its Boston Dynamics unit for sale amid leadership changes and management issues, Bloomberg reported, listing Amazon and Toyota Research Institute as potential acquirers.
  • Amazon makes key industrial robotics acquisition in 2012: The previously-mentioned Kiva robots are now used at Amazon’s warehouse and fulfillment center. Post the acquisition, “there has been a scramble of new providers [like Iam Robotics, Locus Robotics, and 6 River Systems] to fill the void left by Kiva’s technology,” Frank Tobe wrote in The Robot Report.
  • Aldebaran rebrands as SoftBank Robotics: In 2012, Japan-based SoftBank Group bought a majority stake in Paris-based Aldebaran Robotics, the makers of NAO, Pepper, and Romeo robots. Aldebaran was rebranded earlier this year as SoftBank Robotics.

 

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Textbooks and College Tuition Lead Price Increases 1996-2016

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Source: BLS

HT: CB Insights

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Economic Impact of U.S. Venture Capital

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AI: The Story So Far, Stuart Russell (Video)

Machine Learning Research Institute:

As previously announced, we recently ran a 22-day Colloquium Series on Robust and Beneficial AI (CSRBAI) at the MIRI office, co-hosted with the Oxford Future of Humanity Institute. The colloquium was aimed at bringing together safety-conscious AI scientists from academia and industry to share their recent work. The event served that purpose well, initiating some new collaborations and a number of new conversations between researchers who hadn’t interacted before or had only talked remotely.

Over 50 people attended from 25 different institutions, with an average of 15 people present on any given talk or workshop day. In all, there were 17 talks and four weekend workshops on the topics of transparency, robustness and error-tolerance, preference specification, and agent models and multi-agent dilemmas. The full schedule and talk slides are available on the event page.

Stuart Russell, professor of computer science at UC Berkeley and co-author of Artificial Intelligence: A Modern Approach, gave the opening keynote. Russell spoke on “AI: The Story So Far” (slides). Abstract:

I will discuss the need for a fundamental reorientation of the field of AI towards provably beneficial systems. This need has been disputed by some, and I will consider their arguments. I will also discuss the technical challenges involved and some promising initial results.

Russell discusses his recent work on cooperative inverse reinforcement learning 36 minutes in. This paper and Dylan Hadfield-Menell’s related talk on corrigibility (slides) inspired lots of interest and discussion at CSRBAI.

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Benchmarking Digital Transformation

DigitalTransformation_MIT-Deloitte

Deloitte:

If your organization is moving toward digital too slowly, your people may be looking to leave. That’s one of the findings highlighted here and explored more fully in Aligning the organization for its digital future.

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