Earlier this year, China’s SenseTime became the most valuable artificial intelligence company in the world. The company’s latest $600 million investment round, led by Alibaba, is validation of its business model that relies on close ties with the Chinese government, which gains the company access to vast amounts of data for its facial recognition software.
News coverage of SenseTime’s valuation swept the internet. The U.S. and China are widely perceived to be in an AI arms race, so the fact that the most valuable AI company in the world is in China made for sensational headlines. But what exactly is an AI company?
The answer is not be so clearcut. We could narrow this down to to companies that are developing core AI technologies, but even that mostly leaves companies that are better known for other products.
The companies with enough data to make their AI efforts meaningful are mostly large tech companies that accumulated data through other popular products. These are companies like Alibaba, Amazon, Baidu, Facebook and Google.
Google gave people the best view of what a consumer-facing AI company looks like at its latest I/O conference. Audiences got to see how impressive Google’s image processing and digital assistant have become, the latter getting the biggest reaction when it made a phone call on behalf of a user to book an appointment at a hair salon and make a reservation at a restaurant.
After Google’s demonstration of Duplex, social media was abuzz about Google Assistant passing the Turing Test and jokes about AI handling everyday menial tasks like talking to your parents. The technology is still in its early stages and hasn’t been rolled out to consumers yet, but the anticipation is palpable.
The other main AI product the company discussed is Google Lens. This platform uses AI to identify objects in the real world through a smartphone camera. Though Lens has not developed to the point of flawlessness since it was launched last year, reviews show it’s become enticingly sophisticated. It can identify products users want to buy and suggest places to buy the items online. It can also quickly offer translations of text on street signs, menus and other places.
This is how technology companies are ushering in the new era of e-commerce and omnichannel retail. This is the kind of technology that will make it possible for a shopper to see an item in the store they want to buy later and have delivered at home.
In some respects, China is already further along this path. While Google is developing AI to help its users in many different areas of life, Chinese AI companies are often more narrow in focus. This is especially true of Alibaba, which mostly wants to find new ways of getting people to shop on its platforms. The company’s Taobao platform already allows users to search via photo (as does competitor JD.com) and it’s often astonishingly accurate.
This brave new world of AI-led shopping can be both a blessing and a curse for retailers. Alibaba is a direct competitor to many stores in China that aren’t brands (many brands with their own stores also sell on Alibaba’s Tmall).
While Alibaba and Google offer unique value propositions in the world of AI, there are many other players in this space that are more quietly working on their own unique AI solutions to benefit their own users. Amazon still has the most widely used smart speaker and allows its digital assistant Alexa to be embedded in all kinds of smart hardware. Baidu is still the largest search engine in China and widely considered the country’s leader in AI technology. It’s probably more ahead than any of its local competitors in speech recognition.
Then there are the companies like SenseTime. The companies that take contracts with governments looking to more easily keep an eye on jaywalkers and students are getting a big leg up in specific areas of AI. While government contracts can be lucrative, they can also narrow the scope of a company and its research.
What this all means for consumers is still up in the air. At the very least, it’s clear that AI will get better at helping consumers meet their needs in new, practical ways. As more opportunities emerge in this space, a larger variety of companies will find ways of innovating and challenging the incumbents.
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