Scenarios and Potentials of AI's Commercial Application in China
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Scenarios and Potentials of AI’s Commercial Application in China Contents 1. China’s AI industry overview 1 2. Industry-specific commercial application 5 3. Regions’ potentials of commercialization 14 Scenarios and Potentials of AI’s Commercial Application in China | China’s AI industry overview 1. China’s AI industry overview Globally, governments are mapping Figure 1. Global AI market size out national strategies on developing (RMB100 million) artificial intelligence (AI) which 6,800 becomes the new engine in the future 7,000 of world economy. The global AI market 6,000 is estimated to reach RMB680 billion by 2020 with a compound annual growth 5,000 4,285 rate (CAGR) of 26.2%. Meanwhile, CAGR: 26.2% 4,000 China’s AI market is expected to be RMB71 billion by 20201since its growth 3,000 2,700 from 2015, with a CAGR of 44.5% from 2,307 1,684 1,971 2015 to 2020. 2,000 1,000 Despite the rapid growth, China is still young in developing AI technologies. 0 Currently, the U.S. is way ahead of 2015 2016 2017 2018E 2019E 2020E China in several indicators of key AI Source: chyxx.com, Deloitte Research fields, such as global chip market share, number of talents and research Figure 2. China’s AI market size (2015-2020) capabilities. 800 710.0 700 600 500.0 500 CAGR: 44.5% 400 339.0 300 216.9 200 141.9 112.4 100 0 2015 2016 2017 2018E 2019E 2020E ■ China’s market size (RMB100 million) Source: chyxx.com, Deloitte Research 1. 2017 China’s AI Industry Data Report, China Academy of Information and Communications Technology 1 Scenarios and Potentials of AI’s Commercial Application in China | China’s AI industry overview Figure 3. The U.S. is way ahead of China in several indicators ey fields Indicators China U.S. Hardware Global market share of 4% 50% semiconductor products (2015) Financing of FPGA chip USD34.4 million (7.6% of the USD192.5 million (42.2% manufacturers (2017) global total) of the global total) Data Number of mobile 1.4 billion (20% of the 420 million (5.5% of the subscribers (2016) global total) global total) Research capability Number of AI experts 39,200 (13% of the global total) 78,200 (26% of the and paradigm global total) Proportion of speeches 20.5% of the global total 48.4% of the delivered at AAAI (2015) global total Commercialization Proportion of AI 23% of the global total 42% of the global total companies (2017) Investments gained by AI USD2.6 billion (6.6% of the USD17.2 billion (43.4% of companies (2012-2016) global total) the global total) Investments from PEs for 48% of the global total 38% of the global total startups (2017) Source: Public information, Deloitte Research 2 Scenarios and Potentials of AI’s Commercial Application in China | China’s AI industry overview Though it hasn’t been smooth sailing Category-specific problems are Practice issues are solved in for AI development, the explosive addressed in the technology layer. the application layer, in which AI growth from 2015 has been different China has experienced rapid growth provides targeted products, services from the past as AI in the new era has in the technology layer and now and solutions to industries with been commercialized, mainly driven focused primarily on computer vision, commercialization at the core. by improved computing power, top- speech recognition and language Currently, this layer makes up the level design, capital support and user processing. Many giants, including largest part in China’s AI layers by demand. Tencent, Baidu and Alibaba, have the sizes and numbers of companies. so far begun to build their own AI With an advantage of data, giants AI industrial chain falls into the platforms with the aim to extend their set about building their open-source following three layers: industry advantages in the age of AI. platforms targeted on the application Start-ups, such as SenseTime and layer; among those start-ups, Computing power is provided in the Megvii, are actively setting up their unicorns represented by SenseTime basic layer, mainly including AI chip, technology platforms and extending also expands their presence in the sensor, big data and cloud computing, their researches into the basic layer, application layer while enhancing R&D in which China is relatively weak. such as algorithm framework. efforts in the technology layer. Tech giants represented by BATJ have started to build their own AI related basic discipline labs, increase inputs to R&D and expand investments into start-ups in the basic layer. Figure 4. Four drivers for AI market growth Continuous technological Capital brings industry boom advances builds a solid The global investment and foundation for AI growth financing into AI reached In the past five to ten years, AI Computing power Investment USD39.5 billion from 1,208 technology has been financing events in 2017, of commercialized largely on the which the total amount in China back of dramatically enhanced reached USD27.71 billion from computing power thanks to 369 events. The proceeds raised the integration of improved by Chinese AI companies chip processing capability, accounted for 70% of the global accessible cloud services and total and the number of declining hardware price, such financing events took up 31%. as seniors. AI is the new engine for AI are increasingly applied the future economic growth in people’s life and Several policies have been business activities introduced to support AI since The growth of AI technologies 2015, providing large amounts satisfies the demands of of project funds for the businesses, customers and development and governments on improving implementation of AI Policy User demand living standards, business technologies and supporting AI competitiveness and talent introduction and government efficiencies. corporate innovation. Source: Deloitte Research 3 Scenarios and Potentials of AI’s Commercial Application in China | China’s AI industry overview Figure 5. China’s AI industrial chain map Hard asy Basic layer Technology layer Application layer Hardware Software Software Hardware Software Sensor Cloud, data Speech recognition Healthcare Hesai and algorithm iFLYTEK Unisound SoundAI Truking Radmedical Bangeyisheng 12Sigma LeiShen DeePhi Tech Mobvoi Sinovoice AI Speech TINAVI Jianpei Huiyihuiying.com Wingspan Intelligent CloudMinds Nanochap iFLYTEK QED Technique Infervision System Liangzijinrong. Semantic recognition and analysis Autonomous driving RoboSense com Tricorn ruyi.ai MOMENTA Uisee Technology ZongMu Technology MINIEYE SLAMTEC Toutiao.com Boson Mor.AI GTCOM Drone Customer Personalized push Turing Robot Mobvoi DJI Yuneec service Toutiao.com Mioji HerCamera Zerotech Xiao-I Robot Shangzhuangyuan Machine vision Yunwen Sing Palette Technology Chip SenseTime TuSimple Warehousing& logistics Finance MediaTek Megvii BooCax Linx Sobot Tiantiantou HiSilicon YITU Malong Technologies Libiao Robot SenseTime Horizon CloudWalk Emotibot Water Rock Technology Dingfudata Robotics Seetatech Pinguo Geek+ NBS Data Technology Cambricon Sensingtech ReadSense Industrial cooperation 10jqka.com.cn Intellifusion Tuputech LINKFACE Sublue ocean Whalestock.com Westwell Viscovery FaceThink AUBO Licaimofang Canaan VIONVISION Face all Touchnet Technology CreditX JOHAR PERCEPTIN Yi+ Technology AuthenMetric Intelligent robot Others Marketing UBTECH Xiaoyu Zaijia Prafly Jixianyuan Appier Yunnex roobo Ecovacs Zhuge.com Rokid CANBOT Others Education Shenhao 4Paradigm IrisKing yuantiku.com Yixue Education SpeakIn Hongshi Technology Xiaozhi Knowbox Apogee Tech Comprehensive company Alibaba Tencent Baidu Xiaomi JD 360 Sogou Cheetah Mobile Huawei Hard Source: Public information, Deloitte Research 4 Scenarios and Potentials of AI’s Commercial Application in China | Industry-specific commercial application 2. Industry-specific commercial application AI technologies have developed based on the following considerations: rapidly in the past five to ten years and • Does the industry generate large become widely known over time. The volumes of reliable and stable data? Moore’s law has slowed down and the business application of AI has come • Tech giants do not have an absolute into focus. As tech giants are deploying advantage over start-ups in access vertical industry applications, start- to data. ups need to identify entries and focus • Is it a hot sector attractive to on industry-specific solutions to build investors? their strengths. Deloitte expects to see the booming of AI in government • Can the products and applications administration, financing, healthcare, properly address industry pain automotive, manufacturing and retail points? Figure 6. China’s digital government market size forecasting (RMB100 million) 3,500 3,140 3,000 2,722 2,500 2,343 2,067 2,000 1,500 1,000 500 0 2015 2016 2017 2018E Source: qianzhan.com, Deloitte Research 5 Scenarios and Potentials of AI’s Commercial Application in China | Industry-specific commercial application Digital government promoting the smart governance As China is advancing digital by establishing one-stop service governance, government platforms. For example, Shenzhen administration becomes a major Municipal Public Security Bureau channel through which AI may has leveraged facial recognition establish its presence in use scenarios to simplify household registration of smart governance and public procedures and built a citywide security. High entry barriers resulting system for sharing governance from local governments imposing information and resources that pools strict requirements on providers over 3.8 billion pieces of data in 385 enable strong players to be stronger.