The Future of AI as a Service
BytePlus is a Chinese push for its AI supremacy
This is a longer piece about how AIaaS is likely to be a major B2B global business for China.
ByteDance is the most valuable company that’s not public. It’s based in Beijing, and its visionary CEO recently stepped down from that role. China is looking to export its BigData optimization and AI-surveillance capitalism advantage abroad.
What might be the risks for AI-as-a-Service in the B2B sector? Risks to data capture, covert surveillance, BigData model stealth surveillance risk to national security and basically just assisting China increase its innovation engine over the rest of the world? ByePlus is an incredible product.
It’s the low hanging fruit of TikTok’s algorithm licensing and obviously signals China’s play for AI dominance.
What if other companies could use the same incredible recommendation engine as TikTok? It’s an opportunity too good to pass up for many businesses.
ByteDance could be a disruptive force in this kind of AI licensing and the risks it poses won’t be taken very seriously by businesses that just want the next competitive advantage.
TikTok parent company ByteDance began licensing parts of its AI technologies to third parties through a new division called BytePlus.
The Financial Times reports that customers can pay fees to use recommendation algorithms, real-time filters and effects, automated translations, and computer vision tech akin to what’s found in TikTok, which has over 65.9 million users in the U.S. and is expected to see double-digit growth this year.
ByteDance’s growth into a GenZ influence center, apps innovation and gaming giant is ungodly. It’s not even remotely natural. Even with Softbank’s investment and the almost $10 Billion in funding ByteDance has received, it doesn’t even quite add up. So what’s actually going on here?
China’s crackdown on national tech giants has wiped a combined $823 billion off their value since February, with Tencent, Alibaba, and Kuaishou emerging as the biggest losers, according to Bloomberg, you will notice ByteDance has been relatively unscathed.
This is clearly because ByteDance has some alignment with Beijing that many other growing companies in China might not. China cares above all things to export its influence around the world.
China-based firms — particularly those focused on AI — are looking defiantly beyond the country’s borders for growth opportunities. Chinas’ more disruptive companies have a chance in the 2020 to 2040 period to become globally dominant companies with relative ease.
China is the facial recognition leader of the world. Demand for that tech is growing outside of China surprisingly:
For example, video surveillance company Hikvision, which is owned by the Chinese state, claims it now receives nearly 30% of its 50 billion yuan ($7 billion) in revenue from overseas.
Facial recognition giant Megvii says 4.9% of its revenue came from outside China in the first six months of 2019. And in 2017, ByteDance said it expected to earn over half of its revenue from international users within five years.
BytePlus could be very profitable in the AI for hire B2B sector in 2025 or even sooner.
Even as consolidation is occurring in China, new kinds of companies are quickly becoming dominant — ByteDance, Meituan, Didi, SenseTime, Pinduoduo, Bitmain and dozens of others. China’s superiority in regulation will actually spur these to go global, including China’s superiority in new retail and its E-commerce network in Asia.
BytePlus is an incredible vehicle for China to be able to export its AI tech around the world. ByteDance will likely acquire one of the top facial recognition companies of China such as Megvii (computer vision platform Face++).
This would bolster its AI for Hire B2B platform. It already offers an impressive array of services to businesses. ByteDance wasn’t shy about playing down its AI prowess in previous years, it was just in stealth mode as the obvious Beijing backed power play. Now the cat is out of the bag.
China’s new Unicorns aren’t made like tech companies used to be made. They are coming nearly out of nowhere to achieve incredible growth and it’s starting to show on the global level. China contributed 23 per cent of the 611 unicorns in the world, collectively worth over US$2 trillion as of March.
Since Beijing orchestrates all of these technology companies in a coherent ecosystem, they will be more sustainable and work together better than any other country’s dislocated BigTech attempts and corporate leaders prone to human errors. Before you know it, in China AI will be helping to organize the AI for Hire companies.
China’s AI strategy is so superior to the U.S. it’s not even worth debating. Investments in Chinese AI startups topped investments in American AI startups in 2018, the same year China filed 2.5 times more patents in AI technologies than the U.S.
China overtook the U.S. in 2019 for the number of most-cited AI research papers, according to the Allen Institute for AI. BytePlus and China’s superiority in mobile payments, facial recognition, mobile E-commerce and many other areas is showing and will naturally be exported around the world.
Oh, your AI is from China too? No kidding!
The Biden Administration has clearly expressed an intention to reinvigorate the U.S. industry, in part through the National Artificial Intelligence Research Resource Task Force, which will be responsible for developing a roadmap to democratize access to AI research tools.
But the U.S. is around five to ten years too late to even attempt to reform its stagnant duopolies and sinister BigTech companies whose main job is to maintain dominance in their little power systems of the old internet. Meanwhile on the side they clamor to work with China on the low.
China’s scale is just too much for even old money to behold. Essentially with Chinese AI companies eyeing international markets, U.S. firms are likely to eventually find it increasingly difficult to compete. China graduates as many as 3 times the number of computer scientists as the U.S., and the country’s AI Innovation Action Plan for Colleges and Universities called for the establishment of 50 new AI institutions in 2020.
BytePlus is a coming out party of China’s AI-centric form of capitalism that will eventually, I predict, replace the American internet.
BytePlus is just the beginning of what AI for Hire will one day look like. Think about it, at a recent Stanford University-led international challenge for machine reading comprehension, Chinese teams won three of the top five spots, including first place.
And researchers at the government-funded Beijing Academy of Artificial Intelligence (BAAI) in June announced the release of a multimodal AI model 10 times larger than San Francisco-based OpenAI’s 175-billion-parameter GPT- 3.
Megvii and its rivals SenseTime, Yitu and CloudWalk are collectively recognized as the “Four AI Dragons” of China for their market dominance and findings from high flying investors in facial recognition.
In nearly every sector China has various tech “dragons”. China’s smart cities will spawn more, exporting more AI prowess and even further improving China’s BigData optimization advantage. More data, better models, superior processing and business value. It’s not a complicated theory!
For how long has former Google CEO Eric Schmidt been urging lawmakers to ramp up funding in the AI space while incentivizing public-private partnerships to develop AI applications across government agencies against the “Chinese Threat”.
For how long has Google simultaneously been working with Huawei and other Chinese companies, even those blacklisted by the U.S? For how long have Microsoft, Tesla and other BigTech companies been trying to get in the good graces of China?
The future of AI for hire has an American component, but they are unlikely to be the leaders. As we saw with Nike CEO’s comment about with and for China, business leaders just care about profits.
If Amazon could grow its cloud services in China, it would. Apple’s eventual smart car might sell pretty well in China. Tesla’s entire business model rests on its performance in China.
Google and Facebook have already brought us ethically questionable technologies at scale. The jump to Chinese AI for Hire and facial recognition and using their own recommendation engines is really not much of a leap.
America can be bought out because its capitalism is about greed for the most part. China’s economic might and growing AI as a Service sector all but guarantees they will have America in their back pocket, if they don’t already.