China’s AI Industry is Propped-up by BAT?

Baidu, Alibaba and Tencent (“BAT”) are the three Chinese giants loosely equivalent to Google, Amazon and  Facebook. Baidu began in 2000 and services over 2 billion users worldwide. Its market cap is around USD 60 billion (listed on NYSE).  Alibaba was established in 1999 in Hangzhou, China. Its market cap is around USD430 billion. Tencent, listed in Hong Kong, was founded in 1998. A messaging company with WeChat as its social media app. It is also the world’s largest gaming company. Its market cap is HK$3.2 trillion.

BAT’s deep pockets have funded a range of AI companies form smart cities to finance and education. They have invested in 53% of China’s 190 major AI companies. While each has its main area of expertise- Alibaba in commerce, Tencent in social networking and Baidu in search and information indexing – they are challenging one another head-on across dozens of industries.

BAT’s involvement is an integral part of China’s desire to be a global leader in AI by 2030. BAT’s investments have promoted a top-heavy AI industry i.e. many companies dedicated to AI applications while a few involved in developing technologies that underpin it.

China’s rise in AI leadership is helped by abundance of data and lax views on privacy. These conditions make it fertile ground for highly profitable machine-learning applications. China is behind the U.S. on fundamental research on AI, which remains its weakness.

References:

1.         Investing in China with BAT Stocks, Marissa Prince, Feb 19, 2019             (https://www.canstar.com.au/investor-hub/bat-stocks-invest-china/)

2.         Three charts show how China’s AI industry is propped up by three companies, Karen Hao, Jan 22, 2019 (https://www.technologyreview.com)