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China’s goal of becoming the world’s leading AI innovation center by 2030 is based on an ambitious blueprint that encourages individual cities to develop and strengthen their AI ecosystems with the help of academic institutions, tech enterprises, and hefty local and national government investment.
Over the past ten years, AI has been developing rapidly, and San Francisco and Beijing have become the two world centers of AI startups. This piece intends to unveil the best Beijing-based AI companies and to delineate a general landscape of the AI sector in this Asian cosmopolis.
In the previous five years, there have been thousands of AI-related investments in EO’s hometown of Beijing. Among the top 20 most valuable AI unicorns in the world, the US has taken 9 and China 7, with Beijing contributing X of the latter figure. There are even several AI unicorns in the capital that have touched other countries’ nerves – SenseTime (商汤科技) and Megvii (旷视科技) were blacklisted by the US for data security concerns.
Beijing – The center of Chinese AI startups
Beijing and Shanghai are the two centers of Chinese AI startups. With the most mature city infrastructure and business market, startups can find their space in Beijing easily, with access to resources that they want – graduates from national top universities, open policies and clustered financial service providers. Moreover, Beijing is the capital of China and it attracts millions of talents from other regions to pursue opportunities.
With such a background, AI startups are most active in the Beijing area. If we consider companies that are involved with the deep learning part of big data, IoT, computer vision and other technologies that are under the category of AI, Beijing has recorded over 2,000 investment deals since the birth of VC in China (though they mainly occurred in the 2010s), while 3,000 occurred nationwide.
AI has been challenged due to several concerns: profitability, morality, privacy, data security and so on. For startups, the predominant issue is commercialization. 2019 has been regarded as a critical year for AI startups to prove their capability of making money. However, with a general slowing-down of the economy, AI is finding it hard to stand out. The investment activities in the private sector have echoed this.
The year 2018 was the peak of AI investment, whether in terms of the aggregated deal value or the total deal count. Along with the development of AI, we can see a clear pattern of investment rounds shifting from the early stage to the mid-late stage. In 2015, Series C and up financing rounds were only 2.3% of total VC investments, but in 2019, the number ascended to 13.2%.
Compared with the declining deal count, Series D and up financing round count is increasing in the past five years. Top players received more attention and raised more funds in late-stage financing rounds, while the opportunities for new startups shrank drastically. In 2016, seed and angel rounds marked highest, at 87, but in 2019, only 24 occurred.