AI in Business and China: Impressions from the 2018 World AI Conference in Shanghai and Summer Davos in Tianjin

By Philipp Gerbert, Michael Spira and Friederike Reuter

The 2017 AI panel in Davos underlined that artificial intelligence had started permeating mainstream business. With the 2018 World AI Conference in Shanghai and the ‘Summer Davos 2018’ in Tianjin, two of the main business conferences for AI in 2018 have just wrapped up in China. The location of the meetings is not a coincidence. Much has been written about how Chinese companies across industries are plowing ahead in AI. Thus some of the most decorated tech titans and AI experts worldwide gathered in China this year: e.g., CEOs from Baidu, Alibaba and Tencent (BAT), Andrew Ng from Landing AI, and leading researchers such as Michael Jordan from UC Berkeley or Raj Reddy from Carnegie Mellon. So when the Chinese business media reports on the tête-à-tête of global AI leaders, what topics grab its attention and are considered newsworthy?

• AI leaders move aggressively into AI — and everyone will have to deal with it. Robin Li, CEO from Baidu, highlighted at the World AI Conference that all companies will eventually be affected by AI (Asia Today). The walk-in AI application experience at the conference provided a glimpse into such an AI-empowered era (Global Times). At the Summer Davos meeting in Tianjin, The China Global Television Network (CGTN) confirmed that AI in business is getting real and, for instance, is transforming the customer experience (see CGTN site for interview clips of us meeting participants). Particularly striking is how emphatically Chinese companies are pushing into AI — which we also observe in the data. Compared to organizations from other regions, China’s AI adopters are leading in AI investments and business model modifications to accommodate for AI’s potential. (CICC provided further evidence in its September report “AI in China: How Technologies Reshape Industries”)
• Optimism around AI prevails. At the World AI Conference, Michael Jordan explained that AI solutions have not yet even reached their full potential, due to the current pursuit of human-imitative AI (Shine). Also looking to the future, Raj Reddy shared his optimistic outlook for AI as a tool. The business community seems to agree as the CGTN reports a general belief among participants at the Summer Davos meeting that the opportunities of AI outweigh its threats. Indeed, instead of focusing on automation and cost reductions, companies emphasize the development of new business models and growth through AI adoption (see our recent global, also quoted on Chinese TV: BCG-MIT SMR publication “AI in Business Gets Real.”)
• Despite the enthusiasm, challenges loom on the horizon. First, employees, companies and society face a reskilling challenge due to the adoption of AI. Second, Robin Li emphasized the need for AI ethics, with the highest principle of AI being that it is “safe and controllable”. Additionally, Pony Ma from Tencent made a call for comprehensibility, availability and reliability of AI. Third, as discussed by the CGTN, the main challenge for business with AI is still to come: Most organizations find it easy to launch pilots but find it hard to scale AI. Overcoming this challenge, requires companies to adjust their operating models (see BCG publication “The Big Leap Toward AI at Scale”).
• Many hear the AI call for action — so more than ever a strategy for AI is required. As AI is creating real business value across companies and industries, executives are increasingly urged to act. At the same time, organizations are facing inflated M&A multiples and fiercer competition for the best AI talent (see the CGTN interview). In this situation, companies need to act decisively but not hastily. Companies that have a clear strategy where and how they can create the most value with AI will be the winners in the new AI paradigm.

We hope you found these impressions useful. One thing is talking about China, a different thing is experiencing the AI tsunami in the country on site. Certainly also a permanent challenge for the years to come to many other nations and companies around the world.