The Global Connectedness of Innovation
At DCM, we’re always thinking about the future. We look at technologies and innovation around the world, and think critically about where the world will be in 3, 5, 10 years from now. One of the benefits of being a cross-border fund is having an early look at emerging trends from around the world. We’re proud of our portfolio, our past successes, and the positive returns we deliver our LPs. The increasing pace of change and evolving consumer markets keeps us excited and inspired as we look ahead. One trend that can’t be ignored is the rapid progression of machine learning and artificial intelligence globally, not just in Silicon Valley.
Machine Learning driving mobile engagement
It’s no surprise that Facebook uses machine learning to intelligently serve posts and relevant ads within your feed. However, what may surprise you is how companies abroad are also leveraging these technologies effectively. Let’s take a quick look at China. At the end of last year, China had 731 million internet users. That’s 2.3x the entire population of the United States. What’s more impressive, is that 95% — nearly 700 million users — are mobile users. With mobile phones, pixel space comes at a premium. Video sharing app Kuai Shou, now with more than 100 million monthly active users, uses machine learning to surface the most relevant content for specific users based on historical data and predictive analytics. This has helped the Beijing-based startup grow to over 50 million daily active users and raise more than $500 million from DCM Ventures, Tencent and Baidu. According to IBM, 90% of the world’s data has been created in just the past two years. What excites us most is how companies will apply machine learning to make the most of that data in the months and years to come to improve the customer experience.
Cross border AI & Autonomous Vehicles
On a broader scale, artificial intelligence is being introduced and applied to traditional industries and creating tremendous opportunity. In this post, we’re talking about the auto industry. In just a few short years, Uber expanded from San Francisco to more than 80 countries and 500 cities. As the ride-hailing business spans the globe, and local competitors emerged in markets like China (DiDi), India (Ola), Latin America (Cabify, 99), South East Asia (Grab, GoJek) and MENA (Careem), Uber began pushing forward with their research on autonomous vehicles. Just a few years ago, Google (Waymo) was considered one of the only legitimate players in the autonomous vehicle (AV) space. Today, the race for the first Level 4+ AVs is global and AI is critical to the success of self-driving vehicles. China-based Baidu recently announced it will open source its self-driving car platform. DiDi has even opened up an AI lab in Silicon Valley. Even OEMs such as Japanese automaker Toyota is focusing on AI research with the creation of TRI in collaboration with MIT and Stanford. As the race to build autonomous vehicles continues, we’ll be looking closely at what startups break through the increasingly competitive market and how traditional automakers innovate to remain competitive as new power houses emerge.
Looking Ahead
What could the world look like in the next few years? We are seeing greater demand for data scientists and machine learning experts as every software company becomes a data company. It is no longer enough to provide a simple service. Businesses and consumers are expecting more than ever. How will you use the data you’re capturing to improve the user and customer experience? Just as Netflix and Amazon have introduced sophisticated algorithms to surface intelligent suggestions, we will see companies across all stages leverage data in novel ways to dramatically improve their lives.
This is a global phenomenon. Last year, over 650 startups in the AI space were funded, with non-US based companies doubling market share to nearly 40%. 2017 looks to continue this trend as machine learning and applied AI startups seek to solve massive problems in enterprise productivity, automotive, healthcare & cybersecurity.
