Baidu Ventures: the potential of Chinese AI needs a business model

29/10/2019

 

 

According to Felix Fang, vice president of Baidu Ventures, AI technologies will expand to multiple sectors

 

 

Unlike general funds that invest in various sectors, Baidu Ventures is an independent risk fund of $ 500 million, focused only on investments in artificial intelligence. Vice President Felix Fang recently told TechNode that this attention has helped the company gain a strong experience in the sector.

As vice president, Fang is responsible for investment in AI and how technology can enhance and transform the traditional industry. In the course of the interview he specified how the Chinese AI has taken root in the security and surveillance market, also thanks to government policy. Great importance is given to this sector, as it can save lives. In fact, the four major AI companies in China – Sensetime, Megvii, Yitu and Cloudwalk – are all present in this field.

 

The expansion in the various sectors will take place gradually

 

Fang said that, in the future, artificial intelligence technologies will expand to other fields gradually dependent on the available basic data sets and the digitization of different sectors.

“Artificial intelligence in the fields of medicine, retail and industry will gradually develop because the marketing capacity will not be as strong and its uses will be less widespread,” said Fang. “But we believe that these sectors represent potential markets for future artificial intelligence applications and will have better prospects for development in the future.”

 

There is also an evaluation bubble for the AI

 

Fang also believes that there is a valuation bubble in terms of investment in AI. Talking about it, he cites the lack of talent in the sector as a key reason. While funds are abundant in the market, companies will pay more in choosing investment objectives, further inflating the value of the artificial intelligence sector.

“We should consider evaluating a company from a more quantitative perspective, rather than giving an excessive score to some projects that come with a lot of publicity,” Fang said.

As an investor, Fang said he could provide assistance in several ways. The first is to provide crucial talent for early-stage companies. Second, the VC can provide industry partners to help them better understand real application scenarios and, thirdly, it can help with ideas on how to bring a product to market.

 

 

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