More on this book
Community
Kindle Notes & Highlights
To some observers in the United States, AlphaGo’s victories signaled not just the triumph of machine over man but also of Western technology companies over the rest of the world.
Today, Zhongguancun is the beating heart of China’s AI movement. To people here, AlphaGo’s victories were both a challenge and an inspiration. They turned into China’s “Sputnik Moment” for artificial intelligence.
Deep Blue had essentially “brute forced” its way to victory—relying largely on hardware customized to rapidly generate and evaluate positions from each move.
It will usher in an era of massive productivity increases but also widespread disruptions in labor markets—and profound sociopsychological effects on people—as artificial intelligence takes over human jobs across all sorts of industries.
In the eyes of most analysts, China’s technology industry was destined to play the same role in global AI that it had for decades: that of the copycat who lagged far behind the cutting edge.
That global shift is the product of two transitions: from the age of discovery to the age of implementation, and from the age of expertise to the age of data.
Much of the difficult but abstract work of AI research has been done, and it’s now time for entrepreneurs to roll up their sleeves and get down to the dirty work of turning algorithms into sustainable businesses.
Given much more data, an algorithm designed by a handful of mid-level AI engineers usually outperforms one designed by a world-class deep-learning researcher. Having a monopoly on the best and the brightest just isn’t what it used to be.
Harnessing the power of AI today—the “electricity” of the twenty-first century—requires four analogous inputs: abundant data, hungry entrepreneurs, AI scientists, and an AI-friendly policy environment.
Moving from discovery to implementation reduces one of China’s greatest weak points (outside-the-box approaches to research questions) and also leverages the country’s most significant strength: scrappy entrepreneurs with sharp instincts for building robust businesses.
downplaying the importance of the globally elite researchers that China lacks and maximizing the value of another key resource that China has in abundance, data.
They live in a world where speed is essential, copying is an accepted practice, and competitors will stop at nothing to win a new market.
If one’s only edge is a single novel idea, that idea will invariably be copied, your key employees will be poached, and you’ll be driven out of business by VC-subsidized competitors.
They represented a tidal wave of online-to-offline (O2O) startups that brought the convenience of e-commerce to bear on real-world services like restaurant food or manicures.
But whatever the outcome, it stands in sharp contrast to a U.S. government that deliberately takes a hands-off approach to entrepreneurship and is actively slashing funding for basic research.
PricewaterhouseCoopers estimates AI deployment will add $15.7 trillion to global GDP by 2030. China is predicted to take home $7 trillion of that total, nearly double North America’s $3.7 trillion in gains. As the economic balance of power tilts in China’s favor, so too will political influence and “soft power,” the country’s cultural and ideological footprint around the globe.
But none of these changes ever arrived as quickly as AI.
I predict that within fifteen years, artificial intelligence will technically be able to replace around 40 to 50 percent of jobs in the United States.
Rising in tandem with unemployment will be astronomical wealth in the hands of the new AI tycoons.
AI naturally trends toward winner-take-all economics within an industry.
the real underlying threat posed by artificial intelligence: tremendous social disorder and political collapse stemming from widespread unemployment and gaping inequality.
will occur against the backdrop of a far more personal and human crisis—a psychological loss of one’s purpose.
To the Silicon Valley elite, Wang was shameless. In the mythology of the valley, few things are more stigmatized than blindly aping the establishment. It was precisely this kind of copycat entrepreneurship that would hold China back, or so the conventional wisdom said, and would prevent China from building truly innovative technology companies that could “change the world.”
This first phase of the copycat era—Chinese startups cloning Silicon Valley websites—helped build up baseline engineering and digital entrepreneurship skills that were totally absent in China at the time.
was a second phase—Chinese startups taking inspiration from an American business model and then fiercely competing against each other to adapt and optimize that model specifically for Chinese users—that turned Wang Xing into a world-class entrepreneur.
The dramatic transformation that deep learning promises to bring to the global economy won’t be delivered by isolated researchers producing novel academic results in the elite computer science labs of MIT or Stanford. Instead, it will be delivered by down-to-earth, profit-hungry entrepreneurs teaming up with AI experts to bring the transformative power of deep learning to bear on real-world industries.
instead of being mission-driven, Chinese companies are first and foremost market-driven. Their ultimate goal is to make money, and they’re willing to create any product, adopt any model, or go into any business that will accomplish that objective.
The core motivation for China’s market-driven entrepreneurs is not fame, glory, or changing the world. Those things are all nice side benefits, but the grand prize is getting rich, and it doesn’t matter how you get there.
Entry into the country’s imperial bureaucracy depended on word-for-word memorization of ancient texts and the ability to construct a perfect “eight-legged essay” following rigid stylistic guidelines.
While Socrates encouraged his students to seek truth by questioning everything, ancient Chinese philosophers counseled people to follow the rituals of sages from the ancient past.
Growing up, their parents didn’t talk to them about changing the world. Rather, they talked about survival, about a responsibility to earn money so they can take care of their parents when their parents are too old to work in the fields.
Combine these three currents—a cultural acceptance of copying, a scarcity mentality, and the willingness to dive into any promising new industry—and you have the psychological foundations of China’s internet ecosystem.
one discovers that many of the finest specimens of European craftsmanship were created in the southern Chinese city of Guangzhou, which was then called Canton.
To those steeped in the innovation mythology of Silicon Valley, the mini-iPhones were the perfect metaphor for Chinese technology during the copycat era: a shiny exterior that had been copied from America but a hollow shell that held nothing innovative or even functional.
A copycat mentality is a core stumbling block on the path to true innovation. By blindly imitating others—or so the theory goes—you stunt your own imagination and kill the chances of creating an original and innovative product.
But the new user interface didn’t match Chinese web-surfing habits, the new leadership didn’t understand Chinese domestic markets, and the trans-Pacific routing of traffic slowed page-loading times. At one point an earthquake under the Pacific Ocean severed key cables and knocked the site offline for a few days. Meanwhile, Alibaba founder Jack Ma was busy copying eBay’s core functions and adapting the business model to Chinese realities.
But Ma’s greatest weapon was his deployment of a “freemium” revenue model, the practice of keeping basic functions free while charging for premium services.
American users remain on the page for around ten seconds before navigating away. In contrast, Chinese users’ heat maps look like a hot mess. The upper left corner has the greatest cluster of glances and clicks, but the rest of the page is blanketed in smudges of green and specks of red. Chinese users spent between thirty and sixty seconds on the search page, their eyes darting around almost all the results as they clicked promiscuously.
Silicon Valley companies also lose out on top talent. With so much opportunity now for growth within Chinese startups, the most ambitious young people join or start local companies. They know that if they join the Chinese team of an American company, that company’s management will forever see them as “local hires,”
The moment Kaixin001 became a threat, the owner of Renren simply bought the original www.kaixin.com URL from its owner. He then recreated an exact copy of Kaixin001’s user interface, changing only the color, and brazenly dubbed it “The Real Kaixin Net.” Suddenly, many users trying to sign up for the popular new social network found themselves unwittingly ensnared in Renren’s net.
His transformation charts the evolution of China’s technology ecosystem, and that ecosystem’s greatest asset: its tenacious entrepreneurs. Those entrepreneurs are beating Silicon Valley juggernauts at their own game and have learned how to survive in the single most competitive startup environment in the world.
Guo represented a new kind of official for a new era—one in which China needed to both build things and create ideas.
The year was 2010, and Guo was responsible for the influential Zhongguancun (“jong-gwan-soon”) technology zone in northwest Beijing, an area that had long branded itself as China’s answer to Silicon Valley but had not really lived up to the title. Zhongguancun was chock-full of electronics markets selling low-end smartphones and pirated software but offered few innovative startups.
The local government could likely cover our rent for three years if we relocated to the neighborhood of Zhongguancun.
But what if we in China could speed up that process by brute-forcing the geographic proximity? We could pick one street in Zhongguancun, clear out all the old inhabitants, and open the space to key players in this kind of ecosystem: VC firms, startups, incubators, and service providers.
In that worldview, what really makes the valley special is an abstract cultural zeitgeist, a commitment to original thinking and innovation. It’s not something that could have been built merely using bricks and rent subsidies.
It was a place where many users accessed the internet only through cheap smartphones, where smartphones played the role of credit cards, and where population-dense cities created a rich laboratory for blending the digital and physical worlds.
2014 turned into a tidal wave of official policies pushing technology entrepreneurship. Under the banner of “Mass Innovation and Mass Entrepreneurship,” Chinese mayors flooded their cities with new innovation zones, incubators, and government-backed venture-capital funds,
They aspire to the mythology satirized in the HBO series Silicon Valley, that of a skeleton crew of hackers building a billion-dollar business without ever leaving their San Francisco loft.
They burn cash like crazy and rely on armies of low-wage delivery workers to make their business models work. It’s a defining trait of China’s alternate internet universe that leaves American analysts entrenched in Silicon Valley orthodoxy scratching their heads.
