Shanghai gears up to take AI lead

City moves on from missed opportunities to leverage talent, infrastructure

On Jan 13, 30 Chinese finalists of an English-speaking contest gathered in a hall in downtown Shanghai.

The contestants, ranging from primary school children to white-collar workers, had survived three months of intensive preparation, three days of grueling training and three trying rounds of selection.

The finalists themselves emerged from hundreds of thousands of users of the mobile app Liulishuo, or LAIX, which uses artificial intelligence (AI) to correct pronunciation and designs tailored courses to improve English-language skills.

The popularity of the event was one of the latest instances of AI making waves in the community.

"What we do is combine AI with real life scenarios like education, and by doing so AI is materializing from rhetoric to reality," said Wang Yi, founder and CEO of the Shanghai-based company behind the app.

For years, there was a lingering sense of disappointment in Shanghai technology circles at having missed the opportunity to host top Chinese industry players such as Baidu, Alibaba and Tencent.

But the city has since leveraged its reputation as a talent hub, with the necessary infrastructure to progress toward its goal of becoming a budding AI center.

A clear government agenda has paved the way for Shanghai's intention to lead the pack. Authorities are looking to expand the industry, including setting up an AI development fund worth 100 billion yuan ($14.78 billion), as well as 10 public innovation platforms, six demonstration zones and 60 major AI applications.

According to Shanghai's Party chief Li Qiang, the goal is viable thanks to a variety of industry-specific scenarios in Shanghai and the surrounding Yangtze River Delta affluent region.

"There is abundant data to mine, sufficient capital to develop AI algorithms and ... sound IT infrastructure to support the new generation of mobile communications and internet of things technologies," he said on the sidelines of the first World Artificial Intelligence Conference in the city in September.

To shore up that ambition, the municipality has vowed to address new challenges facing the sector, such as researching relevant local regulations, tackling ethical issues, ramping up intellectual property protection and enhancing related technical standards.

Meanwhile, academics and venture capitalists believe that Shanghai needs to establish a firm grip on application scenarios and fundamental algorithm research to take the lead in the thriving sector.

Shanghai boasts unique advantages in AI categories such as networked cars, smart manufacturing and medical image recognition, Chinese Academy of Sciences academician Mao Junfa said.

While internet companies that invest in specific areas can benefit from adopting AI across a number of customer-facing scenarios, the technology can also be better employed to facilitate business-to-business sectors in the region, which is home to numerous small and medium-sized high-tech enterprises, said Li Zhu, founding partner of venture capital firm Innoangel.

On a more operational level, city authorities have issued a 22-point circular that proposes the establishment of three to four towns and five pilot zones featuring AI.

In the latest development, they identified last month 10 real-life scenarios, from education and healthcare to transportation and manufacturing, all of which they hope to uproot or upgrade with the aid of AI and find tangible solutions from AI companies worldwide.

They are looking to AI to modernize sectors such as education, where routine tasks like score-marking and campus security management can be performed by algorithms.

"We not only want to include AI-themed courses such as introduction on voice-controlled drones and robots, but are eyeing to use AI-backed systems to raise schools' overall management efficiency, like banking on data to examine students' command of their newly learned knowledge," said Dong Junwu, principal of the Shanghai Shixi High School.

In the field of smart healthcare, Li Jiyu, vice-head of the Shanghai Tenth People's Hospital, detailed a total of eight categories, from medical imaging and diagnostic assistance to illness prevention.

The city's efforts to stimulate AI development are reaping rewards, with international technology heavyweights like Amazon, Microsoft and Alibaba, as well as thriving domestic startups, scrambling to enter the city and ride the boom.

On Jan 16, Microsoft's largest AI and internet of things lab was established in Shanghai's Zhangjiang high-tech area, eyeing Shanghai as the "perfect destination" for grooming AI talent.

Alain Crozier, chief executive officer of Microsoft Greater China, had told China Daily that Shanghai's advantages include its concentration of industrial partners and strong government support. The city is now home to many leading companies, such as crane giant ZPMC and automaker SAIC, which leverage Microsoft's cloud computing offerings and AI technology.

Alibaba Chairman Jack Ma also said that the coupling of AI and the service industry is set to become the real game changer for traditional manufacturing.

"Integrating AI and the service industry will place Shanghai in a highly advantageous position as the city generated 70 percent of its economic output from the service sector," said Ma, whose company has been tapping AI to predict customer needs and rejuvenate offline shopping via a massive New Retail campaign that launched in Shanghai.

Solid foundation

According to Zhang Wen, president of Chinese image recognition startup Sense-Time, Shanghai has a solid industrial foundation, an integrated database and a well-developed capital market to boost the AI industry. The startup has plans to build global centers for research and development, smart cars, chips and education in the city.

"Shanghai has served an important role in building the country's AI ecosystem since it expressed its ambition to create an industrial cluster for AI. This places Shanghai in a good position to connect upstream and downstream companies," Zhang said.

In addition to its rich industrial resources, Shanghai's quest to become the home of leading AI companies is largely supported by its access to young talent.

Government support for attracting talent will prove vital. In Shanghai, there are subsidies for recruiting top talent - especially people from abroad - as well as special programs for top AI companies and startups that include perks such as subsidies for hiring locals and housing benefits.

Wang from LAIX said his company is a beneficiary of such support, with the government providing apartments that its top talent can rent at favorable rates.

"Shanghai has an international appeal and its inclusive culture and convenient way of life make it appealing to foreign AI talent," Wang said.

hewei@chinadaily.com.cn