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Headlines on artificial intelligence typically belong to globally renowned tech giants, such as Google, Facebook, and Apple. Asia’s AI and machine learning startups, on the other hand, rarely make it onto the world stage.

“I want a world-competitive AI company coming from Asia,” says Tak Lo, the Managing Director of Zeroth, a funding program for early-stage AI and machine learning startups in Asia. “[Part] of that is taking Asian startups and being able to support them from a global network of entrepreneurs.”

Zeroth, which launched on July 1st, is a three month funding program that offers mentorship and $20,000 USD in capital to early-stage startups. The team is still working out its application process but plans to launch its first batch this winter. Though Zeroth will accept startups from any AI vertical – “Surprise me,” says Mr.Lo – the program is stricter in its focus on Asia. Relevant startups outside of the region are welcome to apply, but for the most part, Zeroth’s emphasis is on Asia.

Part of that is personal. “[I wanted] to kickstart the Hong Kong tech community,” says Mr. Lo, who is a Hong Kong native. “Hong Kong is a blank space because it’s so behind [in tech], [but] by being a blank space you can draw whatever you want on the whiteboard.”

“I’m very, very serious [about] trying to bring everything that I’ve learned to Asia,” he adds.

Mr. Lo, who was previously Director of Techstars, a global startup accelerator, is also eyeing the city’s angel investors. Currently, Zeroth is still raising funds from investors in the U.S, the U.K, and Hong Kong.

In China, tech giants such as Baidu and Alibaba are seen as the leaders of artificial intelligence and machine learning. Baidu, for example, has its own artificial intelligence research lab, which is headed by renowned machine learning expert Andrew Ng, previously an associate professor at Stanford University. Ant Financial, the financial arm of Alibaba, is partnering with Beijing-based startup Face++ to incorporate facial recognition technology into its mobile payment system, Alipay.

However, Zeroth is betting on Asia’s local startups. The program hasn’t explored any partnerships with Asian tech giants, though it’s open to them. For now, Zeroth’s main focus is on recruiting companies and mentoring them. Tech expertise is also a top priority, which is unsurprising given Zeroth’s focus on AI and machine learning. The program has filled its team roster with seasoned AI tech entrepreneurs, such as Jaan Tallinn, the co-founder of Skype. Even Zeroth’s name is tech-related – “zeroth” refers to zero-based numbering, which is used in computer programming.

Other startup programs, such as TechCode, a Beijing-based startup incubator, are also digging into a growing AI and machine learning industry. According to estimates by Bank of America Merrill Lynch, the global market for robotics and artificial intelligence systems is expected to be worth around $153 billion USD by 2020.

Image credit: Shutterstock

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Wang Boyuan from Technode and TechCrunch China joined us for a conversation on Jingdong or JD.com. We discussed the backstory behind the company and the key people behind the second largest e-commerce company in China. He also explained the different revenue streams behind JD.com and how Tencent is backing of it as a proxy against Alibaba in China’s e-commerce space.

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Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Wang Boyuan, Writer and Editor, TechCrunch China [0:50]
  • How did you start your career in journalism? [1:10]
  • What are the interesting stories that you have covered this week? [1:40]
    • Warcraft’s movie success in China
• JD.com or Jingdong [2:55]
  • E-commerce company, listed on NASDAQ at US$31.2B market capitalization, founded by Liu Qiangdong in 1998.
  • What’s the mission and vision of JD.com? [3:10]
  • What’s the backstory of JD.com and how it did evolve from 360buy.com to JD.com? [4:00]
  • Tencent’s investment in JD.com [6:40]
  • Who are the key executives in JD.com besides the founder Liu Qiangdong? [7:00]
    • Shen Haoyu 沈皓瑜, the CEO of JD Mall.
  • Who are the board of directors within JD.com? [8:00]
    • Liu has 82.5% of voting power in the board. Martin Lau, President of Tencent sits on the board. Louis Hsieh from New Oriental is linked to Xu Xiaoping of Zhenfund, “The Ron Conway of China”.
  • What are the core revenue drivers for JD.com? [9:00]
    • Retail sales are still their main income. In Q1 of 2016, JD.com earned 54 billion yuan ($8.3 billion) in net revenue, up 47.3 percent year on year, with its gross merchandise volume growing by 55 percent to about 129 billion yuan. Orders rose by over 50 percent in the first three months with more than two thirds coming from mobile terminals such as smartphones.
  • Is JD.com in iOS and Android and also in WeChat? [9:50]
  • What are the core features on the JD.com platform and some of the recent innovations introduced to the e-commerce platform (for example, equivalent of JD Prime similar to Amazon Prime, Amazon dash buttons)? [10:24]
  • How does JD.com compare with Alibaba, for example, their clash on Singles Day? What’s the strategic partnership between Tencent and JD.com? [15:13]
  • JD.com has a financing arm called JD Finance, and recently, the parent company invested US$1B along with Sequoia and other players into JD Finance. What’s the rationale behind this move? [16:23]
  • Will JD.com expand out to the world soon? [20:13]

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In China, human vs. machine face-offs are just as much about entertainment as they are about technology. On Thursday, Ant Financial, the financial affiliate of Alibaba Group, held a facial recognition contest between T.V celebrity Wang Yuheng and “Mark” (蚂可), the facial recognition AI for Alipay, Ant Financial’s mobile payment system.

Over the course of three half hour rounds, Mark and Mr. Wang identified internet celebrities at the event from hundreds of photographs. Both human and AI guessed correctly for the first two rounds, which involved 150 and 300 photographs, respectively. However, in the third round, when Mark and Mr. Wang were asked to identify the childhood photographs of two livestreaming hosts, and Mark lost.

“We wanted to see how the recognition abilities of super humans like [Wang Yuheng] compared to those of a machine,” Dr. Chen Jidong, the Senior Data Expert at Ant Financial, told TechNode.

“We want to absorb and incorporate their special recognition abilities into our algorithm so that our AI can more safely and conveniently service users,” he says.

Mr. Wang studies each photograph while an Ant Financial employee scans them for Mark.

Mr. Wang is known for his appearance on the Chinese talent show, “The Brain” (最强大脑), which pits geniuses from different countries against each other. To win, participants complete various challenges, such as identifying which glass a judge drank out of given 520 glasses of water – the challenge that earned Mr. Wang the nickname “Water Brother” (水哥, our translation).

“I believe that Mark has learned a lot in interacting with Water Brother, but it has a long way to go when compared to humans,” said Dr. Chen after Mark lost in the final round. “This event isn’t really a [battle]. We’re just hoping that more people will understand this technology.”

The contest is largely a publicity stunt, similar to the one by Alibaba in April. Using information like social media content and song popularity, the Alibaba’s AI accurately predicted the finalists and winner of Chinese reality singing show I’m A Singer. Mark’s algorithm was developed by Face++, one of Ant Financial’s partners. The Beijing-based startup specializes in face recognition technology and also powers Alipay’s “smile to pay” service.

Alipay’s facial recognition feature has been around for about a year, but is still being perfected, says Dr. Chen. As a finance-related application, Ant Financial has “very strict” requirements when it comes to its false acceptance rate (FAR), or identifying the wrong person. The technology also has to mesh well with the Alipay app and deliver a smooth user experience for all kinds of users. The point is to someday make passwords obsolete, says Dr. Chen.

“We hope that users will try [our facial verification feature] under different light settings, different angles…even while wearing makeup to see if it will pass,” says Dr. Chen. Improving Mark’s performance under challenging environments is one of Ant Financial’s ongoing initiatives. In the case of the childhood photographs, many were shot in dim lighting, contributing to Mark’s errors.

In addition to photo quality, data security is one of the key challenges for financial applications of biometric technology. Simply using one biometric method – a face scan – to verify someone’s identity is not ideal, says Dr. Chen. In the future, Ant Financial plans to incorporate other biometric methods as well, such as behavioral patterns and the user’s social network.

In addition to Ant Financial, other Chinese companies, such as Ping An, are also looking at using biometric identification. In April, Ping An launched its face recognition loan technology, which cuts down the loan application process to six minutes and can differentiate between twins, according to the company.

Image credit: Ant Financial

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In Asia, China has a reputation as a more equitable country when it comes to gender and management positions. Globally, China has a slightly higher percentage of women in senior roles, an average of 25% versus 22%, according to the Grant Thornton International Business Report in 2015.

However, in the tech industry, chauvinist views – namely that women are less capable of understanding technology than men – exist among both sexes.

“As a woman investor, we are very sensitive. We tend to be very sharp. In terms of tech background, it’s not my strength. That’s why I have my male investors help me,” says Xiaoting Zhang, the CEO and Managing Partner of Ming Capital, highlighting the prevalence of gender stereotypes in China’s tech industry.

At the “China’s Female Investors” panel at TechCrunch Shanghai on Tuesday, three female investors from Ming Capital, Autobot Capital Partners, and ZhenFund discussed the funding landscape in China, and of course, gender.

According to a report released in April by TechCrunch, only 7% of partners at the top 100 venture firms are women, where ‘top’ is defined by longevity, recent investment activity, rounds led, and funding amount. In China, it’s not clear what percentage of venture firm partners are female, but it’s fair to assume that it’s similarly low.

“As a female, we are a minority, especially in internet investment,” says Minman Gu, the Principle of ZhenFund. “I think that we should not…label ourselves as a woman investors. The moment you label yourself, you say no to some possibilities.”

Panelists discussed both disadvantages and advantages of being a female investor in China’s startup ecosystem. For example, according to Ms. Gu, female investors have the advantage of identifying blind spots and opportunities that their male colleagues might miss. She also believes that as a female investor, she has a keener intuition for certain products, such as Dayima (大姨妈), an app that tracks menstrual cycles and provides content related to women’s health and fitness.

In addition, how entrepreneurs handle their family life and family relationships is something that she will pay attention to but her male colleagues might ignore, says Lan Zheng, a Managing Partner at Autobot Capital Partners.

“There’s so many roles and responsibilities [for women],” says Ms. Zhang. “For example, one of our project owners is a startup entrepreneur. She just gave birth to a baby half a year ago. I admire her so much – she’s kind of my idol.”

In China, women are under a lot of pressure to get married and have children before their thirties. There’s the social stigma of becoming a ‘leftover woman’, or an unmarried woman in her late twenties and above. However, that trend is changing, especially in urban centers like Beijing and Shanghai, where more women are choosing to pursue their own careers. As Chinese society becomes more progressive, hopefully its investment culture will diversify as well, allowing for more open-minded views about female investors, especially female investors in tech.

“I’m very good at physics and mathematics. I’m very proud to be a tech-minded or science-minded person,” says Ms. Zheng. “I want to overcome the stereotype that women can only be good at cultural things and can never conquer tech.”

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China’s virtual reality market could be worth $80 billion USD by 2025, which is why we added a whole extra day to TechCrunch Shanghai 2016, organized by Technode, dedicated especially to developments in VR. Alongside fourteen superb panels and keynotes, we also invited a handful of headset and content makers from across Asia to give us a hands-on preview of the future of VR:

Shanghai-based VR content producer VISENSE‘s “将魂之三国”, a game where users swing a spear to smash wooden boxes and shoot arrows at carts.

MotionMagic produces a wide range of content, including a reality show, a theater performance, a real estate demo, and a particularly soothing flight through Van Gogh’s Starry Night.

Chinese AR and VR incubating platform UCCVR lets users test out one of their shooter games. 

MirrorKey’s VR game CubeRun lets you drive while picking up coins on the way. Users can turn their heads to change the direction and can choose a simple version or a ‘nightmare’ version, featuring different speeds.

While HTC Vive’s motion controllers are precise, they still require a wider physical space to install two base stations. Many Korean VR content companies use mobile-based Samsung Gear VR to feature their content and technology instead.

Education content maker Vito Technologies featured a game that used a Xiaomi controller. By moving the joystick, users can make the penguin character move forward. To change direction, users turn their head. 

Using USens‘ hand-and-head tracking technology, a user can pick up a sword and hand it to a terracotta warrior in a similation.

The FIVR (Finnish Virtual Reality Association) featured immersive real estate content, allowing users to walk through rooms.

Winking Entertainment Group developed a VR game called Project Tres (三国VR游戏体验). Using HTC Vive, users can pick up a brush, write, and pick up objects to accomplish certain tasks. 

Kujiale (酷家乐) developed VR-based home interior modeling software. Using the company’s software with a VR headset, the user can drag and drop furniture into the room in virtual reality.

Kujingwang (景网) specializes in building a concert experience in virtual reality. Users can also watch award ceremonies, from celebrities get out of car and walking the red carpet before viewing the singer’s performance in the front row.

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Known for amazing bagels and craft lattes in Shanghai, David Seminsky tells us about his whirlwind China adventures. From his early days at Apple and sharing an office with Steve Jobs, to accidental China jail time, to founding a string of successful brick-and-mortar businesses – Sumerian Coffee, Boom-Boom Bagel, and Dogtown – David shares how he balances risks and opportunities in business, overcame the challenges of local competition, lawsuits, and employee management, while still considering China the next frontier for business despite it all.

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China Startup Pulse is a weekly podcast designed to give startup enthusiasts around the world a behind the scenes and on-the-ground understanding of what’s happening in China’s startup ecosystem. Founded and hosted by Ryan Shuken and Todd Embley, and produced by Vivian Law, China Startup Pulse is sponsored by Chinaccelerator, People Squared, and TechNode.

TechNode does not endorse any commentary made in the program.

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Known for amazing bagels and craft lattes in Shanghai, David Seminsky tells us about his whirlwind China adventures including his early days at Apple and sharing an office with Steve Jobs, to accidental China jail time, to founding a string of successful brick-and-mortar businesses: Sumerian Coffee, Boom-Boom Bagel and everyone’s favorite curbside pub Dogtown!

Podcasting alongside two of the cutest sidekick pups (no, not Todd and Ryan), David shares how he balances risks and opportunities in business, overcame the challenges of local competition, lawsuits, and employee management, yet still considers China the next frontier for business.

Thanks to our sponsors Chinaccelerator, People-Squared, and our syndication partner TechNode. A huge thanks to our Producer Vivian Law and Production Editor David Xu, and finally our listeners –Thank You!

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Xiaomi CEO Lei Jun wanted to make one thing clear when he spoke at the Summer Davos event in Tianjin on Monday: “Xiaomi was never meant to be just a smartphone vendor.”

The company, which rocketed to fame through mega-sales of budget smartphones, is now stepping back from its revenue-driving product, amid a stagnating smartphone market and increased competition form other local vendors, including Huawei.

Xiaomi has long maintained that they are selling an ‘ecosystem’ rather than hardware. On Monday Lei Jun hinted at what the future Xiaomi could look like, and it’s not a smartphone vendor.

“We are aiming to offer consumers a wide range of products at affordable prices,” he said. “We need about 40 kinds of electronic products to attract consumers to our online shopping platform and offline retail stores.”

It represents a major pivot in Xiaomi’s strategy. Not only did Lei Jun downplay the future of the company’s smartphone business, he also committed to a definitive offline strategy, something the company is famed for avoiding. During Xiaomi’s meteoric rise between 2012 and 2014, they became well-known for their frenzied online flash sales, which would sell out almost immediately.

The company also utilized multiple rounds of ‘crowdfunding’ as a promotional tool, boosting their online strategy. At the time Lei Jun himself was dubbed the ‘Monkey King’, humorously known for making his monkey subjects act crazy during mass sale events.

Two years later the smartphone market in first tier cities has slumped, and players such as Vivo and Oppo, who have a strong offline presence in China’s untapped smaller cities, are beginning to pull ahead.

In the vision Lei Jun laid out on Monday, Xiaomi will roll out around 1000 experience stores in the next three to four years. He likened the future Xiaomi to Muji, a popular minimalist Japanese variety store selling everything from stationery and kitchenware to clothing. The variety store analogy suggests that the Xiaomi of 2020 could very well marginalize the role of the smartphone. Xiaomi is working with around 50 companies currently, about 30 of which are still in stealth mode.

Lei Jun also noted that he “knew clearly that it would take 15 years for Xiaomi to go public, because the company’s business model is too complicated,” suggesting that the company is making room for some serious changes before planning a listing. Xiaomi was founded in 2010, which means we could be waiting another nine years for an IPO.

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When hailing a ride, Uber users in China keep the app open for an average of 90 seconds once they get in the car, according to the company.

A minute and a half doesn’t seem like much, but in the word of mobile content it’s very valuable. Which is why Uber is hoping to make serious bank on that minute and a half.

In May, the company first announced their UberLIFE initiative for China, which involves a curated mesh of content including recommended cultural, sporting and dining options based on collected travel data.

Uber China VP and General Manager of Central China reiterated that commitment at TechCrunch Shanghai on Monday, which was co-hosted by Technode, saying that the company wants to be a service “understand the lives” of their users, not just their riding habits.

It’s just one of the latest initiatives the company is trialling as part of an aggressive attempt to maintain customers while attempting to lower subsidies. However while the company has launched several new ride-related services in China, UberLIFE represents their first foray into a much more risky area: content. As U.S. tech companies Apple, Google and Linkedin know all too well, even the most innocent content curation can attract the ire of the Chinese government.

Uber is backed by Baidu in China, the country’s leading search engine, but even they have come under fire from the government recently over content issues. Regulators recently released a ruling requiring Baidu to clearly identify ads on their platforms.

For now, Uber’s goal is to just keep users in their app during that first 90 seconds, and possibly longer. The company implied the recommendations within the app would be driven by data collected on where consumers were going when using the app, though the potential for advertising is very obvious.

It’s worth noting that in taxi services in Beijing, riders can read a similar, physical lifestyle and events magazine that is often offered in the backseat pocket of taxis. Popular examples include 慢步, which is like a localized in-flight magazine for Beijing, so UberLIFE could be picking up on an existing behavior in some cities.

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South Korea is a hotbed for VR. Between the country’s major hardware tech brands (think Samsung, LG) and a seriously well-funded culture industry that includes K-pop and Korean TV dramas, South Korea his primed for the technical and content requirements of next generation VR.

The country’s entertainment industry has also spawned a thriving grass roots startup scene dedicated to improving the VR experience. Here are just seven of those virtual reality startups, who joined us at our 2016 TechCrunch Shanghai, giving us a glimpse into South Korean VR innovations.

Binary VR

Binary VR’s technology recognizes facial expressions in real time and renders them as a 3D avatars in virtual reality. The Silicon Valley-based company was chosen by VR-specialized accelerator BoostVC and received $400,000 USD in seed funding from K-Cube Ventures. The company has a partnership with social VR platform company High Fidelity, which was founded by Second Life founder Philip Rosedale.

Jihoon Ryu, CEO of Binary VR, isa real-time facial expression tracking technology developer who previously developed similar technology while working for US-based Lucasfilm, where he worked on facial expressions for films including Teenage Mutant Ninja Turtles and Transformers.

GAUDIO Audio Lab

GAUDIO makes immersive and interactive 360-degree audio solutions for VR games and content. Part of their experience includes allowing users to hear sounds from specific directions while using VR headsets, with their Head Related Transfer Function (HRTF). The company was seed funded $1 million in July 2015 by SoftBank Ventures Korea and Capstone Partners.

Reality Reflection

Reality Reflection developed a 3D video production system called “Reality Reflection” that creates 3D human avatars using facial scans, full body scans, and 3D video capture. The company uses a single depth camera or multiple DSLR cameras to create hologram-like VR content, which can be viewed on the web, mobile VR devices, and VR head-mounted devices.

JW NEST

JW NEST is VR content developer that creates virtual love simulation games and social video games. Since shooting and adventure games can causeVR nausea and sickness, the company focuses on virtual love simulation games and social video games, which users can enjoy while seated.

MACROGRAPH

Macrograph makes VR narrative content for games and film, which can be watched through a mobile VR headset. The Beijing-based company has produced visual effects and CGI for films like The Forbidden Kingdom and The Restless.

SKONEC

SKONEC is the content developer behind Mortal Blitz VR, which can now be found on Oculus’ store. The company has signed an MOU with Chinese VR company 3Glasses and plans to launch its game in October (comment: do you know what the name of the game is?).

Polariant

Polariant makes mobile-based VR motion controllers that track movement using light polarization. Inspired by the homing mechanism of ants, Polariant invented a 3D positioning and orientation sensor technology based on light polarization. While HTC Vive’s controller requires a desktop PC and a wider space to install sensors, Polariant’s VR motion controller is compatible with mobile devices. The company also aims to provide its motion controllers at an affordable price under $50 USD.

Image Credit: TechNode, Polariant, D.CAMP, SKONEC

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