Late last year, a reporter challenged China’s government to use its surveillance systems to find him in the chaotic streets of Guiyang City’s 5 million people.
Using the city’s 20,000 high-definition surveillance cameras hooked up to the police department’s artificial intelligence (AI) software with facial recognition systems, the police located and cornered the reporter – in just seven minutes.
Guiyang City is just the beginning. China’s communist government wants to use facial recognition to create a vast national surveillance system.
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There are now around 170 million CCTV (closed-circuit television) cameras across China – which is nearly three times the number of cameras in the U.S. China plans to add another 400 million AI-enabled cameras by 2020.
In Beijing alone, the city police department has said that every corner of the capital is covered by their surveillance system.
They can find you anywhere
Traditional video camera surveillance uses low-quality and non-digital resolution. But AI surveillance systems use high-definition digital cameras to create an enormous stream of reliable data that is analysed and combined with other stored data.
That means you don’t need to have half a dozen policemen staring into a row of TV screens, hoping to spot a potential terrorist in a crowded building or street, or to track burglars to their hideaway.
With assistance from Beijing, for example, one company supplying AI-enabled surveillance systems in China says they can now match a person’s face with his or her car. And they can match people with their relatives and other people they’re often in touch with. They can even trace a person’s footsteps up to a week back in time.
Yes, it sounds Orwellian… and if you’re concerned about privacy, it sounds very scary indeed. It would be difficult to do this in countries where personal freedom is a political third rail.
But in China, where the needs of the state supersede the needs of the individual, gathering data on people is a fact of life.
Since last year, facial recognition and artificial intelligence has been used by Chinese authorities to call out public offenders, such as jaywalkers and deadbeat borrowers, on social media.
Police in Beijing have credited AI-enabled surveillance in helping solve more than 1,500 cases in 2015, a 22 percent increase from the previous year. And in the first eight months in 2016, police in Nanchang, the capital of Jiangxi Province and a city 5 million, arrested 1,600 criminal suspects, solved nearly 3,000 cases and captured images of 90,000 vehicles that violated traffic regulations – all through the help of AI-enabled surveillance. In other words, many, if not all, of these cases would have slipped through the cracks had it not been for AI surveillance.
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China is a breeding ground for artificial intelligence
Facebook has come under fire for its application of data collected from its hundreds of millions (sometimes billions) of users. The Cambridge Analytica scandal, where data on 87 million Facebook users was reportedly mined by AI for political purposes, landed CEO Mark Zuckerberg in the hot seat with the U.S. Congress.
That turned off a lot of people from using Facebook, which showed up in the company’s disappointing second-quarter results that had the lowest increase in daily active users in seven years. It wiped US$100 billion off the company’s market cap in a single day.
But Chinese technology and social media giants, which everyone knows share user information with the government, haven’t gotten in trouble… and have been allowed to grow and evolve their use of AI.
Didi Chuxing, the ride-hailing company that defeated Uber in China, announced it will be sharing personal data with China’s National Development and Reform Commission. The company is now eyeing AI features to match a driver with the photo on your smartphone (and vice versa).
More AI-driven companies like them are on the way.
Recently, two relatively young and unknown Chinese companies developing facial recognition software raised US$1.6 billion from several of the world’s leading technology and investment companies.
One of the companies, SenseTime, makes facial recognition software used in monitoring CCTV footage and scanning a consumer’s facial features to validate digital payments. It raised US$1 billion from the venture fund of Softbank (Exchange: Tokyo; ticker: 9984), one of Japan’s largest investment holding companies.
The other company, Megvil, developed a facial recognition system called Face++ that’s already being used in China for a range of security applications, including granting access to buildings and identifying drivers of vehicles operating ride-sharing services. It raised US$600 million from two investors, including e-commerce giant Alibaba (Exchange: New York; ticker: BABA).
These startups use artificial intelligence to discern individuals from one another in captured images or video by accessing a vast library of stored data – data they collected with the support of the Chinese government.
SenseTime has contracts with the government of Chongqing, China’s seventh-largest city with 17 million people. With the government’s help, it has already collected information on 500 million unique identities in the country, and tested on them (i.e., searched for them in cameras) to perfect their system.
China AI investments are growing 60 percent faster than everywhere else
According to International Data Corporation (IDC), AI spending globally is expected to reach US$52.2 billion by 2021. That’s a compound annual growth rate of 46.2 percent per year since 2016.
And while the U.S. currently dominates global AI spending at around US$5 billion annually, China is catching up, with spending expected to hit US$4 billion this year. China’s spending is expected to surpass that of the U.S. in 2019.
This investment will be in surveillance – as well as other AI applications in the banking, healthcare, retail, transportation and other sectors.
In a recent study from CB Insights, of the US$15.2 billion invested in AI start-ups globally in 2017, 48 percent went to China, and only 38 percent to U.S.
While the U.S. still has more AI start-ups than China, it won’t be for long. IDC estimates China’s five-year spending growth for AI will reach 68.2 percent by 2021. That’s 60 percent faster than the global average.
In January, the government announced it will spend 13.8 billion yuan (US$2.1 billion) to build a giant AI industrial park in Beijing’s Mentougou district, which will serve over 400 startups focusing on developing AI technology.
IDC also expects that about half of all AI spending will go toward cognitive (self-learning) software, just like the AI-enabled surveillance systems that can find a person in a city of 5 million people.
In short, we’re only seeing the beginning of China’s massive push towards AI. It’s why huge investment dollars are already flowing into the industry.
Editor, Stansberry Churchouse Research
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