Highlights 6 | Silicon Valley Innovation During and After the Pandemic (Week 6: AI and Robotics)

Highlights | Silicon Valley Innovation During and After the Pandemic (Week 6: AI and Robotics)

It is an understatement to say that Covid-19 has had a sizable impact on global society and economy. As such, SVTC is using its platform to host virtual events. Through conversations with scientific experts from various fields, we hope to explain to Chinese audiences how Silicon Valley is innovating during the pandemic and the future direction of innovation in the post-pandemic era. These talks will take place on Saturdays at 9:30-10:30 am CST (Fridays, 6:30-7:30pm PDT).

Leanne Wang, Global Business Development Director of Silicon Valley Technology Council (SVTC), hosted the conversation with Song Cao, founder and CEO of Turing Video, an American tech company. Mr. Cao, who has a background in computer vision and robotics, received a PhD in computer science from the University of Southern California and a bachelor's degree in electrical engineering from Tsinghua University. He has insights into China-US cross-border innovation and entrepreneurship. During this dialogue, he shared with us how the AI robotics industry turned “risk” into “opportunity” during the pandemic.

In this session, they provided in-depth discussion for the impact of the pandemic on AI robotics innovation, the development and challenges of AI robots, as well as the entrepreneurial experience in China and the United States. Attendees responded to the discussion with great enthusiasm and numerous questions. Below, we will provide a brief summary and the key takeaways of the conversation for those who were unable to attend.

Turing Video specializes in security robot technology, and aims to promote the development and transformation of the security industry and human capabilities. The company assists security personnel through the integration of security robots, software, mobile phones and unmanned aerial vehicles to form a comprehensive security platform comprised of people and machines.

AI and robotics technology will both mature in the coming future, which will improve the operational efficiency of and reduce the operating costs for large enterprises. During the pandemic, an increasing number of large enterprises have joined the trend of digitalization and industrial upgrading via AI robots.

The Impact of the Pandemic on AI Robotics Innovation

1. How has the pandemic spurred the innovation of robotic monitoring products?

Mr. Cao explained that the pandemic has spurred innovation for service robots, which are used to replace maintenance personnel for certain operations. Before 2020, such work was done by people. With the continuous development and maturing of AI and robotics technology, large enterprises increasingly begin to consider using AI robots to assist their workers during the pandemic.

He also mentioned that during the pandemic, operational and maintenance personnel do not wish to go out and perform routine inspections, while the large enterprises saw rising operating costs and pressures. Large enterprises found that robots can perform timely inspections without being affected by the pandemic, so they increasingly turned towards using AI robots, which helped promote the large-scale implementation of more service robots.

Leanne asked when there will be breakthroughs in specific application use cases, prompting Mr. Cao to elaborate on his previous remarks. He believes that the development will be in the direction of service, and that machines will replace human beings in an increasing number of fields and scenarios, while enterprises’ ROI will be improved significantly. First of all, more robots will be used in the food delivery industry. It is not enough to rely solely on food delivery companies such as UberEats during the pandemic. In addition, more robots will appear in the security industry in order to reduce operating costs and replace security personnel. The cleaning industry will also see more robots doing cleaning work in the future.

2 What policies were implemented during the pandemic to drive the purchase of AI robots?

Mr. Cao thinks that it is mainly driven by the enterprises themselves. For example, the security work is tedious, does not pay well, and has a high turnover rate; for those reasons, enterprises will consider using security robots during the pandemic. In the future, labor costs will grow more expensive, and that rising cost will affect the financial performance of enterprises. Enterprises will undergo digitalization through the use of AI robots, which have a lower cost.

Leanne agreed with him, mentioning that Wal-Mart uses robots to pack goods and Amazon for packaging logistics. She also asked Mr. Cao which jobs will be completely replaced by robots and AI in the future, what he thinks of the unemployment problem caused by this, and how to achieve balance between the two.

Mr. Cao explained that historically speaking, machine technology has continuously advanced over the past 200 years, while social efficiency has also developed along with it. At present, society will also undergo such a transformation. Security personnel and house cleaners will be replaced by AI robots.

Mr. Cao believes that machines should do what machines are good at and people should do what people are good at. There will be industrial upgrading in the next 20 years. People will be able to pursue more creative work in the future, while machines perform the labor-intensive and repetitive tasks, with social efficiency improving overall.The future will see technological progress, industrial upgrading and improvements in efficiency broughtby AI robots.

Prospects and Challenges in the Development of AI Robots

1 The future of AI robots

Mr. Cao believes that in the service industry, AI robots and human coexistence will become more widespread, with intelligent robots appearing in office buildings, factories, hospitals, etc. Artificial intelligence and robotics technology will go through several stages of development as other high technology has, from a stage of immaturity to implementation on a larger scale. In the future, the development of AI robots will progress even more, eventually with AI robots being found everywhere in our lives.

Leanne mentioned that many AI robots are developed to solve enterprise-level problems and forgo entering the mass consumer market. In the future, what are the application use cases in the consumer market?

One of the most common applications for AI robots  is the robot vacuum. The consumer market differs from the business market in price and application use case: individual consumers are more sensitive to price. Mr. Cao added that in the long run, there will be more and more applications for AI robots in consumer homes. For example, smart cameras can be used as home assistance in large houses.

2 What is the difference between AI robots in China and America?

Mr. Cao answered this question from the aspects of market, foundation, talent, and application.

1. With regards to market scale, both China and the United States have very large markets, ranked the world’s top two. The purchasing power of US consumers is stronger, due to higher wages in the US.

2. On a fundamental level, American universities and R&D institutions have advantages when it comes to the development of cutting-edge technologies.

3. On an individual level, China and the United States do not lack when it comes to talen, and have a similar level of R&D.

4. On an application level, U.S. consumers are less receptive of AI robots than their Chinese consumers. China’s acceptance of AI in general is higher, which relates to government policies. The US is trailing China in this aspect, but is catching up gradually. China has more application use cases and startups can accumulate more data to improve their products.

Leanne asked whether the difference in data security between the two markets has a favorable or unfavorable influence on the development and application of AI.

Mr. Cao believes that entering different markets means different regulations that the company needs to comply with, based on the country. In Europe and America, companies need to comply with stricter data security, data privacy and network security regulations. In contrast, the requirements in China are not as strict as those in Europe and the US; thus, there is more available data to use, so experimentation can go faster in China.

Sharing Entrepreneurship and Innovation Experiences

1. Views on current status of venture capital

Mr. Cao’s outlook on the current financing situation is relatively pessimistic. He believes the unfavorable circumstances began in the second half of last year. After the pandemic, many companies lost money, making financing more difficult. At present, investors focus on cash flow and large-scale applications to ascertain the strength of the company's products, business models and marketing. A key quiteria for investors is how much income you can generate.  orders from large enterprises is a good endorsement for its product.

Mr.Cao thinks that now that the time of obtaining financing with a nice PPT and a good narrative is over; investors are now more practical and rigorous. What the investors value the most is the rapid growth in income and consumers. We suggest that entrepreneurs should focus on growing their business and revenue. 

The most important thing is to survive. Currently, companies are facing many challenges. During the pandemic, many normal business operations are difficult to carry out. As a result, the annual income declines, and the business shutdown of upstream and downstream suppliers also affect the supply chain of companies.

Of course, he believes that the startups which whether the present difficulties will emerge on the other side stronger. The Internet bubble in 2000, the 2008 financial crisis and now this year's pandemic: based on history, we will see excellent companies stand out from this crisis. We believe this will continue happening after the pandemic, especially those in the AI robotics field. Because the pandemic has prompted large companies to think about digitalization.

2 . Tips for raising capital

Leanne has often worked with many investors and fund management partners in her past, and understands that investors are more realistic and focus on a company’s business operations, finance performance, , and upcoming sales pipeline. She also asked Mr. Cao what suggestions he had for pitching to the investors.

Mr. Cao explained his own views on how to pitch investors, especially for those in the AI robotics industry.

He believes that the strategy and time allocation for the pitch session should be made according to the stage of the startup.The later the stage of the startup is, the more need there is for companies to clarify their financial situation with investors to show potential growth. For early stage startups, the technology and products should account for about half of the pitch, before pitching their ideas on business expansion and implementation to investors.

He also mentioned that for the AI robotics industry, it’s much easier for unicorns to raise funds . As the Chinese saying goes, number one gets the meat, number two gets the soup; there exists a process of survival of the fittest.

He believes that the pandemic has revealed cash flow and money-burning problems, which will increase investors' consideration of risks, and prompt them to further consider the risks and return of their portfolio companies.

In the long run, when startups reach the Pre-IPO and secondary market stages, they should amplify their strength in the actual application use cases, finance performance and operation data can impress investors, as providing hard evidence can demonstrate the strength of the company.

3. Advantages of the Chinese Market for AI Robot Startups

Mr. Cao believes that the advantages of the Chinese market are higher consumer acceptance of AI robotics, extensive data, accessible talents and more application use cases, all of which can accelerate the process of product application and foster greater observation of industry pain points. In the long run, the Chinese market will help global digitization and industrial upgrading. China has its own advantages in implementing artificial intelligence. China's best AI companies can internationalize and take a market share on the global market.

Leanne and our guest, Mr. Cao, shared many insights, which garnered many questions from the attendees. Below, we will summarize the most frequently asked questions.

1. Can you tell me if Turing Video's non-contact body temperature scanners are used in hotels and casinos, and how do you market this product to companies in the service industry? What are the competitive advantages of non-contact temperature scanners?

Mr. Cao explained that Turing Video’s sales team conducts business development  with large companies through B2B business models. As the US gradually reopens, more tools and technology will be needed to facilitate the process. At the same time, robots can assist in controlling the spread of the disease. The service industry has many pain points, so many of these companies are willing to use robot products.

2. What aspects should companies pay attention to when choosing intelligent security robots?

Companies should consider what are the pain potions and potential return on investment. For example, a company might identify five major pain points and set a goal to solve at least three of thosebefore purchasing. Can intelligent security robots solve at least three pain points? Then, considering the return on investment after reaching that 60% threshold, we can find that intelligent security robots are not more expensive than employing people. Both of these aspects can be evaluated through purchasing decisions.

3. Intelligent robots have provided much-needed assistance to companies during the pandemic, which will likely lead to an accelerated adoption of this technology in the coming future. What deficiencies do you think security robots still have and what functions need to be improved?

At present, one function that a security robot lacks is the ability to open and close doors, because it doesn’t have a hand. Moreover, robots mainly get to different floors by using the elevator, which will prove difficult for inspections of factories with outdoor stairs. These problems, which are currently being worked on, will be solved gradually with each iteration and the progress of technology.

Conclusion

During this week’s event, we discussed the technological innovation of AI robots during the pandemic through three aspects: the impact of the pandemic on AI robot innovation, the development and challenges of AI robots, and the entrepreneurial experience in China and the United States.

Thanks again to Mr. Cao for joining us this week. We hope his startup will continue to innovate and pave the way for the adoption of AI robotics technology. We’d also thank all the attendees for their questions and discussions. If you have any topics of interest you’d like to hear more about, please contact us.