ABOUT THIS EPISODE

Kai-Fu Lee 李开复 is one of the most prominent figures in Chinese technology. He founded China’s noted early-stage venture capital firm Sinovation Ventures after launching and heading up Google’s China operations during their years of growth from 2005 to 2009. Born in Taiwan and educated at Columbia and Carnegie Mellon, Kai-Fu had an early career in Silicon Valley, including a stint as principal research scientist at Apple. Microsoft brought him to Beijing in 1998 to set up a research division, as he has seen the rise of the Chinese internet from its earliest days.  

Kai-Fu has more than 50 million fans on the social media platform Weibo and is a much-loved public speaker and author. He is perhaps most admired for his gutsy investing in Chinese startup companies: Sinovation puts money into startup companies in their riskiest early years or even months. Kai-Fu founded it in 2009, at least half a decade before the world began to take Chinese innovation seriously. He was an early believer in mobile companies when many investors were still seeing the internet as a desktop world.

Now Kai-Fu is turning his attention to artificial intelligence (AI), and he spoke to Kaiser and Jeremy about it for this podcast at — of all places — the Trump International Tower in midtown New York City. Jiayang Fan from the New Yorker was finishing off an interview as they arrived, and she stayed for the chat. The discussion ranges from new technologies that are coming from Chinese engineers to the inexorable rise of AI and how it will change the way we live, work, and think.

Recommendations:

Jeremy: “My Family’s Slave,” a controversial cover story in the June 2017 issue of the Atlantic about a Filipina-American “nanny” who raised the author.

Jiayang: Abacus: Small Enough to Jail, a documentary on the only bank in America prosecuted for mortgage fraud, which brings the characters of the Abacus Federal Savings of Chinatown in New York to life. Screenings started on May 19.

Kai-Fu: An “anti-recommendation” against all sci-fi movies except one: Robot & Frank. The 2012 film, he says, gives a truly realistic and thought-provoking view into what the next steps for AI technology may be.

Kaiser: “Friends Like These: How a famed Chinese dissident got caught up in America’s culture wars,” the 2013 Reuters profile of the political kerfuffle in the U.S. over blind human rights lawyer Chen Guangcheng.

English
United States

TRANSCRIPT

00:00:09welcome to this broadcast weekly discussion characters in China at least in partnership with South China subscribe surprise daily email newsletter to stay on top of the latest news from China or download our new improved smartphone app as the website itself try to calm it's a feast of business
00:00:23political and cultural news about a nation that is reshaping the world and while you're there check out our new businesses podcast the Tatian cynical business free for a weekly roundup of top stories from station China's authoritative source for business and financial news I'm because it will join the
00:00:37course by journey goal corn who is casting his eyes about with suspicion in horror because we are I kid you not we are in trump tower in midtown Manhattan not in the hotel anyway where we've come to talk to one of the towering figures in the Chinese tech
00:00:52world doctor chi fully Kaifu Lee is many many things he's a popular author and speaker a very successful venture invest an incubator the former head of not only Microsoft but also Google in China he's also a cancer survivor in remission after treatment the stage for them from us
00:01:10Kaifu is in New York because not only did his daughter graduate from Columbia the kind who was the commencement speaker at Columbia's engineering school just the other day he's just published a book about artificial intelligence in Chinese and %HESITATION a I is not only something he's been thinking
00:01:25about ready but also an area where his venture fund sanitation ventures is deeply invested effects on a mission which some you may still no by its former name which is innovation works now operates the son of Asian ventures artificial television institute at today much about conversational focus on
00:01:41a I specifically in China cut too great to see you get in thanks so much for for making the time well pleasure to be here and I'm merely a residence in the trump residence was my first question what I was doing introduce our other guest just joined us
00:01:59we will walk into the into this we were happy staying and what happens you know old friend Johnson from The New Yorker whose image given interviews we ask you stay off %HESITATION an old friend of podcast courses she'll join as a host I'm very happy to be here
00:02:12it is a bit of a surprise them to see you too always a pleasure well good good good %HESITATION when she can make her cooking show debuts well what a growing it's coming it's constantly working on this so Keifer counts while we in the trump tower because a
00:02:30friend of mine owns this week's he %HESITATION rented to me at a good price does that make it a double money so we we started our podcast half a little over seven years ago in our first episode taped on April first two thousand ten the show's about Google's
00:02:49exit from China %HESITATION David Drummond whose Google chief legal officer drop that that blog post on January twelfth announcing that he would no longer comply with censorship the even if it meant exiting the China market %HESITATION and then after courses that clever work around where they were to
00:03:04re directing all all all search queries to Hong Kong then finally in late March for the other shoe fell Google's actually blocked and continue to be blocked sporadically person then with some finality %HESITATION and so we we take our first show about that because we do love Google
00:03:17in September of two thousand nine is that right that's correct before the the incident guess so it's been over seven years I'm hoping you cannot talk candidly about how you felt how you thought since how he felt about your decision to leave Google and Google's decision especially to
00:03:31leave China sure %HESITATION my decision to leave school had nothing to do with that knew was all about seeing %HESITATION the rising markets in the internet in particular at the time %HESITATION bile %HESITATION internet and also I saw many of my top people leave to do start ups
00:03:49and I saw the venture come community becoming a mature and I felt it was the right time to do it early stage fund because that was the only area in the entire chain that was immature and not being sufficiently helpful to entrepreneurs so we start in early stage
00:04:08fund because animation ventures now now about Google's decision on it is obviously sad to see the works that %HESITATION I've put in the market share gains that we saw the brand that we build the followers we had %HESITATION we're disappointed but that was a decision they chose to
00:04:26make I think looking back %HESITATION the greatest products that %HESITATION Google China produced appears to have been it's people many of whom we are funding many of whom are executive sat %HESITATION top companies and %HESITATION it was %HESITATION %HESITATION a real honor and pleasure to have had a
00:04:44chance to work with them well as you know I work for one of the main competitors of Google but even so I would say and I said often then that I would say Google was probably the American internet company that was most successful in China I mean it
00:04:56had a brand that was synonymous with innovation and with integrity with global connectivity it actually left a brand imprint in China unlike any other any other well I think western internet company you probably deserve some credit for that but it it must really broken heart when when you
00:05:14left around the time that you were leaving operation Aurora we already aware of the hacking attacks that that Google ledges with the real reason behind not had not nothing to do with that did not know any of that so afterwards I mean why all I was probably among
00:05:28the many people who thought that Google's decision was probably wrong that %HESITATION the had come in in two thousand six in early two thousand six with this idea that look it isn't total fulfillment of our mission but it is partial is better than nothing some connectivity some ability
00:05:45to offer choice was better than none I think that I remember you saying things to that effect in the immediate aftermath that you were not happy with the way Google handle decision hi I don't think I was I used the word happy but but I felt there was
00:06:01a need for a search products that were fair and the market always needs a competition and I felt %HESITATION Google China did a good job at the time I was there balancing %HESITATION corporate policy and local law requirements and I thought that could be maintained %HESITATION but it's
00:06:21obviously after I left school I decided it could not let's shift topics but I'd like to ask you about the culture of entrepreneurship in China you spend a few hours %HESITATION in the late nineteen nineties with my court Microsoft research in China just as the first wave of
00:06:36returnee tech founders like Charles jungle coming back and homegrown entrepreneurs like Jack ma was starting some of China's first %HESITATION into that behind us back then you could hardly say that China had anything like a culture of tech entrepreneurship even ten years later say in two thousand and
00:06:53eight it's would be easy to imagine parents of you know a recent chain ha engineering graduate dissuading their son or daughter from trying to start a company in %HESITATION edging them to take a safe job with IBM warm while a will good little by do %HESITATION but something's
00:07:10definitely change and I mean for me this kind of was crystallize I have some friends who are peasants %HESITATION in %HESITATION peasant farmers in a village in Ho bank and their son who's in his early twenties that is for a few hours ago that being trying to get
00:07:22me to help him get a job at a a big %HESITATION you know conservative multinational companies and I was tired because Procter and gamble HR department has me on speed dial %HESITATION anyway I I visited them in February when because I when China for a trip but in
00:07:39this yeah and I spent a whole lost me talking to their son about his startup ideas %HESITATION if I had to myself name a single event that perhaps catalyze the change I probably said was Ali Baba's IPO and Jack ma's ascent to the top of China's ritualised but
00:07:56there are a lot of other factors what what what do you think that all you know what how did this new and this really is new I mean I for me it feels like it's just I mean five years maybe at a maximum this culture of start up
00:08:08entrepreneur listen how how did this come about in China I would agree Jack ma's ascension to the top was very important because I think he felt like the the the boy next door right was robin Lee and how strong you know people felt like these were superstar PhD
00:08:26types maybe that's not for me but Jack really you know the fact that his stories that he couldn't get a job at the Kentucky fried chicken %HESITATION having that made everybody feel I could be like that's right you can call it exactly I think that was a probably
00:08:41a very large events I would like to think the founding of scent of Asian ventures was helpful for that too that believed to change as well I remember in the first I don't think you need to be modest about that actually I mean you know you're following on
00:08:55but you didn't yeah %HESITATION but you know I remember the days when we started you know I was on a lot of %HESITATION TV and internet where and and talking about why the age of entrepreneurship has arrived and there were a lot of skeptics that they %HESITATION at
00:09:12the time it incubator like us could make any difference and we have lots of debates and I in those debates change some people's minds but I still remember the first set of %HESITATION engineers I tried to bring on board to work on the start ups %HESITATION I remember
00:09:26having to wine and dine their parents and tell them I would take care of their kids are riding a seven page letter to one of the parents %HESITATION those are the the depths to which I went to %HESITATION to persuade them to let me take care of their
00:09:41kids to join me in entrepreneurship because these weren't the star that CIOS but they were you know not that they were rejecting jobs from multinationals and by do Ali Baba intense and add and take a much lower salary in a start up and the risks that came with
00:09:57it fortunately at least %HESITATION monetary I sent I think their parents are quite happy today with all of them but that it wasn't easy but anyway I I think %HESITATION %HESITATION myself and Bob she and others who were early early in getting the early stage investment going was
00:10:14helpful cattle as a catalyst to to getting the country to understand entrepreneurship is something that should be encouraged for the people who want it but I would say there's nothing as big as the government push that ultimately change people's minds the strong trunk right the the double innovation
00:10:33let everybody be an entrepreneur let everybody be an innovator %HESITATION that statement I think shifted more people's minds there anything else added up together and that has become I think a double edge sword I think on the one hand %HESITATION entrepreneurship is now accepted it's good everybody wants
00:10:54it on the other hand there are some misinterpretations because rational exuberance over rising and also I think the biggest issue is not a not having enough people explain the next level of detail that entrepreneurship isn't about making the next by doing Ali Baba only it's also about the
00:11:13service economy about opening a coffee shop about opening a tabah store about becoming a a driver of TD and also %HESITATION someone who does deliveries for people to become self employed I think if we take this to the right step and say entrepreneurship includes a large number of
00:11:31people in the service and self employment area than that definitely take China in the right direction because most people entrepreneurs who want to be entrepreneurs cannot do the next Ali Baba and they could do the us that the smaller service level things and with the way the employment
00:11:50%HESITATION pyramid will shape we really need people to become self employed there will be more smaller companies than large ones there will be more self employment their large company employment they'll be more service jobs especially with A. I. displacing many others the government push for entrepreneurship I think
00:12:09is understandable and I think it's great that technology and innovation is being encouraged but I wonder if there might possibly or if they're already is friction between the creativity that's being encouraged which naturally leads I mean especially when it comes to social issues because you know %HESITATION technological
00:12:34innovation is as much about business as much as it is about the promotion of social good those grassroots organizations that might lead to a need to collect information and share information and one can see how that would easily but up against political structures on you know %HESITATION why
00:12:56that is you know build biased at a time when you know information is still I think some expect some respect being %HESITATION %HESITATION they don't need to dance around it right right right it's %HESITATION is being %HESITATION you know restricted so do you feel like there is that
00:13:12all tension between technology that that that that that kind of comprehensive development of creative toxicology and kind of the the %HESITATION political pressures on information yeah this is a very common question on that I get in America %HESITATION I do not believe that is an issue %HESITATION not
00:13:34not that I think it's a great thing %HESITATION you know that's separate discussion we could have but I just think people understand where the boundaries are %HESITATION there's so much room for entrepreneurship and innovation you could do in the biotechnology you could to us social networks you could
00:13:51do a I could to enterprise software you could do a coffee shop I think when you have that many choices of %HESITATION businesses you could start and there are certain things you cannot do I think most people just don't worry about the things they can still %HESITATION because
00:14:07there's enough choices of what they can do and among them they'll find something they're excited about and they feel like they could %HESITATION succeed so so commonality him you're such a hot bed for tech innovation in large part because at the time it sat right on top of
00:14:22the entire supply chain the technology was where the chip tabs where it was where his I. shops where it was where I'm so much what was was happening we're seeing the same thing happening in China right now where we are sitting essentially especially in in mobile devices wearables
00:14:35and I. T. %HESITATION in deals okay you are explained I see some things right so you know a and how much I wonder how much is help that especially a place like search engine we're sitting right on top of that I mean it strikes me that %HESITATION with
00:14:49all the audience all the OEMs there and all the component manufacturers as well %HESITATION there's just that's way too much jargon when this is a rich source reduction of friction right it's it's it's so easy to pick up the phone %HESITATION and you're speaking the same language even
00:15:06the same dialect it's used pedal your your you know hopeful bike down the street to meet with the internet and the rating prototype so much faster is yeah how how significant has this been and and I mean this is really how how much the cripple the United States
00:15:20that the manufacturing is flooded why long ride awful bike I ride my bike I ran on the last that I yes %HESITATION in since then I think is a is a great to place it's a place that's full of people %HESITATION who just want to do something great
00:15:41and they do have the advantage of the supply chain the other exciting thing is they can supply to the China market which has a at a lower cost right so if you look at a lot of those on a products like you know wearable devices %HESITATION %HESITATION watches
00:15:57and and and rings and and wristbands you know they that the Chinese version that's locally made %HESITATION are cut can cost one fifth or one tenth the price and that will drive up volume and tugged and drive up %HESITATION that features so the China market connected to sins
00:16:15and production I think makes it doubly exciting now having said that's the intelligent hardware isn't probably the hardest area right now and they were you particularly investing in you we made some investments we were pretty successful with our %HESITATION show you said John the as and as a
00:16:34product we invest in some yeah she just has like a and %HESITATION Amazon you know them you Amazon echo with the screen yeah we actually did that before the hunk of ice that you can talk to my home with us right yeah state you're shopping and it can
00:16:50do all those things but I think the the number one feature is %HESITATION instant video conferencing %HESITATION with other mobile devices and connecting people to people so we have made some success I think overall are intelligent investments are pretty good intelligent harboring are pretty good but the overall
00:17:09area hasn't really taken off I think it's going to take probably the seven then I'll %HESITATION next steps in terms of making these devices will have less electrical and on and on usage and dumb easier wifi and things like that Lee explained seven nine a yeah it's just
00:17:27the next step in terms of making the semi conductor process even even smaller %HESITATION yeah it's it's telling semiconductor Intel energy efficiency I wanted the transition the exactly exactly so I I do think that they will come and also I think in the back end these smart devices
00:17:43haven't had a I two aggregated data and make them intelligent yet so they're just called intelligent devices but they're really devices that China now boasts a pretty fully fledged entrepreneurial ecosystem you know there's a huge market ego adopted as lots of lots of money to spend we have
00:18:03%HESITATION investment capital maybe too much %HESITATION you know too few good deals possibly their funds in US dollars and and remain the %HESITATION basically at all stages there are a number of different exit possibilities for tech companies from a splashy nasdaq IPO ten AM in a deal %HESITATION
00:18:22with ten center by do Ali Baba %HESITATION so what's missing if anything you know what would you like to see better developed within the attack entrepreneurial ecosystem in China are the ecosystem is now complete %HESITATION so from angel to a two is to venture to gross to P.
00:18:43two pre IPO to stock market and the stock market is not tiered with some in the %HESITATION %HESITATION the %HESITATION %HESITATION %HESITATION nasdaq equivalent and then the NYC equivalent so any cues more the pain she sequel and so the entire chain is complete there are a few areas
00:19:00of strangeness one this the Chinese stock share prices for tech stocks are inflated for us that's an advantage because a Chinese IPO can lead to a very good %HESITATION valuation and there will be more MNA by companies whose stocks are overvalued to acquire companies at the premium %HESITATION
00:19:21but that is a little bit out of whack us all the way with the good way for us %HESITATION and over time that will of course reaching equilibrium %HESITATION with with the U. S. %HESITATION I think another challenge is the %HESITATION increasing %HESITATION difficult fluidity of currency exchange
00:19:39so an entrepreneur has to make a bad decision do I get US dollars or local currency %HESITATION for us as he sees we just got to make sure we have funds if both denominations you you're you're you're actually of funds in both right we have both at but
00:19:53we have to balance them and and and there and you can never second guess correctly which one is definitely the correct one so people go back and forth results in a lot of legal trouble and and and time that that it takes five years ago tech IPOs on
00:20:10the Chinese board we're just we're all almost unheard of for it and it's just amazing how much has changed now it's now it's very absolutely commonplace yes come place now so many people are choosing China of course were as with any efficient market %HESITATION as there are there's
00:20:25enough supply in the China market that there are %HESITATION over valuation will come down another big problem I think with with China is %HESITATION the pendulum swings too far %HESITATION in both ways right like two years ago everyone's doing %HESITATION to %HESITATION to %HESITATION and the prices are
00:20:42going billions and billions and then when it crashed and no one wants to put the sense in though to %HESITATION and companies were closing down today everyone's excited excited about a high and whether number of A. I. companies go out of business there will be a swing to
00:20:57the other direction %HESITATION so this over reaction and %HESITATION and basically %HESITATION peopled group think is an issue both at the entrepreneur level as well as the venture capital level I want to ask you about something that I think is sort of more fundamental to %HESITATION that it's
00:21:14not really something in the house to mimic something more the culture a couple of years ago on our show we had the good fortune of inviting a philosopher named Anna Greenspan on and she had written a book about futurity specifically about Shanhai about how the Chinese young Chinese
00:21:31people socially have a very different orientation of different posture toward the future %HESITATION then you would find maybe perhaps in in many countries of the west are talking to and reading a book is basically convinced me that this is one of the great advantages that China has the
00:21:45wall in most of the rest of the world much of the rest will be outside a so called Alex %HESITATION you know the science fiction visions are just Ian and dark technology has really you know has really screwed mankind in some fundamental way %HESITATION you know we're kind
00:21:59of embarrassed by features we use your future Rama which was you know the the the the name of this General Motors exhibition in Shanghai our I mean in New York in in into the world's fair up by the way I mean she opens what talking about how in
00:22:11it the sun high expo two thousand ten there was another %HESITATION GM exhibit that was also about technology driven features it's it feels like this is lost in the west and it's still present in China I know when I went to work every day by do it was
00:22:25just those buoyancy everyone really kind of believed in what they were doing %HESITATION in that the ability of technology to positively impact mankind I don't know if you if you've noticed a use of a lot of time the west but you were there maybe in a different time
00:22:38you were spending your time in America when the Americans still had that do you feel like that's that's a change now that's happened change in America %HESITATION change America or or you know that the list price of this this buoyancy in China yeah well I think China today
00:22:55felt a lot like the Silicon Valley that I worked in in the in in the nineties that's so yeah so I'm not as in touch with today's pulse in America but you're saying that's changed here with the young people I think you know in the culture broadly not
00:23:08I mean I think that that there's a sort of cynicism even as we embrace technology as consumers we we we kind of sneer at at the idea of flying cars and you know there's a lot of Jerry Jana talking about right yeah I I do think that there
00:23:24is there is a sort of a glowing optimism a lot of Chinese people feel about the future that isn't chatter and then in the U. S. and then another one that that could be a problem for hear them because %HESITATION I thing the optimism we'll drive more investment
00:23:38more entrepreneurs and more more better products that will go international well I think perhaps %HESITATION you guys are alluding to is this sense of optimism that's combined with them possibly an IED Tay about what's possible the sense that everything is possible and that here thing %HESITATION in the
00:23:58U. S. I mean people's expectations are kind of managed by you know their sense of what's real and what's kind of impossible to achieve and whether that's a problem I mean whether that's %HESITATION for the Chinese advance you know whether that's both advantage and a disadvantage in that
00:24:18it gives them this kind of you know you know this this limitless sent south like the future but also this possibly this night Ivete about you know that that makes them unable to distinguish what's you know %HESITATION what's achievable and what's not achievable perhaps in here I think
00:24:35in China people don't debate as much about %HESITATION you know %HESITATION can this technology be used for bad things how do you control the technology from going out of hand how do you ensure fair in this removed by us %HESITATION those questions come up a lot here morality
00:24:53questions on this vehicles there's a trolley problem %HESITATION and and I think that debate is alive and well here which I think is great first intellectual stimulation but if that slows down the progress and %HESITATION countries like China will catch up because there are too many ethical constraints
00:25:14there isn't so much as one with a foot it I would like to think %HESITATION we V. sees an entrepreneur is %HESITATION would still try to ensure the products are put responsibly to good use without breaking laws are hurting people but %HESITATION but yes I think people think
00:25:29more about execution results and I think governments %HESITATION tends to look at ultimate efficacy as opposed to you know specific details of two views on which which is %HESITATION more more prevalent in a cover we %HESITATION kinds and I will probably just %HESITATION the other night to attend
00:25:48%HESITATION speech you gave the Harvard club in New York and you talked about mega trends for China essentially you could you share with our listeners what you think some of the most important trends of the next decade and sure on which would be sure I I talked about
00:26:03several several big trends %HESITATION first let's talk about trends that have already happened %HESITATION actually I just found the New York times op ed piece I wrote a few years ago where several that predictions are are now true %HESITATION one is %HESITATION people's usage patterns are changed we
00:26:21call this consumer upgrade so people now %HESITATION dot eat that they live foods delivery and they want good food delivery %HESITATION they're buying clothes not just on top now buying it on fire and and and people like to have good things in life and that's one change another
00:26:40change is %HESITATION the fact that %HESITATION the phones have become wallets people don't use Cassian nor do they need credit cards that causes very effective transaction okay %HESITATION and a much lower cost and micropayments B. R. possible so China is already ahead so that's a those are some
00:26:59trends that have already happened some of the new trends that we see one is in education and the power of internet in education %HESITATION we we see parents wanting everything for their only child and %HESITATION if you can deliver an American teacher to their child eat remotely by
00:27:18video conferencing they'll pay %HESITATION very prices for that and we're funding a number of companies in in that area now we think enterprise software will be on the rise %HESITATION it can hardly not be on the rise given it's zero so and that's going to be a huge
00:27:35area at some point %HESITATION it will take time for that one not to to to to catch we think our internet based entertainment will continue to be very innovative we invested in some of the top shows some of these are video shows debate show scene shows idle idol
00:27:52girl group shows %HESITATION I won't go into details here but %HESITATION %HESITATION but they are easy to talk about a couple of men and they were very strange to me and harassing there's one called S. age forty eight SNH forty eight yeah you've been away tool to longtime
00:28:06China right this is too old yeah have you heard of the most beautiful Chinese girl in the four thousand years that was measure this one of the easy you are getting %HESITATION %HESITATION but this is one of the campaigns that that that that came out of this image
00:28:23for the eight basically what S. H. for the eight is it has elements of Major League Baseball it has elements of time a Gucci it has elements of social network it has games of elements of computer gaming so all the people participate in the development of these two
00:28:39hundred girls from five cities so the cities compete against each other and the girls compete against each other %HESITATION they start out being like the girl next door and then %HESITATION their fans give them feedback on what they should do to become super star and then a small
00:28:55number of them to become superstars and as an a a creative agency SNH forty eight takes a much higher percentage fee than the Hollywood fees but in addition there is %HESITATION monetization from %HESITATION %HESITATION both %HESITATION account commercial from %HESITATION from movies from %HESITATION as well as from
00:29:16the consumer payments because people pay to attend these concerts they also pay to attend virtually they also send virtual gifts which %HESITATION fly across the roof of the of the theaters so this is some kind of like K. pop grassroots factory on steroids exactly that's a very good
00:29:36yes it's all horribly retrograde in so many ways I'm in terms of gender again the I mean it's all well there's one for boys to locate that make you feel better sign me up all right yeah no I don't think so but there are elements of this innovation
00:29:53that %HESITATION that I've how do you %HESITATION appeal to people how do you connect consumers faster to the product right think about how you know we chat and Facebook and Snapchat have improved is because their products are connected to people and feedback instantly makes them better so now
00:30:10we're connecting these to the development of %HESITATION the next lady Gaga if you well right I mean I think you know so much of this new technology is I think you know front of the line and really %HESITATION you know connecting people people you know ordinary people to
00:30:27celebrities Santa %HESITATION and %HESITATION it does you know make everyone sort of you know stay in front of their computers and phones I wonder the degree to which this the data and also the connectivity can be harnessed for %HESITATION social good and what I mean is in China
00:30:49they're still this very entrenched problem of the rule and urban divide and you know there is a substantial part of the population that still %HESITATION probably skipped over the laptop PC generation and now just tap their phones and how is it you know is it possible that we
00:31:05could harness the technology so that they can participate kind of in this society here are their social entrepreneur is using the same technology if you social entrepreneurs in China so that'd be something that we can identify is missing from the because %HESITATION but that could change when the
00:31:22age of A. I. arrives and the data becomes available and then people don't have to worry about the the money that's often an important part of %HESITATION getting it beyond the stage yeah that's something I'd like to talk about and summed up because I know you thought very
00:31:35long and hard about these particular issue right but let me give you a kind of a %HESITATION a worry some example right %HESITATION that as you mention in the fourth and fifth tier cities what do the young people do their as they connect to the internet %HESITATION it
00:31:49turns out they actually use %HESITATION %HESITATION they actually are not as a connected to the mainstream %HESITATION we chat %HESITATION wait what kinds of communities as an example there is a community that's largely by these are small town %HESITATION young people because I saw her I don't know
00:32:08if you're familiar with that %HESITATION they're creating %HESITATION is not our investment they're creating celebrities who %HESITATION essentially do crazy things to attract %HESITATION follower base you know they will either Ross snake or %HESITATION put the dynamite in their pants and %HESITATION light is not I'm sorry firecrackers
00:32:31certified cracking the pants and this is not in the not so sad but they do hurt themselves as a way to attract fan base and then they get a lot of fans and they sell products to make a living quite different from the walk home cry shown what
00:32:45homework different concepts we could call the quite so popular also says subset of one home but they do so not because that there seeing art there is %HESITATION talents but because of their willingness to Maine themselves and do crazy things like jackass Chinese from fourth this is all
00:33:05right I'll do that makes us feel better the the Jack okay most of us were time talking about a I'm catches request the biggest megatrends on given China's history of strong central government control specially economic control most people probably agree that the ethical and regulatory environment for big
00:33:25data in a I in China is more permissive then you would find in the U. S. maybe or or surprisingly permissive %HESITATION first of all would you agree that's case and we we talked about that we find that it and that's misgivings and second you think that this
00:33:38is going to concerts confer any kind of an advantage on Chinese A. I. actors and finally do you do you do you find this permissiveness if you think that there is a name to be troubling are problematic sure I think the permissiveness %HESITATION is is arguably true but
00:33:53I don't think is the major factor I think the major factors are the following offers let's talk about what's what's in a I app right most people think about a I do think it's a town in this vehicles are robots but actually that's kind of the later stage
00:34:07a I the earliest stage is actually big data a I ride may to getting a lot of faces learning how to make your eyes my beautiful %HESITATION %HESITATION by do getting a lot of data making the search results or the ads more accurate or better monetize Taliban knowing
00:34:23what to promote to you %HESITATION and they may try and knowing how to sell something to use to %HESITATION delivered to your home and so on so it's a big data a I owe and then it's really %HESITATION financial a I know %HESITATION %HESITATION better long determination for
00:34:40credit card fraud and the insurance and banking and so on and then it's a medical a I you know for radiology and X. rays and a MRI eyes and so on and and then this %HESITATION in in in intelligent devices sensors and eventually robot and %HESITATION autonomous vehicles
00:34:57behind all of this is large data that makes this possible %HESITATION a I only works when you have a huge amount of data sets through algorithms to determine the outcome right what %HESITATION go play should I make what %HESITATION products should I recommend on Taliban how do I
00:35:16make her eyes more beautiful %HESITATION those are things with definitive markings how do we which stock should I buy should along money to this person well here she replied repay easel lots of data loss of data so my my my my former colleague and Ewing said you know
00:35:33it's the rockets and rocket fuel the rockets of course the the hardware and the elder themselves you know the case massive D. N. ends and then the rocket fuel is because the data and you what is no good without the other that's right that's right on the rockets
00:35:46are becoming increasingly well known at least decent rockets maybe not the best but %HESITATION %HESITATION decent rocket with a lot of fuel can take you a long way yeah and and that's where China has an advantage so I think China's primary advantage is that there are many domains
00:36:02in which there is larger user base there for more data and what day that means you can make better algorithms the second advantage is China's huge engineering population who can learn to become the rocket scientists if you well %HESITATION you need rocket scientist and you need rocket engineers
00:36:22and the rocket scientists are sometimes %HESITATION people coming out of my do Ali Baba ten cents coming out of the university set returning from the U. S. %HESITATION including from Google Facebook Microsoft and the rocket engineers are the new grass were rushing to get into %HESITATION this %HESITATION
00:36:39how gold rush of of A. I. so all of this I think are the main elements I think that permissiveness that you talk about is maybe the free in this scene which date is may be used or or maybe in some cases even traded or sold on the
00:36:56market I do think the government is trying to %HESITATION limits and actually put as criminal activity the act of certain types of selling privacy data so I think the the at least the the laws in those areas are getting better %HESITATION that's not to say there isn't a
00:37:14lot of state that being traded sold that isn't to say that companies are treating privacy day that with the same level of respects that's treated in US but it's it's getting better and it's probably not the not the main cause and another thing that's important is I think
00:37:31%HESITATION %HESITATION the speed of execution is much faster in China so companies that once they figure it out day that can be turned into making money and saving money people work around the clock to figure out how to make that possible and also %HESITATION China a algorithms when
00:37:50the plights and two domains that didn't have a I before the the bar is much lower in other words the Chinese enterprise software take credit card fraud detection as an example it's much worse than the U. S. so an A. I. company has only a very very low
00:38:06bar to to pass to get bots to show economic value so I think all of these things will come back and %HESITATION make China the perfect market for a high %HESITATION initially with big data but eventually was out on the missile vehicles in summer is the the kind
00:38:22of free wheeling wild west %HESITATION data %HESITATION controls in in China for example with respect to health data you were taught telling me the other night %HESITATION that it's it's really really segmented that it's all really silos that hospitals don't share %HESITATION and it's out of this fear
00:38:41because of of their awareness of just how how double the potential for abuse of of the outside the it seems to inhibit the development of some kind of medical related a I technologies that's really too bad because %HESITATION but that's a universal issue I think %HESITATION generally speaking
00:38:56not just try to yeah I think every every hospital is %HESITATION rightfully trying to protect the patience of privacy and data but I think if you look at the greater good %HESITATION I would advocate we should come up with some way to remove as much personally for information
00:39:12as possible but retained %HESITATION some degree of medical records and the images and the patient history and eventual survival rate and an aggregate that across the world %HESITATION we might that's a case where I think we might compromise %HESITATION maybe a little bit of %HESITATION reverse engineer its
00:39:31privacy %HESITATION we wouldn't purposely in now expose any but then we could save so many lives and solve so many diseases I think we has mankind should come together and figure out to do that absolutely not happening what are your thoughts on the role that the Chinese government
00:39:45is playing in the development of a I do a lot of China watchers and certainly many many American political leaders who hear about Beijing's and sees as I'm four A. I. and frankly watery off to the terrible Chinese kelibat sore the stuff of nightmares should we be worried
00:40:04about an A. I. arms race and how should the US will god %HESITATION China with the Chinese government's A. I. ambitions I think both the Chinese government and the U. S. government are aware of how important the ideas and both are funding supporting %HESITATION helping companies to to
00:40:24moving these directions as far as military I I would have no idea because I don't engaging either US or Chinese military I %HESITATION but %HESITATION we we do know when we talk to the Chinese officials they are knowledgeable they are supportive %HESITATION and they want to fund efforts
00:40:41to help make more platforms and more entrepreneurship possible on on the high so okay %HESITATION one trend that we're we've been seeing is a major deep learning pioneers guys like me on the **** whose it is at Facebook now %HESITATION and enjoying it and who is it by
00:40:57do until fairly recently %HESITATION they are if they simply abandoned the universities of the big research institutes for four of the private sector for the big internet companies it's easy to understand why I mean they have the data they have the harbor they have the resources they can
00:41:10pay the big salaries that these guys but is this is is a danger to see first of all so much a I fire power accruing in the hands of a very limited number of large internet companies and is it the danger that we're seeing Sir the hollowing out
00:41:25of the research institutions I I think it is a danger or why but in particular to U. S. and Canada because that's where a lot of the top scientists reside %HESITATION I think we need to do something about that and the the it comes down to really %HESITATION
00:41:42%HESITATION %HESITATION three questions one is %HESITATION can someone in the academic institution get a large amount of data so they don't have to join the big one to do that too can they increase their own pay or economic return in in some way shape or form actually three
00:42:03can the amount of time they waste on writing a government grant proposals be reduced because these are the three things that attract them to Facebook Google anti too SO on and I think we as us with the open community should somehow come together and make that happen %HESITATION
00:42:23so so some opportunities that may be open for all of us would be how do we collect and open data set and make that available to the academicians and to how do universities how should universities think about A. I. researchers and how to pay them university sometimes pay
00:42:40and be a professor is a great deal arguably a I professors should get the same and thirdly %HESITATION a lot of these university professors published a paper that some entrepreneur takes it and build a product that makes a billion dollars how should the professor find some way of
00:42:56getting at least some share of that %HESITATION and and currently there is then the mechanisms are are not clear except through rap generally bureaucratic university patent licensing offices and that's that's way too slow because it's not about patent %HESITATION it's about %HESITATION on knowledge transfer in cold transfer
00:43:16and time to market that could be in return you know five percent share of the company or something like that so %HESITATION and and then this about the grant proposal maybe there should be %HESITATION %HESITATION some kind of %HESITATION %HESITATION gifting process where the professors can get their
00:43:34bases covered with a having to write of very long proposals just to cover each students in the United States we have the added difficulties of the you know that kind of research funding drying up under trial private yeah so I don't know maybe %HESITATION maybe we can help
00:43:49maybe the V. sees can pull a %HESITATION a fund that will %HESITATION support the researchers because for the BC long term interest is in our long term interest we don't want anyone to go to Microsoft and Facebook and Google I'm so can you talk about some of the
00:44:04A. I. a place that %HESITATION your company %HESITATION from sign a syndication ventures has made and one of the things that really interested me and I to talk the other night was the micro lending service %HESITATION you own Chand bow could you talk about that company and some
00:44:20of the other A. I. investments you have sure %HESITATION we have a company called the smart finance and they make a product called young Jim Brown %HESITATION let me describe it it's an apt that you download and when you need %HESITATION let's say two hundred dollars you click
00:44:34a button and in eight seconds the money comes your phone as I mentioned earlier people use the phone for money nowadays through we chat and Ali pay so this is extremely convenient to the average time these are %HESITATION about user because %HESITATION they probably generally don't have a
00:44:50credit card so that option of getting a sh small loan isn't available so are you on him by was launched to about nineteen months ago and this year it's %HESITATION I would project it will do about thirty million underwriting of loans what god so it's a lot larger
00:45:08than almost any my god so the A. I. component of this is the machine looks at the user is basically decide whether or not that you to lend the money yes on online activity right or what exactly based on what exactly what's the data that's a good question
00:45:23because most %HESITATION Americans with assume its base some some credit report which costs you know some twenty dollars to to get can't possibly be that because number one they're not accurate and number two they're not hard at all angles Elise's they're not targeting was no ratings agency and
00:45:40also I'm not a comically sensible because if you pay twenty dollars for the report you're only making interest on the two hundred dollar loans not economical so it's all based on content basically you fill out the forms when you want to borrow the money you're telling your name
00:45:55you you are scan your ID and then you give me your address and then you upload some cons information from your phone %HESITATION such as you know what apps you use your contact lists and those are scanned through to not I mean they protect privacy but they scanned
00:46:12through and compare it with online databases to see if this represents a human person or someone who is likely to be fraught pads seems like you could hack this though you just just create the right contact list you could download the right suite of apps you could just
00:46:29modify your behavior across period of time and right so it's a good it's a game of cat and mouse right deep learning needs to constantly adapt to that so it's %HESITATION young so of course there are default rates initially the default rates were quite high in the teens
00:46:44and now they're in this low single digits after learning from from data I'm still curious about this data because I'm trying to picture like what's on my own phone and whether that you would lend me money or not %HESITATION waste what kinds is one of my contact is
00:47:01that could be a black mark no %HESITATION you're looking at you know the the contacts in the phone book %HESITATION in the address book and and %HESITATION you you have some kind of economic school for them more you know do they have criminal records or what exactly is
00:47:16the information that you sent a strong explainable see most of the burning you can't give a single reason and that's not because the plan is not smart is because we're not smart we generally think there is a three or four dimensional answer to things and we give you
00:47:31if then else right without this because Kaiser's your friend and because you make less than five thousand dollars a month and you only renting the place out for four months there for it it's unsafe to lend to you that's the human way of thinking but in the deep
00:47:47learning there are two thousand dimensions they look at and these two thousand vector space they make a arbitrarily complex curves that separates the safe to lend money to people and then not safe to might lend money to people and that's the decision makes you there's no such easy
00:48:04way to explain that without going through this two thousand dimensions I'm sorry I mean there there's a very real possibility that the machine will decide not to lend money to people with a smile on their chan because it's found that people of moles on their chins down I've
00:48:20learned well yeah that that's that's but I really think he's out an old the type of phone that you use is irrelevant member of the two thousand classes so that makes sense yeah yeah and that that wouldn't be something along officer with whatever understands the other question that
00:48:39comes up is what about bias it actually doesn't have human bias as you would you would think about it because it's not train down human loan officer decisions is trained on whether you pay you pay back the money or not right so in order to build up the
00:48:53system you got it give out a lot of bad loans and lose a lot of money and get a lot of money back and and build up your training day that yourself over time you know we gotta love save a lot of questions for next time okay unfortunately
00:49:07we weren't wearing shorts and there's one more I think of a major theme that you've been you've been thinking a lot about I saw you in January in Davos and I'm sure as you noticed %HESITATION and I I certainly there's a a major theme that we heard repeated
00:49:19again and again in many sessions was the need to prepare ourselves for the inevitable economic disruptions that A. I. an advanced robotics are going to bring and part of it of course that we were all really chastened by the whole populist uprising happening around the world because of
00:49:31our failure elites failures to really cut prepare the world for globalism and instructions that that was going to bring the dislocations to we don't you've devoted an awful lot of brain power to thinking about what we have to do to prepare for for this future and your commencement
00:49:47address at at Columbia a you said that in ten years you think that a eyes and replace half of human jobs right %HESITATION that would enter an age of confusion where many people as you said will that be may become depressed as they lose the jobs in the
00:50:01corresponding self actualization right so this is on top of a host of other potential chiefly you know greater well income and wealth inequality which is going to be really really problematic spent just among individuals but we know within a country but between countries as well between developed and
00:50:16developing countries what should we be doing how should we be retooling and think about this in in concrete ways right well for some there's some good things too I also mention at the age of plenty right because will there will make so much money that the the possibility
00:50:30of giving a universal minimum stipend I think is is actually quite realistic if the government's get their act together %HESITATION so coming back to what we as individuals should do well we should aspire to do things that the machines cannot do so that would be the %HESITATION the
00:50:45obvious answer so what things can machines not to %HESITATION machines cannot create they cannot come up with new %HESITATION algorithms they cannot come up with a new form of art they cannot create a new sculpture they cannot write a new play or new movie so those types of
00:51:02things would be one class the second type is %HESITATION be a user of a high so when a I tools come out you become very good at it and become a symbiotic combination so that you plus the tool becomes more than that the sum SO hard right %HESITATION
00:51:19but I think the third one is probably the most important because it's going to be all about people to people the machines cannot do not have he motion they don't have love they will not gem generate the warm and fuzzy feeling they don't know love %HESITATION they don't
00:51:34have empathy and they don't have each queue so this carbocation is what we human definitely half the machines definitely do not have %HESITATION and I don't think machines will ever get it's certainly not get it within twenty years so we need to think about candid displaced workers and
00:51:52also can ourselves get into a service job that may be just a very caring concierge a wonderful masseuse very very talkative and fun bartender %HESITATION %HESITATION knowledgeable and %HESITATION excited passionate tour guides those types of jobs I think will be on the rise and I think some jobs
00:52:13will go from %HESITATION professional to service such as a doctor when when %HESITATION when the medic when the when the A. I. Dr becomes better at diagnosis then the human doctor the human doctor will be the bridge between the tool and the patients and make the tough messages
00:52:33easier to bear and give the encouragement that and the care and the attention that maybe the home visits that will give the patients %HESITATION the the %HESITATION a higher chance of making it through the difficulties so John was only room for you I hope I mean as a
00:52:51mediocre horsemen we hope we hope but you know they might you know I mean I can imagine how room robot might be better at doing her own faction nine the fact checking but Jenny with the inner being podcasters I think you three are pretty safe twenty I have
00:53:10to ask I mean when I was listening to a talk the other night and you you spoke on these themes and you talked about you know for example the value of a liberal arts education and as somebody with a liberal arts education who you know I spent the
00:53:23first twenty years of my adult life struggling to find two pennies to rub together hearing this message from an engineer yeah I was wondering like you know what's your advice your own children I mean should we still be studying engineering I think you should study what you love
00:53:41and what you're good at and %HESITATION I had a liberal arts education but I also did computer science I'd love to both parts and I think they come back to be greater than the sum of the parts right if I were just if I just had the engineering
00:53:54education I don't think I'd be writing this book I don't think I would be thinking about the implications for mankind I don't think I'd be giving the commencement speech right not just peek peel a marvelously gifted poly about it is easy to do what you love and that
00:54:11work really hard that it does I think this hasn't really changed to sit with or without a high and %HESITATION but I do think a lot of liberal arts majors become a little more interesting in the age of A. I. because the study of sociology the study %HESITATION
00:54:26font %HESITATION psychology the study of fonts social work the study of philosophy all change because now there's this a I thrown into the equation in the commencement address the eight you said some very heartfelt words about your own experience with cancer %HESITATION and I'm I'm not a we're
00:54:42personal world very relieved to see how well you're doing in our fingers are all across the well how did this experience change your outlook and your priorities of in in that not so I mean related to this question because it seems to have a direct correlation to your
00:54:55your your feelings about what humanity should be in the A. I. age yes it did I think got ten years ago I might have been a lot more sympathetic to you on must call that we should become cyborgs has that same school and this seems like high tack
00:55:10and we want to maximize efficiency and maximize productivity you know %HESITATION and and and become a very influential and change the world but I I I no longer thing that's the highest priority I think what difference what what may be the creator of this world the sending us
00:55:28a I just to remind us that these are not tasks that we should do anymore the repetitive the simple the drudgery and and our pursuit of too many long time to the money and fame may have gone too far maybe this time to step back and think about
00:55:47the meaning of life and %HESITATION be with our loved ones and %HESITATION send out love and and %HESITATION %HESITATION basically feel happy because you're able to love someone and be loved because really we are so grateful you could make him talk to us as an honor and a
00:56:04really great pleasure up so please join us for a recommendation for listeners want you sure well before we get recognition so %HESITATION matter this is that the cynic podcast is powered by some China check on the app newsletter at some kind of com you can also join on
00:56:17Twitter at and on Facebook at Facebook dot com slash sub Chinese if you like a podcast found yeah hi too so you apps helps a lot to us recognition Jenny kick us off and then we'll go to jail after that and then to to to cut okay this
00:56:35one maybe you've %HESITATION read already because it's been burning up the internet it's a cover story of the Atlantic of %HESITATION this week the Atlantic magazine called my family slaves in our %HESITATION yeah so the guy's a Filipino American ones I was his dad he died a few
00:56:52months ago and %HESITATION his family had what in China would probably call an I. E. but she wasn't paid she actually was a basically slaves to the Philippines and she %HESITATION brought up %HESITATION that will send his siblings %HESITATION %HESITATION basically almost as a mother %HESITATION and stayed
00:57:11in America never went back to the Philippines and that's the sort of confessional essay about %HESITATION the story of his family's generated for a bit of controversy to it has for some reason I I don't know you know the %HESITATION I mean this is when I kind of
00:57:24want to use that Chinese insulted bites or I mean here by the office I am white left it's kind of like the the politically correct twitch or is all upset because I don't know why they're upset he didn't know and and %HESITATION patriarch and colonialism out an awful
00:57:42or something %HESITATION we can talk about it all the time yeah %HESITATION okay %HESITATION quickly John what happens %HESITATION I %HESITATION I'm recommending this %HESITATION documentary which I was involved in in only a small part it's called %HESITATION to apple kissed too small to jail and it is
00:58:02%HESITATION about the only bank %HESITATION in America that was prosecuted for mortgage fraud in the wake of the %HESITATION two thousand eight financial crisis I wrote a story about this %HESITATION for the New Yorker in two thousand and fifteen but I think the documentary really is able to
00:58:23bring some of these characters to life that %HESITATION the feature story %HESITATION is not able to do was directed by %HESITATION Steve James who directed hoop dreams and I think he's done a marvelous job and we see it %HESITATION it's in theaters starting the %HESITATION may nineteenth %HESITATION
00:58:40which might be today I'm not sure and no longer keep track of %HESITATION abacus too small to bail too small abacus too small to jail documentary %HESITATION about this bank so if you have a chance to go out and see it group food you have for us I'm
00:58:56going to make an entire recommendations for all the science fiction movies except one not that they're not entertaining and fun but because they mislead us in this very important age of a I the only science fiction movie that I think is not completely misleading is Frank and robots
00:59:14and I would recommend that you see it's heard of that Franken wrote well because it doesn't involve %HESITATION robots killing people loving people or are controlling people about a root reasonably realistic robot that gets developed to accompany older people and the social problems they caught the cause and
00:59:35the how they solved nuts %HESITATION it has drama it's not dramatic it's a well acted as Franklin Jello is an excellent so after and %HESITATION it's I don't think it was a huge box office hit but this really the only one that I think will give us the
00:59:50proper way of thinking about when robots and A. I. come about what we might do and what issues might come up will great okay %HESITATION I reckon this very quickly is a piece from the number twenty thirteen actually it's a few years old called friends like these how
01:00:04fame's Chinese dissident got caught up in America's culture wars by Jonathan Allen %HESITATION long form Reuters piece about chin Wong Chung and Gerry Cohen pastor Bob flew %HESITATION the whole kerfuffle while we had a very good pleasure last night of interviewing Gerry Cohen %HESITATION so this has been
01:00:21very much on my mind anyway once again thank you so much for taking the time I know you got to get out of here John was great to see you yeah who will talk to you again next time we're in Beijing you bet thank you okay great Germany
01:00:33could see is always like twice okay the cynical podcast is powered by some China and is produced by because it will injure the gold card special thanks this week %HESITATION to unlock Chang answer I draw the from sub China thanks also to trump international hotel no one is
01:00:50that sometimes not come and visit our Facebook page Facebook dot com slash podcast follows on Twitter at Seneca podcasting's losing and we'll see you next week ticket

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