The next stage of rapid growth in China’s economy is likely to be driven by Fifth Generation mobile networks (5G) and artificial intelligence (AI). The China Technology Fund aims to capture investment opportunities in this attractive, rapidly growing space.
The “Next Generation Artificial Intelligence Development Plan” released by the State Council of China in 2017 outlines China’s strategy to build a domestic US$150 billion AI industry and ultimately become the world leader in AI. China is expected to invest US$411 billion in 5G infrastructure between 2020 and 2030, marking the most expensive build-out of telecommunications infrastructure in its history.
China is already among the leading global hubs of AI development, with its biggest tech companies (Baidu, Alibaba and Tencent) driving significant investments in research and development (R&D).
The ultra-high data rates, enhanced capacity and reduced latency of 5G technology opens new possibilities for multiple life transforming applications, from three-dimensional video to immersive media, autonomous vehicles and the enablement of smart cities.
5G also unlocks other technologies such as AI, robotics and the internet of things (IoT). Ernst & Young projects 576 million 5G connections in China by 2025, representing over 40% of global connections.
Preparations are well underway in China for the commercial launch of 5G in 2019, making it among the first 5G-ready markets in the world. 5G in China has entered the third phase of testing and the government has reserved considerable contiguous spectrum for 5G use.
Significant breakthroughs in AI have been achieved with advances in data collection and aggregation, algorithms, and processing power. Computer systems that needed to be programmed to execute rigidly defined tasks, can now be given a generalized strategy for learning, adapting to new data inputs without reprogramming.
Many machine learning systems have been developed for commercial use with countless applications, and adoption is growing rapidly in sectors such as finance, health care, and manufacturing. A McKinsey Global Institute study published earlier this year estimated that half of all work activities in China could be automated, affording it the world’s largest automation potential.
The China Technology Fund will invest in China’s 5G and AI via Shen Yu Capital. Shen Yu is led by a team of technology veterans from the top three tech companies in China with deep experience in early-stage technology and a solid, consistent track record in investing.