Tencent, Alibaba, Baidu and JD.com from China are in a global competition with Google/Alphabet, Apple, Facebook, Walmart and Amazon from the USA and SoftBank from Japan. All are agressively searching for talent, intellectual property, market share, logistics and supply chain technology, and presence all around the world.
These leading tech-savvy companies have many things in common. Foremost, they are all in pursuit of global growth and the funding, technology and talent to propel that growth. And they all are investing in voice assistance and other forms of AI and robotics.
Although Amazon is leading the way with its ecosystem surrounding its AI assistant Alexa, each of the others either has or are developing competing systems of equal or greater capability… think OK Google, Siri and Apple’s new Homepod and Cortana or, in China, Alibaba’s Tmall Genie, Baidu’s Little Fish and JD’s DingDong.
Also, they are all moving toward providing AI as a service.
Baidu (NASDAQ:BIDU) is China’s primary search source and also provides Internet-related services and products as well as targeted advertising, transaction services and a video platform. Baidu is heavily investing in researching deep learning, computer vision, speech recognition and synthesis, natural language understanding, data mining and knowledge discovery, business intelligence, artificial general intelligence, high performance computing, robotics and autonomous driving (at their new self-driving lab in Silicon Valley).
Alibaba (NYSE:BABA) is a multi-national China-based e-commerce retailer, payment and technology conglomerate, cloud provider, whose two shopping malls (Tmall and Taobao) have over 1 billion combined active users and are supported by a budding logistics network. Alibaba’s AI-powered platform (which it uses internally for its shopping malls and logistics processing) was recently rolled out in Kuala Lumpur to support smart cities in their digital transformation. It analyzes large data volumes extracted from various sources in an urban environment, through video, image, and speech recognition. The system then uses machine learning to provide insights for city administrators to improve operational efficiencies and monitor security risks.
Tencent (HKG:0700) is a Chinese provider of Internet and cloud-related services and products, entertainment, music services, AI, real estate and social media including WeChat (which recently hit 1 billion users). More than 35% of WeChat users spend over four hours a day on the service compared to the little more than an hour a day spent on Facebook, Instagram, Snapchat and Twitter combined. Tencent has set up AI labs in Shenzhen and Seattle and is researching voice and image recognition systems and transforming what they’ve learned into apps and algorithms to keep their users informed and attentive.
NOTE: Baidu, Alibaba and Tencent make up B A T, the acronym given to the trio of main competitors in China’s quantum computer and machine learning research. In addition to labs in China, each has a Silicon Valley research center. Funding and incentives are provided by the Chinese government. The three BAT companies already collect and analyze huge amounts of data from their e-commerce transactions, mobile gaming, online search and payments to social media, video streaming and on-demand services such as ride-sharing and food deliveries. With quantum computing, they will be able to sift through massive data streams faster and better than with existing supercomputers.
JD.Com (NASDAQ:JD) is a Chinese e-commerce competitor with about half the user base of Alibaba yet with very progressive logistics and infrastructure programs. JD (Jingdong) is testing robotic delivery services, operating driverless delivery trucks and building drone delivery ports. JD operates 7 fulfillment centers and 405 warehouses in China. Last month it raised $2.5 billion for its JD Logistics subsidiary to build out and expand their logistics network.
SoftBank (TYO:9984) is a Japanese telecom conglomerate. Softbank is also the instigator of the SoftBank Vision Fund which is investing massive amounts ($98 bn) in technologies and entrepreneurs pioneering the future through a wide range of sectors: IoT, AI, robotics, mobile applications and computing, and infrastructure, cloud technologies and software. SoftBank, with it’s funding partners Apple, Qualcomm and various sovereign wealth funds, wants to invest another $900 billion in 1,000 AI and robotics companies in the next decade. SoftBank is also a partner with Alibaba and Foxconn to produce and market Pepper and Nao robots.
Google/Alphabet (NASDAQ:GOOG) is a Silicon Valley search engine and Internet products company with a stable of forthcoming AI ventures such as Waymo, Verb Surgical and Nest along with consumer products like Google Home, Android phones and Chromebook computers. Google is leveraging their data, processing power, and talent into an array of AI-based apps, processes and products. Their foray into robotics hardware has resulted in much valuable research but all of the units have either been sold off or closed (except for Boston Dynamics and Shaft which are held up from sale by government regulators). Although still a leader in machine learning, Google is finding much competition from their Chinese competitors.
Apple (NASDAQ:AAPL) is Apple, a Silicon Valley designer, manufacturer and marketer of phones, media and hardware devices and provider of software, services and digital content. Apple is the world’s largest information technology company by revenue and the world’s second-largest mobile phone manufacturer after Samsung with annual revenue of $229 billion. Building out Siri from the virtual world into the consumer product world with their new Homepod is off to a late start.
Facebook (NASDAQ:FB) is also a Silicon Valley-based Internet phenomena with products that include Facebook, Instagram, Messenger, WhatsApp and Oculus. Facebook has over 2.2 billion active users. Their investments in AI appear to be focused on developing a virtual (or physical) assistant. Their acquisition of Ozlo to help Messenger build out a more elaborate virtual assistant for users is an example.
Walmart (NYSE:WMT) is a global retailer with wholesale facilities, logistics and distribution centers all around the world. Walmart operates over 11,000 stores under 59 names in 28 countries and e-commerce sites in 11 countries. It grosses over $480 billion annually and employs over 2.3 million workers. As Walmart increases its online e-commerce market share while simultaneously changing practices to provide better product transparency (particularly in and faster material handling at its stores and distribution centers, it too is on a talent hunt for roboticists and AI/machine learning people and providers.
Amazon (NASDAQ:AMZN) Amazon is the leading e-commerce seller of products, supply chain services, AI, and cloud services that is copied and competed with around the world. Amazon accounts for ~4% of all retail and ~44% of all e-commerce spending in the US. Amazon’s supply chain and logistics facilities use more than 60,000 robots in its various warehouses and distribution centers, and its cloud services, which not only services Amazon, provides on-demand cloud computing platforms to companies and governments on a subscription basis. Amazon’s Echo/Alexa home assistant has started to include capabilities like a display, camera and alarm clock, security cameras, and even a fashion advisor. It is combining all these different incremental parts to build a smart home robot as they become viable and front-ended by the Alexa voice assistant.
Amazon is the company to watch in terms of early innovation. Others follow and emulate; Amazon quietly goes forward and China is on its horizon. CBInsights had two interesting comments on the subject as can be seen in these two charts:
CBInsights looked at which peers companies were talked about in financial reports and calls and found that Amazon doesn’t mention competitors. But Amazon mentions of China are up 57% over 2016.
NOTE: There are no Europeans in this list nor in the Top 15 Alexa Sites. Large robotics firms in Germany and Italy have been sold to China. ARM, the British chip-maker, was sold to SoftBank and DeepMind, the UK AI wonder, was picked up by Google. Many fear that Europe may excel at manufacturing but don’t have protectionist impulses to fend off (and keep up with) America or China and to know that smart manufacturing and smart cars – in fact smart everything – is the new game. Recently European leadership has shown fear in the use of and connection to cloud and analytics platforms in the age of IoT – even though Europeans pioneered the term Industry 4.0.
A major talent-hunting event is the big NVIDIA GPU tech conference being held in San Jose March 26-29. Over 8,000 industry professionals of all types are planning to attend this job fair and place to learn about AI, machine learning and deep learning.
Infrastructure
Common to all is e-commerce and the systems that pick, pack, ship and deliver all the goods. Thus, in addition to investments and interest in cloud platforms, super computing and AI, there is a global explosion in warehouse construction and reconfiguration for automation. According to Cushman & Wakefield, U.S. developers added almost 1 billion square feet of warehouse space from 2013 to 2017, a 2X increase over the previous 5 years. It’s harder to get information for China but news stories indicate similar if not greater growth, new forms of automation and labor shortages.
The constant lament heard in the U.S. is captured (and presumed to be relevant worldwide) is this quote from a fulfillment executive:
“A big part of our strategy is how do we make the current employees we have more productive and to reduce the requirement for more labor at peak times.”
Providing warehouse labor is a big business because workers are hard to find and turnover is more than 10% per month. Hence the simultaneous investment in robotics and smart warehousing systems to maximize human effort and reduce costly errors and turnover.
Warehousing has always been as automated as possible, particularly in pallet and box handling, but as labor has become more scarce and costly, as robotic systems have improved and costs been reduced, and as the number of shipments has increased exponentially due to e-commerce, the nature of material handling and fulfillment has radically changed. Hence the need for mechanical assistance.
But this is fodder for another article to follow shortly on the global inroads being made in fulfillment and material handling. Stay tuned.
