A WEEKLY PREMIUM NEWSLETTER ON CHINA'S TECH
- Insights: Beijing AI Principles: A step in the right direction, but still not enough
- The week
- Featured: China’s data localization laws hurt cloud security: report
- China voices: Tell-all paints firm as Theranos of autonomous vehicles
- Smart reads
Beijing AI Principles: A step in the right direction, but still not enough
June 8, 2019
On May 28, the Beijing Academy of Artificial Intelligence (BAAI) released the “Beijing AI Principles,” an outline to guide the research and development, implementation, and governance of AI. Endorsed by Peking University; Tsinghua University; the Chinese Academy of Sciences’ Institute of Automation and Institute of Computing Technology ; and companies such as Baidu, Alibaba, and Tencent, the principles are the latest global entry in a long list of statements about what AI is and should be. On the surface, a bland and unsurprising take on AI ethics, the document actually pushes forward the global discussion on what AI should look like.
Bottom line: Say what you will about the current tension between the US and China, but the fact remains that the Western-built world order is slowly eroding and China is steadily filling in the gaps. While the principles were not written or endorsed by the State Council (the country’s chief administrative authority), BAAI is backed by the Ministry of Science and Technology which, very likely, approved the statement for publication.
Because it’s not a central government document, it does not carry the full weight of the leadership, but it is a step towards an official stance on ethical AI. It is the first public sector declaration of AI principles to come out of China, bringing Beijing into a conversation dominated by Western voices.
However, like other principles published globally before, it doesn’t do enough to address actual real world development and use cases. Instead of fluffy, feel-good utterances we can all agree on, the global AI community needs to go beyond just words and give us concrete examples of how AI can represent our highest values.
A brief timeline
- October 3, 2017: DeepMind, developers of AlphaGo and AlphaZero, releases “Ethics & Society Principles.”
- April 9, 2018: OpenAI, a non-profit founded by Elon Musk and Sam Altman, publishes its Charter, in English and Chinese
- April 16, 2018: UK’s House of Lords “AI in the UK: ready, willing and able?”
- May 18, 2018: Stanford launches Human-Centered Artificial Intelligence initiative.
- May 26, 2018: Robin Li, found and CEO of Baidu discusses Baidu’s AI principles (Chinese link) at a government data conference in Guizhou.
- June 7, 2018: Google publishes AI principles.
- September 2018: IBM releases “Everyday Ethics for Artificial Intelligence,” billed as a “practical guide for designers and developers.”
- October 12, 2018: Baidu joins the Partnership on AI, founded in 2016 by Google, Facebook, Amazon, IBM, and Microsoft.
- December 3, 2018: Jason Si, chairman of Tencent Research Institution, discusses Tencent’s AI philosophy at 2018 Peking-Stanford University Internet Law and Public Policy Conference.
- March 2019: Stanford upgrades HAI initiative to a university institute.
- May 22, 2019: OECD releases “Principles on AI.”
- May 28, 2019: BAAI releases Beijing AI Principles.
Chinese voices: As with AI research, there has been a substantial asymmetry in statements about AI ethics: many Chinese researchers and practitioners can speak English and know English language statements, but few outside China are aware of Tencent’s and Baidu’s. Neither have published their principles and most statements from their representatives have been made in Chinese for domestic consumption. By publishing in English, the Beijing AI Principles invites the rest of the world to have an open discussion with researchers, academics, and entrepreneurs in China how AI should be developed and implemented.
It’s different this time: While still lacking concrete steps for implementation, the Beijing Principles do have more substance than the recent OECD document. Consisting of five principles (all single sentences) and five suggestions to government (all single sentences), the OECD principles on AI are bland and mirror almost every other government document on the topic. The Beijing AI Principles, on the hand, outlines specific domains (research, use, and governance) and even acknowledges the risks of Artificial General Intelligence and Superintelligence.
The most comprehensive public discussion of AI principles out of China actually comes from Tencent, a company which has been criticized in China for lacking a comprehensive AI strategy. At the 2018 Peking-Stanford University Internet Law and Public Policy, Jason Si gave a speech outlining, in quite specific terms, how Tencent approaches AI development. Even he, however, doesn’t go into enough detail for any reasonable skeptic to believe in their principles without seeing it.
The dark side: The Beijing AI Principles were likely written in good faith, but it is hard to take them seriously given what we know about how China is currently using AI. Domestic policy doesn’t give much credence to either Western notions of limiting the power of the state over the individual or avoiding systems of variable rights by race.
As has been widely covered by Western media outlets, the Chinese government has been paying special attention to people of certain ethnicities living in certain regions. Afraid of losing control, the government has created mass surveillance systems in a bid to ensure stability in these areas. But it’s not just here, but also in China’s smart city push that we can see AI’s power to monitor individual citizens.
In August 2018, researchers funded by the National Natural Science Foundation of China and China Education & Research Network Innovation Project published a paper in English detailing AI models that could identify ethnicity. China’s facial recognition companies have had a hard time with non-Han Chinese due to lack of data, but this goes far beyond just wanting to verify someone’s identity. Indeed, the application of AI here isn’t about who someone is, but rather which group they belong to for the purposes of profiling. The government’s Skynet and Sharp Eyes programs make it clear that policy prioritizes watching, tracking, and monitoring people inside China’s borders. Anytime you hear “smart city” in China, you can guarantee that video surveillance and facial recognition is a key component.
Almost every single tech giant is involved too.
Alibaba has long been developing their own smart city solutions in Hangzhou and in May 2019, brought that system to Shanghai, including 1,100 biometric facial recognition cameras. Huawei has been developing smart city hardware for many years, including smart cameras used for image and facial recognition. Baidu is helping to build Xiong’an, China’s high-tech powered “second capital.” PingAn, an insurance company that’s pivoted into tech, is working with the Hong Kong government to help build the city’s e-ID system.
End of the fluffy cycle
"We’ve got enough [AI principles]. We need to start getting into the details. We need to get real about the conversations we should be having."
—Chris Byrd, research fellow at the Future of Humanity Institute at Oxford University
The bad news is that the Beijing AI Principles is yet another list of feel-good sentiments about problems in AI development. The good news is that almost everyone and their mother has published one by now: the territory is marked and it’s time for some real exploration. What all AI principles lack to-date are concrete and technical details about how to create artificial intelligence systems that actually adhere to our stated values. Not only is this possible (contrary to popular belief, non-engineers can understand how technology works if they take the time to ask), but becoming increasingly necessary as AI quickly becomes integrated into the fabric of our societies.
The Beijing AI Principles are written by a team with a good track record and there’s every reason to believe they mean what they say. AI ethics is another area where China could set the global agenda if they wanted to. There is a real gap currently in the discussion that China could try to bridge, not just because they want the power, but also because the country’s leadership recognizes that there are real problems that need to be solved. Say what you will about their domestic policies, with AI, like carbon, if you don’t have Chinese buy-in, you don’t really have an effective norm. The world should be eager to have contributing to the conversation.
– John Artman, Editor-in-Chief
Chinese electric vehicle maker Singulato is reportedly closing its latest round of funding for an undisclosed amount. According to Chinese business research platform Tianyancha, the company received RMB 6.33 million (around $920,000) in late May. A list of new shareholders appeared at the same time, including a capital fund backed by the government of eastern China’s Anhui province, Lenovo’s investment arm Legend Star, and Japanese trading company Itochu. A spokeswoman from Singulato said the financing has “gone smoothly so far,” but did not reveal further details when contacted by TechNode on Tuesday.
Aiways, a four-year-old Shanghai-based EV company, recently told Quartz it plans to start selling its U5 flagship SUV in Germany, France, Switzerland, Norway, and the Netherlands in early 2020. The move would make it the first Chinese EV company to offer its vehicles in Europe. According to Quartz, Aiways plans to sell the U5 directly to customers, and is exploring a partnership with German startup Vehiculum for lease options. The U5 will begin production for China’s domestic market in September.
Finnish telecommunications company Nokia said it has secured 42 commercial orders for the next generation of wireless networks, surpassing its Chinese rival Huawei. Customers are increasingly looking to Nokia to equip their 5G core networks, either to have dual sourcing for the most sensitive parts of their networks or to replace existing providers, said Nokia director Federico Guillen. Huawei had secured 40 5G contracts around the world by the end of March, according to the company, while Swedish 5G competitor Ericsson has publicly announced 19 contracts, of which eight are live.
A Huawei executive said the company is now closely assessing the effect of a US government trade blacklist. According to Zhao Ming, president of Honor, a Huawei smartphone brand, it is too early to say when the company will achieve its goal of overtaking Samsung as the world’s largest smartphone vendor. Huawei’s CEO of consumer business Richard Yu said in January that the company would achieve that goal by 2020 at the latest. Huawei’s smartphone manufacturer, Taiwan-based Foxconn, has halted several production lines for Huawei phones in recent days as the company reduced orders for new phones, according to people familiar with the matter.
Tencent is planning to release “Call of Duty Mobile” to markets including the US, Europe, Japan, Latin America, and Southeast Asia amid uncertainty in the domestic market, Bloomberg reported. The game, an adaptation of Activision Blizzard’s best-selling franchise “Call of Duty,” is currently in beta-testing without a set release date. Tencent did not provide details about how it would share revenues with Activision. Tencent is also working on other adaptation titles. Its TiMi Studio Group, for instance, is working on similar projects with several other international companies.
In late May, a man in Jiangxi province filed an injunction against Tencent due to perceived violations of his privacy by the company’s QQ browser. The app is separate from the tech titan’s popular social platforms WeChat and QQ, although users have the option of logging in using their accounts on either service. According to the filing, the plaintiff did not give his consent to share user information across platforms, but noticed after logging into the browser via both accounts that personal data such as his profile photos, contacts, gender, birthdate, and geographic location were automatically synced. Furthermore, he was not able to delete the data from the QQ browser.
Internet giant Tencent is leading a $40 million funding round for TrueLayer, a London-based startup that has built a developer platform which allows third parties such as fintech and retail companies to access bank APIs and consumer data. Other potential backers include Singapore’s sovereign wealth fund Temasek.
Alipay, the mobile payment app operated by Ant Financial, may soon begin formally operating in Nepal. According to local news outlets, the head of business at Alipay and representatives from Ant Financial’s compliance, legal, and account departments met with officials from the Nepali central bank last week. The Himalayan Bank, one of Nepal’s largest private banks, is currently applying for permission from the central bank to settle foreign exchange transactions on Alipay.
Following in the footsteps of Mobike and Bluegogo, Ant Financial-owned Hellobike recently doubled the rates for bike rentals in Beijing from RMB 2 to RMB 4 an hour, priced in 15-minute intervals. In at least one other city, Hangzhou, users noticed that rental rates had risen to RMB 3 per hour from the original RMB 2. In late March, Bluegogo more than doubled its effective price per hour in Beijing to RMB 2.5 from RMB 1, while in early April, Meituan-Dianping’s Mobike hourly rates increased to RMB 2.5 from from RMB 2.
Hong Kong will likely retain its status as a biotech IPO hub even after the debut of the soon-to-launch Shanghai tech board, according to investment bankers. The ongoing US-China trade war will likely affect the valuation of Chinese biotech firms but will not prevent them from going public, according to Philip Ross, JPMorgan’s vice-chairman of investment banking. Ross expects to see at least 10 Chinese biotech firms listed in Hong Kong or Shanghai in the coming 12 to 18 months. Others believe that Chinese biotech companies will likely first consider Hong Kong as an IPO destination because it is a proven source for successful fundraising.
|Featured: China’s data localization laws hurt cloud security: report|
The Asia Cloud Computing Association (ACCA) published a report last week on public procurement guidelines which argued that data localization, a legal requirement for cloud operators in China, “on balance weakens data security.”
The ACCA is a trade organization that represents the cloud industry in Asia. The authors of the report are executives and public policy experts working at major players in the Asia cloud market, including Amazon Web Services (AWS), Google, Microsoft, Equinix, and Salesforce.
However, these companies have relatively small cloud operations in China. According to the International Data Corporation, a US market intelligence firm, Microsoft held 5% and Salesforce 4% of the Software as a Service market in 2018; AWS held 6% of the Infrastructure as a Service market.
The Multi-Level Protection Scheme (MLPS), the regulation which outlines security requirements for different types of data, requires all network operators wishing to provide cloud services in China to store data in infrastructure within the country’s borders. They are not absolutely prohibited from moving the data overseas. To transfer “important” data across international borders, Chinese law requires a security assessment. The law defines “important” data as those that are critical to national security or personal data that can identify Chinese citizens.
The ACCA recommends that “policymakers should not require data localization on security grounds,” arguing that the physical location of data does not contribute to their security from cyberattacks. The report argued that storing important data locally can weaken security.
Local storage creates gold mine data centers that can be targeted by hackers, the authors said. More flexible storage regimes allow companies to implement moving-target security approaches such as the Melbourne shuffle, which aims to hide patterns that arise from using data in the cloud by by rearranging it across data centers in different locations.
The report says that where data is stored is not as important as how it is stored, and that policies which place restrictions on the location of data could draw resources away from building more effective defenses against hackers.
Kevin Ji, senior director of research at Gartner, an international research and advisory firm, said that China’s goal is not localization but rather data sovereignty. The Chinese state seeks absolute control over data generated within its borders; localization keeps this data within Chinese jurisdiction but is not an absolute measure.
Many companies are concerned about China’s rules on the transfer of personal data, Ji said. However, it is legal to transfer metadata about individuals, so long as it is not raw data that can be associated with a Chinese citizen’s identity. “If you want to perform data analytics on personal information and move [the metadata] outside China, that is okay,” Ji said.
China’s physical size alone justifies holding data within the country, Ji said: “If companies leverage global sites, the latency would be unacceptable.” China is so big that storing data abroad would cause severe delays in signal transmission between the host server and cloud tenant.
“The challenge is not technical anymore, it is about compliance,” Ji said, referring to the various localization and sovereignty laws that have popped up around the world, such as the EU’s General Data Protection Regulation. Cloud providers must now see how their data is classified according to local laws, and secure them as different legal frameworks require, many of which demand localization. For this reason, “data sovereignty has a negative impact on globalization,” Ji said.
– Eliza Gritsi
|China voices: Tell-all paints firm as Theranos of autonomous vehicles|
This week features an anonymous employee playing whistleblower on his former self-driving car startup. This engineer writes that he initially was lured in by a charismatic founder who sold him a story of building a company to help the nation develop and fight back against American bullying. But eventually, he came to see his boss as nothing more than a scam artist.
Anonymous engineer, Focus on Cutting Edge Tech, 5/4/2019
I am an unmanned algorithmic engineer who just left an autonomous driving company last month and can be said to be "escaping."
During my time working at this company, I have witnessed too many dark corners of human nature and have seen autonomous driving become nothing but a tool for making money. Many engineers have not seen through this scam.
So I want to tell those who are still trapped just what kind of scam is this.
And once this scam gets bigger, it will cause a crisis in the entire industry.
The initial pitch—nationalism
“Make Cars for the Country”
I first got a degree in the US, then after graduation worked as an engineer in America. Although that job was stable, I always knew that once I found a suitable opportunity I’d head back home.
Then I came across “A.”
He used to be at a big American tech firm, and was a really friendly guy. He said that autonomous driving is the best opportunity for engineers to serve the country. I was really embarrassed to have trusted him later, but at the time I was all-in.
He said that autonomous driving is becoming a concentrated expression of national development and competition. However, he can’t bear to see United States bullying China. He doesn’t want to make money but just hopes to contribute to the country. Sounds pretty ambitious, right?
Playing the authorities
After moving back to China, the author found himself working with a team that all bought into the founder’s patriotic dream.
And this set of stories wasn’t only for us, but also the local and provincial governments that are eager to "score" autopilot.But the regional folks weren’t stupid; they wouldn’t hand out money just based on “making cars for the nation.”
So our engineers cooked something up.
Although driverless technology and implementation are not easy, it is not too difficult to make an impressive-looking prototype. As long as the car is on a fixed route on the closed road, it can give riders the experience of "disengaging from the steering wheel." If you let the officials try it, you can win over the local bureaucrats. Therefore, with A's national vehicle story and our technology demonstration, we were able to pry some support out of the local government.
A told us that the local government would give us 300 million yuan, but later we realized that this wasn’t true. Later, I found out that the local government isn’t all that foolish. We got some resources, like office space, land, and policy incentives, but as for real capital—nope.
However, this wasn’t the end of the line for A. The patriotic story got the engineers on board, and combined with the fake prototype, he was able to make Powerpoints and use his relationships to get support from the capital market.
The author goes on to describe fundraising: the investors were harder to trick than the employees and municipalities. The ones who really know tech could see through the tricks and A’s mixed reputation made it hard to raise money from famous funds.
Along came “B,” an old classmate of A who used to work in finance, knew nothing about tech, and bragged that Neil Shen (founder and head of Sequoia China) and Allen Zhu (founder of GSR Ventures) were his “little brothers.” “My one phone call can get us a billion or two!” But later the company announced a fundraising round that didn’t even have one reputable VC in the mix.
They later heard that seed money came from A and B’s hometown friends (tuhao), and that it wasn’t equity but a convertible bond. Even this bond was only given because the municipality stuck their necks out for the firm, and the tuhao figured that in the worst case they’d get a bailout—but little did they know even the municipality was increasingly skeptical.
The author then learned more about A’s background: he’d previously used a P2P firm as a cover for the same sort of government and convertible debt scheme.
Other local governments didn’t know what was going on, but they were too careful with their money to invest. But to the engineers, it all sounded very legit. Other types of people from real car companies joined the firm: SOE car company employees got duped relatively easily because they loved the patriotic story, but true automotive entrepreneurs or those with a background at foreign car firms saw through the scheme. Besides, the SOE employees really wanted to work with cool technology—at their old firms they never got to work with innovative tech.
‘We’ll arrange you a girlfriend’
Wages were often not paid on time, and often deducted for no reason. But A is really skilled at playing good cop/bad cop with HR. HR always finds some reason for deducting wages, not paying wages on time, and not raising salaries as promised.
So we went to ask A what was going on. He didn’t know what it was. It really didn’t work. He said that he wasn’t in the weeds of the specific business, but all in all should respect the work and decisions of his managers.
One night, A said that everyone had to come to work immediately. One employee said that their child was sick, and asked to take care of the child first. But A said no, everyone has to show up ASAP. But once everyone got to the office, there wasn’t any emergency, he just called on everyone for the sake of it. Everyone’s been talking about 996 lately, but we were doing more than 996.
If you can’t fulfill all his requests, he’ll dock your salary. This isn’t what normal management does, right?
A also really understands the psychology of these engineers, and knows how to exploit the best and worst in them. He knows that lots of engineers live simple lives, have low EQs, and have a hard time finding a girlfriend. A used mealtimes as an opportunity to brainwash you, saying that if you work really hard both money and girlfriends will come. To be honest, there are women in the company; some young, some have families. If they heard what A said, how would they feel?
The more we thought about it, the more suspicious we grew and wanted to give up our hopes of back pay and hope for the firm. But every time we tried to leave, A will try to talk his version of sense into us, saying that young people must have a long-term vision, that we are making cars for the country and completing a national mission. But if his talks didn’t stop us, he’d threaten to execute the non-compete. When we joined, we didn’t carefully read the contract, but when we were leaving we realized that lots of the benefits weren’t there, and all the equity-based compensation is up to A himself.
In the autonomous vehicle industry, everyone knows the future is bright, but the way that A is playing the game is like musical chairs: lots of people are going to lose big. When the music stops, it will be a big blow to both these engineers and the whole industry. Those diligent engineers and companies that are doing real things are going to get unfairly tarnished.
Anyway, I am already disheartened, I have escaped and never want to work on autonomous vehicles again. I’m afraid that I will meet someone like A again. I’m afraid to play another part in a scam. I don't want to be beaten like this without driving.
I chose to escape.
– Jordan Schneider, TechNode contributor
Platform instability. A compelling article tries to identify the reason why platforms often fail. (HBR) For the masses. Experts need to make the AI tools involved in art easier to use and simpler to understand, in a push to make it more democratized. (Artnome) Hype. Some studies have found Elon Musk’s claims about the safety of Tesla’s autopilot feature to be untrue. (TheInformation)
We're looking forward to telling you all about the latest tech developments next week. Till then,
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