On March 26th, 2019, Deloitte published pre-conference report for Boao Forum for Asia. The report summarized the Asia-Pacific’s general economic information, Belt and Road Initiative, and hot technology topics and investment-related focuses in China.
The reports discussed China’s venture capitals (VC) and private equities (PE)’ preference in 5G and artificial intelligence (AI). 5G technology is an integrated technology relied on many other technologies’ development and the driven forces under 5G technology for economics include cloud computation, artificial intelligence, computer vision (CV), etc.
Deloitte selected a few China-based and U.S.-based top investment institutes and analyzed their investment activities (approximately 200 cases) in the 5G-related area. It found that these VC and PE invested more in foundational technologies such as AI, big data, visual reality (VR). According to its investigation, investors prefer technology to application.
In the top 10 invested fields, 5 are foundational technology: AI, big data, visual technology, VR/AR, and cloud computation, which takes 55.4% of 157 activities. The rest investment activities happened in application and telecommunication areas. 5G technology brings chances to other technologies and vice versa.
Investment in these cutting-edge technology companies reinstates that the future is led by technology, at least believed by these investors. In Deloitte’s survey, 69.6% of survey participants thought that China’s economic growth drive is technology and innovation. As previously mentioned in EO’s AI-related investment heat, AI received approximately USD 32 billion investment funding in 2018.
The foundational technology is preferred by investors because it is universal and the core drive in many verticals or applications. AI and CV as two most-mentioned areas in China’s technological investments. Unicorns like SenseTime(商汤) and Yitu (依图) develop fast based on their AI technologies and help other companies to realize intelligentization while discovering application scenarios like healthcare, security, autonomous driving, and the fourth.
It is not clear how exactly new technology will change the world, but from the history of science and technology, the change has brought the world to a more efficient and more intelligent level. 5G’s development powers other technologies and some of them have been applied into practice, i.e. the remote neurosurgery supported by 5G. The logic behind investing foundational technology is like the investment put in R&D that may not always have outcomes, but if there is any, it is a breakthrough.