China is experiencing an Artificial Intelligence (AI) boom, but Kai-Fu Lee, founder of Sinovation Venture and a strong advocate of the technology, sees some potential risks on the horizon.
“I think it’s tempting for every entrepreneur to package his or her company as an AI company, and it’s tempting for every venture capital to want to say that I am an AI investor. But AI investing is not for the novice. For people who try to get into early stage of AI without understanding the technology, they will lose their shirt. And I think there will be many bubbles that start to burst towards the end of this year,” he said.
“The start-ups that made up a story that isn’t fulfillable, for VCs to invest in because they don’t know better, so by the end of the year we’ll see some very successful cases pushing AI forward, but also even more bubbles that burst, companies that run out of money, become bankrupt, and that could cause the environment to cool for a while.”