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Tencent's social network group president is betting on artificial intelligence

  • Tencent's senior executive vice president and social network group president Dowson Tong is bullish on A.I.
  • A.I. spending among tech giants in 2016 was between $20 billion to $30 billion, according to a McKinsey report
  • Other Chinese tech giants like Baidu, Alibaba and Didi Chuxing also working on A.I. services

Artificial intelligence may still be in its nascent stage, but the technology has a bright future ahead as companies big and small continue to invest in it and develop their expertise, according to the a senior executive at Chinese tech giant Tencent.

In an interview with CNBC, Dowson Tong, senior executive vice president and social network group president at Tencent, said he was very bullish about A.I. and a big proponent of offering A.I. as a service.

"I am very optimistic (and) I am very bullish about the future of A.I. I think by having all these players, big and small, and each with their own expertise, we're going to see the whole industry prosper," Tong said.

Tong oversees business operation for Tencent's social networking platform QQ and Qzone, the music entertainment group and cloud computing.

A.I. encompasses a number of different technologies, including robotics and autonomous vehicles, machine learning and natural language processing, and deep learning. For example, Microsoft has a team of researchers in India that are working on ways to make a virtual assistants effectively bilingual.

Tong said beyond the recognizable tech names in China — Baidu, Alibaba and Tencent — there are opportunities for small and medium-sized businesses in China. Some such businesses are "very active, pushing the envelope of the technology (and) coming up with new services everyday as well."

Last month, Tencent opened a new A.I. lab in Seattle and appointed a former Microsoft scientist to oversee operations and drive the company's research on speech recognition and natural language processing.

Among other big names in China, Baidu already has an A.I. lab set up in Silicon Valley. Meanwhile, Alibaba recently expanded its big data and A.I. cloud offerings in Europe — the product handles huge amounts of data that lets organizations make real-time predictions. Uber rival Didi Chuxing in March announced an R&D center in Mountain View, California, to look into A.I. in security and intelligent driving technologies.

Experts agree that A.I. is set to unleash a new wave of digital disruption as adoption across various industries begins to pick up.

Tencent's new headquarters in Shenzhen, China, pictured in August 2016
Bloomberg | Getty Images
Tencent's new headquarters in Shenzhen, China, pictured in August 2016

A recent report from McKinsey & Company found that, in 2016, tech giants like Google, Baidu and others spent between $20 billion to $30 billion on A.I. — about 90 percent of the investments were spent on research and development and 10 percent on A.I.-related acquisitions. The report added that venture capital and private equity financing, grants and seed investments also grew to a combined total of $6 billion to $9 billion.

But the report said adoption of A.I. among companies remained low in 2017: Only about 20 percent of firms surveyed by McKinsey that are aware of A.I. said they were adopters, and 41 percent said they were uncertain about the benefits of A.I. Indeed, high adoption came mostly from the tech, automotive and financial services sectors while education, health care and travel saw the lowest adoption rate.

A.I. technology providers still need to convince companies of ways they can create value across the business using artificial intelligence, according to the report. For example, A.I. can provide a better gauge of customer preferences that can allow better targeted sales.

"When we look at A.I., there are different factors (to consider)," said Tong. "We need a scenario where we know exactly what kind of problems you need to solve. We need data to help train the system, to serve or to solve the problems better."

He added, "Today I think we're not only providing A.I. capability, we are also combining the data that we've (collected) from different services and trying to provide intelligent data services that will help our customers to better meet their needs."