Hello,

I spoke earlier this year about artificial general intelligence - the idea that a machine could understand or learn any intellectual task that a human being could - and I’d like to return to it as this is moving from the abstract to the concrete much faster than I had thought.

Specifically, I’m talking about GPT-3.

GPT-3 stands for Generative Pre-trained Transformer 3. Developed by OpenAI, which was co-founded by Elon Musk and Sam Altman,

GPT-3 was pre-trained by crawling through trillions of words found across the internet and in books. Computation time cost US$4.6Mn. The upshot is one of the largest neural networks ever created; one which uses its training to generate its own text.

GPT-3 hasn’t been trained for a specific use-case or by right or wrong answers, which means it can be used for virtually anything- from writing an article to creating an advertisement.

If you’re interested in understanding GPT-3, I’d suggest reading the article published by OpenAI in July.

GPT-3 Applications

At the GPT-3 launch, OpenAI listed numerous examples of how the AI could be used. One was using GPT-3 to read a legal text and condense it into a paragraph which an 8-year-old could understand:

Since the launch, the AI community has found numerous further ways to exploit GPT-3. For example, a developer has shown how apps can be built using plain non-technical English instructions.

This use-case is potentially game-changing, because it means that anybody could program without knowing how to code.

Another example, in September, was GPT-3 being used to the write an entire article. The prompt was:

“GPT-3, please write a short op-ed of around 500 words. Keep the language simple and concise. Focus on why humans have nothing to fear from AI.”

The result was this article published in The Guardian, a British media outlet.

GPT-3 limitations

So, why hasn’t more been made of GPT-3 yet? First, GPT-3 is currently expensive to run. At the time of writing, one experiment, an app called Philosopher AI, has had to pause due the costs of GPT-3.

Secondly, GPT-3 results are still far from perfect: the AI is unable to properly perform reasoning or logic-based tasks, which means it is unable to write fact-based news articles.

Lastly, outside of OpenAI, we don’t yet know in details how GPT-3 AI has been trained; it’s a carefully guarded secret and there are no plans to make it open source. That means the code cannot be tweaked to suit a specific project.

All of these constraints will change over time, either because GPT-3 solves them or competitors do.

However it evolves, GPT-3 is a concrete and significant step towards Artificial General Intelligence: an AI without a clear purpose, that can receive instructions and come up with its own way of performing tasks in the way a human would.

China News

1. Spacecraft launched to gather samples of the moon

Background: Since 2004, China has launched 4 spacecrafts; the latest, Chang'e 4, which was launched in January 2019, achieved the first soft landing on the far side of the moon.

Latest: China has launched the Chang’e 5 space probe, aiming to collect samples from the lunar surface.

What it means: This is the first mission of its kind globally since 1976.

2. AI-driven microbiome trying to go global

Background: Established in late 2017, Xbiome is China’s first AI-based microbiome drug development company. Using AI and gut microbiome data, the company provides personalized gut healthcare solutions. Investors include Zhen Fund and Legend Capital.

Latest: Xbiome is raising a B+ round from investors including Primavera Capital and has submitted a new drug application for acute graft-versus-host disease to the FDA.

What it means: Factoring in this fundraise, Xbiome will have raised around US$200Mn in 3 years. If the FDA application is approved, Xbiome will be the first Asian start-up to have received FDA approval for fecal microbiota transplantation medicine.

3. JD pushes the boundaries of AI in e-commerce

Background: In 2012, e-commerce giant, JD, launched a Chatbot, providing basic guidance and Q&A services. In 2017, JD launched a smart customer service using AI to provide services more akin to human equivalents.

Latest: JD has launched a "high EQ" AI service, which can help users through livestreaming e-commerce, including being able to generate spoken and written content, suitable background music and an AI host who can help sell products.

What it means: Livestreaming e-commerce is booming in China and has been accelerated by the pandemic. By providing a comprehensive AI service, JD is enabling anyone to use livestreaming as a way to sell and is attempting to scale its way into the livestreaming market opportunity.

4. Second digital currency test

Background: China has been working on a digital currency since 2014. In October of this year, draft regulation was issued and the first digital yuan test was conducted in Shenzhen. The digital yuan has already been used in over 3 million transactions.

Latest: Suzhou will launch China’s second digital yuan test, aimed to test the digital currency's offline capabilities using near field communication.

What it means: China is on course to be the first major country to issue a sovereign digital currency.

South Korea News

1. One stop interior design platform growing fast

Background: Established in 2014, Bucketplace has developed a one-stop online shop for interior design products and services. Since Covid and the wish to incorporate an office environment into the home, demand for the company’s products has exploded.

Latest: The company has raised US$80Mn from investors including Bond Capital (known for its investments in Facebook, Twitter, Spotify and Snap). The valuation is 8 times higher than at the beginning of the year.

What it means: Covid has changed how Koreans think about their home living space. Secondly, foreign investors are starting to pick up Korean investments.

2. 5G demand slower than expected

Background: Korea planned to have 14Mn 5G users by the end of 2020.

Latest: As of this week, 5G demand is 60% of the government target, meaning the target is unachievable.

What it means: 5G adoption is slower than expected, in part because of the service fees. Beyond pricing, 5G’s speed is only 4 times faster than the previous generation rather than the advertised 20 times faster rate. Until the speed requirement is addressed, or functionality cannot be supported on a slower speed, we do not expect 5G to replace the previous generation.

3. Korea’s first AI semiconductor

Background: Globally, AI semiconductors are led by US companies such as NVIDIA, Intel, and Google.

Latest: Having worked with the government for 4 years, SK Telecom and Hynix have together released the country’s first AI semiconductor. Compared wth a GPU, the semiconductor has 1.5 times faster computing speed, is half the price with one fifth less electricity consumption.

What it means: The AI semiconductor market is expected to be US$44Bn by 2024. Korea is keen for market share.

Selected Fundraising Activities

Raised 45Mn RMB for its Strategic investment round.

Raised 10Mn RMB for its Angel round.

Raised 100Mn RMB for its C round from Haier Medical.

Raised an estimated 488Mn RMB for its Strategic investment round from Kingdee.

Raised 350Mn USD for its E round.

Selected IPO & M&A Events

Raised 2Bn RMB for its IPO round.

Raised 994Mn RMB for its IPO round.

Raised 884Mn RMB for its IPO round.

Raised 962Mn RMB for its IPO round.

Raised 415Mn RMB for its IPO round.

As ever, please feel free to reach out if you have any questions or comments.

Best,

Jordan