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Showing posts with label artificial intelligence (AI). Show all posts
Showing posts with label artificial intelligence (AI). Show all posts

Friday, September 6, 2024

Use AI to counter AI': Experts call for upgraded tech, system to counter AI-powered cybercrimes amid deepfake scandal

 

AI technologies Photo: VCG

Experts call for attention and countermeasures to prevent cybercriminals from using new technologies such as artificial intelligence (AI) powered deepfake technology amid growing concerns over the issue around the world. 


Numerous chat rooms suspected of creating and distributing deepfake pornographic material with doctored photos of ordinary women and female service members have been reportedly discovered on messaging app Telegram recently, with many of the victims and perpetrators known to be teenagers, The Korea Times reported last week.

Telegram had removed certain deepfake pornographic content on its platform and apologized for its response to digital sex crimes, the Yonhap News Agency reported Tuesday citing South Korea's media regulator.

The issue has raised outrage among South Korean netizens, which soon spread to its Chinese neighbors after some South Korean netizen brought it to Chinese social media platforms.

But it is just the tip of the iceberg of the Telegram's deepfake porn scandal. On August 28, a court in Paris filed a charge against Pavel Durov, 39-year-old Russian billionaire and founder of Telegram, for being complicit in the spread of images of child sexual abuse, as well as a litany of other alleged violations on the Telegram messaging app.

While Durov responded mockingly to the charge by changing his Twitter handle to Porn King, global scientists, governments and regulators view the issue as an urgent alert for them to strengthen measures to prevent cybercrimes powered by new technologies.

Deepfake refers to a kind of technology that uses a form of AI technology called deep learning to make images of fake events, hence the name deepfake.

The core principle of deepfake technology is to animate 2D photos using specific image recognition algorithms or to implant a person's face from a photo into a dynamic video, The Beijing News reported citing an industry observer named Ding Jiancong.

Recently, voice synthesis has also gradually been incorporated into the concept of deepfake. With the gradual maturity of AI large model technology in recent years, some AI image generation models, while pursuing greater realism, have inadvertently become accomplices in AI face-swapping or AI nudity, Ding said.

For instance, the well-known large model Stable Diffusion was developed with a one-click nudity feature, which once became widespread. Although the model later modified its related functions to curb such behavior, the open-source nature of the technology has already opened a "Pandora's box," making it difficult to close again, Ding warned.

Apart from the new deepfake crime, there are also two other types of risks brought about by new technologies, Xiao Xinguang, chief software architect from Chinese cybersecurity company Antiy, told the Global Times.

First, new technologies will drive the escalation of traditional threats and risks. For example, in cyberattacks aimed at stealing information or targeted ransomware, AI technologies can significantly assist throughout the entire attack process, including enhancing the efficiency of discovering attack vectors and automating attack activities, according to Xiao.

Second, the infrastructure of new technologies will become targets of exploitation. Large model platforms are becoming new hubs for information assets, and the entry points for large model applications are also becoming new exposed surfaces that are vulnerable for attacks, Xiao said.

The expert believed that with the advancement of AI technology, it is unrealistic to stop people from using AI to generate fake videos or images. Instead, it will be more effective to have strict regulations over the dissemination of technology.

Xiao was echoed by founder and chairman of 360 Security Technology Zhou Hongyi. When talking about the threats brought about by AI technologies at a forum held in North China's Tianjin municipality on Wednesday, Zhou said that "we must use AI to counter AI."

"AI technology is profoundly affecting various industries, bringing opportunities for the development of new productive forces, but also bringing many new security challenges. It is necessary to reshape security with AI and to create security large models and reshape security products with specialized large model methodologies, which will reform the security industry," Zhou said.

Strict regulations and law are also necessary. AI technology platforms should have reviews for the content uploaded and generated, and users should be required to register with their real names. There should also be severe crackdowns on tools or websites that support illegal activities, experts noted.

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Thursday, December 7, 2023

Beware of AI-driven crimes

 


KUALA LUMPUR: When one speaks about Artificial Intelligence (AI), the first thing that comes to mind might be the T-800 terminator that was sent from the future to eliminate John Connor from the timeline in the 1984 movie The Terminator.

Since then, other movies and series have also depicted the potential use of AI in analysing human behaviour in a bid to predict and stop crimes from occurring.

The year is now 2023, however, and with the latest developments in technology, the threat of AI being used for more sinister reasons is already at our doorstep.

ALSO READ : Police gearing up to combat AI-based crime

Deepfakes, voice spoofing and financial market manipulation could all become the future of crime when syndicates start using AI in their operations.

Recently, a deepfake video of a Malaysian leader promoting a get-rich-quick scheme has been circulating on social media.

Federal Commercial Crime Investigation Department (CCID) director Comm Datuk Seri Ramli Mohamed Yoosuf said the video is a prime example of how AI could be misused.

“The promises made in that video are too good to be true, which means it is most definitely an investment scam and there is no way that a political leader would promote such a thing. It is absurd.

“While the video here is about gaining quick wealth, there are other aspects that can similarly be manipulated, especially in politics and social engineering.

ALSO READ : HK cops encounter fraud syndicate that used AI-generated images

“AI is already here and because of this, it is important not only for the police but also the public to be aware of the potential risks AI could pose in the near future.

“Today’s world has shown how AI is increasingly taking over tasks and roles previously done by humans.

“While some of us might know about the advancements in this field, others might still be unaware of the potential risks that follow the swift advancements made in AI,” he told The Star recently.

Comm Ramli said that based on current predictions, AI could be used by syndicates in their illicit activities against Malaysians by as early as the middle of 2024.

“Once this occurs, everything in the financial sector, every service that has gone online, could face the risk of being infiltrated.

“AI could be used in the creation of algorithms that are capable of hacking computer systems, while other algorithms could also be used to analyse data and manipulate results which gives it the potential to be used to influence or cripple financial markets,” he said.

He added that AI could also be used in advanced video and audio manipulation that can lead to potential identity theft and the creation of deepfake videos.

“In this scenario, the possibilities are limitless as crime syndicates could use deepfake images, videos or voices to dupe people and organisations.

“They could use such deepfakes in bogus kidnap-for-ransom cases, where they trick families into believing they have kidnapped a loved one, while some could even use it to create lewd or pornographic images of victims that could in turn be used to blackmail them,” he said.

He also added that through the creation of convincing false identities through photographs or videos, syndicates could even pose as a person to ask for money or even trick victims into thinking that one of their family members is in danger.

Comm Ramli explained that deepfakes could even be used in spreading propaganda and fake news which could lead to public anxiety.

“There are indicators that AI could be used to perpetrate economic crimes.

“AI scientists are also talking about quantum computing that will enable decryption, which in turn could render all binary encryption technology that is currently in place useless.

“We have been keeping up with the latest news on the use of AI in crime in the region and are aware of an instance in Hong Kong earlier this year where a syndicate allegedly used AI deepfake technology in the application of loans,” he said.

Media in Hong Kong reported on Aug 25 that police there uncovered a syndicate which used eight stolen identity cards to make 90 loan applications and 54 bank account registrations.

In what was considered the first case of its kind there, deepfake methods were used at least 20 times to imitate those pictured in the identity cards and trick facial recognition programmes.

Six people were arrested in connection with the case.

Comm Ramli said that while there have not been any reported commercial cases involving the direct use of AI so far, that does not mean that it will not become a problem in future.

“This is why the public needs to be prepared and be in the know of such things.

“The best weapons the public will have against AI are knowledge and awareness.

“If the public in general are aware of how AI can be used, they will be extra cautious and not be easily duped by syndicates employing such tactics,” he said.

It is important to note that conventional online scams such as love scams, parcel scams and Macau scams are committed by real-life people without the use of AI.

In such scams, a person is directly involved in posing as a law enforcement officer, courier service provider or even a potential lover either through phone call, email or via social media.

Thursday, September 5, 2019

AI Superpowers: China, Silicon Valley, and the New World Order; Singapore tries its own path in clash

THE NEW YORK TIMES , USA TODAY , AND WALL STREET JOURNAL BESTSELLER

Dr. Kai-Fu Lee—one of the world’s most respected experts on AI and China—reveals that China has suddenly caught up to the US at an astonishingly rapid and unexpected pace.  


In AI Superpowers, Kai-fu Lee argues powerfully that because of these unprecedented developments in AI, dramatic changes will be happening much sooner than many of us expected. Indeed, as the US-Sino AI competition begins to heat up, Lee urges the US and China to both accept and to embrace the great responsibilities that come with significant technological power. Most experts already say that AI will have a devastating impact on blue-collar jobs. But Lee predicts that Chinese and American AI will have a strong impact on white-collar jobs as well. Is universal basic income the solution? In Lee’s opinion, probably not.  But he provides  a clear description of which jobs will be affected and how soon, which jobs can be enhanced with AI, and most importantly, how we can provide solutions to some of the most profound changes in human history that are coming soon.
 
Kai-Fu Lee Discusses 'AI Superpowers' in San Francisco
 
https://youtu.be/XIs6LB3b2Yo

KAI FU LEE: AI SUPERPOWERS

https://youtu.be/clbSkL3BiRg

Kai-Fu Lee | Full Address & Q&A | Oxford Union

https://youtu.be/8wOqP6fZuto

AI and You: Interview with Kai-Fu Lee

https://youtu.be/d6GrucLLzEw

Chinese tech exec Kai fu Lee on the future of AI

https://youtu.be/PJ24KLVJzkk

https://youtu.be/gsFFipyt6Ns

Singapore tries to find its own path in clash of AI superpowers ...


SINGAPORE (Sept 4): The escalating trade war between the U.S. and China is chilling global collaboration that has long driven breakthroughs in technology and science. The tiny island nation of Singapore is trying to carve out an independent role in the clash and demonstrate the advantages of cooperation in fields like artificial intelligence.

It’s a difficult balancing act. The country, with cordial ties to the two superpowers, is fighting against nationalistic forces on both sides. Artificial intelligence is becoming something of a test case for how independent countries will participate in emerging technologies.

China and the U.S. have dominated AI development, raising concerns that other countries will lose out on its benefits and have no voice in devising regulations. Yet Singapore’s government is investing S$500 million (US$360 million) on AI and other digital technologies through 2020 and has attracted Chinese and American companies to the country with policies that support AI research. Singapore’s Communications and Information Minister S. Iswaran jumped into the debate this year, proposing a framework for the ethical use of AI at the World Economic Forum in Davos.

“Singapore has an important role to play,” said Lawrence Loh, an associate professor at NUS Business School. “We will never be able to match the technological prowess of the U.S. and China, but there are certain areas where Singapore can take leadership, like using its position to get people to work together.”

Iswaran will elaborate on Singapore’s vision at Bloomberg’s "Sooner Than You Think" technology conference on Thursday. He will kick off an event that will feature speakers from Microsoft Corp, International Business Machines Corp, Temasek Holdings Pte, China AI pioneer SenseTime Group Ltd, as well as Southeast Asia’s leading tech startups Grab Holdings Inc and Gojek.

Singapore has long positioned itself as neutral ground. It’s already home to the Singapore International Arbitration Centre and the Singapore International Commercial Court, forums for international dispute resolution. Prime Minister Lee Hsien Loong said in his annual policy speech last month that Singapore will maintain its neutral position and not take sides between the U.S. and China.

The affluent city-state of 5.6 million is not leaving anything to chance, when it comes to future-proofing its economy.

It has set up a dedicated inter-agency task force to study all aspects of AI. And in recent weeks, it granted an AI patent to Alibaba Group Holding Ltd within just three months — a record pace that underlines the country’s determination to move full speed ahead.

“Singapore plays a pivotal role as it facilitates our entry into markets of our interest rapidly,” Benjamin Bai, vice president and chief IP counsel of Alibaba-affiliate Ant Financial, said in a statement released by the Intellectual Property Office of Singapore.

Still, there is skepticism about the country’s prospects. Singapore, like several other countries, is making a genuine push to develop its AI ecosystem, but its effort is tiny compared with the giants, said Kai-Fu Lee, founder of the venture firm Sinovation Ventures.

“Unless Singapore can unify ASEAN and become the undisputed AI leader and supplier in ASEAN countries, its efforts will not lead to a fraction of the U.S. or China,” Lee said in an email.

The government has been stepping up efforts to lure companies working in AI.

Alibaba has opened its first joint research institute outside China in Singapore in collaboration with Nanyang Technological University, while Salesforce.com Inc opened its first AI research centre outside of its research and development hub of Palo Alto, California — adding to a growing list of new research centers including the Singapore Management University’s Centre for AI and Data Governance.

GIC Pte, Singapore’s sovereign wealth fund, has invested in Canadian AI companies, including Montreal-based Element AI Inc, which has set up an office in the city-state after raising US$102 million in new funding in 2017.

“It’s very hard to see how things will pan out with the trade war,” NUS Business School’s Loh said. “Singapore’s focus should be technology, not geopolitics.”  

Source link


Related:

Intellectual Property and 'Made In China 2025

https://youtu.be/vFA1Bd5e8AU

How does China protect intellectual property rights?



https://youtu.be/H3fzMtHqj3M




R&D crucial to developing new technology

Huawei's story shows that research and development is crucial to developing new technology. As China takes the fast lane of technological development, we would like to see more Chinese high-tech enterprises follow the footsteps of Huawei to create more technology and tangible results, which will benefit not only China but also the whole world.

Related posts:

Trump US-China Trade War became Tech War



Trump-Washington disorder drags world down, lost humanity's fight for survival against climate change

AI Superpowers: China, Silicon Valley, and the New World Order; Singapore tries its own path in clash

THE NEW YORK TIMES, USA TODAY, AND WALL STREET JOURNAL BESTSELLER

Dr. Kai-Fu Lee—one of the world’s most respected experts on AI and China—reveals that China has suddenly caught up to the US at an astonishingly rapid and unexpected pace.  


In AI Superpowers, Kai-fu Lee argues powerfully that because of these unprecedented developments in AI, dramatic changes will be happening much sooner than many of us expected. Indeed, as the US-Sino AI competition begins to heat up, Lee urges the US and China to both accept and to embrace the great responsibilities that come with significant technological power. Most experts already say that AI will have a devastating impact on blue-collar jobs. But Lee predicts that Chinese and American AI will have a strong impact on white-collar jobs as well. Is universal basic income the solution? In Lee’s opinion, probably not.  But he provides  a clear description of which jobs will be affected and how soon, which jobs can be enhanced with AI, and most importantly, how we can provide solutions to some of the most profound changes in human history that are coming soon.
 
Kai-Fu Lee Discusses 'AI Superpowers' in San Francisco
 
https://youtu.be/XIs6LB3b2Yo

KAI FU LEE: AI SUPERPOWERS

https://youtu.be/clbSkL3BiRg

Kai-Fu Lee | Full Address & Q&A | Oxford Union

https://youtu.be/8wOqP6fZuto

AI and You: Interview with Kai-Fu Lee

https://youtu.be/d6GrucLLzEw

Chinese tech exec Kai fu Lee on the future of AI

https://youtu.be/PJ24KLVJzkk

https://youtu.be/gsFFipyt6Ns

Singapore tries to find its own path in clash of AI superpowers ...


SINGAPORE (Sept 4): The escalating trade war between the U.S. and China is chilling global collaboration that has long driven breakthroughs in technology and science. The tiny island nation of Singapore is trying to carve out an independent role in the clash and demonstrate the advantages of cooperation in fields like artificial intelligence.

It’s a difficult balancing act. The country, with cordial ties to the two superpowers, is fighting against nationalistic forces on both sides. Artificial intelligence is becoming something of a test case for how independent countries will participate in emerging technologies.

China and the U.S. have dominated AI development, raising concerns that other countries will lose out on its benefits and have no voice in devising regulations. Yet Singapore’s government is investing S$500 million (US$360 million) on AI and other digital technologies through 2020 and has attracted Chinese and American companies to the country with policies that support AI research. Singapore’s Communications and Information Minister S. Iswaran jumped into the debate this year, proposing a framework for the ethical use of AI at the World Economic Forum in Davos.

“Singapore has an important role to play,” said Lawrence Loh, an associate professor at NUS Business School. “We will never be able to match the technological prowess of the U.S. and China, but there are certain areas where Singapore can take leadership, like using its position to get people to work together.”

Iswaran will elaborate on Singapore’s vision at Bloomberg’s "Sooner Than You Think" technology conference on Thursday. He will kick off an event that will feature speakers from Microsoft Corp, International Business Machines Corp, Temasek Holdings Pte, China AI pioneer SenseTime Group Ltd, as well as Southeast Asia’s leading tech startups Grab Holdings Inc and Gojek.

Singapore has long positioned itself as neutral ground. It’s already home to the Singapore International Arbitration Centre and the Singapore International Commercial Court, forums for international dispute resolution. Prime Minister Lee Hsien Loong said in his annual policy speech last month that Singapore will maintain its neutral position and not take sides between the U.S. and China.

The affluent city-state of 5.6 million is not leaving anything to chance, when it comes to future-proofing its economy.

It has set up a dedicated inter-agency task force to study all aspects of AI. And in recent weeks, it granted an AI patent to Alibaba Group Holding Ltd within just three months — a record pace that underlines the country’s determination to move full speed ahead.

“Singapore plays a pivotal role as it facilitates our entry into markets of our interest rapidly,” Benjamin Bai, vice president and chief IP counsel of Alibaba-affiliate Ant Financial, said in a statement released by the Intellectual Property Office of Singapore.

Still, there is skepticism about the country’s prospects. Singapore, like several other countries, is making a genuine push to develop its AI ecosystem, but its effort is tiny compared with the giants, said Kai-Fu Lee, founder of the venture firm Sinovation Ventures.

“Unless Singapore can unify ASEAN and become the undisputed AI leader and supplier in ASEAN countries, its efforts will not lead to a fraction of the U.S. or China,” Lee said in an email.

The government has been stepping up efforts to lure companies working in AI.

Alibaba has opened its first joint research institute outside China in Singapore in collaboration with Nanyang Technological University, while Salesforce.com Inc opened its first AI research centre outside of its research and development hub of Palo Alto, California — adding to a growing list of new research centers including the Singapore Management University’s Centre for AI and Data Governance.

GIC Pte, Singapore’s sovereign wealth fund, has invested in Canadian AI companies, including Montreal-based Element AI Inc, which has set up an office in the city-state after raising US$102 million in new funding in 2017.

“It’s very hard to see how things will pan out with the trade war,” NUS Business School’s Loh said. “Singapore’s focus should be technology, not geopolitics.”  

Source link


Related:

Zero-sum mind-set won't inspire US AI development

Rational voices have been calling for China-US cooperation in AI, an area where they have overlapping interests. Instead of viewing AI with a zero-sum mind-set, the US should embrace healthy competition with China for the good of the world.



Intellectual Property and 'Made In China 2025

https://youtu.be/vFA1Bd5e8AU

How does China protect intellectual property rights?



https://youtu.be/H3fzMtHqj3M




R&D crucial to developing new technology

Huawei's story shows that research and development is crucial to developing new technology. As China takes the fast lane of technological development, we would like to see more Chinese high-tech enterprises follow the footsteps of Huawei to create more technology and tangible results, which will benefit not only China but also the whole world.

Related posts:

Trump US-China Trade War became Tech War



Trump-Washington disorder drags world down, lost humanity's fight for survival against climate change

Tuesday, March 26, 2019

Bytedance, World's Most Valuable Startup Is Home to a Complex Fortune

US$13bil man: Zhang is the youngest self-made billionaire in Asia on the Bloomberg index, which tracks the world’s 500 richest people. He is worth US$13bil. — Bloomberg
https://youtu.be/VKD3jt0KvhQ

  • Ownership structure used by Zhang Yiming is popular in tech
  • Chinese authorities will soon allow so-called VIEs to list
The 35-year-old founder of Bytedance Ltd. is worth about $13 billion, according to the Bloomberg Billionaires Index, making him China’s 9th-richest person and one of the fastest in modern times to amass a mega-fortune.

The business, founded in 2012, has more than 1 billion active monthly users across eight mobile apps, including a news aggregator powered by artificial intelligence and a video-sharing platform.

Zhang is the youngest self-made billionaire in Asia on the Bloomberg index, which tracks the world’s 500 richest people. His rapid wealth accumulation is a sign that China hasn’t lost its knack for creating mega-rich company founders despite a slowing economy.

His rapid wealth accumulation -- he’s now the world’s 98th-richest person -- is a sign that China hasn’t lost its knack for creating mega-rich company founders despite a slowing economy. It also helps explain why authorities seem to be taking a more tolerant stance toward a corporate structure favored by the country’s technology tycoons, most of whom have chosen to list their businesses overseas.

Zhang’s fortune is harder to calculate than the founders of Baidu Inc. and Tencent Holdings Ltd. in part because his company isn’t yet public. It’s also difficult because Bytedance is structured in the same way as the two tech behemoths -- a complicated ownership system known as a variable interest entity (VIE).

Of the 44 Chinese tycoons on Bloomberg’s wealth index, eight are tech moguls with VIEs listed outside China. The billionaires’ combined net worth exceeded $150 billion as of March 21, and their stakes weren’t publicly known until the companies filed with regulators ahead of going public in New York or Hong Kong.

VIEs have never been formally endorsed by the Chinese government. But in an acknowledgment of their importance, officials will soon permit VIEs to go public in the country, allowing them to list on a new technology-focused exchange set to launch in coming months.

Complex Structure

Bytedance is, for now, a closely held VIE with a complex structure that involves layers of holding companies.

Its main business, Jinri Toutiao, is ultimately owned by Zhang and Bytedance Senior Vice President Zhang Lidong through a Beijing-registered holding firm, according to China’s National Enterprise Credit Information Publicity System.

Zhang pledged his 98.8 percent stake to another Beijing company, which in turn is owned by a Hong Kong-registered firm. That entity, where Zhang is a director, is owned by a company registered in the Cayman Islands. The principals won’t be disclosed unless there’s an IPO prospectus.

The Bloomberg Billionaires Index calculated Zhang’s net worth by pegging his stake at 65 percent and using the company’s valuation of $20 billion, a figure provided in 2017 by people with knowledge of the matter. The analysis assumes his stake has been diluted through funding rounds.

Bytedance is said to have secured a $75 billion valuation in late 2018, making it the world’s most valuable startup -- though the figure isn’t used in the net worth calculation because the details haven’t been confirmed.

Yin Ai, a Bytedance spokeswoman, declined to comment on Zhang’s wealth or the ownership structure.

Zhang uses a VIE because Chinese regulations limit foreign investment across more than 30 sectors including the internet, telecommunications and education. The VIE structure -- which allows offshore companies to control domestic Chinese businesses through contractual agreements -- circumvents the rules and allows, for example, Baidu’s holding company to be based offshore (and list in the U.S.) while still being a dominant force in China.

Internet giant Sina Corp. pioneered the VIE model so that it could transfer income from onshore operating businesses to an offshore holding company, an arrangement that meant the Cayman Islands entity could list on the Nasdaq Stock Market in 2000.

There are risks to the structure for foreign investors, said Donald Clarke, a specialist in Chinese law at George Washington University.

“A contract entered into for an unlawful purpose is invalid under Chinese law,” he said. “Any time the government wants to pull the plug, it can.”

Still, that hasn’t stopped more than 100 companies using VIEs in offshore IPOs, according to research by Zhou Fang, a Beijing-based partner at law firm JunHe LLP, who predicts that more companies will follow.

That growth helps explain why authorities are slowly embracing VIEs. Earlier this month, China enacted a foreign-investment law that allayed investor concerns about the future of such companies, while unicorn VIEs will be able to list on the new exchange in Shanghai, known as the Tech Board.

“To some extent, it shows the government easing concerns over VIEs -- but they still care about who’s the ultimate controller of the company,” said Zhang Biwang, a partner at Allbright Law Offices. As long as the controller of the company remains a Chinese citizen, “the government won’t shut their eyes and ignore reality to make the companies give up VIEs.”

ByBloomberg

Read more: 
China tech firms, seeking passion and energy,
promote younger staff
 https://www.reuters.com/article/us-china-tech-ageism/china-tech-firms-seeking-passion-and-energy-promote-younger-staff-idUSKCN1R60PS

Related posts:

Unknown Chinese startup creates the world's most valuable Bytedance

Bytedance: The complex fortune growing

Bytedance, World's Most Valuable Startup Is Home to a Complex Fortune

US$13bil man: Zhang is the youngest self-made billionaire in Asia on the Bloomberg index, which tracks the world’s 500 richest people. He is worth US$13bil. — Bloomberg
https://youtu.be/VKD3jt0KvhQ
  • Ownership structure used by Zhang Yiming is popular in tech
  • Chinese authorities will soon allow so-called VIEs to list
The 35-year-old founder of Bytedance Ltd. is worth about $13 billion, according to the Bloomberg Billionaires Index, making him China’s 9th-richest person and one of the fastest in modern times to amass a mega-fortune.

The business, founded in 2012, has more than 1 billion active monthly users across eight mobile apps, including a news aggregator powered by artificial intelligence and a video-sharing platform.

Zhang is the youngest self-made billionaire in Asia on the Bloomberg index, which tracks the world’s 500 richest people. His rapid wealth accumulation is a sign that China hasn’t lost its knack for creating mega-rich company founders despite a slowing economy.

His rapid wealth accumulation -- he’s now the world’s 98th-richest person -- is a sign that China hasn’t lost its knack for creating mega-rich company founders despite a slowing economy. It also helps explain why authorities seem to be taking a more tolerant stance toward a corporate structure favored by the country’s technology tycoons, most of whom have chosen to list their businesses overseas.

Zhang’s fortune is harder to calculate than the founders of Baidu Inc. and Tencent Holdings Ltd. in part because his company isn’t yet public. It’s also difficult because Bytedance is structured in the same way as the two tech behemoths -- a complicated ownership system known as a variable interest entity (VIE).

Of the 44 Chinese tycoons on Bloomberg’s wealth index, eight are tech moguls with VIEs listed outside China. The billionaires’ combined net worth exceeded $150 billion as of March 21, and their stakes weren’t publicly known until the companies filed with regulators ahead of going public in New York or Hong Kong.

VIEs have never been formally endorsed by the Chinese government. But in an acknowledgment of their importance, officials will soon permit VIEs to go public in the country, allowing them to list on a new technology-focused exchange set to launch in coming months.

Complex Structure

Bytedance is, for now, a closely held VIE with a complex structure that involves layers of holding companies.

Its main business, Jinri Toutiao, is ultimately owned by Zhang and Bytedance Senior Vice President Zhang Lidong through a Beijing-registered holding firm, according to China’s National Enterprise Credit Information Publicity System.

Zhang pledged his 98.8 percent stake to another Beijing company, which in turn is owned by a Hong Kong-registered firm. That entity, where Zhang is a director, is owned by a company registered in the Cayman Islands. The principals won’t be disclosed unless there’s an IPO prospectus.

The Bloomberg Billionaires Index calculated Zhang’s net worth by pegging his stake at 65 percent and using the company’s valuation of $20 billion, a figure provided in 2017 by people with knowledge of the matter. The analysis assumes his stake has been diluted through funding rounds.

Bytedance is said to have secured a $75 billion valuation in late 2018, making it the world’s most valuable startup -- though the figure isn’t used in the net worth calculation because the details haven’t been confirmed.

Yin Ai, a Bytedance spokeswoman, declined to comment on Zhang’s wealth or the ownership structure.

Zhang uses a VIE because Chinese regulations limit foreign investment across more than 30 sectors including the internet, telecommunications and education. The VIE structure -- which allows offshore companies to control domestic Chinese businesses through contractual agreements -- circumvents the rules and allows, for example, Baidu’s holding company to be based offshore (and list in the U.S.) while still being a dominant force in China.

Internet giant Sina Corp. pioneered the VIE model so that it could transfer income from onshore operating businesses to an offshore holding company, an arrangement that meant the Cayman Islands entity could list on the Nasdaq Stock Market in 2000.

There are risks to the structure for foreign investors, said Donald Clarke, a specialist in Chinese law at George Washington University.

“A contract entered into for an unlawful purpose is invalid under Chinese law,” he said. “Any time the government wants to pull the plug, it can.”

Still, that hasn’t stopped more than 100 companies using VIEs in offshore IPOs, according to research by Zhou Fang, a Beijing-based partner at law firm JunHe LLP, who predicts that more companies will follow.

That growth helps explain why authorities are slowly embracing VIEs. Earlier this month, China enacted a foreign-investment law that allayed investor concerns about the future of such companies, while unicorn VIEs will be able to list on the new exchange in Shanghai, known as the Tech Board.

“To some extent, it shows the government easing concerns over VIEs -- but they still care about who’s the ultimate controller of the company,” said Zhang Biwang, a partner at Allbright Law Offices. As long as the controller of the company remains a Chinese citizen, “the government won’t shut their eyes and ignore reality to make the companies give up VIEs.”

ByBloomberg

Read more: 
China tech firms, seeking passion and energy,
promote younger staff
 https://www.reuters.com/article/us-china-tech-ageism/china-tech-firms-seeking-passion-and-energy-promote-younger-staff-idUSKCN1R60PS


The Insanely Popular Chinese News App That You've Never Heard Of ...

 

The rise of Toutiao | The rise of Toutiao  

 

 Chinese news aggregation app called Toutiao (meaning “headlines”). 

 

 TopBuzz News: Breaking, Local & More - Apps on Google Play

https://youtu.be/OelhULVNQnA



Related posts:

Unknown Chinese startup creates the world's most valuable Bytedance

Bytedance: The complex fortune growing

Friday, February 15, 2019

Mega trends EAC must address


THE government is to be congratulated for establishing the new Economic Action Council that will give a better sense of direction and priorities for the nation to overcome the short-term economic challenges, such as rising cost of living, cost of doing business, restoring investor confidence and promoting sustainable economic recovery.

The Council should move with a sense of urgency. Its composition is balanced with a cross-section of representation, including from the orang asli community and consumer associations, which is praiseworthy as it does not just represent business interests. The presence of distinguished economists is also reassuring.

But I propose that the EAC also develops a longer term National Economic Strategy. To move forward, we need to identify the key mega trends that will impact on the nation in the next five to 10 years and then develop a comprehensive and holistic national strategy to address them.

I have identified here 10 strategic shifts or mega trends that need to be addressed.

1. On the international scene, we see a shift from geo-politics to geo-economics, requiring nations to adopt a geo-strategic response. This can be seen from Brexit and the US-China trade war. Geo-economics, including the control over economic assets such as oil and gas, will have a greater impact on international diplomacy. Increasingly, we will see economic and trade diplomacy becoming more important than political diplomacy to maintain global peace, stability and prosperity. We need to be able to step up to this level to analyse and strategise our response to geo-economic and geo-strategic challenges.

2. We also see a shift in the global centre of gravity from West to East with the rise of China and re-emergence of Japan as well as the growth of India and Korea. We need to identify a strategy to succeed in enlarging our presence in these markets and create new opportunities for our entrepreneurs and SMEs in China and Japan.

3. The world is also witnessing a rapid technological shift towards digital disruption and the Fourth Industrial Revolution with growing interest and applications in artificial intelligence, robotics and the Internet of Things. Big Data can be a strategic competitive advantage. The impact of drones and driverless vehicles will make a big impact on society. What is our national strategy to deal with these new technological advances? Hopefully, the EAC will also develop a strategic game plan to deal with these challenges and opportunities.

4. We also see an eco-sustainability shift with growing concern over climate change. This will drive demand for green technology and clean energy. We have a dynamic Energy, Technology, Science, Climate Change and Environment Minister. More must respond to support this ministry and its institutions. We need to embrace clean energy faster and more comprehensively.

5. Demographic shift will lead to an ageing society and a hollowing out of the demographic middle where we will have more aged elderly and younger cohorts below 30 but fewer of the middle-aged. It has been estimated that 20% of our population will be above 60 by 2040. Hence, we need new strategies and action plans to deal with the changing demographics.

6. Consumer shift will see the rise of e-commerce as we move from bricks to clicks. The rise of online business and e-commerce will not only impact on retail business but also on traditional banking, education and healthcare with the risk of fintech (financial technology), online learning and distance education, and telemedicine (pic). We need to embrace and adapt to these trends.

7. Globally, we also see a political shift from liberalism to the emergence of the right. The rightward shift led to the election of Donald Trump as president of the United States and is also partly the cause of Brexit. Is this era the end of liberalism? What can we do to bring people back to the centre? This trend has also led to a consolidation of the Malay right-wing with the strengthening ties between Umno and PAS. While the immediate focus of the EAC is economic, it also needs a strategy to deal with this phenomenon as it will impact on race relations and religious harmony, which are so essential for peace and stability to facilitate business and economic growth.

8. A shift in wealth and income has caused growing inequalities. The income gap between the highest earning population and the bottom 20% has grown. The income gap and inequalities can destabilise peace and stability. New thinking and new strategies need to be adopted to overcome the growing inequalities in our society.

9. Urbanisation shift arising from continued rural-urban migration will also cause urban poverty to rise. Urban poverty is a challenge that must be urgently tackled. The urban poor is a microcosm of Malaysian society as it comprises all ethnic groups. The rising cost of living affecting the urban poor needs to be prioritised.

10. A freedom shift is very evident after the 14th General Election with Malaysians feeling more free. This is good as it will lead to stronger support and protection of human rights such as freedom of speech, freedom of expression and freedom of association.

I believe the above 10 strategic shifts and key challenges are important priorities the government and the people must work on together.

We should have new policies to address these challenges. In formulating new policies, it is important to focus on the 4Cs – consistency, clarity, certainty and coherence.

The new Malaysia also needs the 3Is – integrity, inclusiveness and innovation. Old problems need new innovative solutions and new problems also need new ideas to resolve.

We should work together to address the above key challenges. We need to come together as a nation seeking national reconciliation and unity.

With a common purpose, we can move forward with renewed determination to build a new Malaysia that is sustainable and not a flash in the pan.

As the government has already established the EAC, I propose that it should also consider establishing a National Strategy Commission to plan future scenarios for the nation as well as effective strategies to overcome them.

A National Strategy Initiative should also be established to carry out in-depth Futures Studies for the country.

Kingsley Strategic Institute | Where Leaders Meet




TAN SRI MICHAEL YEOH OON KHENG

President Kingsley Strategic Institute






The Prime Minister’s Office (PMO) announced the establishing of the Economic Action Council (EAC), which will respond to and take acti.