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Hollywood is hot to invest in AI, why can't Chinese stars invest

author:Shinsho Laboratory
Hollywood is hot to invest in AI, why can't Chinese stars invest

Film and television winter, so that Chinese stars have no money to invest in AI?

Written by | Zheng Sifang

Edit | Gong Zheng

The AI investment boom has swept through Hollywood. A few days ago, Jobs' actor, Hollywood actor Ashton Kutcher (Ashton Kutcher), invested in three popular companies in the field of AI, OpenAI, Stability AI and Anthroic, attracting attention.

Domestically, there are few reports of similar targets related to direct investment by celebrities. In the past 10 years, the field of Chinese celebrity investment has experienced a wave of transfer from traditional catering, film and television, and trendy clothing, to the Internet, metaverse, NFT and other hot spots. Some investment institutional investors told the "Zhenguo Research Office" that most of the domestic AI fields are currently invested by large platforms, and the demand for capital and knowledge thresholds is high, and the commercialization of the project and the exit period are long, which requires investors to have a long-term sense of companionship. Short-term follow-up is not suitable for investment in this area. Stars should first go through the cold winter of film and television and do their works well.

#01

Hollywood stars invest in AI

In late May, venture capital fund Sound Ventures appeared in OpenAI's latest round of funding in the second quarter of this year, and the founder of the fund was Kutcher and his friend Osery.

Kutcher played Apple founder Steve Jobs in the movie "Jobs" (released in October 2015), once known as the highest-paid actor in Hollywood, while Osseri previously worked as an agent for American pop superstar Madonna and veteran rock band U2.

Hollywood is hot to invest in AI, why can't Chinese stars invest

Figure | Jobs played by: Ashton Kutcher

According to an interview with Bloomberg Television, Kutcher raised a $243 million investment fund in just five weeks and invested the money in artificial intelligence startups.

He said there has always been a group of limited partners (LPs) who have maintained working relationships with them.

Interestingly, two of the three companies Kutcher has invested in clearly compete – OpenAI and Anthroic, an AI startup founded by former OpenAI executives, which released Claude, a ChatGPT-like product, on March 15, 2023.

Behind OpenAI and Anthropic are Microsoft and Google, respectively, and the two trillion-dollar giants are constantly escalating their war around AI. In contrast, Stability AI, which belongs to an open-source company, seems more independent.

Speaking about the reasons for the intensive investment in the AI field, Kutcher believes that the release of GPT is an absolute breakthrough.

Some voices believe that Kutcher and Sound Ventures are definitely betting on artificial intelligence, but they use a diversification strategy, putting eggs in different baskets to see which company can finally run.

To the outside world, Kutcher is an actor, but those who know him well know that "sometimes his understanding of technology surprises people in the entertainment industry." ”

Joshua Michael Stern, the director of "Jobs," said that Kutcher knew Apple's history very well. In addition, Kutcher was the first Twitter user to surpass 1 million followers.

In fact, as a co-founder and partner of venture fund Sound Ventures, Kutcher manages more than $1 billion in funding. Over the past 7 years, Kutcher has been investing extensively in the Internet and technology sectors.

Kutcher has invested in Skype, Spotify, Uber and Airbnb, making a total of $250 million over the years, all of which have been invested as shareholders as angel financiers before the software was incubated.

Skype, an instant messaging app, was eventually acquired by Microsoft for $8.5 billion. Spotify grew into the world's largest music streaming platform, reaching 489 million users as of the fourth quarter of 2022; Uber became a transportation network company with 110 million active users worldwide, with a 69% market share in the United States; Airbnb, a website that rents and stays, is now worth $75.494 billion and has hosts and occupants in 191 countries around the world. That's why Kutcher has been called "the top investor in the tech industry."

In addition to the above investments, he also invested in Lenovo, and was even hired by Lenovo as a product engineer and also served as Lenovo's spokesperson for the US region.

Hollywood is hot to invest in AI, why can't Chinese stars invest

Figure | Ashton Kutcher is also the spokesperson of Lenovo America

But while the hot winds of tech ventures have been blowing from Silicon Valley to Hollywood, even Kutcher himself admits that the tech investment space is always full of so-called hype cycles, such as the recent cryptocurrency boom. He also believes that the artificial intelligence industry and the cryptocurrency industry are in urgent need of relevant regulations.

At present, there are not many Hollywood enthusiastic about investing in AI.

As a top celebrity in the American entertainment industry, the latest move of Kim Kardashian (Kim Kardashian) is that in September 2022, Kardashian announced the formation of a private equity firm, SKKY Partners, with Jay Sammons, a former partner of Carlyle Investment Group.

As a result, Kim Kardashian became another American star to enter the private equity industry. But the fund's investment universe seems to be very traditional – focusing on consumer, hospitality, luxury, digital commerce and media.

Kim Kardashian's earlier investments mainly involved women's shoe e-commerce website Shoe Dazzle, lingerie brand SKIMS (brand valuation of $1.6 billion in 2021), personal development online game Kim Kardashian: Hollywood, etc., which can be regarded as accumulating a lot of experience.

Another Hollywood star familiar to Chinese audiences, Leonardo DiCaprio, whose investment is still stuck in the Internet age, the last influential investment dates back to 2011, when he became an investor in the social networking site Mobli for four million dollars.

Mobli is similar to Instagram. In 2012, Mobli had only 2 million users, and by the end of 2013 it had reached 12 million users. In 2015, Mobli launched EyeIn, a real-time image search engine that has raised about $86 million so far.

#02

Chinese celebrities have experienced three waves of investment fever

Compared with Hollywood stars, domestic stars currently invest in AI, which is still relatively rare.

From the perspective of the past few years, the cross-border investment of Chinese stars is mainly in three stages. The first is to pay attention to catering, film and television, clothing and other areas where the investment threshold is not high and the cost of the project is not difficult. This type of investment project is the usual goal of investment after the star has accumulated capital.

For example, Ren Quan invested in Hot and Spicy One, Gao Yuanyuan invested in Peach Restaurant, and Chen He invested in Juxian Zhuang (I will withdraw my shares in 2022). Hong Kong and Taiwan artist Edison Chan's fashion brand CLOT, Pan Weibai and Li Chen founded the fashion brand N.P.C., etc.

Because of the blessing of stars, these projects are often easy to gain high exposure in the early stage of their establishment. The influence of celebrities translates into brand awareness.

Second, with the influence of Internet trends and the environment, entertainment stars have also begun to move from entertainment film and television groups to cross-border technology circles. This period is mainly concentrated in the period 2014-2020. Among them, the popular areas of star investment include the once hot artificial intelligence and the VR boom in 2016.

During this period, Star VC is one of the more representative star investment institutions. On July 11, 2014, Ren Quan, Huang Xiaoming and Li Bingbing co-founded the investment institution. In October 2015, Huang Bo and Zhang Ziyi also joined Star VC as new shareholders.

According to Tianyan investigation, Star VC has a total of 61 investment projects so far, involving 21 industries, mainly concentrated in e-commerce, automobile transportation, artificial intelligence, entertainment media, enterprise services, medical and health, finance, hardware and other industries, of which the time of more frequent investment is around 2017.

The data shows that in the investment in the hardware field, Star VC concentrated on investing in a wave of AI and VR-related companies between 2015 and 2016, which was also the investment hotspot of that year.

According to public information, Star VC has participated in the Series A financing of artificial intelligence and computer vision systems and chips "Zhaoguan Electronics" (a visual artificial intelligence chip design company, founded in Shanghai in 2016), VR+AI technology company 51 VR (founded in Beijing in 2015), and AI unicorn SenseTime (established in 2014) in the enterprise services field.

In the automotive field, during the emergence of new energy vehicles, Star VC has participated in projects such as positioning algorithm solution developers and new energy vehicle sellers, and has also invested in smart parking enterprises and auto parts supply chain service providers around the upstream and downstream industry chain of automobiles.

In addition, some well-known cases cast by Star VC include ideal car (A+ wheel), Handu Yishe (angel wheel investment), and education unicorn head 1-on-1 (C+ wheel).

In addition to Star VC, another who is more active in investment is singer Hu Haiquan.

In 2013, Hu Haiquan founded the equity investment fund company "Haiquan Fund" (Hu Haiquan divested from it in 2022), which currently manages 7 special funds, focusing on investing in artificial intelligence, consumption upgrading, medical and health, pan-entertainment and other fields.

Its projects include Xiaomi VR all-in-one hardware developer Linqi Intelligent (founded in Shanghai in 2017), electronic music platform PYRO Music (founded in Shanghai in 2015), Ruimi (founded in Wuxi in 2015), and electronic music live entertainment company A2live (founded in Shanghai in 2014).

Third, in the past three years, the meta-universe, NFT, and 5G fields have begun to become the investment targets of some Chinese stars.

In March 2022, the new-generation actor Bai Jingting stepped into the VC/PE circle for the first time and joined the equity investment enterprise of Yuna Capital (founded in Hunan in 2013, chairman and general manager Wang Shuai), and began to invest cross-border in the technology circle.

According to public information, Yuna Capital has a cumulative management scale of more than 5 billion yuan, focusing on investing in new materials, 5G applications, Internet of Things, big data, cloud computing, intelligent manufacturing and other fields, and has successively invested in more than 100 enterprises such as Tiger 360, Lens Technology, Valin Cable, Yuanda Zhugong, and Inspur Cloud.

In addition, concepts such as Web3 and metaverse that have become popular in recent years have also become popular for Chinese celebrity investment.

In January 2022, Jay Chou's trendy brand PHANTACi and metaverse platform Ezek jointly launched the NFT work Phanta Bear (Fantasy Bear), which sold 3,000 units in 5 minutes of going online and announced that they were sold out in just 40 minutes, with a revenue of about 62 million yuan; In just half a month, the Fantasy Bear NFT trading volume has exceeded 500 million.

Hollywood is hot to invest in AI, why can't Chinese stars invest

Figure | Fantasy bear NFTs

Before Jay Chou, Lin Junjie, Wong Kar-wai, Chen Musheng, Wang Feng and other well-known figures in the entertainment industry have also tested the waters in the NFT and Web3 fields. Actress Yi Nengjing has spoken out for Web3 many times on social media, and said: "Everything you learn in a lifetime can be dedicated to Web3." ”

However, beyond the wind, risks often accompany projects.

According to statistics, in September 2022, the total investment and financing quota of 10.117 billion yuan, the Web3 field led the venture capital circle with 4.990 billion yuan; similarly, 47 Web3 projects were shut down Chinese mainland September.

Previously, singer Lin Junjie spent $123,000 to buy 3 virtual properties on the metaverse platform Decentraland, and the value has since fallen to about $10,000, a floating loss of 91%. He posted a picture of an empty wallet on Weibo, and also began to ridicule himself: "I heard that many people want to help me manage my finances recently? ”

Although the vent can make the pig fly, it can also allow investors to land from the wind.

Hollywood is hot to invest in AI, why can't Chinese stars invest

Figure | Decentraland left Lin's wallet empty

#03

There is a threshold for celebrities to invest in AI, and there must be an industry boom

ChatGPT is on the cusp, and its industry chain consists of three parts, and these three industry chains are generally considered to have investment opportunities.

First, upstream data supply, including data collection, data labeling, and data preprocessing; The second is midstream model development and customization, including algorithm development, training deep learning models, and secondary development of customized models; The third is downstream application and distribution, including content manufacturers, content creation application service providers, content distribution platforms, etc.

Combined with the current entrepreneurship and investment of relevant domestic large models, the active market entities are mainly based on large platforms such as Baidu and Ali.

Of course, there are also entrepreneurs who have individual strength. FOR EXAMPLE, IN FEBRUARY THIS YEAR, WANG HUIWEN, THE FORMER CO-FOUNDER OF MEITUAN, RELEASED AN AI HERO POST WITH $50 MILLION, ANNOUNCING THAT HE WOULD CREATE A CHINESE VERSION OF OPEN AI. It is rumored that there are three institutional investors behind it, namely Shunwei Capital, ZhenFund, and Tencent Cloud. In April, Wang Yichuan, the former founder of Sogou, announced the start of a large-model business, and its start-up capital was also declared to be $50 million.

From the above point of view, the domestic entities active in this field, whether it is the capital threshold or the knowledge threshold, are relatively high. Cross-border investment by entertainment stars is not easy.

In addition, there is another important factor, the domestic large model is not clear in terms of commercialization, and it will take time. Even professional platform institutions are cautious about investing in this area.

An investor in a well-known investment company in Beijing told the "True Reason Research Office" that although the logic of investment is to go wherever there is money, this field does not mean investing if you want to.

In addition, he believes that investing in similar targets such as OPEN AI, from the perspective of opportunities, has generally risen by a round compared to before the boom, and there is a certain capital threshold. In China, the search for relevant truly valuable projects also requires a golden eye.

From the perspective of exit years, the investment exit of such projects is at least 5-10 years or even longer, investors should have a sense of long-distance running companionship, not suitable for short-term follow.

In addition to the industry threshold, Chinese stars also face their own problems, that is, with the rectification of the entertainment industry, salary restrictions, and the cold winter of film and television in the past three years, the accumulation of personal wealth by stars has slowed down. Many stars cried on the show, no money and no drama. The active concert market of cinemas and singers, affected by the epidemic in the past three years, has indeed caused many celebrities to decline their income, and they have to go to variety shows to earn quick money.

From the perspective of the development process of domestic venture capital, the boom of celebrities participating in venture capital is mainly concentrated in the period from 2014 to 2020. This is not only affected by relevant policies such as double innovation, but also blessed by the dividend period of the rapid development of the film and television industry.

In 2017, the number of private equity investment institutions in China exceeded 10,000 and is considered to have reached its peak. Star investment institutions have also reached a certain height in terms of quantity.

However, with the promulgation of the "New Asset Management Regulations" in 2018, small and medium-sized investment institutions without professional capabilities were quickly eliminated by the market, and star investment institutions were no exception. Since 2020, the number of investments by star venture capital has plummeted.

According to statistics, Haiquan Fund invested in more than ten companies in 2015, but only invested in 3 in 2021, and Hu Haiquan has withdrawn from the list of shareholders from the fund in 2022; Star VC's investment has also plummeted from 15 in 2017 to 1 in 2022, while Mingjia Capital, founded by Huang Xiaoming, has only invested in 1 company in 2021.

It can be said that even if celebrities want to invest in this field, they may not have enough energy. Instead of investing in the field of science and technology, perhaps the most urgent demand in China is that these stars are needed to contribute more high-quality and more sincere works.

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