Thread by @pdenlinger

Great article on how #ByteDance's #tiktok algorithms made it such a success in #China; mainly because in #China, AI algorithms have been applied at scale to entertainment. With AI, the more inputs you have, the better and more accurate the algorithm becomes.

2/ #Tiktok would not likely be as effective in the US because the market is smaller (fewer inputs) than in China. This means that the algorithms could not be optimized as it has with #Douyin in China. In the US, algorithm optimization at #Microsoft, #Google, #Facebook, #Apple

3/ is a much slower and better documented process. With #facebook, it monetized advertising mainly through small ads and political ads targeting extremist subcultures and conspiracy groups, which adds to social fracturing in the US. #Facebook makes money from US collapse.

4/In #China, online political discourse is not allowed, which means that #ByteDance, #Douyin have focused on entertainment. The society is not divided by politics, so teens focus on entertainment and music. Perfect environment for developing recommendation algorithms on a massive

5/ scale without relying on online advertising the way US companies do. It also means that the government has a much more direct involvement in Chinese online companies through their business licenses. This means that the Chinese govt (which means Chinese Communist Party),

6/ can revoke their business licenses anytime. Now, the Chinese government has told #Tiktok that their recommendation algorithm is subject to government approval for export permission. Aim of the Chinese government is simple: it knows that #AI is important, and that superior AI

7/ will make the nation a leader. US also knows this, which is why the US is determined to take down #Huawei and now, it looks like, it wants to take down #SMIC. The US can choke #China through control of the hardware (silicon) manufacturing processes which the #AI needs to run

8/ and it will take at least five years before #China can come up with a manufacturing supply chain completely separate from US technology which it can run its own #AI on. The US's Trump administration knows that this is their last chance before ceding the future to #China

9/ It also means that the #cloud technology and data business are becoming more politicized. For #Google, #Microsoft, #Alibaba and #Tencent, #cloud technology are their biggest growth businesses. This means that the #US and #China supply chain decoupling will also affect #cloud

10/ planning, because the US Justice Dept under William Barr are planning a monopoly suit against #Google which will be announced this month. Will this include Google's cloud platform? If the Justice Dept goes after Google's cloud business, it would also have to take a close

11/ look at #Microsoft's, #Oracle's and #Amazon's cloud platforms. If it does that, it will be targeting the highest growth divisions in the three largest US corporations. How will that benefit the US? For a US President who talks about America First, this is hard to understand.

12/ It also has serious implications for EU countries: the EU doesn't have any companies which can compare with #Google, #Microsoft, #WeChat, #Amazon, #Alibaba. Instead of developing their own homegrown companies, it has been more focused on the regulatory aspect:

13/ suing and fining US tech companies for violating advertising privacy and monopoly practices. If the #EU is to be taken more seriously, it has to foster the growth of EU-wide tech companies instead of just going after US companies. This also means that when it comes to the

14/ #cloud, many company boards will have to decide between going with US or China cloud solutions. Either way, it is safe to assume that the US government will have access to their business secrets, and so will the Chinese government, depending on which provider they choose.

15/ The only way to get around this issue is with end-to-end encryption and zero-knowledge networks. When this happens, the #cloud business will become a commodity business, just like mobile operators are now. Who is the only company which is seriously involved in end-to-end

16/ encryption and zero-knowledge networks, and takes privacy seriously? So far, it is #Apple. Historically, #Apple is a device and services company, and for the #cloud, they rely on #Amazon Web services. But they are building their own data centers internationally, including in

17/ #China, where their local partner is the Guizhou provincial govt. The only way they can provide strict privacy in #China is by building a data centers which implement a zero-knowledge network where there are no public keys. As far as I know, no one else does this.

18/ So my guess is that like in many other areas, #Apple will enter the cloud business with its own solution, and its main selling point will be end-to-end encryption and a zero knowledge network which implements differential privacy. When it does, this will have a tremendous

19/ impact on online advertising revenue, because the privacy controls on #iOS 14 are mainly aimed at educating consumers about their #privacy. When consumers and business users learn how much of their data is exposed online to governments and competitors, many will move to

20/ greater privacy controls, which will pull them to the #Apple ecosystem for hardware/services. Online advertising on the US model is heading to a slow decline and eventual demise. In the meantime, #AI recommendation algorithms will rise in importance, with #China as leader END