In a nondescript office tower a mile from the Las Vegas Strip, two women toil in a windowless room crammed with bikinis in every size, style, and hue. It’s the stockroom of Bikini.com, an online swimwear store. Down the hall, colleagues are working to break into China’s red-hot market for surveillance software powered by artificial intelligence.
Bikini.com is owned by Remark Holdings, a small public company with Hollywood producer Brett Ratner on its board and financial ties to TV’s Dr. Mehmet Oz. Remark’s leaders are trying to transform the unprofitable, debt-loaded website operator into a provider of corporate AI technology in Asia, particularly China. Remark’s business and share price are struggling, but its peculiar AI project has made some progress.
In March, Remark said it had signed a deal with a Thai conglomerate that operates more than 10,000 7-Eleven stores in Thailand, among many other businesses. Charoen Pokphand Group hopes to recognize the faces of customers for loyalty programs, and of shoplifters for security purposes, according to Athikom Asvanund, an executive who advises CP Group’s chairman, Soopakij Chearavanont. In a statement, Chearavanont says Remark’s technology could also help Chinese insurance giant Ping-An, in which CP owns a stake, with tasks like processing claims.
China is the main focus of Remark’s AI project. The company has several subsidiaries in the country, where engineers are cheap and work six days a week. One subsidiary built technology for use by police in China’s fifth largest city, Hangzhou, that analyzes surveillance video to identify motorcycles driving on streets where they are banned. Remark also is helping a Chinese supermarket group identify frequent shoppers through facial recognition software. Remark CEO Shing Tao, a cheery native New Yorker, says his company is using the technology to clock in workers and prevent them from working double shifts at Chinese construction sites, and that he’s angling for police contracts that will use the technology to spot fugitives in public.
Remark is trying to tap into China’s seemingly endless appetite for surveillance, for both security and commercial ends. A national strategy released last year declared the country will rival the US in AI by 2020. Rapid adoption of facial recognition in China means your physiognomy can now get you cash from an ATM—or plucked from a concert crowd of 20,000 by local police, as one man suspected of stealing potatoes learned in May. Tao says the country’s openness to the technology and more lax approach to privacy make it a logical target for Remark. “China is the low-hanging fruit,” he says. “They really understand and accept what AI is, and they’re ready to go.”
Remark is tiny compared with the giant US tech companies at the forefront of AI research; its AI push is built on a shoestring. Remark reported $70 million in revenue last year, mostly from its travel business; that’s less than Google generates on an average day. Remark’s chief technology officer, Jason Wei, says his developers in China lean heavily on open source tools released by Google and academics, and honed their facial recognition software in part with photos scraped from Chinese and US social media sites including Facebook.
That’s not exactly a recipe for world-beating AI technology. Remark’s AI offerings haven’t netted the revenue Tao told investors they would, and the company’s share price has slid 70 percent this year. US sanctions and China’s thriving ecosystem of domestic AI providers also pose challenges to Remark’s efforts to build a business in the country. Asked about Remark, Hao Lu, chief innovation officer at Yitu Technology, a leading facial recognition startup, had never heard of the company or its Chinese brand.
Still, the notion that a small-time website operator is building AI offerings shows how quickly advances in areas such as image recognition spread, with the help of open source software. Four years ago, it would have been implausible for a small company with few technology chops to create tools capable of recognizing faces or objects such as motorcycles. Now, a developer without machine learning experience can cobble together a system that detects some common objects reasonably well in four months, says Reza Zadeh, founder of Palo Alto video recognition startup Matroid. Such software wouldn’t be easy for customers to use or competitive with more sophisticated products like Matroid’s, but it might work well enough to win a deal. “That’s the stuff you will see startups that are inexperienced try to peddle,” says Zadeh, who is also an adjunct professor at Stanford.
Smaller players like Remark may feel freer to take AI technology places that companies with more name recognition can’t, or won’t. Google and Microsoft both have AI research labs in China, but it’s hard to imagine them or other leading US software companies bidding for police facial recognition contracts there. Google, for example, recently pledged not to renew a Pentagon contract in which it applied machine learning to drone imagery after protests from its employees. Asked whether he has qualms about working with Chinese authorities, Tao says he simply wants to help customers operate more effectively, whether they’re in retail or enforcing local laws. “We're not breaking the rules,” he adds.
How Stuff Works
Remark didn’t start as a tech company. It was created in 2006 as a spinout from Discovery Communications called How Stuff Works International, or HSWI, to market versions of the popular explanation site in emerging markets. When that business proved less lucrative than hoped, HSWI in 2009 cofounded an online health si