It’s the 21st century, the century of the robot apocalypse and oh,#ChinaUSAI.
In his report to the 19th Party Congress in October 2017, Chinese President Xi Jinping reiterated his dream for China to become a “science and technology superpower.” It turns out, this decisions could define the entire 21st century and it all starts with supremacy in Artificial Intelligence.
As trade war talk and political rhetoric is heating up, as arguably the worst American leader ever ever squares off with the best Chinese leader ever, what’s the actual state of prioritizing AI and technological development between the two superpowers?
Here’s what we know. The US has likely the foremost academics and talent in artificial intelligence who are attracted either by academia, or by Tech companies such as Amazon, Google, Facebook and others. Washington has been slow to act on calls for regulation in AI.
Washington Finally Forms AI-Regulation Task-Force
The Center for a New American Security (CNAS), one of America’s top defense and foreign policy think tanks, announced the creation of a Task Force on Artificial Intelligence and National Security, as part of the organization’s Artificial Intelligence and Global Security Initiative. It will be led by Steve Moore, dean of Carnegie Mellon University’s School of Computer Science, and Robert O. Work, who was deputy defense secretary from 2014–2017 and formerly CEO of CNAS.
China is Prioritizing Artificial Intelligence to become a Tech Superpower by 2025
China, intent on dominating artificial intelligence in a race with the United States, is said to be on a steep ascent toward at least a tie. But a number of AI experts say that while China can come close, it will be hard to catch up completely, according to Axio. But is this actually the case?
A recent study from a team of economists at the University of Toronto has concluded that China is steadily gaining on the United States in the field of artificial intelligence.
The 2017 Association for the Advancement of Artificial Intelligence (AAAI), a worldwide conference that presents the achievements of the world’s AI leaders, indicated that 23 percent of the authors of academic papers were based from China, according to the AI and International Trade study. This was a massive leap in terms of research output, considering that Chinese AI researchers only contributed 10 percent of the research output in the 2012 AAAI.
- China’s research output in will likely is on par with the United States in 2018, and will overtake them as early as 2020.
- China will throw more money, resources, and has more consumer data to tackle the problem of developing the next-gen of Artificial Intelligence.
- China has 3x as many internet users as the United States has total population. This means that Big Data and less privacy protection favors Chinese Tech companies over their western counterparts.
- Chinese Tech companies such as Tencent and Alibaba have greater access to consumer data than do companies such as Google and Facebook, that do not own either E-commerce markets or apps as ubiquitous and multi-functional as WeChat.
More Funding for AI Research
According to popular technology analysts CB Insights, they reports that China has overtaken the US in the funding of AI startups. The country accounted for 48 percent of the world’s total AI startup funding in 2017, compared to 38 percent for the US. This corroborates data from the Association for the Advancement of Artificial Intelligence (AAAI).
- The next generation of AI talent educated in the States may be tempted to join Chinese Tech companies instead of Western Tech Companies, as in the 2020s may be able to offer better compensation and more bleeding edge working environments.
- International talent may be less likely to want to move to the U.S. with the current policies of the administration and prefer countries such as Canada, Australia, or even the U.K.
- Many of the top Students now in U.S. colleges are in fact Chinese international students. Here is one of the cruxes of the problem, the U.S. is itself the education center for the next generation. These talented Chinese Students won’t all want to work for the sinking ship that is Facebook, or the internally divided company that is Google. Could it be, could it possibly be that some of them will prefer the career track that is Alibaba, Tencent, Didi, Baidu, Huawei, Toutiao or any other number of ascending China companies?
Common Sense is the Simplest Answer to Futurist’s Questions
It’s actually ridiculous to suppose that the next economic superpower won’t be the leader in technology and artificial intelligence. Even the former experts of U.S. Tech giants are coming to the same conclusion.
Recently former Google CEO Eric Schmidt told his audience that it won’t be long before China overtakes the United States in the development of advanced artificial intelligence (AI), according to a report by The Verge.
Knowing what we know about the impact of Chinese cities on innovation, we have to assume that some of humanity’s greatest breakthroughs in exponential technologies and the future of machine learning and AI will come out of China, if not the majority. This is because it’s a numbers game and funding and the government push of Beijing, is on China’s side.
A report jointly published by New York-based research consultancy Eurasia Group and Beijing-based VC firm Sinovation Ventures on Dec. 6 outlined how China has been making rapid advances in AI over the past few years.
Sure Google is making terrific advances, yes Amazon is prioritizing Alexa-like- crazy since we now know the Voice-AI interface will be a multi-billion dollar industry and possibly the future of the human-AI computing interface. But for China, its tech dynasty and state-supported technology community, is literally just getting started. It doesn’t have all the VC bureaucracy and Washington relationship Silicon Valley has to deal with on a constant basis.
China is ahead when it comes to the dollar value of AI startup funding, which CB Insights says shows the country is “aggressively executing a thoroughly-designed vision for AI.” But for the top 5% of researchers, certainly the U.S. is still in the driver’s seat, for possibly a few more years. Typically in academica, the discipline is driven ahead and pioneered by the top few percentage of the greatest minds. China has about another decade until it’s able to recruit such high-level talent on a consistent basis.
Could China overtake the the US in AI development?
It’s no longer a question of if, but when. The answer is we don’t know. In reviewing some of the literature, which I am by no means am an expert, I would think by the late 2020s and possibly much earlier, China will be contributing more to AI development than the United States.
That’s not good or bad, or a politically motivated opinion, that’s just reality. As this occurs, Chinese Tech companies will begin to overtake western ones. Picture this, the market cap of the likes of Apple and Google, overtaken by younger and more innovative Chinese companies?
It’s hard to imagine, right. Or is it?
However, that’s what the data is beginning to show when we make simulations of the likely course of events in the future of technology, innovation and machine intelligence.
We’ve known for some time that compared to the incredible pace of patents by the like sof Amazon, the likes of Huawei are catching up. Comparing products, it does not take a genius to figure out that WeChat is more addictive and useful than Facebook’s flagship app. It’s difficult for Chinese smartphone makers to compete with the profit margins of Apple, but they have and are starting to take marketshare away from Apple, that has been the cream of the crop for a very long time.
China has the Will to create a Chinese Tech Dynasty
We know in terms of investment, Softbank, Tencent and Alibaba are doing things that will change the technological landscape for decades. Yet as impressive as that sounds (Softank is Japanese), it’s the incredible unity of the political will that makes this so much of a certainty.
China has previously laid out plans to become the world leader in AI by 2030, as outlined in a government policy released in July of 2017. With China’s leader now destined to stay on past 2023, the sky is the limit for a Chinese driven era of progress.
In the scope of civilization, it doesn’t matter who owns the keys to the driver’s seat of technological progress and artificial intelligence. At the end of the day, it benefits all global citizens, consumers and users. We may criticise how American apps and an American lead internet have made us into app addicts, but the same thing has occurred everywhere. Who’s to say that China as a leader in tech and AI might not actually be even more responsible and aware of that responsibility than Silicon Valley has, which has largely failed us.
It doesn’t really matter if it’s China or SpaceX or Blue Origin or somebody else that brings us to Mars. But to fulfill the dream of Stephen Hawking, Elon Musk and thousands of others, it must happen soon for the human species to have a higher probability of long-term survival.
The Entirely New Models of AI Development Will Likely Come out of China
It’s indeed plausible that as some have suggested, China has already overtaken the U.S. when it comes to AI research. Yet the Holy Grail of artificial intelligence and the convergence of quantum computing and new ways of thinking about possibly deep learning or another system of AI development means the essential breakthroughs that will occur, will probably take place in China and will thus be in a sense, owned by China for a certain period. This may give them a certain economic benefit and a kind of technological advantage.
New ways of thinking about machine learning and how to help smart machines “learn how to learn” will come from places and companies and smart cities that are themselves experiencing their own mini Golden Ages. We know Chinese centers circa 2025 will be experiencing such an atmosphere. Thus, logically we have to admit that they have the rational best shot at achieving AI-breakthroughs that may never be possible in the U.S. again, at least not in our lifetimes. This is because apart from all other things, the best typically want to work with the best.
The United States, on the other hand, seems to be experiencing a steady decline in its artificial intelligence initiatives. To return back to the AI conference, While 34 percent of the academic papers presented in the 2017 AAAI were still American, the number shows a significant decrease from the output of the country’s researchers back in 2012, when studies from the United States represented 41 percent of the academic papers in the conference. That’s pretty empirical evidence that relatively, China is ascending where America is in decline. As a futurist, it’s statistics like these that change how I view the role of China not just economically and as a leader in the smart grid, but in how smart machines scale to become part of our lives in smart cities all over the globe. I’m Canadian, I personally don’t care where innovation takes place, I’m just pointing to available facts.
According to Futurism, the United States’ current levels of R&D spending on AI are one-half to one-quarter of the levels that would be best for economic growth. China on the other hand, have made becoming a leader in AI, one of the state’s primary goals to illustrate the advent of New China. This is where the facts become scary. China’s one-party rule affords them an incredible ability to “get shit done.” I don’t suspect developing AI will be a major issue for them, as having a higher population here becomes an essential advantage. More collaboration and a bigger slices of funding and Big Data, will win this war. The wheels of Chinese supremacy in AI have been set in motion.
I don’t know if Deep learning is the answer to the next-gen of AI, and I suspect that it is not. However, once the domain of Google, that’s no longer at all the case. We once thought Waymo would arrive at self-driving cars years if not months ahead of “everybody else.” Now we find heading further into 2018, there are dozens of competitors who are likely very near to the same level of advancement, some of those likely in China.
A study published by CB Insights on the upcoming AI trends for 2018 revealed that, for the first time, investments destined for China surpassed those for the US in this particular technology. China attracted almost half of all investments, compared to 38% for the US.
So when does China’s big-push to AI catch up in products, software integration and real-world applications? How quickly does the R&D cycle manifest superiority on the field? The problem here is sociological, China is a mandarin based nation, and English is the global language. American companies have greater penetration, think of Amazon entering and dominating India in just a matter of years. Yet starting in 2017, China has become much more globally minded South and East Asia rapidly and making key investments.
While American bravado charms and champions by culture and promises of altruism like Facebook, China buys up your land, ports, water and key assets positioning itself as the future in a very different manner. If America leads by perusassion, China leads by action. China’s superiority in AI will therefore likely manifest in unexpected ways, in convenience that could even rival the likes of Apple, Google and Amazon. China leads in things like the sharing-economy, where bike-sharing startups Ofo and Mobike, microcosms of the rivalries between Tencent and Alibaba, are scaling globally fast. You will know China’s superiority in Tech when the following events ocucrs.
- When Huawei has a larger global market share than Apple.
- When Alibaba has a larger market cap than Amazon.
- When Tencent’s profits overtake Facebook.
In 2018 you might think these events could never, and never will happen. But what if I told you that for a brief time, one of them already did occur.
Here I am just illustrating how the Tech Dynasty of China is rising, but it’s not a dynasty yet. As a Futurist, I believe the start-point for that even is circa 2022. American original content streaming, digital advertising and AI is likely to consolidate into two or three winners (and I don’t believe Apple or Netflix will be among them). By the mid 2020s, it will likely just be Amazon and Alphabet left standing. Facebook has a digital ads giant, may not have such a bright future. Even as big a monopoly as Amazon is destined to become, as many jobs as it will create for Americans, it’s literally nothing compared to the Chinese Tech Dynasty that’s coming in the form of Tencent, Alibaba, Didi, Huawei, Xiaomi, Baidu and so many others.
Admittedly, this is hard for many Americans and Europeans to get their head around. For Indians and South-East Asians it’s less of a stretch of the imagination. Each year approaching 2022, there will be increasing evidence that this is taking place.
Chinese researchers’ contributions to the best 100 AI journals/conferences rose as a percent of total papers from 23.2% in 2006 to 42.8% in 2015 and as a percent of cited papers from 25.5% to 55.8%.
There’s reason to believe post 2017, the pace of this data-point will now accelerate. In this great transition we won’t be able to think of a China-US “duopoly” for every long, since China will so far outpace the United States in AI-research, as to distance itself as Amazon has distanced itself from Microsoft, as Cortana is to Alexa. One of the key indicators is also in terms of investments. At home we can witness Silicon VAlley has entered a period of stagnation, where Chinese 1st tier cities have entered another a period of incredible growth. Massive investment in R&D including state-sponsored funds means Tencent and Alibaba are also building the future of Chinese with massive smarts.
It could be argued the Chinese duopoly is giving back more to innovation and startups than is the American Ad duopoly of Google and Facebook. As Apple is nearly and will soon be worth $1 Trillion dollars, what has it done for innovation or American job recently? Here is where Capitalism as we know it, is failing innovation. In Asia, they have not hit the same bottleneck, nor are they likely to anytime soon.
China has an Army of Little Amazons Working Night and Day
The Chinese tech custom of working 9/9/6 (from 9am to 9pm, six days a week) is a symbol of the Chinese work-ethic. What does a 72-hour week amount to in terms of actual innovation? The world is about to find out.
Beijing published a national development plan for AI, aiming to increase China’s economic clout by more than 150 billion yuan (22.15 billion dollars) by 2020 and to 400 billion yuan (59.07 billion dollars) by 2025, according to figures from the State Council.
China’s Xiaomi wants to put artificial intelligence ‘everywhere’, and it’s not alone. Face++, a Chinese face recognition startup (and one of Sinovation’s investments), recently won first place in 3 computer vision challenges, ahead of teams from Microsoft, Facebook, Google, and CMU. Xiaomi plans to put sensors and AI processing components in home electronics while running a computing cloud handling more complex calculation for them. To keep up with the likes of Huawei, Xiaomi must think big, and for the likes of Didi to catch Uber and so many other races, China is racing with itself in a race that makes over-taking less agile and less hard working U.S. companies all but a given. All of this is without taking into the most important aspect of all progress. China has yet to hit it’s economic peak of Economic superiority over the U.S.
China Predicted to Surpass U.S. Economically by 2032
This study is pretty conservative I think, a report by CERB, the Centre for Economics and Business Research in London.
Towards the Technological Singularity
But let’s remember, speech and image recognition technology might be nice, but it isn’t the future of AI. Real breakthroughs require converging new answers to age old questions.
If “There is no data like more data”, China is about to have a serious advantage over the U.S. Amazon Prime can have 100 million users, it sounds nice on paper. Tencent’s WeChat already has around 1 Billion users. WeChat’s payment integration with QR codes means it’s far more actionable data that loads of Facebook, WhatsApp and Instagram user accounts. There’s literally no western equivalent to Tencent. They are into mobile gaming and investing in ways that Facebook should have, but never did get into.
When AI stands to transform virtually everything including labor, the environment, and the future of warfare and cyberconflict, the superiority of China in AI over the United States will feel very very real in the 2030s.
China’s rapid agility towards green technology and electric cars is also more aggressive by proximity to air, water and food pollution. The forces that push China further are more urgent and more the will of its leaders. In the U.S. there’s no such leadership or urgency, as America has become the brat of the Paris Accord and must depend on names like SpaceX, Tesla and only a handful of companies to actually even look competitive. Countries like Germany have embraced the smart energy grid, now maybe almost a decade ahead of the U.S.. In China, they aren’t falling behind, they are keeping pace.
By the time China passes the U.S. sufficiently in artificial intelligence, the next-gen pre-sentient AI systems will be starting to come online. Where do you think they will first be born? It won’t be San Francisco, Boston or New York, it will be Beijing, Shanghai and Shenzhen. Think about for a second even what a tier-1 Chinese city means.
China classifies it’s cities according to GDP, administrative level and population.
- All first tier cities have a GDP over $US 300 billion.
- Tier 1 cities are directly controlled by central government.
- Cities with more than 15 million people.
In short, Tier 1 cities of China, don’t even exist in the U.S. Asia’s high density and collectivistic norms for the full-engagement of innovation and progress, are more suited to manifesting the technological Singularity. This might sound counter-intuitive to some, but let history be our witness. Countries that are centralized in the way China is, can also collaborate on join ventures in a way that would not be possible in America, even if America has China’s population. By the way, the American fertility rate is a post 2008 recession trend that is officially a time ticking demographic bomb. The coming wave of automation and the future of work, will further crush it. As China’s economy scales China’s middle class, the generation of Chinese born in the 1990s are the most transformative generation in the history of humankind. Circa, 2035, they are doing some of their best work, manifest destiny for the Technological Singularity.
The Universal Basic Income debates in America of the early 2020s will attract a lot of people who will want to move there. You think climate migrants are going to be big? This will create an economic press, where post-automation, China is significantly ahead of America. India’s demographics with so many Millennials, will be playing catch-up and in the 2030s will make remarkable progress. You don’t’ want to be in the U.S. in the 2030s. This is because Americas have no intention of combating wealth inequality, they will be victims of their own free-market thinking and a decently large segment of the Middle Class is going to pay the price and bite the bullet. China as a high-tech police state will have its own issues. In relationship to the future of Artificial Intelligence, China is still a far better place to be born.
The Chinese Tech Dynasty is Closing In
When you consider even the top funded companies in China in 2017, you begin to get a sense of the scale the Didi, Meituan-Dianping, Daikuan, NIO, Ofo and Mobikes of the world that are coming. Alibaba and Tencent aren’t cannibalizing (divide & conquer a la Wall Street) companies the way Amazon is, or the way the likes of Apple and Facebook have stunted innovation in the West, they are funding and supporting it.
So let’s think about what the China Tech Dynasty will become along with their artificial intelligence.
As China begins to dabble, a bit of Snapchat here a bit of Tesla there, these companies will also have partial access to certain advantages in China. Like Apple, they will in part sell out to China in exchange for some access to their market. And so this story starts to accelerate, Chinese firms will soon be able to scale faster globally than foreign firms cna make it in China. That’s the basic formula for the emergence among many of the other factors I’ve discussed, on a Chinese Tech Dynasty. These 800+ million Chinese consumes fuel firms into the dynasty at record pace.
A Tale of Two Nations in Opposite Directions
The U.S. is failing to invest in basic AI research, and this coincides with a massive lack of trust in American leadership and a crisis internally in the government. China on the other hand, has high-trust levels in their authority and government. As American contracts into a warped populism and fear of the outside world, China is expanding its sphere of influence in Asia and globally.
The AIIB and One Belt One Road initiatives are massive undertakings that all set China up for economic prosperity in the years to come. America’s political climate and internal division that can even be witnessed in a microcosm amid Google’s employees, means China has won the race to AI before it even started since both countries are going through very distinct phases of their National destiny.
For AI, it’s also key to note that the data gap between the US and China is “dramatically larger” than the actual gap between the respective populations or the number of active mobile users. This is because in China, the rights and priorities of the state are seen as more important than the rights of the individual. Techno-collectivism is in this sense more native to how AI-consciousness, whatever you might call it, can emerge.
Human beings as separate entities, will always be kind of dumb. They won’t suddenly dramatically improve their capabilities. Smart machines working in a framework of collective collaboration and efficient cooperation, can in a sense hyper-specialize in a way that means how automation manifests in China vs. the United States, is fundamentally different. How this scales is also expected to impact how machine learning might come to learn how to learn better. Once self-learning AI is achieved, of the nature of a general intelligence, well all of humanity will have a reckoning (if at all such a thing is possible).
This means corporations such as Google, Apple and Amazon are desperately trying to cherry-pick AI talent in China as well. This is occurring even though they are weirdly blocked from actually doing business in China. Yet these companies cannot even slow down the inevitable and they know China is coming for their markets and are more agile than their most direct competitors in the West.
In the race to AI, corporate espionage and nurturing talent funnels even in the other’s backyard, are just part of the game.
China’s State Council Plans for Artificial Intelligence Dominance
However when the China’s State Council laid out ambitious plans for China to become the world leader in artificial intelligence (AI) in 2017, they placed AI at the center, and the goal is for it to become a 150-billion-US-dollar industry by 2030. The U.S. spends so much on its military and as healthcare costs balloon, America’s chances of being first to Mars are greater than winning the race to Artificial Intelligence.
America’s most profitable companies including Apple and Facebook, don’t prioritize R&D and innovation like Amazon does. China circa 2018, is a land teaming with Amazons and Ubers. Even in 2018, there are some signs Didi will eclipse Uber, to become the true monopoly of Asia ride-sharing. Without Amazon, Alphabet and Microsoft doing good work, would America even be in the picture of the fortront of the intersection between human beings and AI? That’s part of the problem, as Tech stocks surge in 2018, winners win big and competition is drying up. Competition is arguably more fierce between Tencent and Alibaba, than it is between Google and Amazon. Since Tencent and Alibaba have technological “children” that are growing up, it takes a sorto of childish logic to see how Chinese Tech monopolies will one day “gang up” on American ones, just as the early web was the property of American firms. The pendulum is shifting.
If you think of the mobile consumer in China, the gap is supreme; Chinese use their phones to pay for goods 50 times more often than Americans. Apps such as WeChat and Toutiao are so ubiquitous, they escape definition since Americans have no equivalent. What Alibaba and JD.com achieve during November in their annual Single’s day festivities dwarfs the entire holiday season of all Western retailers combined.
We know that from 2018 to 2020, China only extends in retail dominance in total sales.
This means in logistics and E-commerce China will be destroying American numbers as this trend continues to grow through the 2020s and a significant gap emerges.
Meanwhile companies that know they have little chance in the race to AI, such as Microsoft, are putting their bets on other races such as Quantum computing. Despite beginning work on quantum computing 12 years ago, Microsoft has yet to produce a working qubit. Google, Intel and IBM are likely ahead of them.
In China, The National Laboratory for Quantum Information Sciences, is slated to open in 2020. The country wants to build a quantum computer with a million times the computing power of all others presently in the world. These innovations could accelerate work on other important problems where China aims to be the global leader. Military applications, cracking encryption, BioTech and fusion research, come to mind. Needless to say, Quantum computing is seen as a possible gateway to a radically new kind of artificial intelligence.
Google may achieve something referred to as “quantum supremacy” in 2018. Bristlecone, a new quantum computing chip with 72 quantum bits, or qubits — the fundamental units of computation in a quantum machine. This is a point where quantum computing diverges by significant degrees ahead of the world’s fastest supercomputers, already owned by China. According to MIT Tech Review, quantum supremacy is attained when: the strict definition of the benchmark is that the task should be impossible for a conventional computer to perform. These are the kinds of advances the Chinese government and Beijing will be especially keen to be the global leader.
Stephen Hawking was worried that super smart computers could spell the end of the human race. China ain’t no Elon Musk or Stephen Hawking sympathizer. AI-supremacy also has economic motives and just as organizations like Softbank or Amazon might have their “end-game” plans, so do strong authoritative legacies of history like the Chinese communist party. Near its hundred year anniversary in 2021, that’s when the Golden Age of China truly begins, and frankly it doesn’t matter what state the U.S. is in or what Amazon or Google will be doing, China is on the path to being in a league of their own.
Patents, computing milestones, AI research citations, all of these are signals. The report published by CB Insights also highlights the momentum coming from China regarding patent applications, which seems set to overtake those made by the Americans. As far as deep learning is concerned, the number of patents issued in China is around six times greater than those published in the US. What are these micro indications really telling us about the future? The artificial intelligence of the future will have Chinese values, whatever they may be. It does not actually matter what AI-regulations the White House puts in place, because AI won’t be a proprietary American invention anymore. For alarmists, this is somewhat disturbing. We don’t know what’s keeping Elon Musk up at night, but if we are to believe his antics, this might be one of them.
Artificial intelligence is increasingly at the center of the security and prosperity challenges of the world, and the country with the best AI definately has several advantages in economic, technological and in terms of being a global super-power. There’s not really a simulation that shows that the U.S. can keep up with China, and we shouldn’t actually believe otherwise. Chinese economic supremacy and Chinese pragmatism may very well end up deciding the fate of the human species, whatever it may be.
For China’s key manufacturing strategy — Made in China 2025 — AI has been singled out as an important area for boosting production, efficiency, innovation and overall quality. That certainly sounds peaceful enough.
If Americans live in layered digital walled gardens, China lives behind a great firewall, but neither is necessarily better than the other. Reality is actually somewhere where global warming is increasing and humanity has a decent chance of not making it out of the 21st century. One of the reasons some popular minds and scientists speculate, could be due to the perils of Artificial Intelligence. If used as a weapon, it could be devastating. From social infrastructures being weaponized, to apps and algorithms influencing our attention and a precarious uncertainty hanging in our future, the daunting conflict between nations is still a significant cause for concern in an era where our ‘tools’ could be too powerful indeed. The danger of man’s aggressive tendencies is still apparently real enough and it may be that as life-inhabiting planets are common in the galaxy, self-annihilation may be nearly as common.
China is now embarking on an unprecedented effort to master artificial intelligence, and for all intents and purposes America will be unable to follow or replicate it. American will not have the means to copy China’s efforts. If this isn’t clear in 2018, it will be abundantly clear by 2025.
American Big Tech can attempt to shape a bill that seeks to clamp down on Chinese buyouts of US firms, but its impact on China’s growth in AI will be negligible. There’s no reason to suppose one day Tencent won’t acquire the likes of Snapchat, or that Toutiao won’t be localized to American audiences. Partnerships with Chinese firms is the way American firms survive and transition into this new age of China’s Tech Dynasty.
Apple Gives In to Chinese Regulators
Apple’s China iCloud Data migration is a case in point, if the most wealth Big Tech company from America is giving in to Chinese rules, that sets a precedent for all tech firms moving forwards. China will no doubt gradually get access to the user data of Americans in a number of different ways. China’s social credit system will reward those in sync with its values and punish those citizens deemed unworthy. The emergence of a kind of global tech police state in the 21st century is highly likely.
We are already seeing America’s own will to regulate itself to create its own “great firewall” against foreign threats of cybersecurity and data, yet with the rise of companies such as Huawei, Xiaomi, Alibaba, JD.com and Tencent, this will become increasingly difficult as the Mandarin world starts to have more impact on the English speaking world in technology and culture. Viral memes from China are already being seen and commented on in the West.
Tencent is about to bring its AI research to life by opening a robotics lab in China’s center of manufacturing, Shenzhen. Chinese tier 1 and tier 2 cities are highly specialized in different areas of technology, research & development. Further integration and the returning international student talent base of young skilled Chinese workers means China’s tech companies are about to hit into a renaissance that nobody else in the world will be able to compete with.
With wages rising rapidly in China, China will become the leader in robotics and automation. By owning the infrastructure of robots, electric cars and the smart grid, China can gain influence globally and facilitate its emergence as a technological super-power to expand its influence, values and economic superiority.
While Apple’s latest move in China has privacy advocates and human rights groups worried, we have no idea how powerful China will become in an era of data and Big data moving forwards. Tim Cook’s concession is symbolic of how Big Tech will have to make compromises with the Chinese State to continue to not just grow, but in order to survive. In this sense, Amazon and Alphabet’s as strengthening monopolies is America’s last great firewall against the invasion of Chinese tech.
With Apple handing over its Chinese iCloud operations to Guizhou-Cloud Big Data (GCBD), which is owned by the government of Guizhou province shows just how far American tech companies will go to comply in order to gain some access to the Chinese market. Here we are talking about the richest company in the world that will soon be the first company to reach a $1 Trillion dollar valuation.
China is thinking about the Future of AI
While in the West even basic regulation on the future of Artificial Intelligence evades us, in China that’s not the case. Academics, industry researchers, and government experts gathered in Beijing last November to discuss AI policy issues. The resulting document, published in Chinese recently, shows that the country’s experts are thinking in detail about the technology’s potential impact.
As reported by MIT Tech Review, the Chinese government’s strategic plan for AI working with experts suggests that China plans to play a role in setting technical standards for AI going forward as well. As in crypto, do in AI. Better regulations means being able to develop AI with strict protocols where corporate partners maintain standards that will also help to spread China’s impact on AI development around the world. As the future leader of AI, it’s important China does this very carefully and there’s no reason to imagine they won’t — given the grand importance and scope that Technological advancement means in the New China framework of their leader’s vision.
Alibaba has made great progress in facial recognition as China’s surveillance system is well documented. This tech can also facilitate kiosks, payment and evaluations of one’s standing in the social credit system. China is already leading in the intersection of technology and citizen life. Alibaba and Tencent are already on the cutting edge.
Alibaba uses AI and machine learning to optimize its supply chain and personalize recommendations building products like Tmall Genie, a home device similar to the Amazon Echo. Since the Chinese consumer is so much more of a mobile native than many U.S. citizens, the opportunities for Chinese apps to create value are significantly augmented, as compared to Western equivalents. Instagram for example, is more of a fad than an actual tool. That same cannot be said for WeChat or Alipay. The Asian spirit of utility embodies these technologies with much more practical applications and that drives app-retention in a way the West has been unable to replicate. Snapchat can get young people addicted to streaks, but what is the point?
From an American position they view China’s AI ascendancy as a threat to national security and technologically supremacy which can be summarized as follows:
China’s booming AI industry and massive government investment in the technology have raised fears in the US and elsewhere that the nation will overtake international rivals in a fundamentally important technology.
China is booming economically, geo-politically and through advancements in business and technology, that they would overtake everyone in Artificial Intelligence, isn’t just an idea, it’s already happening. The question then becomes not how American can react, it’s how to adapt to the new world where China is the leader in AI, hardware, robotics and dozens of exponential technologies that will radically change human life in the next three decades. China is showing a superior plan for the future; and that’s something the U.S. will be unable to copy or replicate.
China’s Strategy to Own the Future of Technology
According to Technode in 2017, there are 1.82 times more American AI companies than Chinese. Investments in the US are 1.54 higher than in China and the talent pool is 2.01 times larger. Out of the total number of AI companies in the world (2542 according to data from June 2017), the US hosts 42% of them, while China ranks second with 23%. Yet the American definition of “more” is not always better. Facebook has vastly more global users than Tencent, yet Tencent is offering more value and business applications to its services. If Facebook remains a communication platform in 2018, WeChat is the center of consumerism in China. Here then we see the incredible difference of how the two countries implement advances in technology.
On the cusp of an era of rapid automation, there are big winners and China’s AI dream is highly implicated. The stakes are high, and Silicon Valley and the U.S. government both are showing weakness in 2018, in terms of leadership, startups and impact on the future of technology and AI.
China’s strategy to lead the world in AI, might turn out to be the critical decision of the 21st century that shapes the future of everything. China’s ambition is not perplexing, as an empire on the rise it’s State Council’s release of a national strategy for AI development in July 2017 positions China’s relationship with the future of AI as being of paramount importance. The highest priority is given to those variables that can most impact the future, and AI is among these.
Data is the new Oil and Chinese Leadership Understand This
China’s decision to pursue AI aggressively, as Jeffrey Ding of Oxford University states in his report, is arguably “the story” of the past year of 2017. The story was so undercovered by the U.S. Media as to be almost unheard of. By doing this, the U.S. has already admitted defeat.
The pursuit of AI is the biggest geopolitical contest of wills in the entire history of humanity. China’s intent to win it shows its laser like focus to the heart of what matters to the future age of technology, business and a world where data is the new oil.
Microsoft, Google, Salesforce and Amazon CEOs can tout the transformative nature of AI, but without a plan in place to keep up with China, they will not succeed. This is because free-market capitalism and democracy cannot beat centralization significant advantages when it comes to Government, R&D and the corporate sector working together.
The West Fundamentally Doesn’t Understand Collectivism or China
China’s AI dream manifests not by the will of the One-party rule but by the active collaboration between corporate leaders, private companies, academic labs, subnational governments and a guiding role by central government who all have a major stake and are partners in manifesting their claims to China’s AI dream.
Even the West’s best publications do not appear to firmly grasp how collectivism works and how the basis of collaboration is the key. At at time when the American people and its Government are the most divided, China’s collaboration between stake holders in its future show the most unity.
Chins’s prioritization of AI in fact is what any sane government would do, to promote AI safety, national security, economic development, and augment social governance in a way that’s congruent with their style of leadership and system. China is setting high benchmarks to show agility and be able to maintain global security in a field that is fundamentally unpredictable.
The 2020 benchmark for the core AI industry’s gross output (RMB 150 billion) would represent a tenfold increase of the AI industry in the next three years.
China is thinking about the global reality and planning for a future where everything from commerce, to trade, to politics, to warfare is accomplish with major AI implications. Chinese AI experts and decision-makers are keenly aware of the AI strategies and capabilities of other countries, including the United States, the EU, Japan, and the United Kingdom.
China is adopting a “catch-up” approach in the hardware necessary to train and execute AI algorithms. Whether its the chips or the human talent, the entire chessboard has been mapped. China already possess the key ingredient for successful progress in AI and that is the data. Access to large quantities of data is an important driver for AI systems and as we know, China’s data protectionism favors Chinese AI companies in accessing data from China’s large domestic market but it also detracts from cross-border pooling of data. The Great Firewall of China is therefore a competitive advantage to manifest the Chinese Dream.
The State Council’s AI plan outlines a two-pronged “gathering” and “training” approach. The Chinese government is starting to take a more active role in funding AI ventures, helping grow the fourth driver of AI development — the commercial AI ecosystem. Disbursing funds through “government guidance funds” (GGF) set up by local governments and state-owned companies, the government has invested more than USD 1 billion on domestic startups.
This means not only is the China Tech Dynasty being lead commercially, but the entire Chinese infrastructure favors startups that contribute to AI innovation in multiple disciplines. The entire country is being awakened by a common purpose and vision of China’s role in that ecosystem.
Economic benefit is the primary, immediate driving force behind China’s development of AI.
While China is interested in investigating the military advantages of superior AI, it’s laying down the economic foundations for its nation to actualize a Chinese dream. In doing so, it’s creating the best conditions for the greatest amount of people. In short, China’s has the most to gain from AI technologies, since AI systems could enable China to improve its productivity levels and meet GDP targets.
China’s AI-First Strategy Is the Key Strategy of the 21st Century
The March 2016 victory by Google DeepMind’s AlphaGo over Lee Sedo, in a sense was a turning point in how nation states saw the future of AI. In a way this led to an immediate reconsideration among government officials of China’s AI strategy.
It did not take long for Chinese leaders to act. A year later, the State Council issued the “New Generation AI Development Plan” in July 2017, formalizing existing investments in AI and unambiguously signaling China’s prioritization of AI development.
The plan’s specific benchmarks for AI and AI-related industries — including by 2030 a gross output of RMB 1 trillion (U.S. $150.8 billion) for the core AI industry and RMB 10 trillion (1.5 trillion) for related industries — demonstrated China’s aspiration to lead the world in the field.
The State Council’s plan represents the culmination of increased policy support for AI development and did not come out of nowhere. For instance, a month before the State Council’s report, the government of the Chinese city of Tianjin had announced a USD 5 billion fund to support the AI industry. Baidu has been enormously prioritizing AI for years. Alibaba and Tencent are as well.
That Government and Industry are working so closely together on joint goals shows China’s framework of governance might be superior in terms of AI’s impact on GDP and economic development. Silicon Valley has created some high-tech jobs, but has also displaced a lot of jobs and will continue to do so as the likes of Walmart are forced to pivot into becoming a technology companies by Amazon. China’s prioritization in government funding and the private sector in the push for AI creates jobs and opportunities.
China’s AI plans includes robotics and the next-web as definitive layers of technological progress along with AI itself. China’s government support for AI-related development demonstrates a consistent emphasis on robotics and indigenous innovation, an indication that smart manufacturing will continue to be a priority. This in short will enable China to be among the leaders in automation and an active enabler of other countries to do it.
China’s 3-Step Plan for AI
1) By 2020, China’s AI industry will be “in line” with the most advanced countries, with a core AI industry gross output exceeding RMB 150 billion (USD 22.5 billion) and AI-related industry gross output exceeding RMB 1 trillion (USD 150.8 billion).
2) By 2025, China aims to reach a “world-leading” level in some AI fields, with a core AI industry gross output exceeding RMB 400 billion (USD 60.3 billion) and AI-related industry gross output exceeding RMB 5 trillion (USD 754.0 billion).
3) By 2030, China seeks to become the world’s “primary” AI innovation center, with a core AI industry gross output exceeding RMB 1 trillion (USD 150.8 billion) and AI-related gross output exceeding RMB 10 trillion (USD 1.5 trillion).
China’s 5-year plans shows a clear indication of where it wants to be heading. China’s agility in the 2020s sets in apart on a entirely different trajectory from America.
China’s AI industry had a gross output of RMB 10 billion in 2016, and is expected to grow to around RMB 15 billion in 2017. Thus, the 2020 benchmark for the core AI industry’s gross output (RMB 150 billion) would represent a tenfold increase of the AI industry in the next three years. The curve begins circa 2019 and by 2022 is significantly different from the ability of another other country on Earth. By 2030, it’s not just the acknowledged leader economically but in AI as well.
By the mid 2020s China is no longer in a position where it needs to be reactionary to what the U.S. is doing in terms of AI development and policy planning, it’s “setting the pace.” That’s when the changing of the guard truly takes place and the Chinese Tech Dynasty is truly starting to rise. This is why as a futurist I have stated that Chinese’s golden age truly begins in 2022.
In October 2016, the Obama administration released the first of three reports on AI, which also corresponded with a large spike in Baidu searches for AI. China has up until now been somewhat reactionary to the U.S., but with a leader that is set to continue on long-term, this all changes. It’s no secret that AI is probably not foremost on the mind of someone as old as Donald Trump. When one Superpower stumbles, another takes its place and this is what has been occuring throughout history as empires rise and fall and as different tribes have contributed to the evolution of human “tools”.
It’s bizarre to think that AlphaGo’s mastery of Go, an ancient game of China, signaled to China that it had to develop its AI capability, almost as a matter of national pride. The Chinese government even banned outlets from covering its May 2016 match with the Chinese player Ke Jie, the world’s number one player at the time.
Chinese government support for AI development, emphasis on indigenous innovation, and prioritization of frontier technologies traces back to February 2006, when the State Council issued their “National Medium- and Long-Term Plan (MLP) for the Development of Science and Technology (2006–2020), as stated in the Oxford University report. Beijing has been at this, for quite some time.
In convergence with AI, is China’s leadership in biotechnology. These international transfer of both technology and talent, as well as investment in whole-of-society and long-term measures. That is, China is playing to an end-game where technology is leveraged for economic and political advantage that greatly benefits global citizens, and not just Chinese citizens and consumers.
China’s Long-term Bets Amount to an Invulnerable Strategic Advantage
China is making several long-term bets from creating hyper-specialized startup communities, to building supercomputing facilities to specialized R&D facilities that could in the long-run, change the course of the history of technology.
From Huawei AI chips to Cambricon, a state backed startup valued at $1 billion, has developed chips that are six times faster than the standard GPUs for deep learning applications and use a fraction of the power consumption; there’s some sense that China has caught up or is rapidly catching up in hardware.
China’s techno-nationalism, an approach that aggressively protects domestic companies from foreign competitors is part of the long-game where Data is the key driver and the 98-fastball in China’s arsenal to achieve AI superiority. China can replicate everything else given the funding, organization and time. Possessing the data of some 800 million chinese consumer, without many restrictions means China has an ace up its sleeve other countries cannot copy.
However it would be a mistaken of the West to believe Chinese policy makers have no sense of the importance of data privacy. Recently, in January 2018, advocates for data privacy celebrated when the Chinese government released a new national standard on the protection of personal information, which contains more comprehensive and onerous requirements than even the European Union’s General Data Protection Regulation, per analysis by CSIS senior fellow Samm Sack, according to the Oxford University report.
One sector where Chinese efforts are still failing are with regards to talent programs that have not managed to attract the “best and brightest” Chinese scientists to return to the mainland. As China continues to modernize, this will be one of the key challenges in the race for AI. China must not only be able to attract its best academic researchers back to China, but to attract the top 1% of global talent in AI research.
In order to recruit foreign talent, the BAT companies have established their own overseas AI institutes. As companies like JD.com, Didi, Toutiao and NIO grow internationally, they too need to be able to attract and retain Western talent. Headhunters working for China’s city governments and technology companies regularly visit international scholars and engineers in universities, companies, and startups and attempt to convince them to work in China. Yet only when China is perceived to be a leader in AI, and has significant measures in place to make foreign talent feel safe and welcome, can this occur at scale.
Finally, China is taking the long-view to growing AI talent. The State Council’s plan also calls for constructing an AI academic discipline, involving a comprehensive effort to establish AI majors, because there really is no talent quite like home-grown talent.
In the commercial AI ecosystem, the Chinese government actively picks winners in the AI space. This is quite unlike the so-called free market system in America. For example, in November 2017, MoST designated four companies — Baidu, Alibaba, Tencent, and iFlyTek — to lead the development of national AI innovation platforms in self-driving cars, smart cities, computer vision for medical diagnosis, and voice intelligence, respectively. The mandates of commercial companies in China are much more recognized and state-sponsored. While still somewhat nascent, Tencent and Alibaba are like the grandmothers of a rising Chinese Tech Dynasty.
The era of Tech monopoly consolidation means that the U.S. and China are both more or less pushing national endorsements that could give Baidu an advantage in working with car manufacturers and Tencent wider access to hospital data, Google and advantage in the Ad-Space and so forth. Rising Tech monopolies like Didi, means they can become something Uber could not with local challengers Lyft and Waymo at home. The National endorsed monopoly status, gives Chinese solutions an unfair advantage over their global competitors.
The Role of the Chinese Central Goverment in the AI Race
The Chinese government is beginning to play a larger role in funding AI ventures. Disbursing funds through “government guidance funds” (GGF) set up by local governments and state-owned companies, the government has invested more than USD 1 billion on domestic startups.
Per a 2017 report, China has a higher percentage of AI companies that have received investments (69%) than the U.S. (51%).
Commercial sectors with significant state backing can progress more quickly. Additionally, the velocity of AI investment is relatively fast: from incorporation to receiving angel investment, the average time for Chinese companies is 9.73 months while it is 14.82 months for US companies. This means China is proving more agile in how it is fast-tracking the future of AI development. The speed up AI development in the 2020s in China is therefore relatively fast. This is in a field that is already moving more quickly than many experts in the field expected it to.
Where Democracy Fails Innovation
China’s unique mode of public-private partnerships has many pros and cons, but certainly is more efficient than any model the U.S. has in place or could hope to implement. This is also because American cannot match the policy support, ample resources, and in some cases, a guaranteed minimum return for investors.
As China now possesses longevity of leadership, the plans it sets in motion as in investing in long-term, whole-of-society approaches to advancing AI technologies, cannot easily be replicated by a democratic system constantly adapting to new leadership and party influences.
China must in the meantime remove any potential bottlenecks to its ability fast-track its AI development plan. China’s semiconductor industry itself is revealed to be a potential bottleneck for AI development. This is perhaps of the China’s major weaknesses histoically.
In the year 2015, China only had 4% of the global market share of semiconductor production, while the U.S. accounted for 50% of the global market share.
Out of the top 10 American chip-makers, 4 specialize in making GPUs; whereas from the top 10 Chinese chip-making companies, none specialize in GPUs. In the second category of hardware, chips like TPUs and some ASICs are designed specifically to rapidly execute neural networks.109 Of the top 10 Chinese chip-makers, 6 specialize in ASIC chips, which are not as flexible as other chips in this category. We must not forget however, China’s ambition is testing its ability to evolve its AI development faster.
China’s success in building supercomputers demonstrates its potential to catch-up to world leaders in AI hardware.
China has relied on imports and acquisitions to boost the most immediately relevant aspects of AI hardware, in the 2020s is must correct this given the high likelihood of trade wars. The Oxford University student points out that, China’s approach to building its domestic semiconductor industry is a microcosm for its overall approach to AI development.
China Leads with Critical Data Mass
Per a report by CCID Consulting, China is projected to possess 30% of the world’s data by 2030.
The Chinese consumer being early and eager tech adopters with high mobile nativity means China’s data protectionism is fairly genius in the long-run. This is the most important segment of consumers in the world for rapid AI development.
The Chinese government censored and blocked Facebook and Google, thereby enabling the rise of domestic platforms like Wechat and Weibo. In retrospect, this was the right thing to do.
If data is a scarce resource for AI development, China could establish exclusive control over this resource for its companies and research institutes. China’s ability to scale globally will increase as its AI development scales to a place of leadership both in tech hardware and other domains.
Challenges to China AI Development Vs. the United States
China has a talent pool of around 39,000 AI researchers, less than half of the size of the U.S. pool of over 78,000 researchers. It will therefore take China some time to “catch up”, in research and algorithm development.
The U.S. ecosystem nurtures more competitive AI startups, with 39 promising AI startups ranked by total funds raised from CB Insight’s AI 100 list, compared to 3 promising Chinese AI startups. In this sense, China is still playing catch up on some bottom lines, but this is the fire under the Chinese psyche that also is enabling them to drive AI development along new lines that can quickly surpass all other competitors.
From 2012 to July of 2017, out of the 79 total acquisitions of AI companies, 66 were acquired by U.S. companies, while only 3 were acquired by Chinese companies (Baidu, in all three cases); relatedly, of the companies acquired in these M&A deals, only one was from China while 51 were from the states.
From 2012 to 2016, according to findings from a Wuzhen Institute report, Chinese AI firms received USD 2.6 billion in investment funding, significantly less than the USD 17.2 billion received by their American peers.
However there are some recent signs things are changing.
In 2017, China’s AI startup scene received 48% of funding going to AI startups globally, surpassing the equity funding share of U.S. AI startups , which received 38% of the global share.
We must also remember that even Tencent and Alibaba are global companies. Tencent and Alibaba are multinational, public companies that are owned in significant portions by international stakeholders (Naspers has a 33.3% stake in Tencent and Yahoo has a 15 percent stake in Alibaba). The South African company’s $32 million investment in Tencent, in 2001, was the deal of the century: That stake is now valued at $128 billion.
Artificial Intelligence Evangelism — the Final Frontier
China continues to ramp up state support for AI, encourage AI tech and talent transfer, and make long-term bets on AI.
Alibaba’s itself wants to be the leader in providing cloud-based AI. This empowers how business in the future works, look at cloud storage (think Dropbox) or cloud computing (Amazon Web Services), with Alibaba cloud AI, it will be possible to make powerful resources cheaply and readily available to anyone with a computer and an internet connection, enabling new kinds of businesses to grow.
Since China’s AI strategy factors into China’s National AI standards and safety, national security, economic development, and social governance platform of the future, it’s nearly guaranteed to get priority funding and attention. Artificial Intelligence development as a force for good, has nowhere on Earth the potential benefits it does than in China.
China’s apparent low level of engagement with Western countries and institutions on discussions of AI safety across private, public, and academic sectors — does not mean that internally it is not doing so. It’s even highly probable that AI may be the first technology domain in which China successfully becomes the international standard setter. With transportation, a smart energy grid and other advances already set in motion, China can focus on its National brain and AI computing development. The body is being built to house the brain of the future, and most agree it will be in China that rests the fate of humanity in the 21st century.
China has Most to Gain Economically from Artificial Intelligence
Research from PwC in 2017 estimated that China had the most to gain from AI technologies, forecasting a potential 26% boost in GDP to benefits from AI.
There’s no incentive quite like the economic one. China is already a rising economic power, it’s only natural to assume that that will eventually translate into science, technology, research and development superiority.
Dangers of the Technological Police State
A report from McKinsey Global Institute supports this view, estimating that 51% of work activities in China can be automated — more than any other country in the world. We take this to mean that China could also be one of the leader in automation and automation technologies that free millions of people from the necessity of work. We know that the economic impact of AI is off the charts:
A report by PwC projects that the AI sector could contribute up to USD 15.7 trillion to the world economy by 2030.
Given the likely income divide and social unrest of the changes in demand of high-skilled and low-skilled workers that automation will impact, China is exploring the use of AI to predict evidence of social unrest before it coalesces. For China that may become a serious problem, just as it will in the United States. AI is thus the boon and the great disruptor of our times.
Council states that AI will also play an “irreplaceable” (不可替代) role in maintaining social stability.
AI techniques may also help Chinese censors find patterns in massive amounts of communication data. China could rather easily fall into a kind of digital Leninism that moves towards a ruthless police-state. China’s social credit system where trust score would affect one’s eligibility for a mortgage, among many other privileges, could easily become a techno-caste system.
China’s Ministry of Public Security (MPS) is reportedly building the world’s largest facial recognition database and is experimenting with expansive surveillance techniques in Xinjiang, a particularly volatile region of the country. It could spread to the rest of the country if China feels threatened by the pace of change that results in more pockets of unrest as automation occurs.
To quote Technode:
Giants aren’t the only ones wrestling in the ring: AI companies in China are springing up like bamboo shoots after a spring rain.
China needs to build a technological bridge to the future of AI, and to catch up with a home-grown AI talent pool. It can be achieved but it may take some more time to show full fruition.
In a rapidly approaching era of smart machines, doer-robots and cloudminds, China is well positioned to be among the leaders if not becoming the greatest innovator of the 21st century itself by mid-century, or sooner.
This article borrows heavily from the
- Oxford University study
- MIT Technology Review
- And among dozens of additional sources from the likes of TechNode, TechinAsia, CBInsights and others.