Worldwide, businesses and researchers are racing to explore the potential of artificial intelligence (AI). As a result, it’s poised to have a transformative effect on the way we do things in our day-to-day lives.
According to PwC research, AI could contribute up to $15.7 trillion to the global economy by 2030. It’s unsurprising, then, that governments are keen to capitalise on its potential. The two countries way out in front in the AI race are China and the US.
China is seen as taking a more proactive stance, at least in the past few years. In 2017, for instance, it was reported by the New York Times that China had laid out a developmental plan to become a world leader in AI by 2030, with an industry worth $150 billion.
The US, on the other hand, has been somewhat slower. Even though the Obama administration issued a report near the end of its term, in 2016, on the future of AI in America, little seems to have been done. That was, of course, until recently, when President Donald Trump signed an executive order on February 11 encouraging American leadership in AI. The White House has also launched an AI-focused website.
BDJ spoke with Jeffrey Ding, DPhil Researcher from the University of Oxford, Gerard Verweij, global and US data & analytics leader at PwC, and Dr Anand Rao, global and US artificial intelligence leader at PwC, to explore the potential of AI in China and the US.
Ding, who specialises in China’s AI strategy and China’s approach to strategic technologies, wrote a report last year, ‘Deciphering China’s AI Dream,’ which looked at the context, components, capabilities and consequences of China’s strategy to lead the world in AI. Verweij and Rao published a ‘Global Artificial Intelligence Study’ that reported on the potential of AI on the world economy as well as the economic gains in countries such as China and North America.
With both countries battling it out to become world leaders in artificial intelligence, who is likely to end up taking the top spot in the rise of the machines?
Is China Lagging Behind the US?
Despite China’s slowing economy and ongoing trade talks with the US, its appetite for AI doesn’t appear to be slowing.
This is noted by the fact that the government’s latest approved $30 billion venture capital fund is projected to help go toward the development of technological innovations such as AI. On top of that is the fact that China’s city of Tianjin plans to set up a $16 billion AI fund, which will go into the development of robots, hardware and software.
Yet, this aggressive stance taken by China - after years of watching the West from the sidelines - doesn’t mean it’ll win the race. This is despite the fact that, in 2017, the Chinese government called for Baidu, Alibaba, Tencent and iFlyTek to lead the development of national AI innovation in everything from voice-activated digital assistants to self-driving cars.
“Chinese firms may have more data for applications targeted toward the Chinese market, but that doesn’t necessarily translate toward gaining ground in overseas markets”
According to the research penned by Ding, China lags behind the US in three of the four main drivers toward AI development: hardware, research and algorithms, as well as the commercial AI sector. The only one in which it doesn’t is big data. The study gives China a 17 on the AI Potential Index compared to America’s 33.
This is something Ding still stands by when asked. However, he notes that the data driver is less clear. “Chinese firms may have more data for applications targeted toward the Chinese market, but that doesn’t necessarily translate toward gaining ground in overseas markets,” he adds.
Verweij and Rao disagree. In their opinion, China isn’t trailing behind the US. This is evidenced by the number of AI patents that have come out of the country since late 2016, and is outpacing other large countries, they say.
“Furthermore, China has a national AI plan and they are doing very interesting things in all areas of AI - deep learning, computer vision, natural language understanding and speech synthesis,” says Verweij. “The number of academic peer-reviewed papers in international conferences by Chinese authors have been growing sharply over the past couple of years.”
Interestingly, while data from the AI Index shows that over 87% of the world’s AI research comes from academia, government-affiliated AI papers in China increased 400% from 2007 to 2017. This was an increase from 188 papers to 957. Corporate AI research also rose by 73%.
In the same period, the US government saw a 90% increase, from 351 papers to 670.
America to See the Biggest Gain, but China Remains Close Behind
The debate surrounding who is likely to win the AI race between the US and China changes day by day. New developments, funding and the expertise to drive the field forward will have an impact on both nations and how they advance.
In PwC’s Global Artificial Intelligence Study, it states that China and North America will see the biggest economic gains from AI, enhancing their GDP by 26.1% and 14.5% respectively by 2030. This is equivalent to a total of around $10.7 trillion. Other areas looked at were Africa, Oceania, and other Asian markets, Developed Asia, Latin America, Northern Europe, and Southern Europe.
“China and North America will see the biggest economic gains from AI, enhancing their GDP by 26.1% and 14.5% respectively by 2030”
The research goes on to note that of China and North America, North America is likely to see the fastest boost from AI in the next few years. The paper reads: “While the impact will still be strong from the middle of the 2020s, it probably won’t be quite as high as in the earlier years.”
China is likely to pull ahead, though, in around 10 years time, the study further adds. This will be due to productivity gains, stimulating exports of AI-related products from China to North America.
In 2017, China is reported to have had record sums of money poured into AI by venture capitalists – $4.9 billion, to be exact, from just 19 investments, making up 48% of all AI venture funding worldwide. This is compared to the $4.4 billion from 155 investments in the US.
AI investment in China is primarily thought to be propped up by three companies: Baidu, Alibaba, and Tencent (known collectively as BAT), considered the equivalents of Amazon, Facebook, and Google. Integral to China’s bid to claim the top spot in the AI race, BAT invests in 53% of the nation’s 190 major AI companies. According to a January report from the MIT Technology Review, Baidu funds 48 companies, Alibaba 31 and Tencent 37.
However, AI funding in the US is also on the rise.
In 2018, venture capitalists invested a record $9.3 billion into US AI startups. This is compared to $5.425 billion the previous year. The number of VC-backed AI deals did fall, though, to 466 from 533.
Yet, taking the combined research and development spending from Amazon, Apple, Facebook, Google, IBM, and Microsoft, it amounted to nearly $55 billion in 2015, with much of that spending going toward AI development.
“China and the US both have different models, strengths and weaknesses on how they are approaching 4IR [Industrial Revolution] technologies,” adds Rao.
“The Chinese model is more top-down, government-driven, local authority-driven, big business-driven model. While the US government (through policy and various DARPA [the Defense Department’s research arm] initiatives) set the policy priorities, big businesses, startups, individuals and academic institutions all play a major role in pushing the research and adopting these technologies.”
Acquiring the Talent for the Job
In order to boost AI research in both countries, talent is required. In 2007, China launched its Thousand Talents program, designed to attract the world’s top scientific experts in AI-related fields to work in the country.
For instance, Tim Byrnes, an Australian physicist, who is attempting to build a quantum computer, swapped a post in New York for one in Shanghai. His position as assistant professor at New York University Shanghai is part of a global recruitment drive to hire 10,000 of the world’s best talent.
“A number of large businesses are setting up internal universities to teach and up-skill their employees as well as their clients”
The US, too, has been known to employ its own tactics in acquiring talent.
Aside from that, however, both countries have a number of universities that have started undergraduate AI programs such as MIT and Carnegie Mellon University. China’s Ministry of Education also announced in February that the country will be opening 400 majors related to big data, AI and robotics in universities in 2019.
“A number of large businesses are setting up internal universities to teach and up-skill their employees as well as their clients...and also some of the large Chinese companies are involved in similar programs,” says Rao.
Ensuring Responsible AI
Of course, while both countries are working toward claiming the top spot, a sensible approach needs to be taken as well. As the development of AI continues, the US and China will need to implement regulations.
In the US, California passed a Consumer Privacy Act last June, while Microsoft has called on companies to adopt a facial recognition code of conduct to address the issues surrounding the technology before it becomes too pervasive.
“There continues to be concerns from individuals, companies, governments and others about many aspects of AI,” says Verweij. “For instance, its security, complexity, transparency, reliability, safety, bias and its ability to bring harm to society.”
The near-absence of AI regulation in China has enabled it to quickly advance its development. However, with data privacy protections being put into place in Europe as well as the US, such as the UK’s General Data Protection Regulation (GDPR), will China be able to keep up?
“Chinese companies and institutions who only operate in China should be able to maintain their data practices, but those who are major players abroad are already adapting”
“Chinese companies and institutions who only operate in China should be able to maintain their data practices, but those who are major players abroad are already adapting,” says Ding. “For instance, Huawei, which has worldwide operations, also has been at the forefront of data privacy protection out of Chinese companies.”
He notes, as well, that China has implemented a personal information protection standard.
So, Who Will Win?
Both nations have the potential and the means of funding to develop the space to greater heights.
At the end of the day, though, it may simply be a case of which country wants it more, directs more funding, attracts more talent and makes it more central to its future.
Right now, that looks to be pointing in China’s direction.
Many of the fears associated with artificial intelligence relate to control. We fear that machines will achieve some form of sentience to then rise up and destroy or enslave us, and we fear that AI will be put to oppressive or otherwise nefarious uses by governments. The latter, arguably, is already well and truly in motion in China. Facial recognition software is being used in the world’s most populous country to keep track of its citizens and, ultimately, aid law enforcement in their efforts to catch criminals.
The uses of AI in surveillance and tracking in China are numerous. One less significant example caught jaywalkers using facial recognition technology and projected their faces onto a screen near the crossing to shame others into compliance. Those pictured were unaware that they were being watched (as much as it is possible to be unaware in a major city). It’s a stunt that highlights how this kind of technology is being put in place in China - such is the sheer lack of regulation at present that small companies are developing use-cases for it left, right and centre.
Much of the technological advancements and application is focused on extending police power, even to the point at which officers are being equipped with AI-powered eyewear to help them identify the wanted. China has long been a state associated with the intense and invasive monitoring of its citizens AI is simply empowering it to extend that.
Illustrations by Kseniya Forbender
To contact the editor responsible for this story:
Margarita Khartanovich at [email protected]
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