Image via South China Morning Post
In recent years, China has emerged as a major contender in the global race to use AI to spur economic progress. If developing AI technology is the 21st century’s answer to the space race, then China is the player who has a laser focus on becoming the world’s preeminent AI superpower. Automating workplaces with AI could add 0.8 to 1.4 percentage points to GDP growth annually, and that’s just the beginning of how economically and socially impactful the all-encompassing AI revolution could be for China, and the world.
According to Goldman Sachs, there are four key areas where development is needed to create value in AI: talent, data, infrastructure, and computing power. China already has the first three, and is poised to maximize its potential in computer power. In the realm of data generation China has a huge advantage. With a vast and largely m-internet savvy population and a high degree of Internet penetration throughout the country, China is expected to produce 20-25% of global digital information by 2020, up from its current 13%. Many say that data is the “lifeblood” of AI, and with its massive volume of data, along with superior lines of coding and its large pool of talent, China is nicely positioned to adroitly leverage its data stores to develop and advance its AI capabilities.
China’s Internet powerhouses (Baidu, Alibaba and Tencent) have all ramped up their AI R&D efforts in the past few years. Similar to the operational strategy of US tech giants, who have opened global research labs in Silicon Valley, so too is the BAT trio aggressively expanding, mapping and actualizing their AI agenda. Earlier this year, Baidu nabbed Microsoft executive Qi Lu as part of its AI strategy, as well as forming a joint company-government laboratory; and Tencent nabbed Yu Dong, also formerly of Microsoft, to lead its AI research facility founded this past April.
Baidu is of particular note. With its bread and butter still in the search business, Baidu is seeking future survival and growth through incorporating AI into its evolving product offerings and business model. According to newly minted COO Qi Lu, the key is developing an ecosystem-like platform, called the Baidu Brain, which can better enable Baidu partners to accelerate their pace of innovation using a stable economic model to build strong, long-term win-wins for developers. There are over 60 different types of AI services in the Baidu Brain suite … with a special focus on natural language-based, conversation-based human computing and facial recognition platform services. For Baidu, the first place their ecosystem will land is in self-driving autonomous cars, via an initiative named Apollo.
Additionally, earlier this year, Baidu acquired Kitt.ai, a Seattle-based start-up that has developed a framework to build and power chatbots and voice-based applications across multiple platforms and devices; they also acquired XPerception, a Mountain View-based start-up that specializes in vision perception software and hardware with applications in robotics and virtual reality. In all areas of the AI universe, Baidu is expanding and leading the charge.
Outside of the BAT trifecta, Meituan-Dianping, the on-demand services provider, is using big data analytics to optimize delivery routes in mere fractions of a second. The “Uber of China,” DiDi Chuxing, is working on deep-learning and human machine interactive driving technologies to optimize its platform and services. Sensetime, founded in 2014 and already one of the world’s most valuable start-ups, provides computer-vision technology to big Chinese corporations, such as China Mobile and e-tail behemoth JD.com. Of course, there are many, many others.
In China, it seems, AI is everywhere.
In contrast to the US, where, of course, private companies such as Microsoft, Google, Facebook and Amazon are invested heavily in AI, the Chinese government has allocated tremendous amounts of capital and subsidies for all things AI related. Conversely, the National Science Foundation in the US received no increase in AI funding for this year.
In July 2017, China’s State Council issued guidelines on developing AI within the country. The goal: to become the global innovation center for AI by 2030, with the total output value of artificial intelligence industries clocking upwards of $147.80 billion (1 trillion RMB). The council is hoping for breakthroughs in the basic theories of AI, in big data intelligence, human-machine hybrid-intelligence, automated decision-making; swarm intelligence;,multimedia aware computing. etc., as well as more advanced areas such as brain-like computing, machine learning and quantum intelligent computing.
Beyond the metrics of pure economic value, China also intends that AI should be applied to “the public service and to social management so as to build a safe, more comfortable and convenient society.” Interestingly, the State Council encourages domestic Chinese AI companies to cooperate with leading foreign AI bodies, even to the extent of merging or investing in foreign companies, setting up joint research centers, or establishing international AI-focused organizations.
Although today the US certainly is the global leader in AI ecosystems, China is rapidly poised to surpass it, given its ample money, political capital, strong economic and strategic motivation and massive volume of consumer and behavioral data.
For China, the true tipping point may have emerged from the defeat of Lee Se-dol, the South Korean Go master, by Google’s Alpha Go in 2016, and then the subsequent loss of Ke Jie of China, the world’s top ranked player, in May 2017, once again at the hands of Alpha Go. This served as an awakening for Beijing – a veritable “Sputnik” moment – and it created a much needed sense of urgency in terms of policy formulation and AI investment.
Other cities in China have started to take the lead, such as Tianjin, where a fund for $2 billion is slated to support the AI industry. The city also plans to set up an “intelligence industry zone” that will occupy more than 20 square km of land. Shenzhen, a hardware hub in the south of China near Hong Kong, offers $1 million to support any AI project established there. Even relatively unknown Xiangtan, in Hunan province, has earmarked $2 billion towards developing AI and robotics.
McKinsey recommends five priorities to form a basis for China’s AI strategy of matching market-driven development, AI adoption, and the right policy framework to foster growth:
- Building a robust data ecosystem.
- Spurring adoption of AI within traditional industries.
- Strengthening the pipeline of specialized AI talent.
- Ensuring that education and training systems are up to the challenge.
- Establishing an ethical and legal consensus among Chinese citizens and the global community.
China seems ready and able to do all of these. For China, AI is the key to future growth, and, for the world, the implications remain to be seen. Though issues such as data privacy, job elimination, and wealth and income equality still persist around the subject of AI in the West (with Elon Musk representing one emphatic viewpoint, in terms of AI skepticism and concern), in China, the nation, as a whole, seems to be putting all its eggs into the AI basket, and that basket may very well change the course of humanity, through technological evolution, for the better.