China’s AI Technology Race
China aims to be the world leader in AI by 2030. A China-based accelerator firm is launching a $77 million fund aimed at helping promising international AI firms enter China.
China has a rising digital economy, which is equal to 30.3% of its GDP or 22.6 trillion yuan ($3.35 trillion) and is driven to a large extent by leading technology companies Baidu, Alibaba, and Tencent (providing in total 42% of venture capital investment in China in 2016). According to the OECD Science, Technology and Industry Scoreboard, 70% of AI technological development is happening in Japan, Korea, Taiwan and China. New areas of the digital economy, such as artificial intelligence, are expanding rapidly in China and are is also spreading through traditional sectors such as education, industry, and health care, improving efficiency and adding value in these areas. The government has also encouraged funding for projects incorporating artificial intelligence, with the goal to generate a market valued at 100 billion RMB ($15 billion). China’s Ministry of Finance has plans to put some $1 billion into AI-related projects in 2018 and China’s Ministry of Science is readying new funds totaling tens of billions of yuan for a new AI project.
For years China has watched with envy as the West developed one frontier technology after another, while it could only count on low-cost labour to fuel growth. However, a China monopoly, in the new era of Artificial Intelligence, is not just inevitable, it is already approaching. The data gap between the US or EU and China is dramatically larger. Chinese use their phones to pay for goods approximately 50 times more often than Americans, and orders for food delivery are almost 10 times greater than in the US. This mobile infrastructure and all the applications built on top of it generate lots of data feeding into the AI virtuous cycle and AI models. China aims to be the world leader in AI by 2030, aiming to make the industry worth $150 billion by then: a goal that many think is achievable.
AI is certainly changing how people think about and interact with technology. Jumping into this opportunity are thousands of startups, which may be the forerunners to AI becoming a culture. Working with AI means dealing with massive volumes of data. The sheer size is unfathomable to the human mind. AI isn’t just about the technology, from the increasingly sophisticated software and algorithms to the growing stable of abilities and services it is able to contribute to human lives.
China’s big AI push isn’t all good news. State support has given rise to a potential bubble in big data analytics, as funding is more likely to be given to projects yielding immediate results. That means that Western countries, especially US, still lead when it comes to the core of AI, thanks also to more talent related not just to AI, but other cognitive subjects critical to building intelligent machines.
According to Chinese tech giant Tencent study, there are just 300,000 AI researchers and practitioners worldwide, but the market demand is for millions of roles. The demand has pushed salaries to absurd heights. According to one independent AI lab, there were only 10,000 individuals worldwide with the right skills to spearhead serious new AI projects. Tencent’s study suggests the bottleneck is education. According to the report, it is the US that is currently ahead in terms of global talent, with more universities teaching machine learning and related subjects than any other nation.
Who is going to win?
Luca Masoero