The AI arms race between America and China, being touted as Civil War 2, is heating up again in the backdrop of OpenAI’s ChatGPT that caught the imagination of people, kicking off the mad rush not just in the US, but globally.
The US media has been selling the narrative of a “new cold war arms race” over AI since 2017 ever since China outlined its strategic objectives and roadmap for becoming a global leader in AI by 2030. However, a report by the European Commission has revealed that while the US currently holds the lead, with a strong AI startup ecosystem, expertise in traditional semiconductors, and high-quality research, China has made strides and significant progress in data availability and AI adoption, racing ahead of the US and EU in these categories. The report compared the US, EU and China’s standing in AI based on examining six categories of metrics—talent, research, development, adoption, data, and hardware.
According to China’s plan, which was divided into three stages, China aimed to catch up with leading AI countries in terms of technology and applications by 2020. The country seems to be pursuing that; it has directed all its resources towards competing with American giants like Google and Microsoft, in a rivalry re-ignited with the advent of a series of advancements in generative AI.
During the recent US House Committee on Science, Space, & Technology’s hearing on, ‘Advancing Innovation Towards the National Interest’, chairman Frank Lucas opened with a question and a concern about China narrowing the gap when it comes to AI research and innovation. He cited a Stanford research which indicates that nine of the top 10 universities based on the number of AI papers they published were based in China. Standing alone on the 10th spot was US-based MIT.
Trouble mounts
China’s tech industry has faced challenges in the past due to US tech sanctions, regulatory demands, and Western distrust, which have limited the international expansion of Chinese tech companies. Recently, there has been a buzz again that the Commerce Department is considering banning sales of AI chips to China unless US companies get a special license. As a result of the news, stocks of NVIDIA and AMD slumped. Despite these obstacles, Chinese companies are determined to catch up in the AI race.
The company could find a workaround in supplying a version of products that avoided the ban like the A800. Chinese execs also feel that piling on more chipsets can solve the issues arising from these bans. The country has directed all its resources towards competing with American giants like Google and Microsoft, in a rivalry re-ignited by OpenAI’s ChatGPT.
China’s investment in AI is rapidly increasing, although it still lags behind the US. In 2023, an estimated $15 billion will be spent on AI technology in China compared to $26.6 billion in the US. However, the Chinese government recognises the critical importance of AI for maintaining the country’s technological dominance and is likely to mobilise resources to drive advancements. The number of Chinese venture deals in AI is on the rise, and have surpassed those in consumer tech.
Chinese entrepreneurs, engineers, and former employees of major tech companies are driven by the ambition to surpass their US counterparts in AI, which is seen as a technology that could determine global power dynamics.
Leading Chinese tech players such as Baidu, Alibaba, and SenseTime are already deploying AI bots like Ernie bot, Tongyi Qianwen, and SenseChat. The Chinese AI ecosystem includes former employees of major tech companies and prominent venture capitalists who are backing AI startups. Prominent figures in the industry, such as Wang Changhu, the former director of ByteDance’s AI Lab; Zhou Bowen, the ex-president of JD.com Inc.’s AI and cloud computing division; Wang Huiwen and Wang Xing from Meituan, and venture capitalist Kai-fu Lee, known for his support of Baidu, are among those joining this effort.
However, Chinese demos of AI technology show there is still a long way to go, and critics argue that true innovation requires the free-wheeling exploration and experimentation that is more prevalent in the US. Hugging face CEO, Clement Delangue testifying during the hearing in US recently also vouched that the US ecosystem has allowed for the growth of Hugging Face which is a big proponent of open source innovation and research in AI. “I believe we could not have created this company anywhere else I am leaving proof that the openness and culture of innovation in the US allows for such a story to happen,” he said.
He also emphasised that to maintain its leadership position in AI compared to other countries, open science and open-source initiatives are crucial. They argue that these approaches align with American values and interests, and they emphasise the need to incentivise and promote openness in AI research and development across all companies.
On the other hand, Chinese AI initiatives are challenged by censorship and flawed datasets due to restrictions on information flow and expression. The strict censorship regime in China raises concerns about the impact on the development of AI and the scale of searchable information. China has the lowest Internet Freedom Score, indicating significant obstacles to access and limits on content. The Chinese government’s new draft rules on chatbots emphasise the need for content to align with socialist values, further restricting AI-generated information. Controlling AI-generated content through censorship poses challenges, resulting in disappointing outcomes for Chinese generative AI efforts.
Real Life Consequences
This race is not just about technological supremacy but many analysts and executives predict that AI will have a profound impact on shaping future technology leaders, similar to how the internet and smartphones gave rise to global titans. They also assert that AI has the potential to drive advancements in various fields, ranging from supercomputing to military capabilities, potentially influencing the geopolitical balance between nations.
Citing the use of AI in Ukraine war, chairman Frank Luca said, “It is in our national interest to ensure the United States has a robust Innovation pipeline that supports fundamental research all the way through to real world applications the country that leads in commercial and military applications will have a decisive advantage in global economic and geopolitical competition.”
Harvard Economics Professor David Yang highlighted and cautioned at China’s significant success in AI evidenced by Chinese companies producing the most accurate facial recognition technology.
Additionally, the US-China AI race is also being seen from a democracy vs autocracy point of view. It has been seen that autocratic regimes and weak democracies show a particular interest in AI, with an increase in purchases following political unrest and protests to predict and control the behaviours of their citizens, aligning their interests with AI technology.
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