China: The New AI Hegemon

China VS USA is a hot topic right now. This also holds true for another hot topic, AI research. Twenty years back, there was a major difference between China and the United States in level of AI research. Although the US witnessed a steady increase in research efforts by both public institutions and the private industry, China still engaged in manufacturing cheap plastic products for the world. But in recent years, China has shifted gear to catch up quickly. From a scientific point of view, China has become a global leader in AI publications and patents. This trend indicates that China is also primed to become a pioneer in AI-powered industries, such as speech and image recognition applications.

According to the China AI Development Report 2018 project, China’s international share of AI research papers has risen from 4.26% (1.086) in 1997 to 27.68% in 2017 (37.343), surpassing any other nation in the world, along with United States. China is also regularly filing more AI patents than any other country. As of March 2019, the number of Chinese AI companies exceeded 1,189, second only to the United States, which has more than 2,000 operating AI companies. These companies rely more on voice (e.g. speech recognition, speech synthesis) and perception (e.g. image recognition, video recognition) than their international counterparts.

You might wonder how did China catch up? The essence of AI research means that the technical advantages of leaders are not particularly strong; how China’s vast market is particularly crucial to enhance AI; and how the country’s favorable regulatory climate is necessarily relevant to AI investment and adoption. It is a mixture of various factors.

AI technology is significantly distinct from other technologies in a variety of areas. Although research advances the field, the research is often openly shared, patent research does not offer much, and innovations often emerge from the virtuous circle of consumers generating data and companies improving their goods on the basis of what they derive from that data. The open science nature of AI is critical for newcomers to catch up with forerunners, since it helps the former to close the information gap with the latter in a short period of time unlike medicine or automobile industry.

The second area that AI varies from conventional industries is that innovation generates revenue. Simply put, data and ability trump patents in AI science. In conventional markets, such as pharmaceutical and electronic media, patents play a key role in maintaining companies’ roles and defending revenue sources. The open science essence of AI means that the comparative benefits of companies also derive from the degree to which they can build up a vast database — and grow domain-specific information or software across the database — more quickly than anybody else.

This suggests that there are two main assets in the AI era: data and engineering talent. China is very rich for all of them. Its vast population has advantages in producing and using big data, and its decades-long efforts to support science and innovation offer it a rich supply of high-quality computer scientists and engineers.

Government plays a huge part for China being number one in AI Research. Under President Xi Jinping, China has made great strides in many fields, which also includes especially in A.I. Companies and the government have agreed on a far-reaching strategy to make China the world’s largest A.I. innovation center by 2030 and are now making serious strides against that target. A new government is unlikely to repeal the plan; China removed Xi’s term limits and would essentially allow him to remain in office for life. This gives China an amazing edge over the West.

It also has three of China’s largest companies — Baidu, Alibaba, and Tencent — superpower. Collectively, they’re known as the BAT, and have profitable and organized A.I. strategy. Influence of BAT does not stop within China. That’s because BAT is now well known in Seattle and around San Francisco and is investing heavily in United States startups. That’s appealing to startups, since a BAT contract usually involves entering the lucrative Chinese industry, which may otherwise be difficult to reach.

China’s pace in AI progress needs the full attention of the world, but it is unhelpful to limit all the multiple innovations to a single story about China as a challenge against the West. Observers outside China need to participate seriously in the dialogue and make more effort to consider and learn from the complexities of what is actually going on.

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