- 3rd January 2019
- Posted by: Manolis
- Category: Blockchain
China flag in the center of circuit board, Artificial intelligence of digital illustrationGETTY
Accelerating trends in artificial intelligence (AI) point to significant geopolitical disruption in the years ahead. Much as mass electrification enabled the rise of the United States and other advanced economies, so AI is poised to reshape the global order. Forecasts suggest that AI will add a massive $15.7 trillion to the global economy by 2030.
Prospects for sustaining global competitiveness are now directly tied to the industrialization of AI. AI and machine learning are predicted to reshape manufacturing, energy management, urban transportation, agricultural production, labor markets, and financial management. Governments that can successfully cultivate a culture of disruptive innovation will be strategically positioned to lead in the twenty-first century. By contrast, governments that resist AI will find themselves facing a daunting future.
Battle of the Titans
At the research level, the United States remains highly invested in AI and other emerging technologies. The National Science Foundation (NSF) currently invests over $100 million each year in AI research. DARPA recently announced a $2 billion investment in an initiative called AI Next whose goal is advancing contextual and adaptive reasoning. Meanwhile, the US military has created a new Joint Artificial Intelligence Center (JAIC) to oversee service and defense agency AI efforts.
But where the US has established a strong lead in AI discovery, it is increasingly likely that China may dominate the industrialization of AI. Alongside China’s expertise in factory machinery, electronics, infrastructure, and renewable energy, the country’s government is increasingly focusing on AI leadership.
According to former Google head Kai-Fu Lee, China’s innovation system is nurturing a kind of global economic duopoly that will inevitably force countries around the world to choose sides. Lee would know. After completing his PhD in speech recognition at Carnegie Mellon he went on to lead AI research at Apple, Microsoft Research, and Google China and now oversees venture capital investing in Beijing.
As Lee points out, the strength of China’s economy is a productive synergy between government policies and market forces. Not only does China have advanced commercial capabilities in AI but more importantly it has a coherent national strategy. Unlike the US, China’s government has become highly invested in leveraging AI to drive its enormous economy. China’s state-led strategy builds on the country’s national champions Baidu, Alibaba and Tencent (BAT) in a long-term effort to restructure the global technology market.
The Chinese Century?
China’s government correctly recognizes that AI is critical to its future growth. Where China has commoditized computers, electronics, smartphones, infrastructure, telecommunication technologies, and supercomputers, Beijing has now set its sights on system-wide AI. This includes autonomous vehicles (AVs), advanced medical equipment, robotics, and financial technologies.
Until very recently, most of the AI-driven innovation deployed by Chinese industries has been “incremental” rather than “disruptive”. But this is changing. China’s technology sector is reaching a critical mass of expertise, talent and capital that is realigning the commanding heights of global power. In fact, the Chinese government plans to lead the world in AI by 2030, announcing more than $110bn worth of technology merger and acquisitiondeals since 2015.
China expects to widen its lead in the industrialization of AI by leveraging massively abundant data and rapid prototyping. The country’s growing internet economy generates vastly more data than any other country, leveraging speed, execution, and product quality, particularly through its fintech companies. With instantaneous mobile payments, for example, China’s mobile infrastructure is providing a tsunami of data for training AI algorithms.
American flag in the center of circuit board, Artificial intelligence of digital illustrationGETTY
Dominating Industrial AI
One very real question today is which economic system will be more successful in the era of industrial AI? Free Market America or Socialist China? After two centuries of Western dominance in technology and innovation, the tables are now turning. China’s highly efficient planning model has become a force to be reckoned with. Even as the big five US technology giants—Amazon, Facebook, Microsoft, Apple and Google—redefine Western capitalism, China is inventing a kind of “technonationalism”.
While the US retains a significant technology dominance in AI, resources are fragmented and national leadership is weak. Even as Congress has recently passed legislation introducing a national security commission on AI, the US still lacks a coherent vision. Perhaps an even more challenging problem is the deep divide between the public and private sectors. In the wake of the Edward Snowden revelations, technology professionals now repudiate government, wary of colluding with an opaque military-industrial complex.
The main problem facing the US and other advanced economies is a kind of market fundamentalism that devalues government-led moon-shots. After a half century of US-led neoclassical economic theory, China’s planning model is proving to be more strategically effective at delivering the goods. Where the US thinks in electoral cycles, China is reshaping the playing field, accelerating the decline of the Western-led world order.
What is obvious is that Western countries are in need of new leadership at multiple levels. Just as a post-war generation built a liberal global order, so today aging democracies are in need of a new and compelling vision for a high tech global society. A new generation of leaders is urgently needed— younger, smarter and most importantly, technology literate.