When San Francisco-based OpenAI unveiled ChatGPT to the market in November, hailed as the so-called iPhone moment for artificial intelligence (AI), it cast a shadow across the Pacific. China’s internet giants, though, have been quick on the uptake. Baidu launched its Ernie bot in March, followed by Alibaba Cloud and Kunlun’s Tiangong in April. Smaller firms are also jumping on the bandwagon every day, with AI and its applications increasingly a new area of competition between China and the United States. “We have to be quick, to catch up with the times,” Zhou Feng, CEO of NetEase’s translation software unit Youdao, said. “What we are facing is a revolution at the technological level.” The world’s two largest economies have already been fighting for economic supremacy with a tit-for-tat trade war, U.S.-led supply chain decoupling and tech containment in the past five years.
China is now seen to be betting on generative AI, regarding it as a strategic tool in the Fourth Industrial Revolution that would not only save the national economy, haunted by a debt mountain, coronavirus-related aftershocks and demographic challenges, but also refuel its bid to overtake the U.S. “Developing big models of AI is a historic opportunity that China cannot afford to miss,” said Kai-Fu Lee, former President of Google’s China operation. The Fourth Industrial Revolution represents a fundamental change in the way we live, work and relate to one another, according to the World Economic Forum (WEF). But it is about more than just technology-driven change, it added, as it is an opportunity to help everyone harness converging technologies to create an inclusive, human-centered future.
AI could lead to around USD13 trillion in additional global economic output by 2030, resulting in an overall 16% increase in global gross domestic product (GDP), according to McKinsey, while PwC believes that China will benefit the most from AI, with the technology contributing to a 26% increase in its GDP by 2030. Combined with the U.S., this would account for nearly 70% of the global economic impact. Beijing’s capacity to deploy its large and economically connected domestic market and talent flow could provide a stable base for the development of computing power, added Microsoft Research Asia Founder Lee, who went on to open venture capital firm Sinovation Ventures in 2009.
“The Chinese economy is so connected in all aspects that its government can do a better job than Western countries in facing resource deployment and work organization,” Lee told the Zhongguancun Forum in Beijing at the end of last month. AI has long been high on Beijing’s priority list, and it is considered as one of the core drivers for high-quality economic development, according to China’s 2021-25 development guidelines. Speaking at a Politburo meeting in October 2021, President Xi Jinping pledged to “fight the battle for key core technologies” and achieve a high level of self-reliance. Xi particularly mentioned the use of a new whole-nation mechanism, which would see Beijing rally every possible resource for its development, similar to what it did to develop its satellite, nuclear weapons and space program in previous decades.
Since Beijing approved a mega data transfer plan last year to move user data in the east of the country to the western region with its abundance of energy and vacant fields via eight national computing hubs, more than CNY400 billion has been poured into the plan. Western countries, on the other hand, tend to count more on private entrepreneurs, and some government incentives to support tech investment. In order to gain the upper hand, Beijing has embarked on an all-out effort to harness the potential of generative AI, with an emphasis on new infrastructure, to propel its computing power and close the technology gap with the U.S.
China, though, still lags behind in a variety of technical dimensions, as the U.S. has 3.5 times more private investments, half of the world’s language models, and the highest repository citation count, according to a study by Stanford University. “The United States is still ahead in terms of AI conference and repository citations, but those leads are slowly eroding. Still, the majority of the world’s large language and multimodal models (54% in 2022) are produced by American institutions,” said the report. But China is quickly catching up by producing the most AI journals, conferences, publications and leading industrial robot installations, surpassing the total in all other countries combined.
Despite the escalating tech rivalry, both countries are engaged in the highest volume of AI research collaborations, which have quadrupled since 2010. But the pace of cooperation slowed after 2020, resulting in a modest 2.1% increase by the end of 2021 compared to a year earlier. Amid Washington’s ongoing tech sanctions, Beijing is seen to have both the resources and determination to scale up its computing capabilities with immense technological infrastructure investments to help narrow the gap, the South China Morning Post reports.
