After San Francisco-based OpenAI launched ChatGPT in November 2022, the AI-based chatbot system quickly gained global acclaim. Undeterred, Chinese tech giants quickly adopted the new technology. Baidu launched the Ernie bot in March 2023, followed by Alibaba Cloud and Kunlun's Tiangong in April.
Following in the footsteps of the “giants”, many small Chinese technology companies are participating more deeply in the artificial intelligence playground. AI and its applications are creating a new wave of competition between businesses and organizations in the world’s two leading economies, the US and China.
“We have to speed up to catch up. What we are facing is a revolution at the technological level,” said Zhou Feng, CEO of NetEase’s translation software division Youdao.
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| AI has long been a top priority for Beijing. (Source: SCMP) |
Beijing's strategic tool
Over the past five years, the world’s two superpowers have been locked in a fierce trade war, waging tit-for-tat moves to gain economic dominance. Washington has also sought to decouple supply chains and block Beijing’s access to new technology.
Although many economists believe China could surpass the US to become the world's largest economy by 2030, Beijing's weak recovery from the Covid-19 pandemic has overshadowed this forecast.
In an effort to gain an advantage, China is betting on AI as a strategic tool in the Fourth Industrial Revolution, hoping it will help the world's second-largest economy recover from a three-year pandemic lockdown, face demographic challenges and increase its efforts to compete with the United States.
“Developing large AI models is a historic opportunity that China cannot miss,” said Kai-Fu Lee, former president of Google China.
According to the World Economic Forum (WEF), the Fourth Industrial Revolution represents a fundamental change in the way people live, work and interact with each other, and is an opportunity for the world to exploit converging technologies to create a comprehensive, human-centered future.
Global management consulting firm McKinsey (USA) estimates that AI could contribute about 13 trillion USD to global economic output by 2030, increasing the world's gross domestic product (GDP) by 16%.
Auditing firm PwC also believes that China will benefit the most from AI, with the technology contributing 26% to the country's GDP by 2030.
Kai-Fu Lee said Beijing’s ability to leverage its vast domestic market, economic connectivity, and talent flow could provide a stable foundation for the growth of computing power. AI has long been a top priority for Beijing and is considered one of the core drivers of high-quality economic development, according to China’s 2021-2025 development guidelines.
Speaking at a Politburo meeting in October 2021, Chinese President Xi Jinping pledged to “fight for important core technologies” and achieve a high degree of autonomy.
Since Beijing approved a big data transmission plan last year to move user data from the east of the country to the energy-rich, open fields of the west via eight national computing centers, more than 400 billion yuan (about $56 billion) has been poured into the mega-project.
To gain the upper hand, Beijing is making every effort to exploit the potential of AI, focusing on establishing new infrastructure, boosting the power of computing technology and narrowing the technology gap with the US.
Computing power is becoming increasingly important in AI, helping to rapidly process huge amounts of information, revolutionizing the speed and accuracy of systems analysis. “The competition between the US and China may be determined by computing power,” said historian Chris Miller, author of The Chip Wars: The Battle for the World’s Most Important Technology .
According to the China Academy of Information and Communications Technology (CAICT), a branch of the Ministry of Industry and Information Technology, China now accounts for 33% of the world's computing power, just 1 percentage point less than the United States.
“China’s focus on increasing its computing power certainly gives it an opportunity to catch up with the US in AI,” said Nestor Maslej, research director at Stanford University’s Institute for Human-Centered Artificial Intelligence.
China's AI industry is "strangled" by chip shortages
However, according to a study by Stanford University (USA), China still has a long way to go compared to its competitors because Washington's private investment is 3.5 times larger than Beijing's. Not to mention, "the majority of the world's major multimodal and multilingual models (54% in 2022) are launched by US organizations," the study stated.
The US is rated much higher than China for its superior investment environment for AI technology research companies, producing higher quality AI research and models. Last year, Washington outpaced its rival by more than five times in the production of AI machine learning systems, creating 255 new major systems compared to Beijing’s 44.
For the AI industry, chips play an important role in increasing computing power, with the proportion of computing power of graphics processing unit chips in the computing field increasing from 3% in 2016 to 41% in 2020.
The US's sweeping export restrictions on advanced chips and chipmaking equipment to China have "strangled" China's AI industry due to shortages of a range of key materials, from graphics processing units (GPUs), FPGAs, application-specific integrated circuits (ASICs) to accelerator chips, according to an editorial published in the Economic Daily .
“China’s domestic AI industry is currently short of computing chips, and if the US continues to sanction China’s chip technology, it will definitely affect the development of computing capabilities in the short term,” said Li Yangwei, a technical consultant working in the smart computing industry in Shenzhen.
According to this expert, the obstacles to the development of domestic computing technology will only decrease when China gradually becomes more self-sufficient in chip technology.
Despite the fierce competition between China and the US, many politicians have warned about the challenges posed by AI and called for cooperation from both sides.
Former US Secretary of State Henry Kissinger said in an interview with The Economist in April that the fate of humanity depends on whether the US and China can come to an agreement, while a breakthrough in AI could happen within the next five to 10 years.
“AI is not a two-nation contest,” Kissinger said at a closed-door meeting hosted by JPMorgan in Shanghai in late May 2023, noting that AI opens a new era of human consciousness that requires close cooperation between the two superpowers to explore the potential and challenges of this superior technology.
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