Last year a U.S. intelligence sector contest — to see who could develop the best AI algorithm for identifying surveillance images among millions of photos — was won, not by an American firm, but by a small Chinese company. The result served perhaps as a warning shot that the race to dominate the realm of artificial intelligence, or AI, is on – and American victory is by no means assured. (This post is based on reporting by 3 reporters in the Jan 23rd Wall Street Journal.)
The Chinese company, Yitu Tech beat out 15 rivals due to one big advantage: its access to Chinese security databases of millions of people on which it could train and test its AI algorithms. Privacy rights in the U.S. make that particular sort of application harder to develop, as companies lack access to the enormous trove of these data common in China, and often accomplished with the aid of government agencies.
AI algorithm development depends on vast troves of data to develop and test their not always obvious hypotheses and angles. Microsoft chief legal officer Brad Smith notes that “The question is whether privacy laws will constrict AI development or use in some parts of the world.”
The U.S. leaders in AI include Apple, Alphabet (Google), Amazon, Facebook and Microsoft, and they’re up against Chinese giants like Alibaba, Baidu and Tencent Holdings. On the academic side, the U.S., particularly in the regions surrounding Silicon Valley, holds a strong lead, in terms of budgets and in patents filed in areas like neural networks and something called unsupervised learning. The U.S. outnumbers China in terms of number s of AI companies by about two to one. As well, current spending on AI in the U.S. is massive, with investments of over $13 billion in R&D each from Microsoft and Alphabet. By comparison, Alibaba only recent pledged to triple its R&D spending to $5 billion over the next three years.
But China plans to close the gap with a new government led AI effort to lead the field by 2030 in areas including medicine, agriculture and the military. Thus, AI startups in China are seeing a tenfold rise in funding over last year. PwC expects China to catch up and reap about 46% of the $15.7 trillion it expects AI to contribute to global output by 2030, with North America a distant second at about half that percentage.
In the West there is a general reluctance to give companies wide use of customers’ data. Even tough U.S. laws and restrictions are still weaker than those in Europe, where privacy rights have become even more contentious, and where new tougher laws are scheduled to take effect in May. Some experts think this reluctance could hamper U.S. AI development efforts and allow Chinese companies to pull ahead in the race for global AI dominance.
Regulation “could be a help or a detriment,” according to former Google and Baidu exec Andrew Ng, who recently founded an AI startup. He adds that “Despite the U.S.’s current lead in basic AI research, it can be easily squandered in just a few years if the U.S. makes bad decisions.”
The race is indeed on.