China’s ancient wisdom, strong work ethic, and economic ambitions make it a contender for top spot in the global AI race

In the ongoing race for global AI dominance, China is still trailing the world leader, USA, but the gap is narrowing — slowly but surely. Speaking of “slowly,” Confucius once famously said, “It doesn’t matter how slowly you go, so long as you don’t ever stop.” And China doesn’t. Evidently.

This isn’t an observation that has gone unnoticed by the political elite in the US. In a recent statement, Senate Majority Leader, Chuck Schumer, expressed his concerns over this state of affairs, citing the latest data from American security agencies and ultimately concluding that “If we don’t do anything, China’s going to get ahead of us [in AI].”

Global standings

According to the global AI index published by Tortoise Media, China is currently second overall after the US, and also second in “Scale” — a measurement that represents a nation’s “aggregated” AI capacity across its whole territory. At the same time, Beijing is second on the planet when it comes to constituent measurements like AI research and development, as well as commercial implementation, with both falling under the “Innovation” metric.

Additionally, based on the data from China’s New-Generation Artificial Intelligence Development Report, among the 100 most-cited AI articles in the world of the past five years, almost a quarter originated from China. Furthermore, China is home to a number of respectable AI conferences, including one of the biggest in the world called WAIC, with Alibaba, Huawei, and SenseTime acting as sponsors.

According to Visual Capitalist, China produced close to 1500 startups in less than a decade, between 2013 and 2022, totalling $95 billion in investment – more than 3 times the amount that the UK and Israel generated together in the same period. Among China’s most successful startups to date are UBTECH, specializing in ML-backed humanoid robots, such as the Walker series; Cambricon, known for building DLPs (deep learning processors) for intelligent cloud servers and terminals; Mobvoi that develops products, such as smartwatches, with voice recognition and generative AI capabilities; and CloudWalk, famous for its facial recognition software.

In a historically diligent culture still dominated by the teachings of ancient philosophers, where laziness is considered sinful, while punctuality and perseverance are drilled into children early on, the AI race is taken seriously indeed. Let’s delve deeper into why that’s the case and how this vision for China’s AI future is being propelled forward.

From the sickle to the circuit

China’s AI advancements illustrate a concerted effort to become a global leader in the field. With that said, much of it has to do with the leadership’s strategy first voiced years ago. The journey began in 1984 when Deng Xiaoping publicly acknowledged the importance of computing technology in education. By 1986, AI components like intelligent computing and robotics were incorporated into the national technology plan. Tsinghua University’s publication of the first AI reference book in 1987, coupled with the return of the first batch of students educated in the West, further bolstered China’s AI capabilities.

The establishment of the Chinese Association for Artificial Intelligence (CAAI) in 1981 — an organization officially backed by China’s Ministry of Civil Affairs – marked another significant step in formalizing AI research. This was complemented by a multitude of national scientific research initiatives focused on various aspects of AI from 1978 onwards, including intelligent simulation, automation, and data processing. In 2006, China’s prowess in AI was showcased to the world when the supercomputer “Sky Shuttle” won the first Chinese Chess Computer Gaming Championships sponsored by CAAI, convincingly defeating a human grandmaster.

Digital age and beyond

The Chinese government’s explicit focus on AI as a priority emerged in 2015. The State Council announced an AI development plan in 2017 and issued a multi-stage action directive the following year, outlining long-term goals and key targets. These ranged from building an open AI technology system to fostering an intelligent economy, with military-civilian integration and the development of ML-backed infrastructure.

In line with its strategic focus, the Chinese government has also identified key corporate players as “National AI Teams.” This special group includes tech pioneers such as Baidu, Tencent, Alibaba, SenseTime, and iFlytek among numerous others. Having been recognized for groundbreaking work in their respective AI subfields, each company is tasked with leading or investing into the development of a designated specialized AI sector in China, such as facial recognition, intelligent computing, cyber security, smart agriculture, and more.

Through these initiatives, China aims for a core AI industry gross output to exceed $60 billion by 2025 and tip over $150 billion by 2030, becoming the world’s primary AI innovation center. Notably, these goals, given the current trajectory, appear well within reach.

Profit as the ultimate motivator

Unsurprisingly, progress is often driven by business. And when workforce-heavy commercial entities in the private sector are out to generate profits by asserting their AI dominance (as they are in China), the results are bound to show. A trailblazer in this domain has been China Computer Federation (CCF), founded in 1962.

As an independent organization for computing technology and applications, CCF has amassed 55,000 paid members across China, comprising 36 technical committees and 30 chapters nationwide. This solution-focused computer science institution has given rise to many big names in China’s tech industry over the years — directly or indirectly. Interestingly, the organization appears to thrive without any official funding from the government.

From research to money-making

The Alibaba DAMO Academy, established in 2017, exemplifies one of the first massive investments in AI research by Chinese companies in the 21st century. With around USD 14 billion invested, Alibaba’s R&D program spans a broad spectrum of AI technologies, including quantum computing, machine learning, and network security.

Further illustrating this commitment are collaborations between industry and academia. China’s largest search engine, Baidu, and Beihang University have jointly developed a graduate degree in AI, which includes China’s first automated driving program. Likewise, Huawei’s talent quest and subsequent partnership with Nanjing University led to the creation of the LAMDA AI Lab with a focus on neural computation, showcasing a synergistic relationship between commercial AI interests and academic research.

Chips, drones, and AI-powered phones

Being one of the biggest smartphone manufacturers in the world, Shenzhen-based Huawei did not stop there. The company announced in early November 2023 that it was prepared to win market share from California-based Nvidia in the semiconductor industry that produces crucial hardware for AI data storage and processing. This ambitious promise marks a significant milestone, considering that Nvidia is expected to be proclaimed the world’s number one producer of memory chips, having reportedly overtaken Samsung of South Korea.

Another one of the global smartphone manufacturers, Beijing-based Xiaomi, announced in August that it would invest almost USD 3 billion annually to embed AI into its products, such as smartphones, tablets, automobiles (including the upcoming Modena), and other smart devices. The company’s plan is to introduce on-board AI technology across all of its products, allowing users access to generative services on par with ChatGPT.

Meanwhile, the world’s largest drone maker, DJI, also from China, is utilizing cutting-edge AI for navigation through computer vision technology. The company, seemingly unfazed by economic sanctions from the US, continues to produce unmanned aerial vehicles (UAVs) and equip them with ever more innovative camera systems and ML-backed software for more precise aerial videography, including solutions for military applications. Which brings us directly to the next point: the US-China trade war.

The bald eagle vs. the panda

The intense US-China rivalry is also fueling significant advancements in AI, driven by competition and strategic interests. Zhipu, an up-and-coming AI start-up from Beijing, epitomizes this race, reflecting the country’s ambitions to take on global AI powerhouses like OpenAI. Zhipu has secured over USD 340 million in funding from corporate investors in China that include Xiaomi, Alibaba, and Tencent —

the world’s largest video game vendor.

Moreover, US sanctions have actually spurred Chinese companies involved in AI to strengthen their resolve, making their production more robust and adaptable. For example, the aforementioned Huawei is allegedly developing a “shadow manufacturing network” across China via its partners and subsidiaries, circumventing US sanctions. Described by the US Semiconductor Industry Association as a “conspiracy of success,” it highlights the resilience and innovation of Chinese firms under pressure.

Notably, this competition extends to national security, with both countries recognizing the strategic advantage AI offers in military applications. CNAS, a Washington DC-based think tank, underscores the role of military AI in diplomacy with China, suggesting that the side with superior AI capabilities could gain a decisive advantage in any potential conflict. In their view, this technological edge in AI could render conventional weapons, including nuclear warheads, less central, subsequently reshaping the geopolitical status quo.

What’s next?

With China’s eyes set firmly on reaching global AI dominance by the end of this decade, it remains to be seen whether a country of over 1.4 billion people can live up to the expectations it has set for itself. Especially interesting, and potentially decisive, is what the other global players can serve in return. What’s more, with the dynamic AI landscape continuously evolving due to advancements in the field, we may soon witness paradigm-shifting scenarios that could radically alter the outcome of the race.