China is winning the AI arms race – CB Insight

Marathon runners taking the position for the start of race

Silicon Valley might be the centre of the technology world as it stands but new research from CB Insight claims the pendulum of power might be swinging more towards China.

In terms of the number of start-ups emerging in the AI field worldwide this is rising rapidly, up 141% when you compare 2017 to 2016, and while the lion’s share of these are based in the US, the Chinese are seemingly better at attracting funding. Some of this can be put down to government backing, but you might argue it doesn’t matter where the money comes from (in terms of developing technology) just the fact that it is in the bank account and paying for research.

$15.2 billion was invested in AI globally according to CBI with Chinese companies hording an impressive 48% and the US collecting just 38%. Just to put this in perspective, over the course of 2016 Chinese firms only attracted 11.3% of the funding. As mentioned above, some of this will come from the government which has its risks but for the US it should be seen as a worrying statistic. AI is the future of the technology industry, it will after all underpin the development of numerous other technological developments, and the Chinese government is doing more than the US to secure leadership in the field. Could the focal point of the technology world shift from Silicon Valley to Shenzhen?

The focus in China is predominantly around two technologies; facial recognition and AI chips. CBI notes facial recognition is down to the governments ambitions for nation-wide surveillance systems, while on the chip side of things the country is directly challenging the US for global dominance. The chip battle could be crucial as well. AI is becoming ever more decentralised and those companies who are able to offer on-device intelligence will be a dominant player in this sub-sector.

That said, these are not exclusive areas of focus for China. While the money being invested into start-ups is a good indicator of where power lies, the influence of the Chinese government could be seen as distorting. Unfortunately for the US supporters it would appear Chinese researchers are also being a bit more proactive.


As you can see from the graphs above which indicate the number of patent filings, the number being filed in China vastly exceeds those in the US. Again, this does not directly mean anything as a killer patent could dominate the industry but it is another indication that the pendulum is swinging.

Right now such research means very little. The US is still the dominant force worldwide when it comes to technology, but the rise of the sectors most dominant names shows just how quickly the status quo can be disrupted. Who would have thought Amazon would have been such a dominant force in IT infrastructure a decade ago, or Facebook would be the first point of call for advertising revenues?

AI will power autonomous vehicles, it will decide how communications networks operates, control virtual assistants, take over cyber security operations and revolutionise the customer services sector. These are usecases being discussed now, but how about IntelligentX which wants to introduce the world’s first AI-brewed beer, or Prose which wants to use AI for made-to-order hair products? There is so much to AI we haven’t even thought about yet.

AI will be the fundamental driver of change over the next couple of decades and the Chinese government is doing more to make sure global influence is based within its own borders. The balance of power in the technology world could be swinging away from the US.

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