Growth in A.I. Spurs Political Tension

Growth in A.I. Spurs Political Tension

By Alex Adeseye | June 15, 2017

Governments and enterprises around the world are pressured to take to the forefront of the artificial intelligence (A.I.) industry, as the market experiences explosive growth and economic potential. According to ReportsWeb, the Global Artificial Intelligence market is poised to grow at a compound annual growth rate of above 35% between 2015 and 2022. As a pioneer in A.I. development, the United States is set to continue to dominate the market segment due to widening usage of A.I. applications among various verticals. China, meanwhile, is the fastest growing A.I. developer in the Asia-Pacific region, with respect to its economy and electronics industry base. The United States and China are the two foremost, developed nations pursuing these A.I. innovations, especially with advancing research on strong A.I. like deep-learning and machine-learning technology. As a result, tensions appear to be building.

Last month, China's Center for Information Industry Development (CCID), Guiyang Big Data Development Committee, Guiyang City Nanming District Government, and Beijing Miteno Communications Technology Co. held the 2017 Artificial Intelligence Jia Xiu Forum in Guiyang, Guizhou, China. The forum was created to discuss China’s strategy in dealing with the global A.I. technology evolution, especially regarding its interactions with the U.S. More than 60 A.I.-related government officials, business leaders, and research experts discussed new trends and opportunities for A.I. development, yet the underlying concern focused on the dual competition and cooperation between the U.S. and China in A.I.

Comparing four core factors (algorithm, data basis, application and A.I. platform) and four environment factors (policy, talent, start-up and R&D investment), the forum came to several conclusions. The U.S. leads in the MIT A.I. development list regarding algorithms. In applications, the U.S. A.I. market is more mature, with a higher product penetration in spite of its lower growth rate. However, China has had a breakthrough in A.I. algorithms such as machine vision. With the demand for transformation and upgrading via A.I. applications, China boasts huge market potential.

Recently, the U.S. government has also placed considerable attention to its relations with China regarding A.I. technology.  A Reuters report indicates that the U.S. plans to place stricter limitations on investment capital from China flowing into U.S. companies that are working on A.I. This move would seek to better protect U.S. national security by shielding new technologies, which China could potentially use to strengthen its military capabilities. An unreleased Pentagon report explained how the U.S. government seeks to intensify its role in the Committee on Foreign Investment in the United States (C.F.I.U.S.), the interagency committee that reviews foreign acquisitions of U.S. companies on national security grounds. Under the Obama administration, C.F.I.U.S. halted attempts by Chinese companies to acquire high-end chip makers.

Republican Senator John Cornyn is currently drafting legislation that would give C.F.I.U.S. greater power to block some technology investments. According to a Cornyn aide, "[A.I.] technologies are so new that our export control system has not yet figured out how to cover them, which is part of the reason they are slipping through the gaps in the existing safeguards." This legislation would increase scrutiny of buyers from nations identified as potential threats to national security. According to James Lewis, a military technology expert, China may pose such a threat. He states, "The Chinese have found a way around our protections, our safeguards, on technology transfer in foreign investment. And they're using it to pull ahead of us, both economically and militarily.”

The aforementioned Pentagon report also emphasized the need for measures beyond the U.S. military, like changing immigration policy to allow Chinese graduate students to remain in America after completing their studies, rather than for them to return home. Venky Ganesan, managing director at Menlo Futures, further emphasized the need to keep the best students studying A.I. in the US.

Many industry experts warn that stronger U.S. regulations may not even stop technology transfer, but they may instead trigger China to retaliate against the U.S. economy. Chinese Foreign Ministry spokesman Lu Kang has already responded, saying that Chinese investment should not be "politically over-interpreted" or "interfered with politically." If legislation appears especially too aggressive, many believe that the government will face heavy pushback from the tech industry as well. Research firm Rhodium Group showed that China funneled $45.6 billion into completed acquisitions and greenfield investments in the US last year. This investment amount has further increased by 100 percent in 2017.

On the flip side, the U.S. military is looking to employ elements of machine-learning into its drone program. The Pentagon is seeking to develop algorithms that can filter through material and alert military analysts about valuable information in the war against the Islamic State and insurgents in different countries. A Pentagon official said that the U.S. government is requesting to spend around $30 million on the effort in 2018. China too is investing massively in related technology. Recently, Baidu Inc. agreed in April to acquire U.S. computer vision firm xPerception, which makes vision perception software and hardware with applications in robotics and virtual reality.

With increasing pressure on both sides to advance in their A.I. capabilities, the political implications are clear. While tension may not be as potent as that of the Cold War era between the U.S. and Russia, the dual hyper-awareness and competition between the U.S. and Chinese governments appears to overshadow relations between the nations’ technology industries. As well, with technology companies in India revamping the IT industry and emerging into startup culture, focusing on innovations in deep and machine-learning, cloud computing, big data analytics, and robotic process automation, one may wonder about the implications. How will technologically and economically dominant countries like the U.S. and China respond as competition in other nations only increases? Only time will tell.

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