Will China Overtake the US in Artificial Intelligence Race?

Many nations are racing towards dominating the global innovation arena, specifically with an eye on gaining a competitive advantage through artificial intelligence (AI). According to a study by the World Intellectual Property Organization (WIPO), the United States and China lead in global competition. The race is actuated by the desire to boost competitiveness, protect national security, increase productivity, and help solve societal challenges.

Currently, the United States leads the race, with China taking the second spot, and the EU occupying the third place. But China looks set to challenge US domination in AI through a raft of initiatives. On several fronts, the country is already asserting itself in the field. Below, we’ll look at areas where China has shown resilience in the race to overtake the USA in AI.

1. Hardware

Despite the head start in AI research, China lags in AI hardware. Undoubtedly, hardware, especially the semiconductor, is essential for the competitiveness of any nation seeking to dominate AI. Countries without a semiconductor industry are very vulnerable to the whims of their competitors.

For example, in 2018, the US placed a ban on the export of parts and software to Chinese firm ZTE corporations. The results? The conglomerate almost folded its operations. Although the ban was eventually lifted, the scenario shows how China’s dependence on the US for the supply of technology threatens their AI goals.

With the US controlling the manufacture of AI-enabled semiconductor chips, China has a long way to catch up. Also, the Asian giant has to improve its expertise in designing computing chips capable of supporting advanced AI systems.

2. Central Strategy

In 2017, the Chinese government laid out a State Council paper with a three-step program to make China a world leader in AI by 2030. The program aims to make the AI industry worth about $150 billion, and the government is pushing for greater adoption of AI in several areas such as smart cities and the military.

To monitor its progress towards achieving the goal, the council paper laid out milestones that it should achieve by 2020. Notably, it wants to have an AI industry that rivals its global peers, to be the preferred destination for top AI talent, and to make significant contributions in fundamental research. 

Furthermore, the Chinese government is very bullish on AI that it has planned for a $2.1 billion research park exclusively for Artificial Intelligence. The Chinese government is also closely working with established digital behemoths such as Alibaba, Baidu, and Tencent, facilitating the exchange of data in the companies.

In the US, the story of technology funding is well known. Venture capital traces its roots to the country and is behind the emergence of tech conglomerates such as Apple, Facebook, Amazon, IBM, Google, and many more. Collectively, public and private investors have pumped trillions of dollars in these forms, and they are here to stay.

In the United States, President Trump gave an “Executive Order on Maintaining American Leadership in Artificial Intelligence” in 2019. The action prioritized the development and deployment of AI across the country to ensure it dominates the AI ecosystem across the globe.

Through the Executive order, the president announced a national strategy on artificial intelligence, directing the Federal government to pursue five pillars. Also, the US is actively leveraging AI to enable the Federal government to deliver its services smartly. Moreover, the US Department of Defense revealed its intention to invest $2 billion within the next five years towards advancing AI.

Although the US had assumed a lackluster approach to AI when compared to China, it is now proactively making it a key priority.

3. Local Implementation

In China, a State Council paper is no ordinary document. It is a policy document with teeth. So, when it comes to execution, all ministries and local governments have to play their role in actualizing its goals.

A State Council paper is typically a call to action that mobilizes the entire country into action. While there’s no official data on the pumped into AI development by the Chinese government, the investment is undoubtedly enormous. And it isn’t just supported by the central government, local governments play a role, too.

In fact, media reports reveal that the city of Tianjin alone plans to establish a 100 billion Yuan fund (approx. US$14.06 billion) specifically for the AI industry. Shanghai has also set up an AI fund to build a “first-class AI innovative ecosystem” by 2021. Not left behind is China’s capital, Beijing. The city plans to build an AI development park that will house up to 400 enterprises costing 13.8 billion yuan.

Unlike China that has decentralized its AI development to the grassroots, the US hub for tech innovation is North California. Over the years, Silicon Valley has been the euphemism of tech development, but it has slowly started to lose its stranglehold of the title. Its greatest problem is complacency and solipsism.

Other regions within the US, such as New York City, have started to witness the emergence of AI-focused technology firms. Moreover, the Boston area has also been very proactive in research. But despite the intra-country shifts, Canadian firms are increasingly eroding the dominance of Silicon Valley.

4. Fundamental Impact

According to the Allen Institute for Artificial Intelligence analysis, China has surpassed the US in terms of authorship of AI papers. Moreover, the Asian country has overtaken the US in the production of high-impact papers, which are the most cited papers. The research projects that China is likely to dominate the top 10% publications by 2020 and the top 1% publications by 2025.

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China also has some of the best universities in artificial intelligence. According to the WIPO study, China has 17 of the top 20 academic institutions involved in patenting AI. Moreover, it places more emphasis on the fast-growing area of deep learningan AI technique that includes speech recognition systems. It also has some of the top-notch companies in speech recognition, and natural language processing, including Face++, iFLYTEK, SenseTime, and Unisound.

5. Tech Ecosystem

The Chinese technology ecosystem is now a powerhouse in its own right. The country is home to several multi-billion dollar tech giants such as Huawei Technologies, Tencent, Baidu, and Alibaba, who are individually investing heavily in AI.

China’s unremorseful imitation, hypercompetitive citizens, and entrepreneurial economy have worked in favor of Chinese businesses. The unique business models will most likely be applied in rolling out AI across the country.

While the US has a lead in AI development, it is uncertain whether it will maintain the slot. Several analyses of funding data for AI startups reveal that in some years, Chinese startups receive more funding than their US counterparts. For example, in 2017, Chinese Startups received approximately $8.1 billion in investment compared to almost $6.2 billion for US startups.

6. Data Regulation

China’s laws are very relaxed, especially when it comes to privacy and the use of AI technologies. The country’s citizens are more than willing to trade their privacy data for safety or convenience. 

Already, the Chinese government is using facial recognition technologies, and they’ve been well received by citizens. In countries like the US, privacy concern is the most significant impediment to the universal use of facial recognition technology.

7. Adoption

When it comes to AI adoption, China has a head start. The country’s Ministry of Industry and Information Technology developed the Three-Year Action Plan for Promoting Development of a New Generation Artificial Intelligence Industry (2018–2020)”. The policy document called for the integration of AI in manufacturing.

AI has infiltrated Chinese culture. Therefore, by embracing it, the government doesn’t just subsidize AI firms; it also creates use cases to spur widespread adoption. Moreover, the Chinese techno-utilitarian culture is receptive to AI adoption, irrespective of the ethical issues that surround the technology.

8. Data Availability

Typically, we produce a lot of data when we interact with social media, search engines, and payment portals. The data generated is of great value for machine learning models. China leads in terms of data collection because it is the most populous and has the highest number of internet users.

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Additionally, from the angle of the amount of data available to large internet companies, China is the crown wearer. The firms are also those levering AI technology in the country, giving the Asian nation a competitive advantage.

Although American internet companies have a global reach, their Chinese counterparts access a greater variety and depth of data. Through their all-in-one super apps and by inserting themselves in traditionally off-line activities, Chinese firms collect more varied data. Should they spread their tentacles internationally, they will whittle down any gains made by the US in terms of data.


The future of artificial intelligence is going to be a battle for talent and data. As you can see, both the US and China are bracing themselves for the future by preparing the ground to be the superpower AI. Currently, the US has the lead, but will it maintain the race? Not if it cares about privacy.

Evidently, China exhibits signs of outpacing the US in the near future, at least from the perspective of AI deployment, data, and the ecosystem. But the fundamental question is, will it win the race? Only time will tell.