Article as published in Inside Big Data.

Despite declaring a “no limits” partnership with Russia in February, China has been in no particular rush to support Vladimir Putin with the war in Ukraine.

Likely, there are plenty of reasons for that.

But one big reason is that such a move could draw economic sanctions from the West, putting at risk China’s plan to become the world leader in Artificial Intelligence technology and the AI economy. That goal, announced by President Xi Jinping in 2017, is well on its way to fruition, and China doesn’t want to do anything to undermine it.

Most AI innovations have been coming from the United States, but China expects to catch up with the U.S. by 2025 and lead the world by 2030. 

Prior to Xi’s big push, some of China’s efforts with technology that used AI were copycats, such as WeChat imitating Facebook, WhatsApp, and PayPal, or Alibaba copying Amazon.com. Within three years of Xi’s 2017 announcement, though, China was leading the world in e-commerce, including drone delivery and facial recognition as a currency. Meanwhile, the country has 17 AI startups valued at over $1 billion each, founded by young techs from Chinese universities and backed by Chinese investors.

This push to become the world’s AI leader has impacted elsewhere in Chinese culture. Was it just an act of benevolence that the Chinese government lifted the policy limiting most Chinese families to one child each a year before Xi's announcement? Hardly. China stopped seeing its population growth as a potential famine problem and started seeing it as a potential creation opportunity. The more brains, the higher the possibility to succeed in its plans. Besides that, the more people, the more data the country will have to use, and AI thrives on data. In addition to that, the larger the market, the more people consume new products and services without the restrictions foreign countries can raise.

And China is a large market. The Chinese population is four times larger than the U.S. The country runs on mobile, with 50 times more mobile payments than the U.S. and ten times more food deliveries, providing more data about users' behavior. Access to all that data is what determines the success or death of a company. That is why Google, Facebook, Microsoft, and so on, want user data.

With all of that personal data, a company such as SmartFinance in China can predict a person’s credit worthiness in just eight seconds. SmartFinance’s algorithm analyzes 5,000 data points related to loan delinquency, while regular banks use about 10 data points.

While privacy laws in the U.S.  limit access to data, China is thriving in facial recognition through companies like Megvii, which leads the world in using AI to recognize people in 0.1 seconds. China is putting facial recognition to use in numerous ways. For example, it is used to make payments, so someone can, let’s say, pay for a bowl of lo mein or green tea ice cream anywhere in the country. Also, taking advantage of the country’s limited privacy laws, the Chinese government installed cameras everywhere, including in rural villages, to observe where people go, their behaviors, and so on. Today that data is used to fine people when they break laws (adios, police officers!), but you can be sure it will have many other uses in the near future.

For the time being, the U.S. continues to lead in AI investment and innovation. Nevertheless, there will be a time when American developers will be either scarce or attracted to work for Chinese companies. In less than a decade, companies and individuals around the world will be choosing either American AI or Chinese AI, which means the winner will have more funding for more development.

We need to do more to continue leading the industry. Part of that effort must involve education. To win this race, I believe that it is not just about introducing AI curricula in the schools but transforming the way students learn. Moreover, students sitting in our classrooms today will be the ones making decisions about the ethics of AI. We must prepare them to do so wisely. Unfortunately, while China is executing its plan to lead the world in AI, we are experiencing political wars within our education boards and unfocused education policies in our schools.

Also, there is the matter of how to compete when China, with its disregard for privacy, can collect more data, which is a great advantage in AI advancement.

I disagree with China’s lack of privacy, but I do believe this is the chance to prove we can do better with democracy, as we’ve always done. We sent soldiers to fight so many wars that weren’t ours – Vietnam, world wars, Afghanistan – because of the consequences that a dictatorial leadership could bring to our democracy. Why not come up with a privacy solution that allows data collection, given the probable consequences of China coming out ahead in the AI race?

Whether we like it or not, the one who improves algorithms faster and collects more data will win.