The Future of State-Sponsored AI Research in China

In previous articles, I discussed how the recent advancement of generative artificial intelligence (AI) technologies can affect the chinese state and the chinese society. In this article, I explore China’s approach to AI research, as well as its implications for the world order.

The recent AI breakthrough represented by GPT-4 is actually the result of more than a decade of intensive AI fundamental research and tens of billions of dollars of sponsored investments by tech giants including Microsoft, Alphabet, and Facebook. The two main organizations driving the advancement of generative AI technologies are Alphabet’s DeepMind, founded in 2010, and OpenAI, founded in 2015 and backed by Microsoft. Both research organizations conducted AI research independently, without being rushed to monetize by their sponsors.

Although there were many doubts on the part of investors about spending lavished on these laboratories without generating a profit, persistence finally paid off. OpenAI released ChatGPT and Microsoft immediately integrated ChatGPT into its products. In a quick response, Google was able to launch Bard, its own AI chatbot, to compete with Microsoft.

Although China’s tech giants (Baidu, Tencent, Alibaba) have their own AI labs, they have not been able to develop technologies comparable to ChatGPT. One main reason is that instead of focusing on independent fundamental research, the artificial intelligence labs of these Chinese tech giants were founded with the mission of improving the profits of their backers. Many AI researchers integrate with different business units to provide consulting services to improve revenue and profit for that business unit. It was only after ChatGPT demonstrated its monetization capabilities that many Chinese tech companies, big and small, quickly jumped on board to announce their plans to develop the Chinese version of ChatGPT. Another gold rush began.

The fundamental mindset of Chinese tech companies is still driven by short-term profit, and they have always looked to the state to sponsor technological breakthroughs. This has happened in the intelligent electric vehicle (IEV) industry, into which the Chinese government has invested tens of billions of dollars through incentives and subsidies. As a result, China today has the most comprehensive IEV supply chain in the world and is the largest IEV market, a great success by any measure.

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Going back to AI research, instead of providing incentives and subsidies for AI companies, the state has decided to develop AI technologies on its own, through state-sponsored AI labs. However, instead of having a few national AI labs, the Chinese government opted to launch regional AI research labs, financially backed by resourceful metropolitan governments.

For example, in 2018, the Beijing metropolitan government and the Ministry of Science and Technology (MoST) jointly supported the establishment of the Beijing Academy of Artificial Intelligence (baai) to conduct independent research on AI. Then, in 2020, the Beijing metropolitan government, MoST, and some leading universities jointly founded the Beijing Institute of Artificial General Intelligence (BIGAI) to conduct general research on AI. In 2020, the Shanghai metropolitan government supported the establishment of the Shanghai Artificial Intelligence Laboratory (SHLAB) to develop a general hop AI platform. In 2020, the Shenzhen metropolitan government supported the establishment of the International Academy of Digital Economy (IDEA) to focus on cutting-edge research and industrial implementation in the field of artificial intelligence and the digital economy. Similarly, many other regional governments have also established their own AI research labs.

These leading regional AI labs are run by world-class AI experts. For example, BIGAI is led by a former UCLA professor Song Chunzhuand IDEA is led by a former Microsoft executive harry shum.

It seems that 2020 was the year the Chinese government decided to directly sponsor fundamental AI research, rather than provide incentives or subsidiaries for private companies. However, the division of labor between the state and the private sector remains the same: the state incubates technological leaps and the private sector focuses on the last-mile commercialization of these advanced technologies.

Two questions remain. First, will the state consolidate these regional labs into a national AI research system as mainstream AI technology matures? Second, will these state-sponsored AI labs become state-owned enterprises (SOEs) to provide AI technology?

Faced with the current geopolitical situation, state-sponsored AI research can have a profound impact on the future world order. In the best days of globalization, China joined the WTO and has since developed a huge domestic market. It has also incubated the world’s most comprehensive and sophisticated supply chain, ranging from textiles to high-tech products like IEVs. China’s IEV supply chain in particular overflow to boost the development of the entire robotics and automation sector, filling the job gap as China’s population ages. Now, AI is the last piece to complete China’s technological self-sufficiency.

If the state-sponsored AI research movement succeeds, China will be fully ready for a whole new world order, should deglobalization come. By comparison, as US Senator Marco Rubio pointed out in a recent speechAfter decades of globalization, the US economy has become one that is primarily focused on finance and big tech, while manufacturing capabilities have been mostly outsourced to other countries. Therefore, the United States may not be as ready as China for potential deglobalization.

In short, state-sponsored AI research is China’s Apollo Program. When the United States was in the space race with the USSR, the success of the state-sponsored Apollo Program and, more broadly, the American space technology sector, contributed significantly to the end of the Cold War. Now, in the AI ​​race between China and the US, AI research will be critical to China’s future success, and therefore too important to be left in private hands.

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