The AI arms race - Is data China's sleeping dragon?

Research

31 Oct 2018

Over the past five years China has taken a leading role in the development of several key areas of artificial intelligence. Once a laggard in many areas of tech, China is now making exponential strides especially in areas such as data growth, fuelling its AI dominance. China's government wants the country to be the global leader in this new field before the end of the next decade.

China is targeting global AI leadership by 2030

The race to lead the world in AI is on, and the Chinese government has made no secret of the fact that its objective is global leadership by 2030. Other countries have enjoyed a head start in many areas of new technology, but key elements of AI have evolved only recently. Over the past five years China has already taken the lead in fields such as programming and algorithm development, and is close behind in others like computing capability.

A standout example of the Chinese government’s commitment to AI is Xiong'an, an entirely new "digital city" established in April 2017 about 100km southwest of Beijing. Designed from the ground up to be a smart city, Xiong'an will feature cashierless stores, smart airports, special traffic lanes for autonomous cars, facial recognition security systems and next-generation high-speed rail – a place where these and other applications like 5G networks can be tested on a huge scale and rolled out across other cities nationwide. Besides official government backing for AI, investment from the private sector has been just as intense: China is currently home to over 23% of global AI start-ups, second only to the US.

Where does China fit into the global AI playing field?

AI is fuelled by data growth, and China has advantages in terms of both scale and a regulatory environment that allows for far greater data collection and usage than in the US and Europe. China simply has more data than any other country. Sceptics might wonder whether the Chinese AI drive will suffer a similar fate to initiatives in other tech sectors such as semiconductors, solar and LED, where results have been mixed. We believe AI will be different. In other tech areas, China was years behind the leaders when it started. This is not the case with AI – it is new for everyone.

Authorized clients of UBS Investment Bank can log in to UBS Neo to read the full report.