Culture | The gladiator’s edge

In the struggle for AI supremacy, China will prevail

Or so reckons Kai-Fu Lee, a tech insider, in “AI Superpowers”

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AI Superpowers: China, Silicon Valley and the New World Order. By Kai-Fu Lee. Houghton Mifflin Harcourt; 272 pages; $28.

CHINA’S “Sputnik moment” came on May 27th 2017. On that day an algorithm thrashed Ke Jie, the world’s best player of Go, an ancient and demanding Chinese board game. Mr Ke’s defeat by AlphaGo, an artificial intelligence (AI) system developed by DeepMind, a British firm that had been bought by Google, was as much a blow to China’s psyche as the Soviet satellite was to America’s self-esteem in 1957. Within months, China announced ambitious plans to dominate AI by 2030.

Kai-Fu Lee thinks it will succeed. He is well placed to judge. He moved from Taiwan to America at 11, earned a PhD in AI in the 1980s and has been a senior manager at America’s mightiest tech firms, including Apple, Microsoft and Google. Now he runs a Chinese venture-capital fund, which gives him a ringside seat for the contest between what he calls the two “AI superpowers”, China and America.

He thinks China will win because it has the edge in the four determinants of AI success: brains, capital, regulation and data. His verdict on the last three criteria is largely persuasive. For example, China’s internet economy generates vastly more data than any other, particularly in the area of payments—many Chinese merchants eschew coins and currency in favour of digital money. Meanwhile, whereas American cities are restricting self-driving cars, the district of Xiong’an, 60 miles south of Beijing, is being built from scratch to accommodate them (along with 2.5m people). The mayors of Chinese cities are splashing cash on AI startups.

Mr Lee’s analysis of brainpower is more nuanced. The West has the best researchers, he acknowledges, and they still offer benefits. But, he argues, they are no longer paramount. The era of AI breakthroughs has been superseded by an age of implementation—getting the algorithms to work on everyday problems. Now the main advantage lies in having millions of “tinkerers”. And China does.

His observations will unsettle his erstwhile colleagues in Silicon Valley. Compared with Chinese entrepreneurs—who are street-smart, hungry and ruthless—“the valley’s companies look lethargic and its engineers lazy.” One group grew up amid poverty and upheaval, Mr Lee notes; the other are children of suburban accountants and dentists. In his view, Chinese entrepreneurs are “gladiators”, who have assimilated “the lessons learned in the coliseum”, namely “kill or be killed”. He recounts dirty tricks and anticompetitive ruses. “The only recourse when an opponent strikes a low blow is to launch a more damaging counterattack, one that can take the form of copying products, smearing opponents, or even legal detention”—that is, getting the police to arrest a rival.

By contrast, American firms are complacent, sticking comfortably to their distinct corners of the web—Facebook in social media, Amazon in e-commerce, and so on—with little real rivalry among them. He mocks them for their “mission statements” and “core values” that blind them to market opportunities.

Values are the missing character in Mr Lee’s narrative; or rather, he thinks they are a distraction. The West is enamoured of the idea that innovation and creativity require free speech, Mr Lee says. Yet China’s growth debunks that platitude. Though the free-flow of ideas may be necessary in the social sciences, in apolitical technologies the Chinese system has already proved to be innovative.

As for the troves of data that make AI systems work, Mr Lee believes that Chinese consumers’ willingness to give up privacy for convenience is a huge boon to its companies in the AI race. “It’s up to each country to make its own decisions on how to balance personal privacy and public data,” he writes. “There’s no right answer.”

The ghost in the machine

These are controversial claims. For example, Mr Lee fails to consider how consumer interests may change, especially as people become wealthier and more demanding of government. He ducks the urgent question of state surveillance, which (for instance) is being used in Xinjiang province to repress individual freedom. The reticence is understandable; there is a lot of money at stake, after all.

His long-term vision is stark. By his reckoning, as many as half of all jobs in America will be vulnerable to automation within 20 years; he expects something similar to happen in China eventually. Again, he predicts China will cope better, since its economy is at an earlier stage of evolution and its workers will adjust more flexibly. At the same time the existing economic model of developing countries, based on low-cost labour, will collapse, with no obvious alternative. The world will devolve into a neo-imperial order, in which, if they are to tap into vital applications, other countries will have to become vassal states of one of the AI superpowers.

Is he right? For the most part, probably not. True, AI represents the new space race, and China and America are set to lead it. But Mr Lee’s comparative analysis of Chinese and Western capitalism suffers (ironically) from a lack of data. China has had only 30 years’ experience of capitalism since Deng Xiaoping’s reforms took hold: not enough to discover whether its no-holds-barred approach is indeed more efficient than a rules-based system of competition. It took several nasty financial disasters in the late 19th and early 20th centuries for the West to constrain its own worst business practices, the better to let its animal spirits flourish. A financial crash may yet temper Chinese hubris.

Despite its futuristic theme, Mr Lee’s book fits into a familiar genre of business scare stories. In the 1960s the French were aflutter about “Le Défi Américain” by Jean-Jacques Servan-Schreiber; in the 1980s Americans were paralysed by Ezra Vogel’s “Japan as Number One”. “AI Superpowers” should be taken seriously. But it is not the final word.

This article appeared in the Culture section of the print edition under the headline "The gladiator’s edge"

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