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Who Will Win The AI Race? EU, China, Or US?

Who Will Win The AI Race? EU, China, Or US?

  • While China has made quantum leaps in AI in the last couple of years, the US still holds the pole position.

AI is the future, and whichever country becomes the leader in the sphere will become the ruler of the world, said Russia’s President Vladimir Putin in 2017. 

Progresses in AI advances economies and give countries a huge geopolitical advantage. The technology opens up a world of opportunities across industrial and commercial sectors. Further, AI can also boost the military prowess of countries.

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In 2019, the Centre for Data Innovation (CDI) analysed the AI capabilities of China, the US, and the EU across six categories including talent, adoption, research, development, hardware, and data using 30 metrics. Later, CDI published another index by updating 15 metrics based on the latest data.

Numero Uno

The US still leads the race in AI, scoring 44.6 points in the overall index, followed by China and the EU at 32.0 and 23.3, respectively. 

In 2019, the Venture Capitalist and Private Equity (VC + PE) fundings in the US, at $15 billion, were 1.6 times more than the EU and China combined. The US also had more than 28,000 highly cited patent families compared to the 2,985 in China and 691 in the EU, as of 2018.

The US firms spent $124 billion in research in 2019, 8.5 times more than the EU and 5.2 times more than China. The number of top AI researchers in academic conferences was more than twice that of the EU and four times more than China. Further, the US also scored higher than China and the EU in average research quality.

Despite China’s diverse efforts to gain an edge in chip manufacturing, the US is still way ahead in all metrics related to the semiconductor industry in manufacturing, R&D, and designing chips.

“By remaining the global leader in AI, the US reinforces its power in the world in a new way. From healthcare to finance to defence, American algorithms will become the bedrock of much of society,” said Abishur Prakash, a geopolitical futurist at the Center for Innovating the Future in Canada.

“At the same time, US technology firms who are developing AI, are fast becoming equal to governments in terms of their power. All of this extends the US footprint. It also gives the US, leadership in areas related to AI, like data and robotics, which nations like China are betting on to build new societies and global clout.”

Catching Up

Through the past decade, China has closed in on the US, making incremental advances across several metrics.

Though still far behind the US in R&D expenditure, the country has trumped the EU, with Chinese firms spending $24 billion on R&D compared to $15 billion by the EU firms in 2019. The number of AI papers published by China in 2018 stands out at around 25,000 compared to 4,500 and 8,700 in the EU and the US, respectively. Moreover, the quality of China’s AI research has improved in the past couple of years.

In terms of hardware, China has twice the number of supercomputers in contrast to the US in the top 500 list, according to 2020 data. 

China also leads in the amount of data generated.

“It depends on how one looks at the state of affairs. It could be argued that China leads the world in AI in terms of deployment,” said Prakash.

“For instance, China is using AI to crunch data and come up with foreign policy ideas, diagnose health conditions in less than 60 seconds, identify people who are breaking road rules and even dispense toilet paper to stop wastage. No other nation, including the US, is using AI at the same level as China. 

“The area where China lags is in coming up with original innovations that are not reverse engineered from Silicon Valley. To achieve this, China must employ a multi-faceted strategy that focuses on areas like attracting foreign talent, combining various startup ecosystems in Chinese cities and identifying new problems that need to be solved.”

The Third Wheel

Overall, the EU falls behind the curve compared to the US and China, but has seen mixed improvements across different metrics. 

For instance, EU performed better than the US in terms of percentage growth in VC + PE funding, from 13% to 22% between 2016 & 2019, but fell behind the US with respect to the number of funding deals, acquisitions of AI firms, and the number of AI firms that raised at least $1 million in funding since the previous report. 

However, the EU did better than China in the number of VC + PE deals, the number of AI startups, and the number of AI firms with more than $1 million in funding.

However, the field-weighted citation impact (FWCI), which is the ratio of total citations by average citations, of papers in the EU increased in 2018. The EU’s FCWI is 1.0 compared to China and the US at 0.8 and 1.4, respectively. The EU also has a higher H-Index and more number of AI researchers than China and the US. 

“Clearly, the EU wants to play a role. But it is unclear as to what role it can play, especially now that the UK, which was Europe’s AI-leader, is no longer part of the economic union,” said Prakash.

“The focus on ethics, while important, assumes that the world wants European ethics in the first place. Why would Japan or Brazil or the UAE import ethics from the EU over building their own? And since Europe does not export much AI, it can’t “force” its ethics on the world by integrating them into products and services.

“For the EU to gain some leadership in AI, it has to focus on specific areas, not “AI” as a whole. One area where Europe could excel is with self-driving cars.”

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