Bull Session

AI Goes to China

July 28, 2017          

Episode Summary

On The Digital Life this week, we discuss China’s push to dominate AI, the interplay of technology and politics, and the competitive stakes in the rising digital global order. The State Council of the People’s Republic of China country announced a development plan last week to build a domestic industry worth almost $150B and become the world leader in AI by 2030. The Chinese government will be investing heavily to ensure it moves to the front of the line when it comes to AI. Will China become the same kind of economic powerhouse in AI, as it has in manufacturing? With the US cutting back on science research, it seems possible, even likely. Regardless, the race for AI leadership is on.

China Plans to Use Artificial Intelligence to Gain Global Economic Dominance by 2030
Chinese State Council Guidelines for Artificial Intelligence
In China, cutting-edge innovation often comes with orderly, numbers-heavy government mandates.
China’s Artificial-Intelligence Boom
Beijing Wants A.I. to Be Made in China by 2030

Welcome to episode 217 of The Digital Life, a show about our insights into the future of design and technology. I’m your host Jon Follett, and with me is founder and co-host Dirk Knemeyer.

Greetings, listeners.

For our topic this week, we’re going to discuss China’s push to dominate artificial intelligence, the interplay of technology and politics, and the competitive stakes in the rising digital global order. So let’s get started. Last week, the State Council of the People’s Republic of China announced a development plan which aims to build domestic industry worth almost 150 billion dollars and become the world leader in AI by 2030. Wow, what a throw down. That’s the official term for it, which is when the state council puts this announcement on their website and releases it to the press, basically saying that, “The rest of the world’s on notice, we’re going to dominate AI, which we see as the future of software and sort of embedded into every bit of our economy.”

I think it’s time that we sat up and took notice, because the Chinese government is pretty good at long term planning, and if there’s anything that’s going to make you queasy is if you’re a US business interested in AI, I think this qualifies. So the Chinese government has said that it’s going to be heavily investing to make sure that its companies, government, and military all stay ahead of the curve when it comes to AI. So there are some things going on in the United States right now that make this a very interesting conundrum for United Statesians, for us Americans who love our technology and have done reasonably well in terms of leading in the past. So in order to lead in the future, you really need to invest in scientific research. It’s just sort of a fact of life.

And unfortunately, we are in a scenario now where we’re talking about massive cuts to science research. So this seems, to me, to be sort of the opposite policy of what the Chinese government is doing. So the Chinese government looks out, sees the future, says, “The future is AI and software,” and says, “We are going to dump a bunch of money into that because that’s going to be billions of dollars flowing into our coffers.” And unfortunately, I think we’re sort of running in the opposite direction, which is not good for sort of the long term viability of the US as a competitor in AI. Not saying that this is going to be a crushing blow, but it’s certainly a big problem. So with that preamble, Dirk, your thoughts on this? There’s plenty to dig into here and I’m sure we can have a lot to discuss.

Yeah, I mean good for China to have the vision and foresight to make these sort of investments at a national level, at a policy level. It was interesting, as I was sort of researching this based on your links, Jon, there was a discussion that it was sort of a Sputnik moment for the Chinese when the Google AI came in and beat the Chinese world champion in Go. It wasn’t when this AI was beating other Go players, it was when it beat their player who was also the world champion that sparked this huge wave of focus and investment into artificial intelligence. So the vision only goes so far, because it took a very parochial schooling in the game of Go for them to make these policy changes.

But listen, I mean there are advantages and disadvantages to both the way that the Chinese run their country and the way we run our country, and where China’s at and where we’re at. And the sad reality is, from a government, a national perspective, we’re not going to be able to respond to what China’s doing, and that’s for a number of reasons. I mean, one is the fact that China is not a democracy, and we are a democracy, and so as the election of Donald Trump shows, that there are people who are focused on things that are not visionary, or not innovative, or not future-looking. They’re focused on the past. They’re focused on their own parochial self-interest, which to some degree is understandable.

But the fact is, the voting into power of people with backward looking agendas is going to slow us down, and not just specifically in the persona of Donald Trump, but as long as our government doesn’t have the ability to make these huge investments over time, regardless of what the people think, and perhaps contrary to what the people think, we’re not going to be able to adjust to that. Another issue is the relative maturity of our countries. The United States traditional military is over an order of magnitude more powerful than the Chinese traditional military, and coming with that are huge industries, huge companies, lots of people who are trained and have jobs in different ways, and we are not able … Part of this again is a democracy issue, but it goes even just beyond that to the make up of our nation.

We aren’t able to just abandon those on a dime. And so look, the future is not in Boeing and McDonald Douglas. The future is in artificial intelligence, and in different technologies that are current, giant infrastructure, and traditional technologies can’t adapt to. Maybe we have to just leave things behind and radically change. That’s really hard for a mature … I mean, China’s obviously a mature nation as well, they’ve been around a lot longer than we have. But China, for a long time, was a third world power frankly. I mean, very behind technologically. So it’s only more recently that their infrastructure and their focus on technology is taking flight, and so they’re coming in from a much more green field perspective without a lot of the detritus that made us the most powerful in the past, but increasingly becoming less powerful in the future.

And the other thing I want to mention, there’s actually more than three, but I want to pass the ball back to you as well. The other thing I want to mention that’s hurting us, or will hurt us in this future, let’s call it the future battle for AI supremacy with China is our openness. We are … Look, I mean within the government, there are obviously shadow, hidden things that are going on that aren’t being shared with everyone. I got it. But from a business perspective, from where most of the investment and progress in AI that we’re aware of, has been perspective. We’re revealing what we’re working on, how we’re working on it, and what we’ve done early days. Because a lot of it is driven by corporate interests, so we’re incentivized from a profit motive perspective to get the word out there.

And then, even at the government level, for the things that aren’t as secretive or military, there’s just a lot of information there. China is not bound by the same ethos, and China has a reputation in other aspects relative to national security, stretching beyond government into business as well, to lock that stuff down. And we’re only finding out things that are happening even on the business side of things in China once they are already ahead, once they’ve launched a new technology of some kind, in a very advanced state. There was a story a few weeks ago about the quantum teleportation, or quantum teleportation might not be the right word, but using quantum technologies to take something and basically teleport it from the Earth out into space.

It’s not that literal how we think about it in Star Trek. It’s a little, once you hear the specifics of the technology, a little less interesting. But those are sort of just bombshells. And we’re like, “Oh my God, like China’s there in quantum computing.” Yeah, they’re there, because they’re doing it with a lot more money, with a lot more focus, with a lot more closed perspective. So we’re only hearing about it when it’s kind of too late to catch up. I just think China is really well suited to vault way past us in these technologies.

Yeah. That’s potentially very disturbing trend in terms of where that positions the US as a technological superpower. So let’s talk about that a little bit. There’s this burgeoning digital order that we’ve covered in many different flavors of that on the show. You have sort of the digital life as seen through the lens of hacking and extra-governmental activity, the militarization of that kind of behavior. You have the digital life as framed by business, sort of the largest, latest and greatest businesses and innovations. And then you have the digital life as infrastructure, so talking about the open web, obviously came out of the United States, and this idea that there could be a, “Splinternet.”

The sort of separating the pieces of the internet out so that they’re only serving a particular country’s interest. So building your own infrastructure because the open internet doesn’t serve your needs. And I would actually put some of this AI advancement into the infrastructure category for the future of software, namely because it’s going to underpin things like cyber military. It’s going to underpin things like surveillance and sort of guiding the way that the digital life takes shape. So as we see world superpowers stake their claim to different aspects of the digital life going forward, I got to say that the US really needs to accelerate a bit, because in some ways, it feels like we’re getting left behind. And so let’s do a little comparison to another major piece of economic infrastructure around manufacturing. So America was a manufacturing superpower in the 50s and 60s, and we lost that edge to a number of countries, in part because we globalized our supply chains, and American companies took advantage of that.

Was capitalism at work, Jon. Profits. Profits, profits, profits.

Sure. So the question that I want raise is is this far-looking Chinese policy to develop AI, is AI really the manufacturing of the 2020s? We won’t say it’s the sort of the underpinnings of the economy today, because we know it’s just not. But in five years, in ten years, in the 2020s, is this going to be … Are we setting ourselves up to be sort of outpaced again by the Chinese because they’re so much more forward-looking? I’m afraid that we are.

Yeah. I mean I think that’s a risk. And from my perspective, for some of the reasons that I’ve shared already, I think it’s a real risk. Now, the flip side of it is look, we have still … And again, we being the United States, we’re taking sort of a parochial look at this ourselves. But we still have the greatest collection of research universities in the world. If you’re going to want to get into fields related to artificial intelligence, it’s not going to start with universities in China. It’s going to start with places like MIT, or CalTech, or Stanford. So that’s a huge advantage that the United States still has.

Because the fact is, whether from China or from other places, a majority of the international students come to those organizations continue working in the United States after they graduate. Big advantage for us. Second, from the standpoint of business, we continue to have the greatest … I mean greatest, how do you define that? From a market cap perspective, the more powerful and influential technology companies in the world, particularly as relate to the technologies that lead themselves into artificial intelligence. So the whole forecast isn’t a gloom and doom one certainly, because we have amazing infrastructure, even getting then to VCs and funding as well, like our funding infrastructure on the private side is tremendous.

But we’re just so vulnerable on the national side. The fraying of the United States as a declining superpower, combined with the limitations of democracy and the openness, where in the standpoint of multinational competition, an open nation is really hobbled against a closed nation. And doubly so from a language perspective. That’s something we don’t think too much about. How many people in the United States are able to read and understand Chinese? Are able to read and understand Mandarin or Cantonese or whatever? Few. Very, very, very few. A fraction of a percent I’ll say. Maybe more if we’re considering people who themselves are Chinese immigrants or recently first, second generation Americans, Chinese Americans.

In China, and in most of the world, English is taught and learned to a much larger degree. So China is a nation where they’re, again, more insulated, more internal, so less so than perhaps Europe, but many people in China are learning English as their training. So you have one nation, China, that has a number of people in this field who can communicate in our language. We have very few people who can communicate in their language. And even though artificial intelligence and algorithms, a lot of that is the language of math as opposed to the language of language, which language of language probably doesn’t make sense, but that’s okay.

That’s all right.

That’s a disadvantage. And so there’s all these built in structural disadvantages because of who we are, where we are in history, and how this battle is going to play out. My hope is we as a species evolve beyond these sort of multinational battles and competitions in a time frame where we’ll look at all of this differently and not see it as a conflict with giant stakes. But it could be.

Yeah. I think what bugs me just a little bit is seeing the game take shape, seeing this digital political order rise, and worrying that we don’t have our eye on the ball. So it’s all fine and good to say that America had a level of greatness associated with the manufacturing base that was in existence in the 50s and 60s, and that’s fine. I think looking forward to a very different economy that’s taking shape now, a very different political order, and asking, “How can we use these technologies to benefit all? To benefit the poor, the middle class, the wealthy?” See that benefit across the board, that’s fine too.

But to sort of look to the past as a model for the future, I don’t think that you can do that. And I don’t think that this Chinese policy seems very forward looking, and really building on science, building on technology, that’s going to drive the economy forward. If we’re looking to the past to try to find our examples for the future, we’re just going to end up in a ditch again. And unfortunately, I think that’s where we’re headed.

Into a ditch?

If we don’t pay attention to where the game is going, and the game is going to AI and software and all sorts of innovation in science, genomics. I mean, we can talk about that at length. But if we don’t pay attention to where the technology is going and prepare people and our economy for that future, rather than reminiscing about the good old days when certain things were the way they were. Time for reminiscing is over. Let’s look forward and let’s get there. That’s the part that worries me the most.

Yeah. I mean, it’s all abstract though. The big question is what happens if we lose? So today, for example, the United States could theoretically go in and in most, whether it be conventional military or other even cyber war AI, other modern technologies, could clobber most other nations. But we’re not clobbering nations. That’s not the reality of it. We have the security so that others can’t clobber us. We have the security of knowing we could clobber them if we wanted to. But it doesn’t manifest as anything clobbering. I mean, certainly people in the Middle East and war-torn places might disagree with that, but conveniently putting that on the side and closing our eyes and going, “La, la, la, la, la.”

There’s all of this power and this advantage, but it’s not being used to crucify our first world opponents, let’s say. So let’s say China wins, let’s say 50 years from now, they’re, wicked adding this stuff. What then? I mean, do we think they’re going to attack us? Do we think they’re going to take over the United States? Do we think they’re going to eradicate our people or drive us into abject poverty? I don’t know. I don’t think so. So at some level, like yeah, we might lose our dominance, but so what? Like what happens then? And I could certainly come up with some doomsday scenarios, but they don’t seem too likely, do they, Jon?

Probably not. I think suffice it to say that the AI race is on in a big way, and it will be interesting to see how, over the coming months and the year ahead, how our government responds and what comes next, because like it or not, AI is here to stay and it’s underpinning the future of our software. Listeners, remember that while you’re listening to the show, you can follow along with the things that we are mentioning here in real time. Just head over to TheDigitalife.com, that’s just one L in The Digital Life, and go to the page for this episode.

We’ve included links to pretty much everything mentioned by everybody, so it’s a rich information resource to take advantage of while you’re listening, or afterward if you’re trying to remember something that you liked. You can find The Digital Life on iTunes, Soundcloud, Stitcher, Player FM, and Google Play. And if you want to follow us outside of the show, you can follow me on Twitter, @JonFollett, that’s J-O-N F-O-L-L-E-T-T. And of course, the whole show is brought to you by Involution Studios, which you can check out at GoInvo.com. That’s G-O-I-N-V-O.com. Dirk?

You can follow me on Twitter @DKnemeyer. That’s @D-K-N-E-M-E-Y-E-R. And thanks so much for listening.

So that’s it for episode 217 of The Digital Life. For Dirk Knemeyer, I’m Jon Follett, and we’ll see you next time.

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