Until 20 years ago, the United States was leading in AI research, leaving China far behind. In the US, both public and private institutions were seeing a growth in AI development while China was conducting mineal activities in global manufacturing. But over the years, China has been catching up. China has now become a world leader in AI publications and patients, according to researchers. As China's position advances, it is capable of becoming the AI superpower.

According to the 2018 China AI Development Report and the current studies on economic and social impact of AI technologies, China's progress is amusing. Earlier, China's contribution to the global share of research papers in the field of AI was 4.26%, which now jumped to 27.69%. These staggering numbers imply that China has left every country behind, even the United States. China is also consistent in filing more AI patents than any other country. As of March 2019, there are 1,189 AI firms in China, second to USA that has 2,000 active AI firms. The Chinese firms focus mostly on speech recognition, speech synthesis, image recognition, and video recognition devices than other competing countries.

Though this is impressive, the conditions that helped China rise up in the AI field might also risk its future development in AI. Harvard Business Review conducted field interviews to explain this. They spoke to 15 AI related organizations from different industries and used the theory of catch-up cycles, a framework developed to explain a country's successive change in industrial leadership.

China's Rise In AI

The catch-up framework suggests that, in some circumstances, changes in market conditions, technology, and policy environments can put early-starters and late-starters on an equal position. For late-starters, it can open a window of opportunities by reducing the advantage of incumbents. For instance, while Nokia was the market leader of mobile phones, the advancement of smartphones flattened Nokia's position and gave fast-movers like Samsung a chance to overtake it.

In China's case, this framework sheds light on some important factors – how AI developments don't imply robust technologies, how China's market is suitable to improve AI, and how China's friendly regulatory environment is attracting AI investments and adoption.

Research In AI Differs From Other Technologies

Unlike others, research in the field of artificial intelligence doesn't guarantee a solid end result. While research makes a path for an innovative way forward, developments in AI happen with user usage data and companies refining the AI program with what they learn from the given data.

According to one of NISE Intelligent Technology's managers, "Currently, everyone is proud of publishing AI research results. Generally speaking, if you publish the paper, in this profession it is not too difficult for others to figure out the code and implement it." This is coming from a start up that specializes in AI algorithms and AI chips. Such is the case because AI is an open science.

Another reason as to why AI is different from technologies is the fact that artificial intelligence gives more weightage to innovation. Data and talent trump patents in this field. This requires data, computer science and engineering talent which China has plenty.

China's Market Is Suitable For AI Implementation

China's huge market size helps it get large data sets for AI innovation. For example, Didi, China's version of Uber and the largest ride-sharing company in the world as of now processes more than 70TB of data, with 9 billion routes being travelled  a day and 1,000 car requests per second. Such a market not only provides big data advantages but also provides strong economic incentives that creates dynamic opportunities for startups and organizations to explore AI applications in their industries.

China's Weak Privacy Regulations Promotes AI growth

In recent years, China has passed a number of policies in favour of AI which gives out a signal to stakeholders, investors, and entrepreneurs in the field of AI that the government is backing them. This is in relation to China's lack of clear privacy regulations. For example, the omnipresence of surveillance cameras in China generates data for AI firms specializing in visual and facial recognition. Other countries with strict public privacy policies wouldn't witness such a rapid AI growth.

AI's Future In China

Right now, China is the leader of AI development, thanks to the above factors that provide a rapid pace. However, these factors might limit it's development as well. For example, primary holders of AI patents in China are government owned universities, and not industries. University and industry bonds in China are weak which limits technology transfers. Additionally, it is speculated that Chinese consumers' enthusiasm to use AI technology will yield the country quick money but not research that can have long-lasting impacts. The US-China trade war does no favour to China as well. Conflicts over intellectual property right, the deglobalization movement, etc are challenges that will immediately impact China's further developments on AI.