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How Is China Faring in the Global Artificial Intelligence Race?

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By Eric Sinrod on July 17, 2019 2:46 PM

FindLaw columnist Eric Sinrod writes regularly in this section on legal developments surrounding technology and the internet.

The artificial intelligence race is on, and the question still remains as to which country will dominate. And, of course, there will be business, legal and political consequences when it comes to the ultimate winner and losers.

We have been hearing news reports for quite a while that China is set to become the world economic power and that it is doing everything possible to outpace its rival countries in many spheres. So, how about China when it comes to AI?

In the second quarter of 2019, Chinese investors placed the equivalent of $140.7 million into AI startups. While that is not an insignificant amount, it represents a steep decline from a year earlier in the second quarter of 2018 when Chinese investors invested $2.87 billion into AI startups. What gives?

What Is Causing China's Slowdown?

Well, apparently this is part of a huge slowdown in the AI industry in China -- and a far cry from a promise by the Chinese government that the AI sector would be worth $150 billion by 2030. Indeed, it was that boast that caused worry in other countries about a global AI arms race.

And yet, as it turns out, valuations of companies in China that bet heavily on AI are sinking, some companies are reporting losses, and some top Chinese AI scientists are quitting their jobs.

Why is this happening? Early AI demos that appeared promising did not pan out, China is not able to produce the semiconductors needed for AI research (requiring massive imports), among other reasons.

What are the implications of China potentially not vaulting to the forefront of AI? Will the perceived AI arms race abate, with other countries breathing a sigh of relief and standing down somewhat? Or, will other countries see an opportunity and seek to take the lead?

This blogger believes that the AI train is out of the station. If China does not take the lead, another country will seek to be at the forefront -- so long as it is backed by its own government and the laws of its own country.

That is not to say that everything about AI is positive. Some regulation is required. But that is a discussion for another day.

Eric Sinrod (@EricSinrod on Twitter) is a partner in the San Francisco office of Duane Morris LLP, where he focuses on litigation matters of various types, including information technology and intellectual property disputes. You can read his professional biography here. To receive a weekly email link to Mr. Sinrod's columns, please email him at ejsinrod@duanemorris.com with "Subscribe" in the subject line. This column is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this column are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.

Related Resources:

Artificial Intelligence: Are We Safe? (FindLaw's Technologist)

Can AI Robots Own Copyrights? (FindLaw's Technologist)

Who Owns the Copyright for AI Art? (FindLaw's Technologist)