Last year, speaking at a visit to a specialist technology training centre in Moscow, the Russian president Vladimir Putin gave his audience an ominous warning. “I have said it before and I will say it now,” he told reporters, “he who can establish a monopoly in artificial intelligence… will rule the world.”
That same year Donald Trump signed Executive Order 13,859, announcing the “American AI Initiative” – a Federal government strategy for advancing AI capabilities by investing in R&D and skills development, and fostering collaboration between the private sector, academia, government and “like-minded international partners”.
Two years before that, China announced the Next Generation Artificial Intelligence Plan. This aimed for Chinese AI to reach a “globally advanced level” by 2020, to be “the major driving force for industrial upgrade and economic restructuring” by 2025, and to become the world’s “global AI innovation centre” by 2030.
The context for these initiatives is an escalating “AI arms race” between the world’s pre-eminent economic and military superpowers. As the US-China rivalry intensifies in the wake of Covid-19, leadership in AI has become a major global battleground. Advances in this technology promise to give the edge in terms of military and economic strength.
As the latest Spotlight report on the future of work details, AI is changing the world in profound ways. In virtually every sector, automation will revolutionise work practices, improve productivity and drive efficiencies. But this technology is also predicted to cause dislocation in jobs and industries affected by what tech enthusiasts call “disruption”. A 2013 paper by Dr Carl Benedikt Frey and Michael Osborne, experts in machine learning and the future of work at the University of Oxford, estimated that 47 per cent of total US employment was at risk from computerisation. (See our interview with Frey).
Data, the raw material on which AI algorithms are trained, has been described as the 21st century’s oil and the world’s “most valuable resource”. AI and the data economy were identified as the first of four “Grand Challenges” that must be met in the UK’s Industrial Strategy, published in 2017.
But it is the US and China who lead in this global race. Their rivalry over AI takes place against the backdrop of the US trade war launched by President Trump against what he describes as China’s unfair trade practices, as well as tensions over China’s treatment of the Uighur Muslim minority and the status of Hong Kong and Taiwan.
In 2019, an interim report from the US’s National Security Commission on Artificial Intelligence, chaired by the former Google chief executive Eric Schmidt, articulated this struggle for hegemony. “AI cannot be separated from emerging strategic competition with China and developments in the broader geopolitical landscape,” the report said.
It went on to detail China’s deployment of AI to “advance an autocratic agenda” and “commit human rights violations”, warning that AI technology could be used to launch disinformation campaigns, wage war and threaten critical national infrastructure. “The future of our national security and economy are at stake,” it said.
Since 2008, China has become the engine of global growth. And now, as part of the Communist Party’s “Made in China 2025” initiative, the country is shedding its former reputation as “the world’s factory” – a source of low-quality consumer products and cheap labour for foreign multinationals – and becoming a leader in emerging technology, big data, artificial intelligence and machine learning. This is helped in no small part by the Chinese state’s mass collection of data on its citizens. In contrast, US and European big tech is subject to stringent privacy regulation.
In addition to the obvious civilian uses of AI to improve a country’s economic competitiveness, part of the appeal of the technology is its military application. The Financial Times reports that Military Science, a Chinese military journal, predicts a shift from “informationised” warfare – our current model, using hi-tech IT systems – to “intelligentised” war, with belligerents using AI. China’s Next Generation Artificial Intelligence Plan openly commits to enhancing “AI civil-military integration”, and the so-called “civil-military fusion”.
The effect that the technology will have on both American and Chinese workers and on their respective national economies will be huge. Automation and AI will boost GDP, but millions of lives will be upended. China may be better placed to deal with these coming shifts. The country has a 300-million strong itinerant workforce and regular population movements between town and country, along with years of high productivity growth and expanding GDP. This has revolutionised the country’s working cultures many times over in the last few decades. China’s workforce is used to reskilling and transition.
As the world heads towards a predicted “Asian century”, Trump’s US, engulfed by culture wars and stymied by comparatively sluggish growth, looks increasingly in decline. Beijing, with its state-managed “socialist market economy”, has channelled vast resources towards productive investment in the technologies, industries and putative “sectors of the future”. In 2008, China’s largest company was Petrochina, the state-owned oil and gas giant. But by 2018 it had been overtaken by Alibaba, the publicly traded e-commerce and AI technology company, as well as Tencent holdings, a conglomerate that includes the instant messaging service WeChat; the world’s largest music streaming service, Tencent Music Entertainment; and an AI research and development arm, Tencent AI Lab. Baidu, another public company headquartered in China’s capital, is the world’s second largest search engine, and invests heavily in AI.
While these large, private companies seemingly mirror the US’s big tech success stories, the often blurry line between large-scale private enterprise and the Party-state creates the impression in outsiders that they are dealing with a country rather than a company. Associations between government and industry are so widespread that some China observers have dubbed these private companies “state overseen enterprises”. Most notoriously, the supposed links between Huawei and the CPC have been used to justify sanctions against the company in the US and UK.
Those blurred lines also highlight the challenge for the US in keeping up with China, with its strict constitution and separation of powers. Although the US boasts most of the world’s top tech companies, including all of the GAFAM firms (Google, Apple, Facebook, Amazon and Microsoft), they are all strictly independent enterprises. In 2016, Apple refused to unlock an iPhone used by a terrorist gunman and rejected cooperation with the FBI and the US government, citing concerns over “civil liberties” – a situation that would be anathema in China.
As the world economy begins on its journey of post-pandemic recovery, the retreat into shorter supply chains, domestic production and even protectionism may create a very different and perhaps more polarised world. AI is sure to play a crucial role in how we rebuild in the decades ahead. What we don’t know is whether Washington and Beijing can avoid the so-called Thucydides trap – the observation that war between a rising power and a former hegemon is more likely than not. Nor do we know who will, as Putin put it, come to “rule the world”.
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