FTI Newsletter, Issue 102

FTI Newsletter, Issue 101
April 21, 2018
FTI Newsletter, Issue 103
May 13, 2018

China’s AI Boom Could Be America’s Bust.

Every two weeks, we take a deep dive into an emerging tech trend, exploring what it is, why it matters, key players, plausible scenarios for the future, and what action you and your organization should take. 

Last week, e-commerce giant Alibaba invested $600 million in SenseTime, raising its valuation to $4.5 billion. SenseTime, which develops facial-recognition technology, is now the world’s most valuable artificial intelligence startup. Until that valuation, most Chinese consumers probably never heard of SenseTime––you probably didn’t, either. Depending on where Chinese consumers live, SenseTime could be monitoring them throughout the day, even if it’s not obvious. Or even visible.

So why does this matter to you? SenseTime, along with Megvii and others, are just a few examples of the companies that have led to China’s current artificial intelligence boom, which is directed and supported by the Chinese government. China has promised to turn AI into a $150 billion industry by 2030, and to do that, China is courting global investors, chipmakers, and AI researchers alike.

Isn’t the U.S. the global leader in tech? Here in the United States, the Trump Administration has done little to respond to the competition, and the Administration is making it more difficult for gifted international AI researchers to study, train and develop their ideas in the U.S. This is critically important, because AI isn’t a tech trend. It is the third era of computing. Everything we do in the future will, in some way, be tethered to AI. As this Administration intentionally steps off the world stage, withdrawing from international treaties and agreements, it’s clear that China is taking a leading strategic role in designing humanity’s future.

If data is the new oil, then China is the new OPEC

China’s massive population, nearing 1.4 billion people, offers researchers and startups command of what may be the most valuable natural resource going forward — human data — without the privacy and security restrictions common in much of the rest of the world. The Chinese are mining that rich data to train AI to detect patterns used in everything from education and manufacturing to retail and military applications.

“It’s pretty simple. By 2020 the Chinese will have caught up (to the U.S). By 2025 they will be better than us. And by 2030 they will dominate the industries of AI. Just stop for a sec. The [Chinese] government said that.” – Eric Schmidt, president of Alphabet

Emerging Tech Trend: China investing in research and U.S. companies

Key Insight: The country is strategically acquiring U.S. tech secrets through joint ventures and minority investment structures and establishing AI research centers around the world.

Examples: Alibaba, China’s version of Amazon, has announced it would invest $15 billion into AI research during the next three years, planting research centers in seven cities worldwide including San Mateo, Calif., and Bellevue, Wash.  Baidu (a Chinese search-engine company often likened to Google) established an AI research center in the Silicon Valley, and Tencent (developer of the mega-popular messaging app WeChat) began hunting for American talent when it opened an AI lab in Seattle last year. It has since upped its stakes in companies like Tesla and SnapChat.

Near-Futures Scenarios:

  • Optimistic: U.S. positions itself to remain competitive in AI. American companies, communities reap the benefits. China previously has failed to deliver on similar bold investments and promises. An early declaration, that it would build the fastest bullet train in the world, did come to pass. Going forward, the U.S. government recognizes AI as the third era of computing and funds basic research across different sectors. It supports initiatives to train the American workforce in forward-leaning skills and professions. It rejoins global conversations. And it positions the U.S., through policy shifts and incentives, to remain competitive with China during this next decade of critical development in AI.
  • PessimisticAmerica loses IP, talent and geopolitical control. Already, a talent war is underway. An AI professor, for instance, can pivot to the commercial sector and make $500,000 to $1 million a year, which draws talent away from critical academic and government positions here in the U.S. The war is on, too, for IP. Chinese investments in U.S. companies do not revolve around standard return-on-investment financial strategies — Chinese firms expect IP as well. Without any changes, these deals could give China a tactical business, geopolitical and military advantage over not just the U.S., but also Japan, Korea, and the E.U.
  • CatastrophicWeaponizing AI, and police surveillance. China’s police force already uses AI-driven technology to identify the unique features of faces: bone structure, skin color, even capillaries. And now China’s People Liberation Army is using AI for things like spotting hidden images from drone footage and equipping helicopters and jet fighters with AI for unmanned flights. Government leaders created a top-secret military lab — a Chinese version of DARPA — and are building billion-dollar AI national laboratories. In just the past two years, China’s military has achieved remarkable AI successes, including a recent test of  “swarm intelligence” that can automate dozens of armed drones. Given what we know to be true today, China could gain both a significant economic and military advantage, putting democratic ideals at risk.

Action Meter: It’s time to start monitoring China. Organizations must devote time and resources to understanding China’s approach to AI and how it could affect not only business units, but the geopolitical balance.

Watchlist: FaceTec; Megvii; CyLab Biometrics Center at Carnegie Mellon University; Noveto; SenseTime; Sensible Vision; China; Russia; Alphabet; LG; Apple; Facebook; Alibaba; Baidu; Tencent: Samsung; Android; NEC; U.S. Government Accountability Office, China People Liberation Army.


Around the Institute

Summer Teaching Fellows: Applications are now available
Our 2018 Teaching Fellows Program is now accepting applications! This August, FTI will host a special Teacher Training Fellowship for teachers who want to incorporate futures forecasting into their curriculum. The program lasts three intensive days, and we will teach fellows how to incorporate the tools of futurists into their existing coursework. Apply here.

Future of AI public panel at the Wall Street Journal
The WSJ’s Future of Everything conference kicks off in May with a day devoted to the future of AI. Join FTI’s Amy Webb, along with Kate Crawford (co-founder, AI Now Institute and NYU Distinguished Research Professor), Gary Marcus (Professor of Psychology and Neural Science at NYU), Garry Kasparov (fmr World Chess Champion and author), Jeffrey Wright (actor, Westworld) and others. More details and tickets here.

Futurist Amy Webb has some concerns about the future
Ahead of her talk at the Charles H. Wright Museum of African American History in Detroit, Crain’s spoke with Amy Webb about data privacy, local journalism and what we can do right now to make an optimistic version of the future come true. Read more…

Mark Zuckerberg comes out of his Congressional testimony unscathed. China will dominate AI in the coming decade. HomePods are not selling like HotCakes. Apple leaks leakers leaking leaks. Waymo wants to test truly driverless cars in California. Watch or listen to “This Week in Tech” with host Leo Laporte, Lindsey Turrentine, Jason Hiner and Amy Webb. Watch/ listen…

Public panel on the future of space flight to Mars
This May, Beau Willimon (creator and executive producer, The First and House of Cards), LisaGay Hamilton (actor, The First), Michael Lopez-Alegria (technical advisor, The First and NASA astronaut) and Amy Webb (futurist consultant, The First and founder of FTI) will be in conversation at the Humans To Mars Summit. They’ll discuss the future of spaceflight and will talk about their new show, The First, airing on Hulu this summer. More details and tickets here.

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