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U.S. spends more on AI as AI in China continues to grow

Research and development of AI in China continue to grow. Meanwhile, the U.S. plans to up its spending on non-defense AI projects by close to $1 billion in 2020.

The Trump administration's fiscal year 2020 budget includes nearly $1 billion in non-defense AI research and development as the adoption and funding of AI in China continues to grow rapidly.

The budget request is to fund the Network and Information Technology Research and Development Program, a federal program that coordinates the activities and budgeting for research and development of several technology agencies.

U.S. AI efforts

The fiscal year 2020 budget supplement, released in September, allocates $973.5 million for AI as a new spending category to support existing White House efforts to ramp up robotic process automation and AI innovation and adoption.

Millions of dollars will go toward funding research and development for a range of AI-related projects, including machine vision, cybersecurity challenges unique to AI, and chips optimized for neural nets.

While the funding should help U.S. government's AI efforts, it's unclear how it will match up with AI work in China.

Past efforts of the U.S. government, according to Rudina Seseri, founder and managing partner of venture-capital firm Glasswing Ventures, have lagged considerably to those of other countries.

"For all that is being done, it's not even 1% of the spending that other countries have made," Seseri said during a talk at the AI World Government 2019 conference in Washington, D.C. in June.

The U.S. government's efforts in the global AI race are "far, far behind China," a country that, in addition to spending more, also collects more data from its citizens, she noted.

In China, "the human rights of data (is) not a notion that exists," she said. "The government has free control of everyone's data."

AI in China

That may be evident in China's development of smart cities. The government is constructing, or plans to construct, more than 500 cities with smart city capabilities that include automatically monitoring and routing buses to optimize traffic flows, and prioritizing mobile payment systems. The urban strategy also leans heavily on the internationally controversial goal of expanding surveillance of citizens by setting up networks of security cameras with gait and facial recognition software.

Traditional industries are still lagging behind [in AI adoption in China].
Danny Muanalyst, Forrester

Given the Chinese government's extensive involvement in city planning, and its propensity to spy on its own citizens, these kinds of smart cities have no real equivalent in the U.S. A number of U.S. cities, however, have begun using AI and analytics to better their transportation systems and some have started to install intelligent security cameras and intelligent street lights.

Other Western countries have begun creating smart cities as well, including the U.K. and Canada. Calgary, Alberta, for example, deployed sensors to collect data on noise levels to help with noise management and on soil conditions to create better care for gardens, among other things.

Development of AI in China has skyrocketed in past years, with the government spending heavily on research and development. In 2017, the State Council of China released a plan with China's AI goals over the next decade.

The plan details China's ambition to become level with other world players in AI theories and technologies by 2020, and become the world leader in AI by 2030, with a domestic industry worth almost $150 billion.

The plan includes efforts to promote and support domestic AI enterprises, and encourage partnerships between them and international AI schools and research teams.

Yet, at an enterprise-level, the adoption of AI in China is comparable to that in the U.S.

Chinese and U.S. enterprises

A 2018 Forrester study commissioned by Chinese tech-giant Huawei surveyed 200 large and medium-sized companies and found that the vast majority of respondents see AI as a driver of innovation in their industry. About 65% of respondents say AI will play an extremely important role in their digital transformation.

Meanwhile, a little over half of the respondents lacked professional AI talent, and 70% of respondents said a lack of technology skills is slowing the adoption of AI in the enterprise intelligence market.

According to Danny Mu, a Forrester analyst based in Beijing, AI has been widely adopted by digital-native enterprises in the internet industry, even as "other traditional industries are still lagging behind."

That's about on par with enterprises in the U.S. Reports regularly highlight that most business leaders see the importance of AI, even as many traditional companies have yet to start using it.

The U.S. trade war with China has hampered China's push to develop AI technologies, however, and has begun to force China to become more independent of Western hardware and software.

Some of China's largest technology companies, including Baidu, Alibaba, and Huawei have started developing their own hardware and AI platforms to rely less on Western-developed technology.

The "trade war is a good reminder to Chinese companies to evaluate the risk from dependence," Mu said.

While the trade war may affect Chinese companies' ability to purchase American-made technologies, Chinese scientists are still actively conducting AI research, something which "is hard to ban by trade wars," Mu said.

"AI is changing industries," he said. "Companies and governments can't afford to lag behind when it comes to AI technology."

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