The Race for Global Domination in AI

"Government officials in Hangzhou have grand ambitions to make their city in eastern China a global center for artificial intelligence-and the funds to try to make it happen. In June, they pledged $140 million to subsidize AI firms that operate in town. Not to be outdone, Shanghai promptly followed in July with its own $140 million subsidy program, and inaugurated an "AI innovation town" two months later with low-cost office space for start-ups in the sector."

"This frenzied spending spree follows a playbook that has proved successful in many industries in China: The state acts as cheerleader, financier, and protector, uniting the country's bureaucrats, executives, and entrepreneurs in a mission that Beijing believes is vital to China's future. China's top-down approach has made the country the envy of much of the world when it comes to industries such as manufacturing and infrastructure construction. But AI-and the technological innovation it demands-is something different."

""The Chinese government is struggling to figure out how to support" the AI sector, Paul Triolo, a partner at the advisory firm Albright Stonebridge Group who specializes in Chinese technology, told me. The U.S. government, in contrast, "is trying to get out of the way and create an environment in which capital markets and these very innovative companies can run with the ball.""

Local governments in Hangzhou, Shanghai, Shenzhen and Chengdu are committing large subsidies and investments to attract AI firms, fund research, and provide low-cost office space. Pledges include $140 million in Hangzhou and Shanghai, $70 million annually in Shenzhen, and $42 million in Chengdu for a model-training center. The approach mirrors past Chinese industrial strategies where the state acts as cheerleader, financier and protector, coordinating bureaucrats, executives and entrepreneurs toward strategic goals. China’s top-down model has excelled in manufacturing and infrastructure, but AI’s demands on technological innovation present different challenges. The U.S. favors a hands-off environment letting private markets and companies lead.

Read at The Atlantic