On October 8, 2019, the U.S. Department of Commerce added 28 Chinese companies and organizations to the “Entity Control List”, prohibiting these entities from purchasing U.S. products and cooperating with U.S. companies. Dahua Technology, Hikvision, HKUST Xunfei, SenseTime, Megvii, Meiya Pico, Yitu Technology, and Yixin Technology in the list are from AI unicorn companies and security monitoring companies, respectively. However, from the perspective of the nature of the enterprise, these eight technology companies are all involved in the field of artificial intelligence. This is another unreasonable sanction imposed by the U.S. Department of Commerce after Huawei, but why are all Chinese artificial intelligence companies targeted this time, and what concerns does it reveal about the U.S.?
Since the United States provoked the Sino-US trade war in 2017, the Sino-US trade war has lasted for two years, which reflects the challenge of China’s economic rise to the US’s world economic status. China has become the world’s second largest economy. China’s stable economic growth and technological development have had a great impact on the real economy and industries of the United States.
With the passage of time and the deepening of the trade war, the trade war has risen from basic trade tariffs to sanctions on real companies. The United States is trying to fundamentally hinder China’s economic development and technological progress and improve the competitiveness of American companies.
On April 16, 2018, the U.S. Department of Commerce announced that the U.S. government would prohibit ZTE from purchasing sensitive products from U.S. companies within the next seven years; on May 16, 2019, the U.S. Department of Commerce listed Huawei and its 70 affiliates as entry into the export control “entity list”. Huawei is leading the rapid development of a new round of 5G technology. In terms of 5G standard core essential patent applications, Huawei won the first place with 1,970 patents. At the beginning of September 2019, Huawei announced that the global shipment of 5G base stations reached 200,000 units, and the number of global 5G commercial contracts reached 50. The development speed is far ahead.
The eight artificial intelligence companies sanctioned by the United States this time are mainly involved in the fields of computer vision and security monitoring. These companies generally have different technological advantages. Among them, the combined market revenue of security giants Hikvision and Dahua Technology in 2018 exceeded 70 billion Yuan. However, computer vision companies represented by SenseTime and Megvii already have mature commercialization solutions, and have developed from a single software service model to an integrated software + hardware integration. The fields involved have also changed from the initial Security and finance, penetrating into diversified fields such as unmanned driving, IoT, retail, transportation, education, and medical care.
This article will conduct an in-depth analysis of the current situation of the artificial intelligence industry in China and the United States from four aspects: policy, enterprise, talent, and investment.
Policy level: Artificial intelligence is rising as a national strategy, and China and the United States continue to increase their policies
Since AlphaGo defeated the human Go world champion for the first time in 2016, a new round of artificial intelligence technology boom has been set off. The coming of a new round of intelligent technology revolution will give new impetus to the economic development of the times and profoundly change the face of human society and the world. Therefore, more and more countries have begun to raise artificial intelligence to the level of national strategy. In 2016, artificial intelligence was written into China’s “13th Five-Year Plan”, and the Chinese government subsequently issued intensive development policies related to artificial intelligence. In 2017, the introduction of China’s “New Generation Artificial Intelligence Development Plan” raised artificial intelligence to a national strategic level, and since then, more specific and detailed related policies have been released.
On February 11, 2019, U.S. President Trump signed an executive order to launch the “U.S. AI Plan”, raising the development of U.S. artificial intelligence technology to a national strategy to ensure that the U.S. maintains its international leadership in the field of artificial intelligence. And determine eight key development strategies:
Make long-term investments in AI research.
Develop effective methods for AI collaboration.
Understand and address the ethics of artificial intelligence.
Ensure the security of AI systems.
Develop shared public datasets and environments for AI training and testing.
Measure and evaluate AI technologies through standards and benchmarks.
Better understand the needs of national AI R&D personnel.
Expand public-private partnerships to accelerate AI development.
At the enterprise level: Artificial intelligence companies dominate the United States, and China is catching up quickly, with each field having its own characteristics
According to the real-time monitoring data of the global ICT monitoring platform of the Data Research Center of the China Academy of Information and Communications Technology, as of the first half of 2018, a total of 4,988 artificial intelligence companies have been monitored worldwide, of which the United States leads the way with 2,039 companies. ranked first in the world, followed by 1,040 in China. As of June 2017, the total number of artificial intelligence companies in the world was 2,542, of which 1,078 were in the United States, accounting for 42%; followed by China, with 592, accounting for 23%. Driven by the wave of artificial intelligence, the number of global artificial intelligence companies has almost doubled rapidly.
On February 7, 2019, CB Insights, a world-renowned venture capital research institution, released the “AI 100” list of artificial intelligence startups in 2019. These 100 artificial intelligence companies cover 13 core fields such as agriculture, automobile, enterprise technology, finance and insurance, government, industry, semiconductor, telecommunications, and retail.
On the list of the 100 most promising AI start-up companies, there are 6 companies from China, namely Shangtang Technology, Yitu Technology, Megvii Technology, Momenta, 4Paradigm, and Horizon Robotics. Among them, the businesses of SenseTime, Yitu, and Megvii are involved in the computer vision field directed by the government, and the remaining three businesses are involved in the fields of driverless driving, finance and insurance, and semiconductors. The rest of the companies on the list are from the United States, Israel, the United Kingdom, Canada, Germany, Sweden and other countries. Among them, the United States has the largest number of companies, with more than 70 companies.
A total of 11 unicorn companies have been shortlisted for this list, and the total financing scale has reached 6.254 billion US dollars. Among the 11 companies, SenseTime and Megvii ranked first and second respectively, and Yitu Technology ranked sixth. The combined financing scale of the three computer vision companies in China accounted for more than half of the 11 companies.
Talent level: the United States occupies the height of talent, and Chinese talents continue to rise
According to the public data of Tencent Research Institute, as of June 2017, there were about 300,000 artificial intelligence talents in the world. In terms of the distribution of talents in the AI industry, the United States has an absolute advantage in the basic level of AI, which is 13.8 times that of China. China has a smaller gap with the United States in the application layer. The United States has about 78,700 employees, and China has about 39,200 employees, which is about half of the United States.
Among the 367 universities in the world that study artificial intelligence, the United States has 168, accounting for 45.7% of the world’s total, while China has only 20. Among the top 20 schools in the world in terms of academic ability in the field of artificial intelligence, 14 are in the United States, and only 3 in China. There is still a big gap in academic ability.
From the perspective of patent applications, from 1999 to 2017, the number of invention applications and authorized patents for key technology branches such as image recognition, biometric recognition, speech recognition, speech synthesis, natural speech understanding, and machine learning in the field of artificial intelligence in the world exceeded 100,000 Among them, China’s patent applications accounted for 37.1%, while the United States only accounted for 24.8%.
From 1998 to 2017, the United States produced the most artificial intelligence papers in the world, ranking first with 149,100 papers, followed by China with 141,800 papers. The gap between the two gradually narrowed, and China was catching up. At the same time, among the highly cited documents collected by Web of Science, the proportion of Chinese documents has increased from less than 15% in 2008 to 47% in 2017, indicating that the quality of China’s artificial intelligence scientific research level has been recognized internationally. However, in terms of the number of scientific research institutions and scholars publishing papers, the United States is still far ahead of China. The number of scientific research institutions and scholars publishing papers in the United States accounted for 43% and 47% of the world respectively, while China accounted for only 5% and 11%. .
Investment level: The frequency of artificial intelligence investment and financing in the United States is the most active, and the scale of investment and financing in China is far ahead
According to the latest data from the China Academy of Information and Communications Technology, China and the United States account for a major share of global AI financing. In 2018, the amount of financing in China’s AI field reached US$32.9 billion, while that in the United States was US$16.9 billion, about half of China’s; in terms of the number of financings, the US raised a total of 542 in 2018, and China’s totaled 540. are almost identical. Therefore, it can be seen that the huge amount of financing in China with a single financing amount exceeding US$100 million is much higher than that in the United States, ranking first in the world. As of Q1 2019, the AI field in the United States has received US$4.4 billion in financing, and China has received 3 billion yuan; the number of financing transactions in the United States is 103, which is temporarily higher than China’s 83.
At the same time, in the latest “2019 Artificial Intelligence Investment Market Research Report” released by EO Intelligence, the investment in China’s artificial intelligence market in 2018 reached 140 billion yuan, and the top 5 industries with the investment amount were industry solutions, robotics, finance, and automobiles. and great health. The number of investments in 2018 was 337, a slight decrease from 2017. The top 5 industries with the most frequent investments were corporate services, robotics, general health, industry solutions, and basic components.
According to the latest report jointly released by PricewaterhouseCoopers and CB Insights, the total amount of venture capital investment in the US artificial intelligence industry reached a record US$9.3 billion in 2018, a sharp increase of 72% over the previous year. Looking at the industrial layout from the perspective of investment, the US AI industry has a comprehensive layout, and has accumulated technological innovation advantages in the basic layer, technology layer and application layer, especially in the core areas of the algorithm, chip and data industries; China’s AI industry is more biased towards the application layer It is expected to surpass the United States in face recognition technology, but there is a big gap with the United States in the underlying technology of the basic algorithm.
Regardless of the amount of investment and financing and the number of investment and financing transactions, China and the United States are in the leading position in the world, and China’s continuous active investment frequency and investment amount reaching a new high have made the competition between China and the United States in the field of artificial intelligence more intense.
Sanctions Are Not All Crisis, The Reverse Is Rebirth
On the whole, although the United States is still far ahead of China in the basic hardware level of artificial intelligence and the soft power of talents, China has a comparative advantage in its continuously active artificial intelligence investment market and mature commercial application solutions. At the same time, China’s vast artificial intelligence market can also promote the overall development and catch-up of artificial intelligence technology. Therefore, behind the United States’ inclusion of Chinese artificial intelligence companies in the entity list is a reflection of the technological competition between China and the United States in the field of artificial intelligence for technological dominance and market discourse power.
When the list was made public, Chinese companies expressed strong protest against the US Department of Commerce’s inclusion of the company in the Entity List. A number of companies stated in their opposition announcement that they will adopt relevant countermeasures, rely on their own technical strength, provide high-quality and stable products and high-quality services, and at the same time adhere to independent research and development of core technologies and take the development path of technological originality.
China’s National Day military parade in October 2019, as the debut of the unmanned combat module, a variety of unmanned reconnaissance aircraft is one of the best manifestations of China’s national defense strength and scientific research and technological strength, and is also a typical representative of the field of artificial intelligence. In the future, China’s great revival will inevitably be accompanied by the continuous breakthrough and rise of science and technology. On the way forward, China’s artificial intelligence will be listed as a potential threat or competition object by more foreign companies. Therefore, only by continuously improving their own strengths, realizing the entire industrial chain, and improving the competitiveness of core technologies can Chinese technology companies go higher and further.