AI: US and China must rise above a zero-sum race

As the dominant AI power, the US should understand that its latest salvo in the tech war risks undermining technological advances that depend on collaboration as much as competition
Global cooperation and a standardised regulatory framework will nurture an environment conducive to breakthroughs

Jeffrey Wu

Published: 4:30pm, 13 Feb 2024

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The global technological landscape is witnessing an intense pace of development in artificial intelligence (AI), with the US and China at the forefront. Often portrayed as a race, the dynamic is increasingly framed as a zero-sum game, where the success of one is seen as the defeat of the other.

This portrayal, however, oversimplifies the complex nature of AI development and global technological progress.

A recent policy shift proposed by the US, requiring cloud firms to disclose foreign customer details, adds a new layer to this narrative.

AI development is not a straightforward contest with clear winners and losers. It is a multifaceted ecosystem involving a myriad of players from academia, industry and government. From optimising power grids to early disease detection via medical imaging and poverty reduction, AI advancements carry global significance that transcends national achievements, marking a collective technological leap.

These innovations not only solve critical problems but also generate positive externalities, enriching society by fostering efficiency, enhancing quality of life and driving sustainable development worldwide.

Currently, 64 per cent of top-tier AI research papers have co-authors who come from different countries. The race analogy, while compelling, does not fully capture the collaborative and interconnected nature of technological progress.

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The Biden administration’s proposal, aimed at protecting intellectual property and sustaining a competitive advantage, inadvertently shifts the discourse back towards a zero-sum scenario. This approach emphasises the pursuit of AI supremacy to achieve substantial economic, military and geopolitical gains, particularly in the context of geopolitical and military dominance.

Despite this, the US already commands a resounding lead, characterised by a market that champions quality, diversity and global infrastructure, and backed by a strong culture of innovation and collaboration. It is home to OpenAI, the juggernaut behind the chatbot ChatGPT, which became the fastest-growing consumer application in history, reaching over 100 million monthly active users just two months after launch. It also has a large lead over all other countries in top-tier AI research, with nearly 60 per cent of top-tier researchers working for American universities and companies.

Their status is challenging for any country to contest as this dominance stems from institutional advantages like favourable regulatory and tax environments and mature capital markets, alongside “network effects” of concentrated AI talent in hubs like Silicon Valley.

Talent naturally gravitates towards environments where it can be most productively utilised and compensated, a dynamic evident in the US but less so in China, especially in the wake of the government’s clampdowns on technology and gaming, among other sectors.

The US’ relentless pursuit of AI supremacy, through decoupling and embargoes, not only represents a departure from the collaborative ethos that has been fundamental to the success of American technological innovation, but also risks unforeseen and potentially detrimental consequences.

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It could stifle global AI cooperation, as entities tread cautiously with regard to sharing data and resources. Its second-order effects could Balkanise the global tech landscape, creating isolated AI sectors and cloud infrastructures worldwide.

Furthermore, divergent AI regulations could lead to a “race to the bottom” scenario, where companies might move to countries with the least-stringent laws, potentially harming global ethical standards.

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The US’ latest proposal, while simple in theory, also faces complex execution challenges, as gathering detailed customer data is burdensome, costly and could generate economic and legal obstacles for US cloud providers.

China’s response to this policy is pivotal to AI’s future. While the path of mutual escalation looms, the more probable outcome is that China will bolster its domestic AI capabilities and forge new international alliances beyond the reach of US influence. With its vast data collection capabilities and integrated digital ecosystems supported by government policies, China positions itself as a sound contender.

A drone carrying blood takes off for the Shenzhen Traditional Chinese Medicine Hospital from the Shenzhen Blood Centre in Shenzhen, in China’s Guangdong province, on January 19. Photo: Xinhua

Already outpacing others in several domains, China has approved numerous AI models for public use and witnessed Baidu’s Ernie become a household name among over 100 million users. Extensive industrial-use cases stemming from deep supply chains and rapid, mobile-first consumer adoption are driving further momentum.

As China faces economic and geopolitical challenges, its commitment to becoming a global AI leader by 2030 remains undeterred. Its track record of developing technological giants in sectors from EVs to semiconductors is likely to be a prelude to its forthcoming chapter in AI.

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Each nation brings unique advantages and approaches to the table, influenced by its specific regulatory landscape, market dynamics and technological infrastructure. Collaborative efforts can undoubtedly lead to shared benefits, but the tumultuous transition to a multipolar world makes confrontation inevitable.

As such, true advancement in AI may not come from merely avoiding confrontation but through a transformative approach that redefines competition itself. Competition is, of course, welcome as it breeds progress. However, fair competition operates efficiently under standardised rules, and the US, as the current leader, appears to be setting these rules.

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The pursuit of radical technologies by global powers is not new. That’s why adopting a framework similar to nuclear non-proliferation treaties – where nations agree to transparent AI development goals, share breakthroughs under a regulated framework, and establish an international AI oversight body – could be a start.

Implementing such a framework, however, will be an immense undertaking. AI surpasses nuclear technology in its complexity, diverse applications and societal implications. Unlike the tangible risks of nuclear technology, the unique ethical and privacy challenges of AI, combined with its borderless reach, make regulation and governance particularly challenging.

Ultimately, the path forward should merge competitive spirit with a commitment to shared goals, shaping a future where AI serves as a bridge between nations, not a battleground.

Jeffrey Wu is a director at MindWorks Capital, a leading Hong Kong-headquartered venture capital firm specialising in technology investment across Greater China and Southeast Asia