Worldwide demand for Artificial Intelligence (AI) technology is poised to increase dramatically. PricewaterhouseCoopers estimates AI will add $15.7 trillion (U.S.) to the global GDP by 2030. McKinsey agrees, further estimating that by 2030 at least 70% of the world’s companies will be using AI.

The two most robust economies in the world – the U.S. and China – are leading the charge to develop the technologies that will power the coming AI revolution.

But does this have to be a zero-sum game, where only one country emerges as winner?

In a recent New York Times Op-Ed, MIT President L. Rafael Reif noted that if China and the U.S. try to double-lock their doors when it comes to developing and owning the technology powering the AI revolution, then both run the risk of locking themselves into mediocrity.

Far more will be accomplished if both nations work together, to better leverage each other’s unique strengths.

China: AI powerhouse

China is poised to become an AI powerhouse because it has:

  1. A clearly-defined national strategy from the highest level of government, which has created tremendous momentum, and unlocked a flood of investment capital for AI research, development, and implementation. CB Insights reports that Chinese startups currently are attracting 48% of global AI investment (up from only 11% in 2016), while the U.S. lags behind at 38%);
  2. Access to massive amounts of real-world consumer data, generated by an economy in which everything imaginable is purchased via mobile payments using smartphones. Such data is the lifeblood of AI development. As Kai-Fu Lee, former head of Google China and Founder and CEO of Sinovation Ventures, says “In the age of AI, data is the new oil, and China is going to be the new Saudi Arabia.”; and
  3. National and local governments laser-focused on developing and adapting infrastructure (e.g., autonomous vehicle-friendly highways and cities) with real-world AI implementation in mind.

U.S.: AI innovation machine

The U.S. AI innovation machine is powerful because it has:

  1. Ready access to the American-developed and owned hardware needed to run advanced AI algorithms. And by blocking Chinese attempts to acquire U.S. chip companies, the U.S. government is ensuring that developers in China will continue to look to the U.S. for cutting-edge hardware for AI applications;
  2. The world’s top AI talent and institutions for studying advanced AI. According to a July 2018 Tsinghua University study, China lags far behind the U.S. on the AI talent front (having, e.g., only one-fifth the number of high-quality AI researchers the U.S. has). And a recent Advanced Insights report finds that four of the five top schools for advanced AI are American: MIT; 2. Carnegie Mellon; 3. Stanford; and 4. University of California, Berkeley (the fifth top school is in Singapore); and
  3. Incredible diversity in its AI talent pool, and in its population generally. Diversity is critical to AI development. If data sets used to train AI algorithms are limited or biased, or if those creating an AI algorithm do not recognize or account for those limits and biases, the output will be fundamentally flawed. Thus, the ability to attract diverse AI talent from around the world gives the U.S. a tremendous advantage in developing robust AI algorithms for use globally. Similarly, the data generated by America’s diverse population is invaluable for purposes of training AI algorithms to be effective around the world.

Unite and conquer

If China and the U.S. treat each other as vigorous competitors with unique strengths that can be learned from and leveraged, there is no limit to what can be accomplished. Together.

China can benefit from the diversity and expertise of American AI developers to create more robust algorithms and applications. Similarly, the U.S. can leverage the massive volume of real-world consumer data being generated in China to further advance and better train American AI algorithms.

American innovators also can use China’s increasingly AI-friendly infrastructure and institutions to implement, test, and refine U.S. AI innovation in a real-world setting. Intel recognizes this, announcing in November 2018 that for purposes of taking advantage of “potentially massive use cases in China,” it is in talks with Chinese AI companies regarding co-investment and cooperation. LOT Network Founding Member Google knows this, too, having opened last year a Research Lab in China dedicated solely to AI, emphasizing that “Whether [an AI] breakthrough occurs in Silicon Valley, Beijing or anywhere else, it has the potential to make everyone’s life better for the entire world.” And Chinese developers can take advantage of the diversity of the U.S. population to test and improve their AI algorithms and applications for use outside China, and around the world. After all, as CEO for the Allen Institute for Artificial Intelligence, Dr. Oren Etzioni, notes in a November 2018 Wall Street Journal interview, “If you train your machines and computers using data only in China, then it works only in China.” Chinese technology giants (and LOT Members!) Tencent and recognize this, recently launching AI Research Labs in Seattle and Mountain View, respectively.

China and the U.S. also can jointly set the pace for development and implementation of global AI standards. In the U.S., The Institute of Electrical and Electronics Engineers (IEEE) has been working on standards for AI. China is doing similar work with its AI Industry Alliance (AIIA). Encouraging these organizations to work together will ensure that adopted standards benefit everyone (including, importantly, AI end-users), everywhere.

Concerns regarding privacy and data security are also better addressed collaboratively. If China hopes to increase its influence on the global AI stage, regulators there will eventually have to consider adopting privacy and data security standards similar to those in Europe and the U.S. Working together to find mutually-acceptable middle ground – taking into account concerns of AI developers, implementers, and end-users globally – will greatly benefit both China and the U.S., and the world as a whole. Baidu recognizes this, in October becoming the first Chinese company to join the Partnership On AI, a U.S.-based initiative established to serve as a platform for discussion and engagement about AI standards, ethics, and the impact of AI technology globally.

Finally, U.S. AI innovators concerned by the prospect of having their technology copied in China will benefit by working more closely with the Chinese government, and their Chinese technology counterparts, to explain their concerns, and to propose and lobby for specific solutions best addressing those concerns. The alternative – to simply cut-and-run from that market – is unfathomable. As Scott Kennedy, a specialist on China’s economy at the Center for Strategic and International Studies in Washington, noted in a recent NPR interview, “China is the fastest growing, largest market on the planet ever in history. You take your product. Multiply it by 1.4 billion potential consumers. That’s a big opportunity for anybody.” The U.S. system for protecting IP remains one of the most successful in the world, and the Chinese government has repeatedly – most recently through President Xi Jinping, in a November 2018 keynote address in Shanghai – emphasized its commitment to developing an equally effective system. To better encourage AI innovation everywhere, China and the U.S. must collaborate on IP protection concerns and solutions, sharing with each other mistakes made, lessons learned, and best practices.

Both China and the U.S. bring unique strengths to the race to create and own the technologies that will power the coming AI revolution. While embracing the competitive spirit that has always driven each nation’s respective development and growth, China and the U.S. must work together to unite and conquer the world of AI, for the greater global good.

About the authors

Rodger Sadler – in New York – is Managing Director and Head of Legal & Intellectual Property at Cote Capital, an IP Capital investment firm that invests in early-stage technology startups, and late-stage R&D projects at S&P 500 companies.




Chuan Shen – in Beijing – is Director of the Overseas Business Division at China’s Intellectual Property Publishing House.




The opinions expressed in this article are those of the authors, and not necessarily those of their employers.