An occasional review of technology, markets, and ideas.


China, America and the AI race.


In his 2018 book "AI Superpowers: China, Silicon Valley, and the New World Order" Kai-Fu Lee, a pioneer in the field of AI and a China-based venture capitalist, makes the case that the AI revolution will disproportionately help China and will give it the opportunity to surpass the United States.

"Putting all these pieces together—the dual transitions into the age of implementation and the age of data, China’s world-class entrepreneurs and proactive government—I believe that China will soon match or even overtake the United States in developing and deploying artificial intelligence. In my view, that lead in AI deployment will translate into productivity gains on a scale not seen since the Industrial Revolution." (Kai-Fu Lee, AI Superpowers)

There are a number of reasons that lead Lee to his conclusion about Chinese supremacy in the realm of AI. Most important is that there exist deep links between the Chinese government and "private industry" meaning that what happens in consumer and enterprise tech in China can easily be used for military purposes. This is in sharp contradistinction to the United States where Google – the undisputed leader in AI – backed away from its work with the Department of Defense for fear of an internal employee rebellion.

This brings us to a FT article from earlier this week in which Nicolas Chaillan, the first chief software officer for the USAF, claimed that the United States is so far behind the People's Liberation Army that in 15-20 years we will have no hope of competing:

“We have no competing fighting chance against China in 15 to 20 years. Right now, it’s already a done deal; it is already over in my opinion,” he said, adding there was “good reason to be angry”. – "US has already lost AI fight to China, says ex-Pentagon software chief"

Indeed, war today is fundamentally different from war even 20 years ago. The Chinese have long understood that technology unlocked an entirely new paradigm of war. Writing in "Unrestricted Warfare" back in 1999, two PLA colonels, Qiao Liang and Wang Xiangsui observe that with the proliferation of technology and globalization there really is no notion of a battlefield and thus everything becomes a battlefield:

"When we suddenly realize that all these non-war actions may be the new factors constituting future warfare, we have to come up with a new name for this new form of war: Warfare which transcends all boundaries and limits, in short: unrestricted warfare...[T]his kind of war means that all means will be in readiness, that information will be omnipresent, and the battlefield will be everywhere. (Qiao Liang, Unrestricted Warfare)

Chaillan points out that these digital technologies where China is achieving dominance are far more important than any single piece ineffective hardware we are able to develop. One particularly salient example is that while we spent $350bn outfitting our military with F35s that were been in development for 15 years and lost a dogfight to an F16 from 40 years ago, the Chinese have been honing digital force projection through PLA Unit 61486 and PLA Unit 61398. As they point out, the omnipresence of information means that the battlefield is everywhere.

So what's the scope of the Chinese digital assault?

  • Office of Personnel Management hack where 21.5 million records were stolen from the government's background investigation database.
  • Anthem hack in which 78mm names, birth dates, and social security numbers were stolen.
  • Equifax hack in which credit information for 147.9 million Americans was stolen.
  • Starwood Hotels hack in which someone stole reservations data including travel history, credit cards, and passport data for 500 million people.

While we are busy "fixing basic cloud things and laptops" the CCP has managed to steal all of the personal data on roughly 80% of Americans.

There is no doubt that the PLA and CCP are trying to create a social graph with as much metadata about each of the nodes as possible. While we continue to argue about whether Facebook is ruining democracy, China has essentially run off with the keys to the kingdom and amassed a far more dangerous database that they will undoubtedly use to strategically undermine America and her interests throughout the world.

Whether we are going to make it or not seems to be an open question indeed.

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Jamie Larson