Fall 2021
Dear Friends and Family,
The excerpts begin with a quote from Russian President Vladimir Putin where he states that whichever nation becomes the leader of Artificial Intelligence will become the ruler of the world. Today, there appears to be just two nations that are in the game: The United States and China. The two have different approaches to implementing the technology. Fundamentally, the U.S. is approaching this race without a grand strategy for our long-term future or for the application of artificial intelligence. China began with a long-term strategy for world dominance in the 1980s and has incorporated artificial intelligence as a fundamental component.
My Takeaways:
Next: Segment 12 is titled “The Battle for World Domination,” and will include a status report on the governmental activities of both the U.S. and China. It will include Kai-Fu Lee’s perspective that China has the advantage and why. It will also include a summary of the three big battles surround AI – Economy, Global Power and Agency.
Happy Learning,
Harley
Dear Friends and Family,
The excerpts begin with a quote from Russian President Vladimir Putin where he states that whichever nation becomes the leader of Artificial Intelligence will become the ruler of the world. Today, there appears to be just two nations that are in the game: The United States and China. The two have different approaches to implementing the technology. Fundamentally, the U.S. is approaching this race without a grand strategy for our long-term future or for the application of artificial intelligence. China began with a long-term strategy for world dominance in the 1980s and has incorporated artificial intelligence as a fundamental component.
My Takeaways:
- The U.S. is relying on six big American tech firms (Google, Microsoft, Amazon, Facebook, IBM, and Apple) to develop and apply artificial within the country, with the philosophy that a free-market approach will win. This requires the government to grapple with the issue of breaking some up Big Tech firms (primarily Google, Facebook, and Amazon) because of their monopolistic power. But doing so, would undoubtedly deter artificial intelligence application.
- China takes long-term planning very seriously and they have proven to be very skillful at it in the past, as author Rajiv Malhotra reports, “By selling the U.S. on the idea of cheap labor, China negotiated a massive transfer of intellectual property, manufacturing capacity, and overall power from the U.S. The Chinese executed their plan so brilliantly that the Americans never even suspected that China would be able to overtake them.”
- China recognized their technical talent shortage when they put their strategy together. This led to them sending their high potential students abroad in the 1980s and 90s mostly to U.S. universities and then starting in the 2000s they began recruiting the world’s best brains to come and work in China by luring them with attractive compensation packages. In 2017, China’s State Council called for the inclusion of AI fundamentals and coursework beginning in elementary school.
Next: Segment 12 is titled “The Battle for World Domination,” and will include a status report on the governmental activities of both the U.S. and China. It will include Kai-Fu Lee’s perspective that China has the advantage and why. It will also include a summary of the three big battles surround AI – Economy, Global Power and Agency.
Happy Learning,
Harley
BIG TECH & AI – SEGMENT 11
TWO DIFFERENT AI APPROACHES – EXCERPTS
TWO DIFFERENT AI APPROACHES – EXCERPTS
Artificial Intelligence is the future, not only for Russia, but for all humankind. It comes with colossal opportunities, but also threats that are difficult to predict. Whoever becomes the leader in this sphere will become the ruler of the world. – Russian President Vladimir Putin.
THE APPROACH OF THE UNITED STATES: We will soon grapple with the realization that our lawmakers have no grand strategy for AI nor for our longer-term futures. Filling the void is opportunism and the drive for commercial success. America’s portion of the Big Nine companies may be individually successful, but they are not part of a coordinated effort to amass and centralize economic and military power in the U.S.
In America, the government relies on the G-MAFIA (Google, Microsoft, Amazon, Facebook, IBM, and Apple), and since we’re a market-driven economy with laws and regulations in place to protect businesses, the Valley has a significant amount of leverage. The G-MAFIA should not be constrained or regulated in their pursuit of profit as long as they aren’t violating other laws. But all this opportunity comes at a cost. There is tremendous pressure for the G-MAFIA to build practical and commercial applications of AI as quickly as possible. In the digital space, investors have grown accustomed to quick wins and windfalls. The G-MAFIA tend to move swiftly in developmental spurts until something bad happens, the then the government gets involved.
But once your data, gadgets, appliances, cars, and services are entangled, you’ll be locked in. As you buy more stuff – like mobile phones, connected refrigerators, or smart earbuds --- you’ll find that the G-MAFIA has become an operating system for your everyday life. Humanity is being made an offer that we just can’t refuse. What’s implied here is that soon we won’t just be trusting the G-MAFIA our data. As we transition from narrow AI to more general AI capable of making complex decisions, we will be inviting them directly into our medicine cabinets and refrigerators, our cars and our closets, and into the connected glasses, wristbands, and earbuds we’ll soon be wearing. This will allow the G-MAFIA to automate repetitive tasks for us, help us make decisions, and spend less of our mental energy thinking slowly. We will have zero degrees of separation between ourselves and the G-MAFIA. It will be impossible for lawmakers to assert any real authority once the whole of our existence is intertwined with these companies. But in exchange for that, what might we be giving up?
It might seem like the best course of action is to simply force G-MAFIA companies to break apart. By October 2019, 48 state attorneys general, along with the House Judiciary Committee, the Justice Department and the Federal Trade Commission were all investigating whether to break up the big tech companies. Simply splitting apart each of the companies – as though that would be technically feasible, given the ubiquity of shared service – would mean not one big tech giant but two smaller, new tech giants are now mining, refining and using our data in ways we might not like. We need a more sophisticated approach.
THE APPROACH OF CHINA: The AI tribe under the People’s Republic of China operates under different rules and rituals, which include significant government funding, oversight, and industrial policies designed to propel China’s portion of the Big Nine the BAT (Baidu, Alibaba, and Tencent) forward. Together, they are part of a well-capitalized, highly organized state-level AI plan for the future, one in which the government wields tremendous control. In China, AI training begins before students enter university. In 2017, China’s State Council called for the inclusion of AI fundamentals and coursework, which means that Chinese kids begin learning AI skills in elementary school.
China has the largest digital market in the world regardless of how you measure it: more than a trillion dollars spent annually, more than a billion people online, and $30 billion invested in venture deals in the world’s most important tech companies. China has a clear vision of its near-future global dominance in economics, geopolitics, and military – and it sees AI as the pathway leading to that goal. To that end, maintaining absolute control over information is a paramount issue for state leaders, so China has adopted an authoritarian command of content and user data, an industrial policy designed to transfer intellectual property from American companies to their Chinese counter parts. Examples include particular data sets, algorithms, and the design of processors. Many American companies hoping to do business in China must promise to hand over their proprietary technologies first. And there are new regulations in place, forcing foreign companies to localize their research and development within China, and to store any data used locally as well. Storing data locally is a difficult task of foreign companies. Since the Chinese government could invoke its authority to review data and circumvent encryption at any time.
Beijing takes long-term planning seriously. Both government leaders and Communist Party officials embrace strategic foresight – making China one of the few countries on Earth that plans and maps comprehensive economic, political, military, and social strategy, including its 2030 plan to transform China into “the world’s primary AI innovation center.” That plan is unlikely to be repealed by a new government, since in March 2018 China abolished term limits and effectively allowed President Xi Jinping to remain in power for life.
This is all happening during a period of strong economic growth in China, whose middle class is growing at breakneck speed. By 2022, more than three-quarters of China’s urban population will earn enough money to make the middle-class cut. In 2000, just 4% of its population was considered middle class. (Strikingly, 70% of Americans consider themselves to be part of the middle class, but Pew Research Center data shows that our middle class has been shrinking for the past four decades – less than half of Americans earn enough to fit the category).
No other country bridges both the developed and developing world like China does. As a Communist power and economic powerhouse, China is a partner that’s now too big to ignore, a political adversary that has radically different viewpoints on human rights and a conduit for global alliances. With increased wealth come power. This necessarily unseats other countries from those positions of power and influence, and it also weakens democratic ideals worldwide. Second, China will leverage its advancements in AI and economic stimulus to modernize its military, giving it an advantage over Western nations. Because in the future wars will be fought by code, not hand-to-hand combat, using AI techniques a military can “win” by destabilizing an economy rather than demolishing country sites and city centers. From that perspective, given China’s unified march advancing artificial intelligence, China is dangerously far ahead of the West.
While in the U.S., our tech giants are navigating a tricky path between national security and full transparency, the relationships the BAT has with China’s government are exactly opposite. But here’s a chilling example: the current posture of the US military is that a human must be kept in the loop, regardless of how advanced AI, unmanned systems, and robots become. This will ensure that we don’t someday cede lethal authority to software. This is not the case in China.
China’s national Social Credit Score system will “allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step.” The AI-powered Social Credit System was developed to engineer a problem-free society. To promote “trustworthiness,” citizens are rated on a number of different data points, like heroic acts (points earned) or traffic tickets (points deducted). Those with lower scores face hurdles applying for jobs, buying a home, or getting kids into schools. In some cities, high-scoring residents have their pictures on display. If all this seems too fanatical to believe, keep in mind that China once successfully instituted a one-child policy to forcibly cull its population. These policies and initiatives are the brainchild of President Xi Jinping’s inner circle, which for the past decade has been singularly focused on rebranding and rebuilding China into our predominant global superpower. China is more authoritarian today than under any previous leaders since Chairman Mao Zedong and advancing and leveraging AI are fundamental to the cause.
There is another reason we should be concerned about China’s plans, and that brings us back to that place where AI tribes form: education. China is actively draining professors and researchers away from AI’s hubs in Canada and the United States, offering them attractive repatriation packages. There’s already a shortage of trained data scientists and machine-learning specialists. Siphoning off people, will soon create a talent vacuum in the West. By far, this is China’s smartest long -term play – because it deprives the West of its ability to compete in the future.
CONCLUSION: AI’s consumerism model in the U.S. isn’t inherently evil. Neither is China’s government-centralized model. AI itself isn’t necessarily harmful to society. However, the G-MAFIA are profit-driven, publicly traded companies that must answer to Wall Street, regardless of the altruistic intentions of their leaders and employees. In China, the BAT is beholden to the Chinese government, which has already decided what’s best for the Chinese.
Source: The Big Nine: How the Tech Titans & Their Thinking Machines Could Warp Humanity by Amy Webb (2019)
CHINA’S AMBITIOUS PLAN: Long-Term, Systemic, and Disciplined: China has consistently defied Western attempts to demonize its government as an abusive, totalitarian state. China controls its own narrative. Its citizens’ education has been built on the foundation of the grand narrative of past greatness and its future as the world’s foremost superpower. It is clear among the Chinese people today that the long-term destiny of their country’s greatness has been drilled into them as non-negotiable. This collective self-confidence is a remarkable asset.
China boldly configures itself in the global value chain as the prime supplier of low-cost manufacturing. But the results were not visible for a long time. In 1975 China was still bogged down by the Cultural Revolution. When Google was founded in 1998, only 0.2% of China’s population had internet connection, compared with 30% in the U.S. Persistence eventually paid off. By 2017, less than twenty years later, nearly half of all AI venture funding worldwide was coming from China’s investors. In 2007, China had no high-speed rail lines, yet by 2019 it had more miles of high-speed rail lines than the rest of the world combined. In the past twenty years China has vaulted to the forefront of development in one industry after another.
A prominent reason is that the Chinese government made huge bets on high-risk initiatives that led to game-changing transformations. Democratic governments are less willing to take such extreme risks because failure can lead to political ruin. The Chinese political system also does not require the time-consuming consensus for high-tech development that is needed in democracies at each stage and for each decision. Nor are Chinese leaders preoccupied with domestic fragmentation as a serious diversion. Furthermore, multinational corporations operating in China have no need to contend with messy domestic politics. While American human rights activists have constantly accused China of labor abuses, and the U.S. government regularly issues official protests, U.S. manufacturing giants nonetheless have become increasingly addicted to the profits made possible by maintaining manufacturing bases in China. Against all odds, China became the factory of the world at a dramatic pace.
China started out with a long-term strategy. They realized they faced a serious talent shortage in critical domains of competence. To fill these gaps in skilled labor for advanced technologies, it adopted a multipronged approach that included a menu of human resource development programs.
- Raising educational standards to schools and universities to achieve the world’s best practices.
- Sending its high potential students abroad in the 1980s and 1990s mostly to American universities, to learn and bring back vital knowledge required to advance their technology.
- Recruiting the world’s best brains to come and work in China by luring them with attractive compensation packages.
Today’s life-or-death battle recognize no ethics or scruples – they are in a winner-take-all game, a cutthroat competition in which success is obsessively pursued at any cost. To survive, players cannot be complacent for even one moment because new competitors are always at the gate. Constant innovation and ruthless self-preservation are the only rules. Chinese companies assume that their best ideas are being plagiarized and their employees being poached. Understanding how this market approach has evolved deserves a quick recap at the various stages of industrialization in China over recent decades.
- China began the process by selling cheap labor to American companies.
- Chinese companies quietly and humbly learned from their American clients, then reverse engineered and imitated U.S. business models and products.
- Inspired by U.S. entrepreneurs, several thousand Chinese start-ups rapidly emerged, adapting American models for Chinese market conditions.
- The surge in technological competition turned China’s start-up business ecosystem into a coliseum in which thousands of companies fought for market supremacy. The ethos was kill or be killed. What mattered was rapid deployment, the ruthless to survive and thrive amid chaos and bloodshed. Using cleverness, tricks and subterfuge, entrepreneurs blatantly copied ideas and techniques from wherever they could to get ahead.
- The scale and intensity of mimicry forces Chinese companies to innovate incrementally. They constantly refine their products, cut costs, implement new ideas, and hustle to raise money. Companies unable to sustain constant innovation are frozen in copycat products and will not survive.
- The result is that China has a formidable, and unparalleled supply-chain ecosystem. In contrast, most other countries’ supply chains lack any central operating plan and tend to function as fragmented silos.
With its recent rise to power in the last half of the 20th century, China used the diplomacy of aesthetics to manipulate several U.S. administrations and the high-tech industry. The U.S. failed to understand the Chinese mind and underestimated its commitment to become the most powerful nation in the world. By selling the U.S. on the idea of cheap labor, China negotiated a massive transfer of intellectual property, manufacturing capacity, jobs and overall power from the U.S. The Chinese executed their plan so brilliantly that the Americans never even suspected that China would be able to overtake them.
Source: Artificial Intelligence and the Future of Power by Rajiv Malhotra (2021)
The unabbreviated version of the above can be found in the pdf document below.
| 11l_big_tech_11l_different_ai_approaches_--_segment_11.pdf |