Kai-Fu Lee on China's AI advantage

A fast changing world, driven by staggering breakthroughs and new fissures opening up. Can we make sense of patterns of change across the globe during this time of exponential technology?

In this series, I speak to some of the most brilliant minds building, investing in or analysing the near future. Perhaps conversations with these #brilliantminds will help us unpick the future.

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If you'd rather listen to my conversation with Kai-Fu Lee, you can do so on Spotify, iTunes, Stitcher, Soundcloud, Breaker, Overcast or wherever you get your podcasts.

Riding the data wave:

In August of this year, China passed 800 million internet users. In comparison, the U.S. is just shy of 287 million (according to the 2016 Census). The most popular app, WeChat sees more than 1 billion monthly active users (MAU), while the second most used app, Tencent's QQ, has MAU of almost 700 million. Chinese users create 50x the amount of data in some domains compared to their American counterparts. One of those areas is fintech. The entire volume of mobile payment transaction exceeds China's GDP, reaching about 17 trillion US dollars. Kai-Fu describes this amount of data as "rocket fuel" for AI.

As Kai-Fe lee says: "[T]he entire Chinese life has become digitally-injected in a way not imaginable in the US or Europe. Suddenly, there's data, intelligence, and AI built into traditional and internet applications."

The entire Chinese life has become digitally-injected in a way not imaginable in the US or Europe. Suddenly, there's data, intelligence, and AI built into traditional and internet applications.

The government approach

The Great Firewall of China, founded on one of Deng Xiaoping's favourite maxims: "If you open the window for fresh air, some flies will be blown in", has been a hallmark of China's restrictive internet policies since late 1990s. In 2015, President Xi's government took it a step further, advancing the technology that blocks users from circumventing the firewall. Censorship ingrained in digital technologies is one of the reasons commentators in the West are concerned about China's growing AI powers.

However, according to Kai-Fu, Chinese policy-makers take a proactive agile approach: they "are watching the technologies and then they're very quick to implement things when they need to" and the "government generally takes a techno-utilitarian approach to technology, which is believing that [...] letting technologies launch earlier and then figuring out if they need to be regulated later. I think that is also a very good fit for AI—as you launch the product and collect the data, it gets better and better over time."

[T]he Chinese government generally takes a techno-utilitarian approach to technology, which is believing that letting technologies launch earlier and then figuring out if they need to be regulated later. 

Job displacement as a challenge and opportunity

Kai-Fu warns that the U.S. and China face similar challenges in terms of job automation; furthermore, the U.S. workers might face even steeper obstacles once AI begins entering workforce at scale. He argues that: "Many routine jobs in the U.S. are paid fairly [well], creating further incentive for entrepreneurs to build technologies to displace them. While re-skilling is going to be a very important component of the solution, we have to figure out what areas can absorb that many people. It's not going to be realistic to push more people into the creative side: if people worked ten or twenty years in a repetitive routine job, expecting them to become a scientist is unrealistic."

What do you think? Is China accelerating away from the US inputting AI across every part of daily life? And will AI threaten richer-nation workers more than those in China? Or will it, in general, benefit those workers?

There are many more brilliant insights from this conversation which you can listen to on iTunes, Spotify, Overcast, Breaker & Stitcher. #brilliantminds