China’s “Sputnik Moment” is what Kai-Fu Lee, author of the famous book AI Superpowers, likes to call it. Five years ago, when AlphaGo—an artificial intelligence–based program developed by DeepMind, a startup that Google acquired in 2014—defeated two of the world’s best human exponents of the board game Go, it came as an eye-opener to China and its A.I. community.
Soon after, the Chinese government launched an ambitious Next Generation Artificial Intelligence Development Plan to build China’s A.I. ecosystem, promising policy support, central coordination, and investments that are slated to cross the $150 billion mark by 2030. The goal: China’s A.I. industry should generate 1 trillion yuan ($160 billion) of annual revenues, with related industries crossing 10 trillion yuan ($1.6 trillion) in annual sales, by the end of this decade.
From every other country’s perspective, it’s instructive to understand how China has succeeded in getting companies across industries to use a labor-displacing technology and ensure that, in several sectors, A.I. lays down deep roots. We’ve been studying the comparative dynamics of A.I. ecosystems in the U.S., China, and Europe, and we believe that ecosystems are shaped by their national environments, which differ in terms of the academic, commercial, political, regulatory, and cultural conditions. The way governments, institutions, and companies—the triple helix of business innovation—interact influences an ecosystem’s formation, especially when an entire nation treats a technology as a strategic priority.
Viewed through this triple-helix lens, several key factors about A.I. ecosystems come into focus. One: Fostering local talent lays the foundation of success. Prodded by policy, Chinese universities have set up A.I. research departments, and the number of bachelor’s and master’s degree programs related to A.I., which added up to about 64 in 2016, jumped sixfold to 392 in 2017 and to 902—or 14 times more—in 2018. By 2017, venture capital investments in Chinese A.I. firms accounted for 48% of the global total, surpassing those in the U.S. for the first time. In 2020, China filed more A.I. patents than any other country in the world while the number of A.I. startups in the country had crossed 1,100— second only to the number in the U.S. Above all, the government’s support of ecosystems that include companies and universities jump-started the development of A.I. applications.