China or the United States: Who Will Win the Race for AI Supremacy?

April 12, 2023

Several Chinese academics have expressed concerns regarding the fierce rivalry with the US over AI applications and fear that, in the end, it will result in a "divorce" that will harm both countries.
Attendees experience the Metaverse concept of VR science during the panel on entitled "Artificial Intelligence (AI), Metaverse and all Else" within the Antalya Diplomacy Forum in Antalya, Turkiye on March 12, 2022. Photo by Anadolu Images.


he rapid development of artificial intelligence (AI) in recent years has brought about a new era of innovation, with applications in diverse sectors, ranging from healthcare to finance, entertainment, and more. The competition between China and the United States over AI has been widely debated in academic circles with some experts suggesting that the two countries are engaged in a race to dominate the field of AI. Presently, the U.S. is known as the leader in AI development, with many of the world’s leading AI companies based in Silicon Valley. However, China is rapidly catching up, with significant investment in AI research and development, and a growing number of AI startups. In fact, China has announced plans to become the world leader in AI by 2030.

One of the areas where the competition between China and the United States is most apparent is  the development and deployment of AI chatbots that utilize natural language processing technologies like ChatGPT, a powerful AI chatbot that can engage in human-like conversations with users, based on a machine learning algorithm that uses natural language processing (NLP) techniques to understand and respond to user input. Developed by OpenAI, a research organization based in San Francisco, ChatGPT has quickly become one of the most popular and widely used AI chatbots, with applications ranging from customer service to entertainment.

This makes the development of powerful and effective AI chatbots a key strategic priority for both China and the United States. For this purpose and to achieve geopolitical sovereignty, both countries continue to focus on possessing the most influential elements that contribute to building a pioneering AI chatbot which include sizeable investments for building advanced computing microchips, amassing large amounts of data, building advanced algorithms, and employing talented engineers. Neither the U.S. nor China has fallen short of making such large investments. According to a report published by Stanford University in 2022, both countries are world leaders in overall private investments made to further the development of AI, with the U.S. investing three times more than China.

The Chinese approach to AI

Artificial intelligence is a broad field that has multiple sectors and it is hard to make a statement about one country dominating it. For example, China has excelled in facial recognition technology more than other countries, using it as a form of control and local surveillance. The ethics question here is whether China amassing big data to feed AI algorithms comes at the cost of the privacy of Chinese citizens.

However, when it comes to large-scale language models, global regulations and language restrictions hinder China’s development, as evidenced by the fate of Erniedeveloped by the Chinese engine giant Baidu, which was poorly received by investors when it was launched. This is because Ernie has a limited capacity to comprehend and process English statements and generate responses accordingly. This “puts it behind ChatGPT, which is able to generate responses in English, Chinese, and other languages,” as reported by the Chinese tech analyst, Chin Lee, in March 2023.

That said, China continued to make significant strides in the development of AI chatbots and succeeded at a domestic level. Companies like Alibaba and Tencent invest heavily in the development of chatbots that have the capacity to engage in natural and meaningful conversations with users. A good example is Alibaba’s chatbot, AliMe, which has been deployed in a wide range of applications, from customer service to hotel bookings and beyond.

At the international level, the Chinese government is not happy with the progress of Western AI chatbots. In a video that was made public, state-run media outlets claimed that the international chatbots may be utilized by U.S. authorities to “spread misinformation and manipulate public opinion.” Furthermore, the Chinese government attempted to impose restrictions on popular Western websites and applications like Google, Facebook, and Amazon, and many popular Chinese apps have removed access to ChatGPT.

The U.S. approach to AI

As the home of many tech giants like Google, Microsoft, and Facebook that have been instrumental in driving AI development in the United States, the country is currently the global AI leader. The U.S. approach to AI is primarily focused on fundamental research and developing new algorithms. The U.S. government has made significant investments in AI research and development, recognizing the importance of AI in driving economic growth and national security, and addressing societal challenges. The government has allocated billions of dollars in funding for AI research and development institutions and initiatives such as the National AI Initiative and the AI research institutes of the National Science Foundation (NSF).

When it comes to natural language processing models, the U.S. is considered to be ahead of China. The American approach to AI is characterized by a focus on fundamental research, significant investments in AI research and development, and collaboration between industry, academia, and government. These efforts have contributed to the development of cutting-edge technologies that have the potential to transform industries and society as a whole.

Nonetheless, U.S. tech giants are continuously looking over their shoulders at China while the U.S. government has expressed concerns about China’s growing influence in the AI industry and taken steps to limit Chinese investment in U.S. tech companies, citing national security concerns.

Overall, China tends to focus more on the rapid deployment of new technologies rather than using applied research methods. On the other hand, the U.S. is more focused on fundamental research and algorithm development. Both approaches have their strengths and weaknesses, and both countries are pushing forward aggressively to win the competition for AI dominance.

The development of natural language processing technologies is just one example of the ways in which this competition is playing out between the two countries. While the U.S. is currently dominant in the NLP sector, China is catching up quickly and aspires to dominate the industry by 2030. By then, the AI industry is expected to contribute up to $15.7 trillion to the global economy.

The race for AI dominance is not only reflected in the economic sector, but extends to shaping politics, education, and society as a whole through AI-based distribution mechanisms of information such as chatbots. This explains why China and the U.S. continue to invest in AI technologies aggressively and keep track of each other while taking extreme measures to ensure winning the competition for AI supremacy. Eric Schmidt, chair of the National Security Commission of Artificial Intelligence in the U.S., stated that all of China’s plans, resources, and progress in the AI industry should concern every American citizen and that it is necessary for the U.S. to win the AI competition.

Similarly, Chinese officials have limited their citizens’ access to certain Western AI technologies and have warned them about the dangers of the use of Western AI applications, specifically ChatGPT, in spreading misinformation. While both countries contend in the race for AI supremacy, several academics at Beijing University have expressed concerns regarding the fierce rivalry between the two countries and fear that, in the end, it will result in a “divorce” that will harm both China and the U.S.

Nour Naim is the Founder and Director of AI Minds. She is a researcher who is interested in Artificial Intelligence (AI) ethics, AI for social good, algorithmic bias, computer vision, machine learning, and natural language processing. Naim received her PhD from the Department of Management and Artificial Intelligence at Istanbul Aydin University, Turkey.