{"id":44553,"date":"2020-01-17T04:00:23","date_gmt":"2020-01-16T20:00:23","guid":{"rendered":"https:\/\/daxueconsulting.com\/?p=44553"},"modified":"2021-11-18T11:08:45","modified_gmt":"2021-11-18T03:08:45","slug":"history-china-artificial-intelligence","status":"publish","type":"post","link":"https:\/\/daxueconsulting.com\/history-china-artificial-intelligence\/","title":{"rendered":"The history of Artificial Intelligence (AI) in China"},"content":{"rendered":"\n

Along with the gradual maturation of China\u2019s artificial intelligence (AI) <\/strong>technology observed in recent years, many industry giants progressively increased their investment in this new market. The burgeoning applications related to AI technology have also expanded the scope of this technology from niche research fields to broader commercial areas. In fact, today, AI in China has broad market prospects. Besides being among the leading nations\u2014in terms of AI research output, China is also ideally placed for the rapid development of AI technology. With its population of 1.4 billion<\/a> and some of the world\u2019s foremost research centers in the field like Tsinghua University<\/a>, Shanghai Jiaotong University<\/a> and the Chinese Academy of Sciences<\/a>, China disposes of enough data and brainpower to make significant breakthroughs in AI technology. <\/p>\n\n\n\n

Download our AI in China 2020 White Paper<\/a><\/div>\n\n\n\n
\"The
[Source: Daxue Consulting, history of AI in China]
<\/figcaption><\/figure>\n\n\n\n

AI in China 2020<\/h2>\n\n\n\n

A\nre-occurring question is what China\u2019s place is in the global realm of AI\ndevelopment. We are often bombarded with headlines pitting China against the US\nin competition. But after reviewing the AI developments that have happened in\nrecent years, it is apparent that Chinese AI developers are eager for\ncollaboration.<\/p>\n\n\n\n

China\u2019s high level of AI adoption and citizens\u2019 positive perception<\/a> towards AI sets it apart from other nations. China has the advantages<\/a> of a massive data pool and a high level of adoption. The areas where China can improve are in talent, hardware and research quality. <\/p>\n\n\n\n

AI Talent in\nChina<\/h2>\n\n\n\n

Whereas\nthe US and EU get a lot of AI talent from foreign countries, China is finding\ntalent within its borders. Between 1998 and 2017 the US gained 1,283 foreign AI\nacademic researchers while China only gained 53. However, China has a larger\npopulation to work with, and it is a population that is becoming increasingly\nmore educated<\/a>. <\/p>\n\n\n\n

China\nis already working on more initiatives to increase AI-related education at the\nUniversity level. In 2018, China\u2019s ministry of education announced a plan to\npromote AI education, and several top universities have already added AI\ndepartments and majors. Due to China\u2019s AI having a shorter history, AI\nresearchers in China, on average, have less experience. 25% of Chinese AI\nworkers have more than 10 years of experience compared\nto 50%<\/a> of the US AI workers. <\/p>\n\n\n\n

Highest quantity of AI research<\/h2>\n\n\n\n

China\nhas published the highest quantity of AI research globally. Though Chinese\npapers are cited significantly less than US and EU papers, the quality of\nresearch has been increasing. Each year more\nand more AI papers<\/a> globally cite Chinese research. <\/p>\n\n\n\n

China\nis investing in improving the quality of AI research, three initiatives are: <\/h4>\n\n\n\n

1)\nChina\u2019s New Generation AI Development Plan, which calls for China to have made\nsignificant breakthroughs in AI theory by 2025<\/p>\n\n\n\n

2)\nThe Chinese government has created research centers, including the Artificial\nIntelligence Research Center, which has more than 100 employees.<\/p>\n\n\n\n

3)\nThe Chinese Ministry of Industry and Information Technology plans to allocate\n$950 million annually to fund strategic AI projects. <\/p>\n\n\n\n

China\u2019s AI influence is expanding globally<\/h2>\n\n\n\n

The\namount of collaboration between American and Chinese AI researchers peaked in\n2017, but is still much higher than it was five years ago. One thing that has\nbeen holding Chinese researchers back from collaborating with the US is visa\nrejections. Meanwhile, Chinese AI research collaborations with the EU have gone up<\/a> since\n2018.<\/p>\n\n\n\n

One\nexample of US-China AI collaboration happening in the medical industry,\nnotably, a team of American and Chinese medical scientists made technology that\ncan automatically\ndiagnose<\/a> common childhood diseases, thanks to the high volume of easily\navailable data in China.<\/p>\n\n\n\n

Microsoft,\nIntel, and Tencent even participated in a cucumber-growing\ncompetition<\/a> to operate autonomous greenhouses to explore artificial\nintelligence applications in indoor farming.<\/p>\n\n\n\n

Baidu, Alibaba,\nTencent internationalizing\ntheir AI operations<\/h2>\n\n\n\n

Despite\nthe US and China being pitted as AI enemies, companies have been reaching\ncross-border for collaborations and mutual gain.  Baidu has been reaching across borders for AI\ncollaboration, Alibaba is entering foreign markets through B2B e-commerce, and\nTencent is spreading it\u2019s influence through investments in gaming companies.<\/p>\n\n\n\n

Baidu<\/h3>\n\n\n\n

Baidu\nhas joined a consortium<\/a> led\nby US companies advancing the understanding of AI globally. Baidu<\/a>\nhas also been developing ad tech in Silicon Valley and has launched a DU Ad platform<\/a> with a goal to help developers\nin China and elsewhere increase their mobile profits in overseas countries. <\/p>\n\n\n\n

Baidu\nhas entered foreign markets through utility\napps<\/a>. These are apps that are not exciting to neither create nor download,\nbut they are useful and sticky, think phone battery savers, spam call filters,\nscreen capture apps.<\/p>\n\n\n\n

Alibaba <\/h3>\n\n\n\n

Alibaba\nis taking a path of B2B cross-border e-commerce, for example it recently partnered\nwith US\u2019s Office Depot for a B2B campaign targeting America\u2019s small to medium\nsized businesses. This B2B path avoids direct competition with Amazon for the\ntime being. <\/p>\n\n\n\n

Tencent<\/h3>\n\n\n\n

Tencent\nhas been investing<\/a>\nin video game companies around the world. Tencent has purchased 100% of Riot\nGames, an American game developer most famous for League of Legends. Tencent\nhas purchased 40% of Riot Games, famous for Fortnite, has 5% stake in Activision\nBlizzard. In addition to these two American gaming companies, Tencent also has\nstake in South Korea\u2019s Bluehole and France\u2019s Ubisoft, and many more game\ncompanies around the world.<\/p>\n\n\n\n

AI investment between the west and China<\/h2>\n\n\n\n

The\namount of cross-border AI-focused investment between the US and China is\nincreasing, but there are more Chinese investments in AI startups in the US\nthan vice-versa. Chinese AI investment in the US and US AI investment in China\nboth peaked in 2017.<\/p>\n\n\n\n

According\nto CB\nInsights\u2019 data<\/a>, between 2014 and 2018 there were almost as much BAT-backed\nequity deal shares in the US as there was in China. Some BAT-backed investments\nin the US include Atomwise, Lightintelligence, ZestFinance and ObEN. The US\nfacial recognition startup CloudWalk even received a $301M grant from the\nGuangzhou Municipal Government.<\/p>\n\n\n\n

On\nthe flip side, Microsoft is an example of a western country with a strong AI\npresence in China. With a research\nlab<\/a> that has been present in China since 1999, Microsoft has hired and\ntrained thousands of Chinese AI developers.<\/p>\n\n\n\n

The main sectors covered by AI in China<\/h2>\n\n\n\n

Delving\ninto the AI market in\nChina, we see that this technology already covers a wide range of\nsegments. Some of the most dynamic areas include what Daxue Consulting defines\nas the basic layer<\/strong>\u2014the basic parts and algorithms of AI products; the technology\nlayer<\/strong>\u2014technology which support AI products\u2014and applications<\/strong>, which are the AI products in the different\nindustries. In the graph below, we have clustered Chinese companies which make\nuse of AI technology\ninto four groups, depending on which specific segment the companies focus on: Applications,\nTechnology, Basic, <\/strong>and Comprehensive, <\/strong>which refers to those companies\nthat are working in all three areas.<\/p>\n\n\n\n

China\u2019s Artificial\nIntelligence companies<\/h3>\n\n\n\n
\"Chinese
[Source: Daxue Consulting, companies in applications sector]<\/figcaption><\/figure>\n\n\n\n
\"China's
[Source: Daxue Consulting, companies involved in AI technology development]<\/figcaption><\/figure>\n\n\n\n
\"China's
[Source: Daxue Consulting, companies involved in AI base sector]<\/figcaption><\/figure>\n\n\n\n
\"Comprehensive
[Source: Daxue Consulting, companies involved in every dimension of AI development]<\/figcaption><\/figure>\n\n\n\n

Market size of AI technology in China <\/h2>\n\n\n\n

China’s artificial intelligence\nindustry is becoming one of the most important markets in the nation. However,\nthe market of AI in China\nis not mature yet, there is still a large space for development. In 2018, the\nsize of China\u2019s artificial\nintelligence market reached 33.9 billion RMB and the compound annual\ngrowth rate (CAGR) was more than 44% between 2015 and 2018. By 2020, the market\nsize is expected to reach 71 billion RMB.<\/p>\n\n\n\n

China’s Artificial intelligence by market size<\/h3>\n\n\n\n
\"China's
[Source: Daxue Consulting, China’s AI market growth]<\/figcaption><\/figure>\n\n\n\n

Distribution of AI companies by industries <\/strong><\/h3>\n\n\n\n

The\nAI-related companies established in 2018 mainly belong to the security, speech\ninteraction and healthcare industries. These areas have strong market demand\nand mature technology applications. A large portion of China’s AI market share is from speech,\ncomputer vision and natural language processing technology.<\/p>\n\n\n\n

\"Artificial
[Source: Daxue Consulting, companies in AI market]<\/figcaption><\/figure>\n\n\n\n
\"China's
[Source: Daxue Consulting, AI development by industry]<\/figcaption><\/figure>\n\n\n\n

Distribution of AI startups by region <\/h3>\n\n\n\n

AI\ncompanies in China are\nmainly concentrated in the economically developed first and second-tier cities\nand coastal areas. Inland provinces are trying to grasp the development boom as\nwell. In addition, Beijing, Shanghai, Shenzhen and Hangzhou are ranked among\nthe Top20 in the world for the quantity and industrial output of AI companies. As a result\nof its large and talented workforce, industrial resources and capital, which\nwere superior to other regions and cities, Beijing recorded the highest number\nof AI companies in\nChina. <\/p>\n\n\n\n

\"AI
[Source: Daxue Consulting, AI companies by province]<\/figcaption><\/figure>\n\n\n\n
\"Number
[Source: Daxue Consulting, cities ranking by number of AI companies]<\/figcaption><\/figure><\/div>\n\n\n\n

Investments in AI technology in China <\/h3>\n\n\n\n

In 2018, the investment value in China\u2019s AI industry\nreached 131.1 billion RMB, which is an increase of about 67.7 billion RMB\ncompared to 2017. The scale of this investments granted China the first\nposition in the world ranking. Although the growth of AI financing events\nslowed down in 2018, the total investment value still increased significantly.\nLarge financing events occurred frequently, and capital was more concentrated\nin leading companies.<\/p>\n\n\n\n

The value of China’s AI industry<\/h3>\n\n\n\n
\"Financing
[Source: Daxue Consulting, Financing of AI technology by year]<\/figcaption><\/figure>\n\n\n\n

Why AI technology is developing so fast in China? <\/h2>\n\n\n\n
\"AI's
[Source: Daxue consulting, reasons behind the development of AI in China]<\/figcaption><\/figure>\n\n\n\n

TECH PARKS<\/h3>\n\n\n\n
\"Location
[Source: Daxue Consulting, number oi AI tech parks in the main cities]<\/figcaption><\/figure>\n\n\n\n

In\norder to promote AI\u2019s development, the Chinese government launched a series of\nAI industrial parks in the eastern and southern parts of the country. In 2018,\nChina had more than 60 AI tech parks. Industrial parks usually have\npreferential policies to attract AI companies, such as rental subsidies and tax concessions. <\/p>\n\n\n\n

\"industrial
[Source: Daxue Consulting, number of AI industrial parks by city]<\/figcaption><\/figure>\n\n\n\n\n\n

Chinese perceptions of AI <\/h2>\n\n\n\n

An important element in the development of AI technology is the potential perception that consumers have of AI based products. More often than not, the cocktail of information that has been surrounding AI research and its applications has created confusion among lay readers. In fact, catastrophist Hollywood movies like Terminator, or the nefarious predictions<\/a> of famous entrepreneurs like Elon Musk come to the mind of many people, whenever they hear or read about artificial intelligence. <\/p>\n\n\n\n

\n\nIn order to get an idea of what Chinese netizens think of AI, the statistical Daxue Consulting conducted a sentiment analysis on the platform Zhihu<\/a>. Zhihu<\/strong> is the first Q&A website in China and has transitioned to a social media sharing platform, gathering more than 100 million answers on various topics. The platform is especially relevant for inquiries regarding higher- and well-educated social classes.\n\n<\/p>\n\n\n\n

\"AI
[Source: Daxue Consulting, Zhihu users’ opinion on AI] <\/figcaption><\/figure>\n\n\n\n

Netizen’s perception of AI<\/h2>\n\n\n\n

In\naddition to the sentiment analysis conducted on Zhihu, the statistical\ndepartment of Daxue consulting has conducted online analyses of other popular\nonline platforms like WeChat<\/a>\nand Weibo<\/a>. In particular, we\nfocused our research on the reasons netizens give for perceiving AI as having a\npositive or negative impact on their lives and the society in general.<\/p>\n\n\n\n

Positive perception of AI<\/h3>\n\n\n\n

According to internet users,\nAI can play a very important role in facilitating the daily life of citizens.\nSome of the reasons that are most frequently cited on Weibo and Wechat for\nembracing the introduction of AI technology in the society are the following:<\/p>\n\n\n\n