AI is central in determining economic leadership in the era of Big Data, as the economic value of AI is enormous. For some industries, deep learning potentially creates value to as much as 9% of a company’s revenues. The economic momentum behind AI is fueling the idea that the AI competition is mostly commercial and largely between companies. Some argue that development of AI shows an unprecedented global collaboration, looking at the open-source resources, the willingness of scientists to upload their findings immediately, rather than publish in journals, and the cross-license patents of, for example, Tencent and Google.

One reason the competition over AI is so charged is that it is not only a source of new products and services, harnessing the autonomous vehicles era, but this very same technology can equally be deployed in “swarm intelligence,” guiding dozens of armed drones into an automated attack force. AI supremacy thus does not only affect businesses and industries, but also the geopolitical balance, since it could mean a change in warfare. AI leadership of one superpower over another could mean a reordering of global power relations. In 2017, Russian President Putin stated in a speech that “Whoever leads in AI will rule the world”. Today, the U.S. and China are the clear leaders. President Xi Jinping has made AI one of the central pillars of the Made in China 2025 plan to transform the country’s economy, meaning U.S. technology exceptionalism can no longer be taken for granted.

It takes three domains to gain AI supremacy: advanced algorithms, specialized computing hardware, and the supply of data. Although the U.S. is still a clear leader, China is trying to catch up in the former two, while having a clear advantage in the latter. China has the necessary scale and data density partially due to its governmental surveillance programs and the online footprint of Chinese customers, who pay and order online a lot. Another advantage China has is the collaboration between state and private companies on a large scale, i.e. big tech companies joining government research labs.

In July 2016, only a few months after Google’s DeepMind used AI to defeat a world champion in the ancient Chinese game of Go, China revealed plans to become world’s AI superpower by 2030. The speed and decisiveness with which China has worked on catching up with the U.S. since then, has sparked new willingness in the U.S. to secure its position. The U.S. and Chinese military are both putting vast amounts of capital and energy in deploying AI. If AI is the new space race, this is the Sputnik moment. Looking at the U.S.’ long history of driving innovation through its Defense Advanced Research Projects Agency (DARPA), for instance, China has been quick to copy the model by rapidly reorganizing the PLA science and technology branch. AI computing could add information about incoming threats and targets, AI could facilitate pilotless flights and improve the effectiveness of airstrikes, AI could even speed up warfare to a point where unassisted humans can’t keep up. The term “hyperwar” has been coined for this phenomenon by retired U.S. Marine General John Allen, to urge NATO to step up its investments in AI.

Meanwhile, although the focus is mostly on the duopoly of the U.S. and China, other countries have ramped up their AI investments, most recently India, the UK, Russia – also showing many military AI demonstrations – and the EU. Last month, the European Commission announced it will be investing an extra €1.5 billion in AI research. Moreover, Canada is seen as an example to the EU, due to its success in attracting AI talent.

The AI arms race has just begun and it has been argued that this race will increase the risk of a nuclear war. Tensions between AI leaders will at least increase, disadvantaging those who are lagging behind in deploying AI, both economically and on a security-level.

 

RISKS MARKED ON THE RISK RADAR AS NUMBER 2:

AI Arms race

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