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China, Leading in AI?

China, Leading in AI?

CEO and Founder of Bilby Ryan Manuel writes about China's strategy to recapture the lead in the global AI race

While the West struggles with private litigations around data privacy and artificial intelligence, China is developing its own model of how to become a global leader in AI and data regulation.

China’s weakness is in unsupervised machine learning, the use of computing to create foundational models that can be applied to any sector or field. Its tech giants' large language models, for example, are no match for OpenAI’s ChatGPT.

Part of that is that the US has put a chokehold on China importing the most advanced chips, those that might give China the computing power it needs to try and keep up or even leap ahead.

Another part is that China itself has its own impositions on the free transfer and speech of language and that this will make it harder for a cluster to train itself in how to use language better (because the data coming in itself is constrained).

And indeed, evidence for this could be seen in China's first draft law on generative AI. This draft imposed onerous requirements on model builders to ensure that their final outputs are "true and accurate.” That would require extraordinary amounts of data cleaning and post-build model retraining — and the time spent doing that will allow their overseas counterparts to leave them further in the dust.

However, when released, the final legislation proved to be far more nuanced, focusing on content-based security assessments (and that too was only for those with "sway over public opinion”), leaving Chinese tech companies plenty of wiggle room. And authorities granted 8 firms licenses nearly instantly. This is not the strict control we were expecting.

Further breaking down barriers, China’s recent changes have also facilitated easier data export for foreign companies. The government is essentially reversing the onus of specifying "important data," allowing companies more freedom to move data without bureaucratic labyrinths.

Yet as Angela Huyue Zhang notes in her great piece on data privacy, just having a law is also bringing China’s tech giants benefits. The absence of stringent state-mandated data privacy laws in the West has led to an avalanche of private litigation against tech behemoths like OpenAI, Google, and Meta.

China's approach offers its tech firms a shield against such legal minefields, providing a competitive advantage. As Anu Bradford argues in her piece on Project Syndicate, this is even more the case when compared with.

Europe's regulatory focus on stringent data privacy, exemplified by GDPR, which constrains tech companies with heavy transparency and due diligence obligations. China’s new laws may yet foster a more agile but less consumer-centric digital ecosystem.

What does this mean for businesses globally? A potential shift in the AI landscape where China could leapfrog, leveraging its strengths in applied over basic research. If you're in the AI space, ignoring China's regulatory moves is no longer an option. Watch this space.


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