Written by Maciej Szczerba

"AI Superpowers, China, Silicon Valley and the New World Order"

All of us know who Steve Jobs, Bill Gates, Larry Page and Sergei Brin or Jeff Bezos are. Until I came across the orders of a book, a short review of which I want to write here, I admit that I did not know who Kai-Fu Lee was.

All of us know who Steve Jobs, Bill Gates, Larry Page and Sergei Brin or Jeff Bezos are. Until I came across the orders of a book, a short review of which I want to write here, I admit that I did not know who Kai-Fu Lee was.

And it is one of the most prominent experts and investors in the field of artificial intelligence. Born in Taiwan, educated in the USA, he gained his business and scientific experience both in China and in the Silicon Valley.

He was the first manager of Google China. He currently manages Sinovation Ventures, an investment fund that manages over USD 2 billion.

In 2018 his book "AI Superpowers, China, Silicon Valley and the New World Order" was published. I found the book on Amazon and bought it there, but while writing this post I realized that it is also available in Polish.

https://www.amazon.com/AI-Superpowers-China-Silicon-Valley-ebook/dp/B0795DNWCF/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=1593791940&sr=8-1

http://www.publio.pl/inteligencja-sztuczna-rewolucja-prawdziwa-kai-fu-lee,p325132.html

This is a very interesting view of the development not only of artificial intelligence, but of the development of the Chinese Internet market in general, the Chinese entrepreneurial culture and the Confucian educational tradition.

The book makes the the thesis: Silicon Valley will lose its dominance to China in the near future and China will win the AI dominance race against the United States. This will happen because:

1.
China, with its population of almost one and a half billion people (the US is 325 million people, just over 20% of the Chinese population), produces the most data in the world. The best AI algorithms lose out to average quality algorithms if they are supported by the largest (best) resource of data. On a better data resource, algorithms learn much faster.

2.
The Chinese Internet industry is much more competitive than Silicon Valley. As a country which only 45 years ago underwent the infamous communist 'cultural revolution', China has created an entrepreneurial ethos which wants to succeed at all costs. Kai-Fu Lee describes Chinese entrepreneurs as 'gladiators in the Roman Coliseum' - all tricks are allowed to survive. To a large extent, Chinese IT entrepreneurs are people from poor families who have had to come to everything by themselves. 

American businessmen from Silicon Valley are middle-class and upper-middle-class children. They have had repetitions by their parents: "first, learn, second, think innovatively, and success will come alone".

In the Western, and especially the American, educational model, schooling is supposed to develop a child's creativity and teach independent thinking. Copying someone else's ideas is stigmatised in Silicon Valley. 

The Chinese, used for years to copy western products (and even brands!) in their factories, have no dilemma about copying. Their digital products do not have to be original - they simply have to make money.
The Chinese education system places great emphasis on the learning of memory - the learning process does not have to be creative, it must be effective.

3.
The Chinese Government has been significantly supporting the development of AI technology, while the US is treating it as a private business. Unfortunately, it turns out that the authoritarian government is able to force mayors of the largest Chinese cities to pursue an active policy: renting city premises, creating office spaces for start-ups, or supporting VC funds investing in AI applications.

4.
Chinese companies have more qualitative data. It is not just about quantity alone. Lee shows interestingly that at the time of the development of online and offline business - O2O (such as Uber, restaurant food delivery, city bike rentals and scooters), American companies tried to remain software companies only. Drivers or couriers and their equipment such as cars and scooters remained external suppliers. The Chinese philosophy is different - Chinese O2O companies invest in their cars, scooters and employ couriers and drivers internally. In addition, they integrate O2O services (increasingly called OMOs - "online merges with offline") with payment services. Thanks to this approach, they obtain huge amounts of data. They can see which city districts people move between most often, when, where and what they buy during their day.

A very interesting interview with Kai-Fu Lee here:

https://www.youtube.com/watch?v=cQ48rP_Rs4g

A very interesting film about AI and the growing role of China in the development of AI in the global economy here (Lee is also in it):

https://www.youtube.com/watch?v=5dZ_lvDgevk

Artificial intelligence, the real revolution
China, the USA and the future of the world
Author: Kai-Fu Lee
Publisher: Media Family
Poznan 2019

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