Wake up America! China is surpassing the United States in innovation. This is the title of a recent ITIF study, Information Technology
While it is true that the large North American companies – the so-called seven sisters, Alphabet, Meta, Apple, Amazon, Nvidia, Tesla and Microsoft – can boast leadership in innovation (in addition to a stock market record), this financial showcase is somewhat misleading.
Otherwise, Washington’s fear that Beijing will surpass it on the right would not be explained. Hence the vetoes on North American technology exports and on Chinese firms like Huawei. The Americans, who have been in the breach for years, have much more to lose in this combat.
If you look at the companies that hold the most patents in the leading sector of artificial intelligence (AI), there are three Chinese firms among the top five in the world: Pingan, Tencent and Baidu. And just by looking at the patent applications in 2022 in Europe before the EPO, it is discovered that the Chinese Huawei leads the ranking. There is a lot of talk about ChatGPT, but Chinese companies have plans to confront it and are advanced in image recognition systems.
Which way does the scale fall? Washington invests seven times more than Beijing in AI and creates five times as many companies, but China leads the citations in scientific publications in this field, twice as much as the US, with almost 30% of the total, according to Artificial data. Intelligence Index Report.
Let us now take the case of semiconductors. “After more than two decades of outsourcing, America now finds itself in a worrying situation: it can design the most advanced electronic products, but it cannot manufacture them,” states the study by the IPC, the global association for electronic manufacturing. China is in a very similar situation, depending on Samsung (Korea) or TSMC (Taiwan). But when it comes to designing chips, the United States has no rivals, with a market share of 85%.
Mary E. Lovely, China expert and analyst at the prestigious Peterson Institute of International Economics (PIIE), was in Barcelona this week to explain the US position regarding China. “We all know that if a country is capable of developing defense technology, sooner or later it will do so. This explains US controls on Chinese AI and, in the future, cloud computing. China is clearly very close to the United States in many aspects and, in fact, has probably surpassed it in some, for example in battery technology. We know that the Chinese are very capable. They have been sending people to the US and Europe for years, they have produced wonderful PhD students and those people have taken that science to China. They are producing more college graduates than any other country in the world. “This policy is going to bear fruit.”
And the money? Because foreign investments in China are in free fall. Can the Chinese finance their technological development? “The United States has financing. Their problem is another: will there be enough American labor force? We have land, we have water, but do we have labor? China, on the other hand, has a savings surplus. So lack of capital hasn’t really been their problem, but lack of technical knowledge. And the United States has been acting so that they do not have access to them.”
However, Beijing can count on one advantage: minerals. “What is being lost from sight in this technological struggle is not so much innovation, but the energy destined to feed it,” a technology executive who has lived in the United States and China tells this newspaper.
For example, according to data from the Spanish Engineering Institute, it is estimated that OpenAI needed up to 78,437 kWh of electricity to train the ChatGPT-3 model, a volume of energy comparable to that consumed by an average home in Spain for 23 years. “Technology devours energy. And in this section China is better positioned. It has raw materials and minerals and has controlled resources in Africa for years. “Beijing is winning this battle.”
