China Wants To Become Leader In Artificial Intelligence, Somehow

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The Chinese government means to become a major leader in the world of artificial intelligence, via a massive investment in the sector. What The State Council, which disclosed the initiative, did not note is that it is up against U.S. based tech giants like Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT). It also has to compete with R&D by the U.S. government and America’s largest universities. The goal, based on those hurdles, is out of reach.

In an announcement, the People’s Republic disclosed:

The State Council has issued a guideline on developing artificial intelligence (AI), setting a goal of becoming a global innovation center in this field by 2030.
The total output value of artificial intelligence industries should surpass 1 trillion yuan ($147.80 billion). A mature theory and technology system should be formed.
Developing AI is a “complicated and systematic project” according to the guideline. An open and coordinated AI innovation system should be constructed to develop not only the technology but also products and market.
AI in China should be used to promote the country’s technology, economy, social welfare, maintain national security, and contribute to the world.
Breakthroughs should be made in basic theories of AI, such as big data intelligence, multimedia aware computing, human-machine hybrid intelligence, swarm intelligence and automated decision-making. Advanced theories which can potentially transform AI should also be looked at, including advanced machine learning, brain-like computing, and quantum intelligent computing.
Trans-boundary research should be promoted to connect AI with other subjects, such as cognitive science, psychology, mathematics, and economics.

A look at Microsoft’s recent earnings shows how advanced American companies are within the sector. For its fiscal fourth quarter, which ended June 30, Microsoft posted revenue of $23.3 billion, up from $20.billion in the same quarter a year ago. Net income rose to $6.5 billion from $3.1 billion. And much of the improvement was driven by revenue from cloud initiatives.

“Innovation across our cloud platforms drove strong results this quarter,” said Satya Nadella, chief executive officer at Microsoft, “Customers are looking to Microsoft and our thriving partner ecosystem to accelerate their own digital transformations and to unlock new opportunity in this era of intelligent cloud and intelligent edge.”

Granted, even if all Microsoft’s revenue was from artificial intelligence and cloud operations, it would not come close to the Chinese goal. However, by most measures, Microsoft’s revenue in the sector is well behind Amazon’s, and close to sales at Alphabet (NASDAQ: GOOGL). A number of other U.S. companies also produce billions of dollars a year in cloud and artificial intelligence sales.

China has an ambitious goal, which does not seem even close to a real one.