New Special Report Outlines China’s Weakness Amid Technology War With US

March 26, 2020

March 26, 2020 — A new special report, Competing in Artificial Intelligence Chips: China’s Challenge Amid Technology, released today by the Centre for International Governance Innovation (CIGI) assesses the challenges that China is facing in developing its artificial intelligence (AI) industry due to unprecedented US technology export restrictions.

Author and CIGI Senior Fellow, Dieter Ernst, outlines that a central proposition is that China’s achievements in AI lack a robust foundation in leading-edge AI chips, and thus the country is vulnerable to externally imposed supply disruptions. Latest developments in the COVID-19 pandemic has further decoupled China from international trade and technology flows.

It was assumed that China could always purchase the necessary AI chips from global semiconductor industry leaders. Until recently, AI applications run by leading-edge major Chinese technology firms were powered by foreign chips, mostly designed by a small group of top US semiconductor firms. This is no longer the case.

“This is a very timely and important report from a long-term veteran watcher of the global semiconductor industry. Ernst’s careful and detailed analysis of the technology war between US and China in AI chips demonstrates how China’s AI capabilities were exaggerated and distorted by ideological and geopolitical considerations,” lauded Lan Xue, Dean of Schwarzman College, Tsinghua University, member of China’s AI Strategic Advisory Committee and its COVID-19 Committee.

Xue went on to say, “The report also shows the devastating consequences for semiconductor industries in both countries if decoupling policies from the US were fully implemented. It is a must read for those who care about AI, global innovation and international competition.”

Drawing on field research conducted in 2019, this report contributes to the literature by addressing China’s arguably most immediate and difficult AI challenges. The report highlights China’s challenge of competing in AI, and contrasts America’s and China’s different AI development trajectories. Capabilities and challenges are assessed, both for the large players (Huawei, Alibaba and Baidu) and for a small group of AI chip “unicorns.” The report concludes with implications for China’s future AI chip development.

To download and read the full report please click here.

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About the Centre for International Governance Innovation (CIGI)
The Centre for International Governance Innovation (CIGI) is an independent, non-partisan think tank whose peer-reviewed research and trusted analysis influence policy makers to innovate. Our global network of multidisciplinary researchers and strategic partnerships provide policy solutions for the digital era with one goal: to improve people’s lives everywhere. Headquartered in Waterloo, Canada, CIGI has received support from the Government of Canada, the Government of Ontario and founder Jim Balsillie. 

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The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.