The Question of Comparative Advantage in Artificial Intelligence: Enduring Strengths and Emerging Challenges for the United States

JANUARY 2020 The Question of Comparative Advantage in Artificial Intelligence Enduring Strengths and Emerging Challenges for the United States CSET Policy Brief
AUTHORS Andrew Imbrie Elsa B. Kania Lorand Laskai

 Center for Security and Emerging Technology | 2 Who is leading in artificial intelligence (AI) and machine learning (ML)? How should leadership in AI be evaluated or measured? Which aspects of comparative advantage in AI possess the greatest strategic importance? These questions are critical to address as nations around the world embrace the potential of AI through a range of policy initiatives. None of these questions yields easy answers. Leadership and comparative advantage in artificial intelligence are difficult concepts to measure. There is no one formula to determine who may be “winning” or will be leading in the long term across various aspects of the field. On some fronts, the United States remains in a relatively favorable position in AI, but its centrality in the ecosystem should not be assumed or taken for granted. The scope and scale of Chinese research in AI are rapidly increasing. Careful evaluation of relative strengths and weaknesses can generate more useful and actionable insights to assess policy choices. The United States possesses distinct strengths in top AI talent and research. U.S. comparative advantages reflect its dynamic innovation ecosystem and capabilities in semiconductors. Such advantages can take decades to build and appear to be difficult to buy or quickly duplicate. While the People’s Republic of China (PRC) excels in commercial applications, American prominence in foundational elements and enablers of AI, including hardware, talent, and basic research, are important. Despite considerable progress in AI research in recent years, breakthroughs rarely occur in single moments. The latest advances are the product of decades of refinements to deep learning’s conceptual architecture. Future progress in AI will look less like the space race and instead require dynamic research environments that create and sustain synergies among government, industry, and academia.1 China’s future trajectory in AI remains uncertain. The development of AI in China will depend on the evolution of its overall environment for innovation. The Chinese government is devoting billions to AI through R&D initiatives and government guidance funds, which are stimulating private investments and expenditures by leading companies. These investments may prove effective despite likely inefficiencies in allocation, but also run the risk of introducing
 Center for Security and Emerging Technology | 3 new distortions in the market through the surge in funding. The inflated valuations of China’s “AI unicorns” could be a symptom of an “AI bubble.” Looking ahead, the state of AI in China will be hard to disentangle from the broader macroeconomic environment. This policy brief examines a number of potential strengths for the United States and PRC in AI. Our analysis identifies both areas of U.S. comparative advantage and those where it risks falling behind a rising China.2 Success in AI research, development, and applications will be shaped by the three building blocks of AI: hardware (e.g. AI chips that enable the underlying computing capabilities), the availability of data, and continued advances in algorithms. On the policy and commercial fronts, enablers of AI development include the workforce of AI researchers and engineers, availability of funding for basic and applied research, and private sector investments. Overall, competitiveness in AI will reflect the dynamism of national innovation ecosystems, which we consider in terms of educational opportunities, access to global talent through immigration, and networks of research collaboration.3 The creation of norms and frameworks for governance of AI are equally imperative, while the application of AI to enable a range of military capabilities could affect the future balance of power among nations.4 The state of AI as a field is dynamic and rapidly evolving. In summary, this brief can draw some initial conclusions about the state of play between the United States and China. Core Elements of AI Capabilities ● Proficiency in semiconductors to create AI chips and hardware: American leadership in semiconductors is a major strength in the near term, but Chinese initiatives to catch up and develop indigenous capabilities will present a challenge in the long term. The United States needs to keep pace with new directions in the development of semiconductors, particularly AI chips. ● Access to sizable amounts of data with depth and diversity: Neither the United States nor the PRC possesses a definitive or generalized advantage in data. Relative strengths can only be assessed for specific sectors and applications or for particular enterprises. The availability of data may be less important than policy and bureaucratic initiatives that make data more available and
 Center for Security and Emerging Technology | 4 facilitate its integration.5 The impact of long-term research that enables AI/ML to progress beyond the current reliance on massive amounts of data, such as the use of synthetic data, will be a critical trend to monitor and exploit. ● Advances in research and underlying algorithms: Since AI as a field remains fairly open and inclined toward open-source toolkits and platforms, advances in algorithms are unlikely to provide any durable advantage to the United States or China. However, the influence of policy choices, such as decisions about the allocation of research funding to academia, could contribute to divergence or specialization in different countries. Critical Enablers of AI Development ● Workforce of AI researchers and engineers: The United States possesses notable strengths in its current workforce, particularly highly skilled AI researchers. However, China’s educational initiatives and recruitment of AI talent appear to be scaling up at a pace the United States may not be able to match in the years to come. Immigration will be all the more critical to sustaining American competitiveness. ● Funding for basic and applied research in AI: The United States has been slow to increase funding for AI R&D relative to its potential and the opportunities. Present trends show that China is catching up in overall support for R&D. Despite current deficiencies in basic research, PRC S&T plans indicate that Chinese leaders intend to ramp up investments for research from the central and local governments. ● Commercial investments and applications: The U.S. venture capital ecosystem is more sizable and dynamic, but Chinese AI start-ups attract funding comparable to or exceeding that of their U.S. counterparts. Chinese government mechanisms, such as guidance funds, seek to combine state support with the proficiency and resources of a growing venture capital ecosystem. Systemic Drivers of National Competitiveness in Science and Technology ● Dynamism of economy and innovation ecosystem: The American innovation ecosystem has been a key enabler of the U.S. lead in S&T,
 Center for Security and Emerging Technology | 5 but its dynamism will require sustained investments. China’s innovation ecosystem is overcoming long-standing weaknesses to achieve progress in indigenous innovation. ● Strength of education system and leading universities: The American education system has been a traditional strength, but suffers from critical weaknesses, particularly in primary and secondary education. The failure of U.S. STEM education and of technology companies to embrace diversity and inclusion has further undermined the creation of a pipeline of trained scientists and engineers. Meanwhile, the Chinese education system faces major disparities of opportunity between urban and rural schools. Chinese universities remain uneven in the quality of education provided, but are moving up the rankings internationally in terms of their strength in research and education. ● Access to global talent through openness to skilled immigration: Immigration has been a critical determinant of American advantage that is now imperiled by adverse trends in politics and restrictive policies. China’s demographic advantages in the near term will likely become a liability because of its aging population, and it may struggle to attract immigrants. ● Centrality in networks of research collaboration: The United States is in a more favorable position when it is able to leverage the benefits of collaboration with allies and partners. However, China is becoming more central in global science, including pursuing new collaborations through the Belt and Road Initiative. Core Elements of AI Capabilities 1. Strength in Semiconductors for AI Chips and Hardware U.S. Strengths and Weaknesses The United States maintains considerable strengths in the research, design, and manufacturing of advanced semiconductors, which constitute the basic building blocks of all major advances in modern computing, including in AI. In 2018, U.S. semiconductor companies commanded nearly half of the $469 billion global semiconductor market.6 This market share means that U.S.
 Center for Security and Emerging Technology | 6 companies have a first-mover advantage in harnessing the advanced silicon powering innovation. The U.S. advantage extends not only to semiconductors, but also to the equipment used to manufacture them. Almost all semiconductor manufacturing equipment (SME) firms, such as Applied Materials and Lam Research, are from the United States, the Netherlands, and Japan, and nearly all high-end AI chips are fabricated by firms headquartered in Taiwan, the United States, and South Korea.7 Given the extreme costs of high-end fabs and SME, the field has narrowed to a select few players in the United States or allied nations. This dynamic creates potential chokepoints throughout the semiconductor supply chain that the United States could leverage against strategic competitors.8 In October 2018, the United States sanctioned Chinese chip national champion Fujian Jinhua, starving the company of vital equipment and virtually forcing it to halt production.9 The prevalence of PRC intellectual property theft and technology transfer tactics in this sector indicates the degree to which Chinese challengers have struggled to compete, despite billions in spending to date.10 In the near term, the United States has the option and possesses the leverage to hamper the growth of China’s tech industry through exploiting chokepoints in the semiconductor supply chain. Yet the collateral damage from an aggressive containment strategy of Chinese technology capabilities to U.S. companies, which depend on the Chinese market for revenue, would be considerable. Longer term, an overuse of export controls may advantage foreign competitors or lead U.S. companies to move their operations abroad.11 For these reasons, leveraging U.S. advantages in semiconductors through export controls requires policymakers to calibrate policies and balance the risks and rewards of chokepoints. Even as the United States maintains its lead in semiconductors, cutting-edge fabrication increasingly happens elsewhere—mainly in East Asia. The rise of globalized supply chains and the “fabless” business model allow U.S. semiconductor companies to focus on chip design and outsource production to foundries like Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest dedicated foundry for semiconductors. As a result, U.S. control over the flow of cutting-edge chips is weakening.12 Chinese companies like Huawei can also outsource chip production to TSMC and
 Center for Security and Emerging Technology | 7 other leading-edge foundries, allowing them to compete with U.S. chip companies and evade U.S export controls.13 In response, the U.S. Department of Commerce has considered reducing the threshold of “U.S. content” that subjects U.S. re-exports to a licensing requirement from 25 percent to 10 percent, a potential measure that has provoked concern among industry stakeholders. Reshoring this manufacturing capacity and reasserting U.S. control over semiconductor production, while not impossible, would be difficult and require concerted effort on the part of government and industry. PRC Strengths and Weaknesses Recognizing this risk, China has attempted to build domestic capacity to manufacture semiconductors. Its progress has been slow because of the immense complexity involved in designing and manufacturing semiconductors; each stage of the supply chain requires unique knowhow and specialized expertise that take time to master. China’s leadership has elevated semiconductors as a priority and will reportedly invest over $100 billion within the next decade to close the gap with the United States.14 Since Chinese companies like Huawei and ZTE were added to the Department of Commerce’s Entity List,15 China’s determination to pursue indigenous innovation has only intensified.16 In cases where the United States has stymied Chinese advances with unilateral export controls but substitute options remain available, China has typically managed to find workarounds or substitute components within a short timeframe.17 The challenge will be for China to replicate core innovations in semiconductor technology where no comparable substitute exists. China’s model of development through state subsidies appears ill-suited for the semiconductor industry, which is fast moving and requires both business acumen and sizable technical expertise.18 Nearly 20 years after PRC science and technology leaders set out to develop a competitor to the x86 processor, Chinese alternatives remain limited and significantly behind U.S. counterparts. State-led pushes in the 1990s to establish a foothold in the chip fabrication market failed to produce commercially viable firms capable of keeping up with foreign leaders. China’s most successful fab, the Semiconductor Manufacturing International Corporation (SMIC), kept PRC’s S&T officials at arm’s length during its early development.19 The current state drive, led by the
 Center for Security and Emerging Technology | 8 National Integrated Circuit Fund, attempts to learn from prior mistakes and introduces more market mechanisms than in the past. However, many experts are skeptical that this state-led push will be sufficient to wean China off foreign chips.20 Regardless of the Chinese model’s efficiency, the reality is that China is building its manufacturing capacity to compete in semiconductors as the United States loses indigenous capability and outsources semiconductor manufacturing to foundries elsewhere.21 Technological trends may also play out in China’s favor. As Moore’s Law reaches its end, squeezing additional computing power out of chips will require new materials and specialized AI chip architectures.22 The United States enjoys a dominant market share in leading-edge GPU (Graphics Processing Units) and FPGA (Field Programmable Gate Array) design, as well as many of the top AI-relevant ASICs (Application Specific Integrated Circuits). For the time being, China’s leading AI chip designs often incorporate U.S. and allied designs. Yet as technological progress slows and evolves, China may have an easier time catching up. Chinese players are starting to break into the AI chip space on some fronts. China’s AI chip unicorns Cambricon and Horizon Robotics, for example, have attained multi-billion-dollar valuations within just a few years.23 Huawei has launched its own AI chip, Ascend 910, designed to process efficiently the massive amounts of data often required to train algorithms.24 Alibaba has also created a new AI chip, known as the Hanguang 800, which it claims possesses the computing capabilities of 10 GPUs.25 Alibaba’s chip subsidiary Pingtouge (平头哥) open-sourced its microcontroller design platform on GitHub in order to make chip design more accessible.26 So far, however, PRC AI chips have primarily achieved successes in “inference,” the process of running existing neural networks; the process of training continues to rely primarily on GPUs produced by NVIDIA.27 Whether Chinese companies like Huawei can compete with NVIDIA in the AI training space remains to be seen. 2. Quantity, Quality and Diversity of Data U.S. Strengths and Weaknesses
 Center for Security and Emerging Technology | 9 The United States and its allies benefit from the geography of the internet and the fact that most fiber-optic cables run from or terminate in U.S. and allied territories. The United States benefits, as well, from greater cloud storage capacity, widespread use of business analytics software, and access to business-specific data, which can be valuable for training machine learning systems. The U.S. government has launched initiatives to make data more available and improve accountability, an objective of the 2019 Executive Order on Maintaining American Leadership in AI.28 Beyond the quantity of data, the quality and diversity of data are important determinants of its value in AI/ML. The most valuable American tech companies gain the bulk of their revenue outside the United States; by contrast, Chinese counterparts gain nearly all of their revenue from the Chinese market. U.S. tech companies therefore have as many or more users of different nationalities than comparable Chinese companies.29 Companies with a greater international presence may also enjoy a comparative advantage because of their capacity to access more diverse data. However, the relative dominance of major technology companies, which command a significant proportion of data, may tilt the playing field. As scholar Tim Wu observes in his account of the origins and evolution of the American information industry, “History shows a typical progression of information technologies: From somebody’s hobby to somebody’s industry; from jury-rigged contraption to slick production marvel; from a freely accessible channel to one strictly controlled by a single corporation or cartel.”30 The tendency toward consolidation by American technology companies with established advantages could impede innovation in the long term, which has provoked debates on new directions in antitrust.31 As for militarily relevant data, the United States benefits from an array of remote sensors and collection platforms with global reach. These platforms generate more data, in more locations, with greater precision than comparable platforms of near-peer competitors. By some accounts, the U.S. military has collected more granular information on the forces of potential adversaries than on its own forces.32 The U.S. government may benefit from more diverse and higher quality data in some use cases, but its ability to access that data, particularly that of commercial enterprises, is often limited. Much of the data the U.S. military collects is siloed, poorly integrated, or in an unusable form. This “dirty data” presents a serious challenge.33 Because of bureaucratic politics, reliance on legacy software and systems, and a lack of enabling infrastructure for cleaning and integrating data, policymakers often
 Center for Security and Emerging Technology | 10 lack access to high quality and labeled data that can be widely shared and leveraged. PRC Strengths and Weaknesses By one account, China is on track to possess as much as 30 percent of the world’s data by 2030.34 Such crude estimates tend to be limited, making a more rigorous examination of the state of data in China essential.35 China enjoys access to data from its more than 800 million mobile internet users, contributing to Chinese strengths in AI applications like ecommerce. Chinese super-apps such as WeChat collect data uniquely granular in coverage, and Chinese technology companies are integrating AI to capitalize on that data.36 At the same time, new policies and regulations are addressing issues of data privacy and protection in response to public concerns and cyber security incidents.37 The ambiguity of these policies can impede both Chinese and foreign companies.38 For the Chinese government, the integration of datasets across enterprises and levels of government remains challenging, and big data is the focus of a number of plans and policy initiatives. The Chinese government seeks to open up public data in order to promote AI industry. For instance, an initial work plan in Beijing aims to overcome current shortcomings through a municipal data resource network enabling public applications, including in financial services, healthcare, and autonomous driving.39 China’s national strategy for military-civil fusion encompasses an integrated approach to managing data resources in such tasks as national defense mobilization.40 China’s AI policy and research communities may also possess an asymmetric information advantage: Chinese AI experts track U.S. AI developments closely, translating and analyzing key research and strategies in the United States and worldwide. By contrast, the community of U.S. AI experts who study and translate Chinese AI developments is relatively small.41 3. Advances in Research and Algorithms U.S. Strengths and Weaknesses By most estimates, the United States commands the preponderance of highly cited research in AI.42 It continues to lead China in AI citations, but this lead is
 Center for Security and Emerging Technology | 11 shrinking.43 In the past couple of years, the majority of algorithms have been discovered and pioneered by U.S.-owned companies. For instance, DeepMind pioneered unique advances in AI reinforcement learning through AlphaZero by enabling learning based entirely on “self-play” with no actual data involved.44 AI has also developed the capability to beat humans in poker.45 In addition to these advantages, American companies have developed the primary toolkits and software frameworks—such as TensorFlow, Pytorch, and Caffe—commonly employed in AI research. They remain far more dominant than their nascent Chinese equivalents.46 The prominence of these platforms contributes to the centrality of American leadership in artificial intelligence, including in the accumulation of data. PRC Strengths and Weaknesses China has emerged as a global powerhouse in AI. An evaluation of AI paper trends from the Allen Institute for Artificial Intelligence estimates that “China is poised to overtake the US in the most-cited 50% of papers this year, in the most-cited 10% of papers next year, and in the 1% of most-cited papers by 2025.”47 As of 2018, China also commanded a significant proportion of global scientific and engineering publications with a share of 21 percent relative to 17 percent for the United States.48 The strength of Chinese research varies across different subfields of AI, however, and the rates of in-country versus external citation are disproportionate. As of mid-2019, China ranked first in the world with more than 280,000 patent applications,49 and Chinese institutions were prominent in deep learning patenting.50 Yet these quantitative indicators can be limited or even misleading, and the influence of state policy, such as financial incentives for publications, can distort advances. Chinese companies have emerged as serious contenders in AI, rivaling or arguably surpassing U.S. AI companies. Several leading Chinese companies have been branded as China’s “national team” in AI, including Baidu, Alibaba, Tencent, and Sensetime. Chinese start-ups and tech giants are particularly strong in applications including facial recognition and natural language processing.51 For instance, in June 2018, a team from the Chinese People’s Liberation Army National University of Defense Technology was at the top of a competition organized by Apple and Google for “robust vision.”52 Baidu’s advances in natural language processing, particularly ERNIE (Enhanced Representation through Knowledge Integration),53 have
 Center for Security and Emerging Technology | 12 overtaken most competitors and achieved the highest score to date in one assessment.54 By a range of metrics, China’s research in AI has become increasingly prominent in terms of quality. For instance, its participation in leading international conferences has rapidly increased, drawing closer to parity with the United States.55 The 2017 annual meeting of the Association of the Advancement of Artificial Intelligence (AAAI) marked a milestone, involving a nearly equal number of accepted papers by researchers from China and the United States respectively.56 Since then, the representation of Chinese researchers at top conferences, including the International Joint Conferences on Artificial Intelligence (IJCAI) and the Conference on Neural Information Processing Systems (NeurIPS), continues to rise. Critical Enablers of AI Development 4. AI Workforce and Talent Cultivation U.S. Strengths and Weaknesses Measuring the AI workforce is challenging. As the 2019 AI Index notes, “Traditional statistics and labor force surveys do not yet include AI and related occupations. Thus, online jobs platforms function as proxy indicators to assess the evolution and growth in AI labor market indicators, and largely demonstrate the demand side of labor market outcomes.”57 The United States enjoys a significant advantage in talent, drawing AI researchers with its world-class universities and companies, higher standards of living, relatively higher compensation, and commitment to human rights, liberty, equality, and openness. It remains dependent on foreign-born talent. The majority of computer scientists and electrical engineers employed in the United States are foreign-born, and the figure rises to roughly two-thirds of those employed in Silicon Valley.58 As for the future AI workforce, more than two-thirds of graduate students in computer science and electrical engineering are foreign-born, while the domestic pool of AI graduate students has remained relatively flat since the early 1990s.59 The demand for AI talent in the United States exceeds the supply for many reasons. These factors include burdensome student debt and a lack of
 Center for Security and Emerging Technology | 13 diversity and investment in STEM education at all levels. With lucrative opportunities in the private sector, faculty shortages at the graduate level are becoming especially problematic for PhD programs. For the U.S. military and government, particular difficulties have arisen because of inadequate mechanisms for recruiting and retaining AI talent. At the same time as U.S. immigration policies grow more restrictive, international competition for AI talent is rising.60 PRC Strengths and Weaknesses Talent remains a significant bottleneck, which Chinese policymakers recognize and seek to address through new policy initiatives. China produces more science and engineering graduates than the United States, though the quality of their education may not be necessarily comparable.61 To date, a high proportion of Chinese graduates in AI have opted to work overseas rather than in China or with Chinese research institutions. Some recent examples and anecdotes, however, suggest a number of top Chinese scientists are starting to return, such as Jia Yangqing’s departure from Facebook to join Alibaba’s DAMO Academy.62 Moreover, a significant proportion of China’s workforce in the field has prior experience abroad, either studying (24.2 percent) or working in a foreign university or company (19.8 percent).63 It is worth underscoring there is not yet a clear trend toward more Chinese graduate students returning to China, relative to the proportion opting to remain in the United States.64 While estimates vary, AI talent in China is sizable and growing. As of late 2017, China had an estimated 18,232 individuals in its AI talent pool, second to the United States’ 28,536, according to a study from Tsinghua University.65 With regard to “top” AI talent, measured in terms of the H-Index, China fared less well, ranking only 8th in the world, with 977 individuals relative to 5,518 for the United States.66 Moreover, a high proportion of AI graduates and researchers from Chinese universities have been leaving China to date.67 This limited talent pool is concentrated in major cities, such that smaller cities and more rural provinces may struggle to attract adequate expertise despite the optimistic ambitions often expressed in their AI plans. The Ministry of Education’s “AI Innovation Action Plan for Institutions of Higher Learning” (高等学校人工智能创新行动计划), released in April
 Center for Security and Emerging Technology | 14 2018, calls for Chinese universities to become “core forces for the construction of major global AI innovation centers” by 2030.68 To bolster its AI talent training system, China seeks to improve the discipline’s structure, strengthen professional development, improve the construction of teaching materials, enhance personnel training, launch universal education in AI, support innovation and entrepreneurship, and expand international exchanges and cooperation. China aims to establish at least 50 AI academic and research institutes, while also pioneering an interdisciplinary “AI+” approach. As of mid-2019, 196 universities in China had reportedly established a big data and data science major, 101 had established programs in robotic engineering, and 96 had introduced the new major of intelligent science and technology.69 5. Funding for Basic and Applied Research in AI U.S. Strengths and Weaknesses The United States still leads the world in R&D spending.70 While this lead is narrowing relative to China, the United States benefits from a network of allies and partners that collectively account for an estimated two-thirds of global R&D spending, possessing comparative advantages and niche capabilities.71 The history of postwar U.S. innovation suggests a plurality of models for stimulating cutting-edge research and development. The United States can harness the bottom-up creativity and freedom of the private sector with federal support for long-term investments in basic and applied research, greater transparency, and a strong intellectual property system. However, there are reasons for concern about the possibility of an innovation deficit. The U.S. government has sustained only modest increases in AI R&D in recent years.72 As the National Security Commission on Artificial Intelligence notes in its interim report, “Requested FY 2020 federal funding for core AI research outside the defense sector grew by less than 2 percent from estimated FY 2019 levels. Over the past five years, federal R&D funding for computer science (which includes AI) increased by 12.7 percent, barely sustaining a field in which tenure track positions grew by 118 percent over the same period.”73
 Center for Security and Emerging Technology | 15 The scope and scale of research funding has failed to keep pace with the opportunities and challenges of today’s emerging technologies.74 American innovation remains relatively concentrated in a limited number of high-tech clusters, while other locales with favorable preconditions have not yet emerged as successful.75 The networks so critical to the success of American innovation have frayed, as the once highly productive relationship between state support and scientific advancement has attenuated. The profile of the federal government as a primary funder and enabler of innovation has declined and many private sector actors have adopted a go-it-alone mentality toward innovation. Over the long-term, these trends, if not reversed, could undermine the strength of U.S. R&D in emerging technologies. PRC Strengths and Weaknesses Since 1991, China increased R&D spending by an estimated 30-fold and intends to continue ramping up funding.76 Today, it is second only to the United States in total funding of R&D. In 2018, PRC R&D funding reached nearly 2 trillion RMB, or about $292 billion, and the intensity of R&D spending relative to GDP increased to 2.19 percent.77 For 2019, R&D was set to 2.5 percent of GDP.78 PRC funding for basic research has remained a smaller share, leading to calls for greater investments in basic research.79 Robust state support for research from both the central and local governments will facilitate the dynamism of China’s AI research. Although central funding for basic research is limited, there are plans to increase it,80 and a high proportion of funding is disbursed through local governments for both research and applications.81 The history of state-supported AI research in China dates to the 1980s, contemporaneous with and in response to the U.S. Strategic Computing Initiative and Japan’s program for Fifth-Generation Computer Systems. As of the late 1980s, the 863 Plan incorporated major projects involving intelligent robotics, intelligent computing, and intelligent information processing.82 In September 1990, the Ministry of Science and Technology (MOST) approved the “Outline of the Development Plan for ‘863/306’,” which funded research on intelligent computing for decades to come.83 Launched in 1997, the National Key Basic Research and Development Plan/Program (国家重点基础研究发展计划, “973 Plan”) also included plans and policies involving semiconductors.84 Replacing and incorporating these prior initiatives, the National Key R&D Plan has launched major projects in
 Center for Security and Emerging Technology | 16 intelligent robotics and transformative technologies, which will receive 2.93 billion RMB or $421 million in 2020.85 The National Medium- and Long- Term Science and Technology Development Plan Outline (2006-2020) (国家中长期科学和技术发展规划纲要) provided a more cohesive agenda for innovation with the goal of China becoming an “innovation-oriented country” by 2020.86 This plan emphasized new categories of information technology, such as intelligent sensing, ad hoc networks, and virtual reality technology, as well as intelligent and other advanced materials. It is noteworthy that PRC research in AI started to ramp up within that time frame.87 When this plan is updated in its next iteration for 2021-2035, AI will likely be positioned as a major focus.88 Chinese leaders at the highest levels consider AI a “strategic technology.”89 According to the New Generation AI Development Plan, China aspires to develop a $21.7 billion AI industry by 2020 and lead the world in AI by 2030. The 2020 benchmark would represent “a tenfold increase of the AI industry” over the 2018 to 2020 period, underscoring China’s ambitions.90 The “New Generation Artificial Intelligence Development Plan” and the “Three-Year Action Plan for Promoting Development of a New Generation Artificial Intelligence Industry” underscore China’s intent to leverage AI to enhance and upgrade its economy. Chinese leaders seek to achieve this by building up a domestic AI industry and integrating it with the real economy, while promoting indigenous innovation of “key and core” (核心关键) technologies to reduce external dependence on foreign technologies.91 The Chinese government continues to launch new funds and initiatives in basic research. The National Key Research and Development Plan funds a series of “key projects” (重点专项) on AI-related research, including big data and intelligent robotics.92 In October 2017, the National Development and Reform Commission (NDRC) launched the Artificial Intelligence Inno-vation and Development Mega-Project (人工智能创新发展重大工程),93 which will fund research on deep learning intelligent chips, open-source platforms for deep learning applications, and highly reliable intelligent unmanned systems.94 In January 2018, the National Development and Reform Commission announced nearly 50 AI and “Internet Plus” projects it would fund, including CAS Sugon’s platform for deep learning applications, Cambricon’s project on a cloud deep learning processor chip, and Zhongdun Security’s high accuracy facial recognition system.95
 Center for Security and Emerging Technology | 17 It is too soon to evaluate the success of these initiatives. PRC programs will support interdisciplinary research at the nexus of AI with brain science, biotechnology, and even quantum information.96 The government is developing its AI ecosystem and making significant investments in AI ventures, including through “government guidance funds” amounting to estimates in the tens of billions of dollars.97 These investment mechanisms deserve continued analysis.98 According to the fourth plenum work report, Chinese leaders aim to “intensify investments in basic research; perfect the institutional mechanisms to encourage and support basic research and original innovation.”99 6. Commercial Investments and Applications U.S. Strengths and Weaknesses America’s commercial ecosystem in AI is vibrant and growing. In 2013, AI startups in the United States attracted $1.1 billion in venture capital funding. By 2018, VC funding for AI startups in the United States increased eight-fold to $9.3 billion.100 While mostly concentrated in California, New York, and Massachusetts, AI startups across 42 states are attracting a broad range of support and investment, including 16 startups with more than $100 million in equity funding and nine unicorn startups in areas such as robotic process automation software, autonomous vehicles, and healthcare.101 As of September 2019, AI startups had raised an estimated $6.6 billion in VC funding relative to $6.7 billion in VC funding for startups internationally.102 The scope and scale of commercial investment in AI inverts a paradigm in which the U.S. federal government traditionally provided the majority of investment in basic research for emerging technologies, particularly those technologies with military applications.103 This inversion has created friction between the U.S. government and commercial enterprises. Despite the relative advantages of the U.S. tech ecosystem, the Department of Defense still struggles to tap into the success of start-ups and emerging commercial enterprises.104 There is not only a gap in culture, but also a critical issue of incentives. Legal and regulatory burdens and questions of transparency, business practices, outlook, and speed pose obstacles for closer partnership between the federal government and commercial sector in AI. Increasingly, the Department of Defense works with a diverse array of suppliers, including early stage, VC-backed AI startups. The Joint Artificial Intelligence Center and the Defense Innovation Board are spearheading a
 Center for Security and Emerging Technology | 18 range of initiatives to engage private sector innovation, but challenges remain. Large programs of record continue to favor traditional players.105 Acquisition processes need to be reformed and adapted to the speed at which emerging technologies are designed, developed, and deployed. And the Department of Defense will need to continue to explore ways to incentivize prime contractors to partner with technology startups and incorporate nontraditional players into large programs of record.106 PRC Strengths and Weaknesses China’s commercial ecosystem in AI has proven highly dynamic and competitive. In 2017, China’s AI start-ups reportedly received a record financing of about $7.3 billion,107 amounting to 48 percent of the world’s total AI funding.108 To date, financing has been concentrated in the disciplines of natural language processing and intelligent robotics, in which Chinese start-ups appear to have special proficiency.109 In 2018, total financing for AI in China reportedly more than doubled relative to 2017, reaching 383.2 billion RMB ($55.8 billion) across 577 companies, again first in the world.110 In that year, overall venture capital financing in China also reached a record high.111 For 2019, AI funding decreased slightly, potentially indicating the start of a recalibration of expectations and enthusiasm.112 The emerging strength of China’s commercial enterprises will be critical. Baidu, Alibaba, Tencent, iFlytek, and Sensetime, among others, have been designated as the “national team” of champions in AI. These enterprises promote the development of open innovation platforms.113 Baidu is responsible for autonomous vehicles, Alibaba Cloud (Aliyun) for smart cities, Tencent for medical imaging, and iFlytek for smart voice.114 The platforms will be piloted in the Xiong’an New Area, a development southwest of Beijing intended to become a futuristic demonstration of Chinese innovation, showcasing AI technologies and applications. The companies also contribute significantly to the ecosystem through investing in other start-ups.115 Systemic Drivers of Competitiveness 7. Vitality and Dynamism of Economy and Innovation Ecosystem U.S. Strengths and Weaknesses
 Center for Security and Emerging Technology | 19 The United States nurtures an open, decentralized economy. It protects individual and property rights, and it is committed to the rule of law. America has benefited from the relative robustness of its institutions of governance. However, we lack good metrics or evidence that U.S. markets are more competitive than Chinese markets. The United States has seen large increases in monopolization and profit margin in multiple industries in recent decades, to an extent that may undermine long-term competitiveness.116 The United States also benefits from social networks that connect its science and technology labor force with the private sector. Academic research on national innovation indicates that these networks contribute to long-term technological advances and science and technology competitiveness.117 Dynamic ecosystems, such as Silicon Valley and the tech hubs of Route 128 in Massachusetts, epitomize the strengths of this system. America’s innovation advantage has emerged under unique historical and institutional conditions that have proven difficult to replicate elsewhere.118 The confluence of labor and capital can promote technological advances and enable entrepreneurship, which requires a tolerance for risk and failure. Even more important is the ability to harness labor and capital around fresh ideas and innovative thinking.119 The U.S. research ecosystem has benefited not only from talented entrepreneurs, but also from a state that pursues policies that are highly entrepreneurial.120 The United States remains a hub of innovation, but the U.S. government cannot directly leverage the fruits of that innovation. Rather, it must build bridges and partner with academics and companies that may have divergent or conflicting priorities. Considering these unique characteristics of the U.S. innovation ecosystem, the United States benefits from an open international environment that plays to its strengths. By contrast, an environment in which nations turn inward, admit fewer foreign researchers, and compete via appointed national champions seems to play to China’s strengths. In the United States, it has become more challenging for entrepreneurs to enter into high-risk sectors, such as the life sciences and biomedical applications. Although venture capital is readily available, some successful start-ups whose technologies are innovative but do not possess near-term viability from a commercial standpoint lack sufficient investment to bring their products to market.121 PRC Strengths and Weaknesses
 Center for Security and Emerging Technology | 20 China’s approach to innovation combines state support with market mechanisms, but it suffers from several weaknesses. These include inefficient planning and allocation of capital, weak arbitration between government and business, insufficient protections for IP, and information bottlenecks resulting from closed decision-making processes. The limits of China’s top-down approach to innovation are evident in lackluster results to date from its semiconductor fund, preferential funding for state-owned companies in the management of S&T projects, and the use of party committees and “special management shares” to increase party control over the tech sector.122 China has been less committed to individual and property rights, but is starting to implement reforms, mindful of the necessity of IP protection to enable and promote innovation.123 The Chinese government has studied and sought to replicate innovation ecosystems comparable to prominent American counterparts. Only a small proportion of the cities and tech parks in China that aspire to become “China’s Silicon Valley” are likely to succeed. The Party-state sees data and artificial intelligence as important instruments for governance. Despite a heavy-handed approach, the creation of tech parks and campaigns to promote “mass innovation and mass entrepreneurship” is starting to yield some dividends.124 For instance, Beijing’s Zhongguancunhas has emerged as a major center for AI start-ups and research. As of early 2019, there were an estimated 745 “AI enterprises” in China, according to the MOST’s research institute for AI strategic research, ranking second and amounting to 21.67 percent of the total number of such enterprises in the world.125 China’s model of innovation can be highly inefficient, given the often-poor allocation of investment, but it could also prove effective in the long term. In particular, the combination of state support and the dynamic, fiercely competitive commercial ecosystem in China may create and accelerate synergies. In AI research, China has lagged behind in the development of open-source toolkits and software, resulting in dependence on foreign—typically U.S.—frameworks for AI development.126 The government has established a growing number of dedicated open innovation platforms that involve prominent commercial enterprises.127 These platforms are intended to promote innovation, while providing basic capabilities to foster a healthy ecosystem of start-ups. As platform guidelines describe, their development “is a move aimed at making AI technical R&D resources publicly available” in order to “export AI technology service capability to society, promote
 Center for Security and Emerging Technology | 21 industrial applications for AI technology, nurture leading companies in the industry, and support the growth of medium-, small-, and micro-size companies.”128 The relative weakness of open-source software has been a major concern for PRC S&T leaders.129 Initial efforts are underway to promote indigenous alternatives to U.S. options. For instance, Baidu’s framework PaddlePaddle has grown more prominent, experiencing a significant increase in downloads. Its EasyDL tool has become popular given its ease of use.130 Alibaba has also produced an open-source machine-learning platform known as Alink, which provides algorithm libraries and facilitates machine learning.131 At the same time, the ideological imperatives informing Xi Jinping’s leadership and decision-making have encouraged tighter control over the tech sector, driven in part by a perception that their capabilities may pose a threat. A tension between the need for innovation and the ever-more intrusive imposition of Chinese Communist Party (CCP) control mechanisms has led to interference in corporate matters that may distort or compromise the culture of competition contributing to much of China’s economic success. The Party’s confidence in this model of state involvement in the economy may prevent reforms needed for course-correction or adjustment. 8. Education and Leading Universities U.S. Strengths and Weaknesses The U.S. education system, particularly at the university level, is a crucial advantage. America boasts more than half of the world’s top 10 universities for computer science, more than half of the top 20, and more than half of the top 50.132 The availability of resources for innovation is important, particularly funding and infrastructure, but the creation of enabling environments is also critical. The best universities in America took decades to grow and develop,133 and these universities continue to attract the best and brightest. According to one evaluation, computer science graduates from American universities tend to outperform those from other countries.134 Nevertheless, America’s education system demands urgent reform. The United States prides itself on being a meritocracy, but stark disparities in opportunity remain.135 By one estimate, a quarter of U.S. students fail to complete high school; half fail to complete college on time; and the proportion of young Americans with graduate degrees is slipping relative to
 Center for Security and Emerging Technology | 22 other countries.136 Notwithstanding ongoing debates over whether there is a major STEM shortage in the United States,137 it is worth noting that the scores have stratified: students who have been scoring in lower percentiles are performing especially poorly, dragging down the average.138 The Pew Research Center finds that a majority of Americans consider K-12 STEM education in the United States as “average” or “below average” relative to other countries.139 A significant proportion of students in leading U.S. universities are from overseas, whereas U.S. students appear to have less interest and opportunity to pursue these fields of study and careers, despite the demands for talent. The number of American teenage boys who want to pursue a career in STEM declined from 36 percent in 2017 to 24 percent in 2018, while showing a modest uptick to 27 percent in 2019, according to Junior Achievement.140 The number of teenage girls interested in careers in STEM declined from 11 percent in 2018 to 9 percent in 2019.141 The rising costs of education, as well as an epidemic of student debt, render higher education unaffordable for many Americans. Meanwhile, the U.S. tech sector often fails to retain diverse talent and has made only halting progress toward embracing diversity and inclusion. PRC Strengths and Weaknesses The Chinese education system is characterized by a high level of variability in quality and opportunity. Urban China—particularly in Beijing and Shanghai—has much higher quality education in STEM than rural areas, revealing striking disparities.142 Yet in urban locales, education reforms have improved outcomes and enabled students to outcompete their peers around the world.143 Chinese leaders have made improvements in STEM education a priority at all levels and seek to expand quality and quantity. Chinese universities are producing a growing number of graduates in computer science and engineering, contributing to its overall goal of hosting globally competitive universities. As of summer 2019, there were more than 8.34 million graduates from Chinese universities. If an approximation of 30 to 40 percent graduating in science and engineering remains accurate, then the total would be an estimated 2.5-3.3 million.144 The quality of Chinese university research and education varies, but leading institutions like Tsinghua are considered among the best in the world in science and engineering.145 Chinese industry experts and policymakers have expressed concerns that this
 Center for Security and Emerging Technology | 23 education does not inculcate the creativity necessary for original, cutting-edge research.146 Meanwhile, China’s spending on STEM is increasing. Its STEM learning industry is forecast to grow to $15 billion by 2020.147 Beyond formal educational programming, a growing number of Chinese students are turning to online platforms reportedly becoming the primary channel for AI courses.148 The use of AI to enable adaptive learning is an emerging industry rapidly growing as a means of improving and expanding learning outcomes.149 For instance, iFlytek has expanded its “smart education” products and programming into a growing number of classrooms at the middle school and high school levels in order to improve efficiency in teaching and learning.150 9. Access to Global Talent through Openness to Skilled Immigration U.S. Strengths and Weaknesses The United States remains demographically vibrant, and its working-age population is forecast to grow over this century, largely because of immigration.151 Immigration is especially critical for the U.S. AI workforce. The majority of students with graduate degrees in computer science employed in the United States are foreign-born, as are the majority of computer science and mathematics professionals in Silicon Valley and teaching and research staff in computer science and engineering at major U.S. universities.152 As of 2011, 87 percent of top university patents awarded for semiconductor device manufacturing included at least one foreign-born inventor.153 Harsh rhetoric and restrictive policies risk driving away students and talented researchers.154 At the same time, heightened politicization of immigration issues has undermined attempts to implement necessary reforms, such as raising caps on permanent residence and expanding options for recent graduates.155 The difficulty and uncertainty of immigrating to the United States appear to be driving researchers away from the United States toward more welcoming countries, including Canada.156 The United States faces a major talent shortage in AI, but its current policies on immigration risk turning away the foreign-born talent America needs to advance U.S. scientific and technological progress for the long term.157 PRC Strengths and Weaknesses
 Center for Security and Emerging Technology | 24 Although China is aging, the size of its population constitutes an advantage for the time being.158 China faces large inequities in education and opportunity, as well as major gaps in the distribution of talent between urban and rural areas. To offset these disadvantages, China is implementing national- and local-level programs to support domestic AI researchers and creating AI institutes and laboratories overseas to engage foreign talent.159 The Belt and Road Initiative is driving science and technology cooperation with other countries, which could be an important source of talent for China in the future. China has also developed multiple vectors for technology transfer out of the United States.160 China’s state-directed talent recruitment plans, such as the “Thousand Talents Plan” (千人计划), may help mitigate the current human capital bottleneck.161 By some estimates, dozens and perhaps even hundreds of overseas talent bases engage in recruitment of top tier talent to China. A significant majority of Chinese students and researchers with experience in top overseas programs, particularly in the United States, choose to remain abroad. Although a number of foreign scientists have been recruited through talent plans, China struggles to become a more welcoming destination for immigration.162 It remains to be seen what combination of factors or incentives, if any, may be required to tip that balance more decisively, given that many of the barriers to competitiveness are political.163 10. Centrality in Networks of Research Collaboration: U.S. Strengths and Weaknesses The United States is bordered by friendly neighbors and has maintained a network of alliances and partnerships worldwide. Many of the countries neighboring China are U.S. allies. America’s allies provide important comparative advantages in mobilizing manpower, facilitating power projection, conferring legitimacy, deterring adversaries, and spurring political, economic, and technological cooperation.164 The United States can leverage its vast network of allies and partners to promote safe and reliable AI through smart investments in AI R&D, sharing non-sensitive data while protecting privacy, controlling semiconductor supply chains, and developing norms and standards.
 Center for Security and Emerging Technology | 25 In a networked world, the country with the most connections enjoys a crucial advantage.165 This new global environment calls for a “systems integrator” approach to international relations and technological development.166 Leadership need not entail dominating the network; rather, it involves shaping the network in ways that achieve common objectives and foster collaboration in research and development.167 As scholars have noted, it’s about turning complex zero-sum problems into positive-sum solutions.168 The ability of the United States to orchestrate networks that drive scientific and technological discovery will prove an enduring strength. Historically, America has been successful in mobilizing international action through its alliances because it articulated a broader vision of leadership that embraced the interests of its liberal democratic allies. That strategic vision is increasingly at risk. American relationships with allies and partners have frayed and weakened. Alliances pose coordination problems and can prove time-consuming to leverage. Allies can also create vulnerabilities to foreign intelligence. Beyond these potential inefficiencies and risks, U.S. policy in recent years has created new fissures and eroded trust in America’s credibility as a reliable ally and partner. AI will introduce major challenges in terms of interoperability and will require the United States and its allies to step up efforts to coordinate policy, share information, pool capabilities, and promote greater coherence and complementarity in capability development. By weakening its alliance commitments and creating uncertainty around U.S. security guarantees, the United States risks frittering away a key asset and undermining its ability to benefit from collaborating with allies in R&D and the creation of norms and standards for AI. PRC Strengths and Weaknesses Given the sector’s relative openness and the Chinese government’s efforts to leverage international innovation resources, a fairly high proportion of AI research— 42.64 percent by Tsinghua’s estimate—has involved international collaboration.169 There are strong network ties between American and Chinese researchers, and China has stepped up its scientific investments in Europe and Israel, concentrating on emerging technologies.170 Chinese investment in U.S. AI companies increased from $1.5 million in 2010 to $514 million in 2017,171 but has since declined, in part because of the impact of reforms to the Committee on Foreign Investment in the United States.172 Chinese venture capital investments in U.S. AI companies facilitate
 Center for Security and Emerging Technology | 26 their access to AI technologies with both civilian and military applications.173 As the United States imposes constraints and safeguards against PRC access to U.S. technology, China has looked to diversify its access to technology and global collaborations. China is also extending its political and strategic influence through the Belt and Road Initiative. The BRI enables China to access new markets, acquire strategic assets such as ports, secure reciprocal trade preferences, and build connections with governments eager for loans with few strings attached, while also expanding the development of digital infrastructure and internationalization of Chinese technology companies through the “digital silk road.”174 As part of the BRI, China will establish 50 new joint laboratories in partnership with member countries.175 America lacks an alternative vision to China’s BRI, backed by sufficient resources and targeted at areas playing to U.S. strengths, such as digital infrastructure, sustainable urban planning, maritime domain awareness, and financing for connectivity initiatives.176 The Chinese government, meanwhile, has concentrated on expanding international cooperation, while seeking to characterize the United States as paranoid and protectionist. For instance, in January 2018, leading universities in China and France created an “AI alliance” intended to promote research cooperation, including Tsinghua University, Zhejiang University, and Shanghai Jiao Tong University as partners.177 China has also looked to increase cooperation in AI research with the United Kingdom.178 China is expanding research collaborations around the world and has deepened military and technological cooperation with Russia. This engagement can provide a source of valuable technical expertise, including human capital and access to new sources of data. For instance, these countries seek to expand the sharing of big data through the Sino-Russian Big Data Headquarters Base Project.179 Another project will leverage AI technologies, particularly natural language processing, to facilitate cross-border commercial activities intended for use by Chinese and Russian businesses.180 For China and Russia, artificial intelligence has emerged as a new priority in technological cooperation in 2020 and beyond.
 Center for Security and Emerging Technology | 27 Artificial Intelligence and Geopolitical Influence Current advances in AI research and applications could enhance geopolitical influence, from the capacity to shape norms to emerging military capabilities. These dimensions are important to examine. 11. Capacity to Shape Global Norms, Technical Standards, and Governance U.S. Strengths and Weaknesses America’s postwar leadership of the international order may endow it with advantages in promoting AI global governance. U.S. strengths have included its agenda setting, diplomatic acumen, and cultural appeal. The United States can leverage these strengths to further cooperation on AI safety and promote norms and standards that guide AI’s development and deployment in service of the common good.181 U.S. withdrawal from multilateral institutions and agreements will diminish its ability to leverage these advantages. The risks of arms racing dynamics against the backdrop of an intensifying security dilemma could lead the United States and China to develop and deploy AI-enabled systems without adequate safeguards against brittleness, unpredictability, and systemic risks that will arise when algorithms interact at machine speed.182 The U.S. State Department has lost talent and capacity, particularly within the past couple of years. Current trends risk undermining American diplomacy and leadership on these critical issues at a time when deeper engagement with not only our allies and partners but also our competitors is important.183 U.S. failures to live up to its values at home can also limit its influence and effectiveness on the global stage. PRC Strengths and Weaknesses The Chinese government invests heavily in soft power and “discourse power” (话语权) in particular, seeking to increase China’s influence on the global stage.184 For instance, the Chinese government exercises greater influence at the United Nations, including efforts to redefine traditional concepts of human rights to place economic development ahead of political freedoms.185 It aims
 Center for Security and Emerging Technology | 28 to shape the debate in international institutions through greater participation in standard-setting organizations.186 China’s New Generation Artificial Intelligence Development Plan calls for China to lead in AI ethics, standards, and global governance.187 Initial frameworks for AI ethics could be welcomed, but should also be treated with some skepticism; the Chinese government’s commitment to using AI “to benefit humankind” stands in stark contrast to its employment of AI for surveillance and censorship.188 Despite genuine debates among Chinese academics on issues of AI ethics, the Chinese government will likely attempt to co-opt these conversations to assert its own centrality, in ways that advance Party-state priorities.189 Meanwhile, China has been engaged in a charm offensive on AI ethics, convening a growing number of AI conferences and inviting prominent individuals in the field.190 The relative effectiveness of this approach has manifested so far in the promotion of the concept of cyber sovereignty and an authoritarian approach to internet governance gaining traction worldwide. In AI, the spread of surveillance technologies has heightened concerns about “high-tech illiberalism” and “digital authoritarianism.”191 Indeed, the Chinese Communist Party recognizes AI as an ideal instrument to increase its capacity for control.192 12. National Defense and Military Power U.S. Strengths and Weaknesses The U.S. military’s technological superiority has been unparalleled in recent history. America excels in the 14 categories of systems believed to allow for command of the commons, from nuclear attack submarines to satellites and transport logistics.193 It benefits from an array of sensors that can provide a militarily relevant advantage in data, which is important to training algorithms for defense applications.194 The United States also enjoys a comparative advantage in developing, fielding, and deploying advanced weapons systems, which can take up to 15 to 20 years to build and require high levels of coordination to employ.195 By contrast, China has struggled to produce high-performance aircraft engines and compete in undersea warfare, despite recent progress.196 Its state-owned defense industrial base has been sclerotic, but it is starting to
 Center for Security and Emerging Technology | 29 become more competitive. Innovations coming from the U.S. defense sector have driven advances in basic and applied research. America’s defense industrial base benefits from decades of experience in managing complex defense projects. Orchestrating large-scale defense projects requires practical, on-the-ground experience that China and other powers cannot readily learn through cyber theft and industrial espionage.197 Notwithstanding these advantages, America’s defense industrial base evolved to meet the demands of a previous era; it is not driving AI innovation in the United States. The U.S. companies and universities at the forefront of private sector innovation have an often-uneasy relationship with the U.S. defense establishment. Moreover, the U.S. military has encountered difficulties in its efforts to recruit, retain, and manage talent, particularly considering the rigidity and antiquated elements of its personnel system. The U.S. military has also suffered from the strains of war. The costs are mounting after 18 years and taking a toll on personnel and readiness alike.198 Despite persistent efforts to introduce reforms, the U.S. system for procurement and acquisitions remains cumbersome, to an extent that hampers innovation and can deter companies from working with the Pentagon. In addition, the commitment to costly legacy systems can create constraints that impede investments in emerging capabilities. For instance, even legacy information technology architectures can be difficult to modernize in a secure manner.199 There are also reasons for concern that the U.S. defense industrial base has atrophied and lost critical capabilities in certain materials and expertise that may be difficult to recover.200 PRC Strengths and Weaknesses China’s military has been rapidly modernizing, outpacing American assessments and expectations. The PLA has been advancing a range of high-end capabilities that include integrated air defense systems, anti-ship ballistic missiles, stealth, and C4ISR, along with asymmetric capabilities, such as space, cyber and electronic warfare. The PLA has launched historic reforms that will be disruptive in the near term, but could produce far-reaching implications for the future of Chinese military power in the long term. In the process, the PLA has pursued and sought to operationalize weapon systems designed to blunt U.S. advantages in the Western Pacific. So far, most metrics on total spending and aggregate military capabilities fail to
 Center for Security and Emerging Technology | 30 capture this asymmetry of investments and strategic objectives, not to mention the advantages geography could provide to the Chinese military. Meanwhile, the Central Military Commission (CMC)—particularly through its S&T Commission—is launching new programs to capitalize on China’s national AI initiatives, promoting innovation in emerging technologies critical to operational advantage in future warfare. Under Xi Jinping, military-civil fusion has been elevated as a national strategy.201 This agenda is implemented through the Central Military-Civil Fusion Development Commission, which oversees the design and application of initiatives ranging from new platforms for procurement to local efforts to create new parks and zones to promote military-civil fusion enterprises. The Chinese military seeks to increase its access to commercial technologies and academia, including through new joint laboratories, such as in human-machine integration.202 The PLA’s embrace of military innovation and attempts to leverage emerging technologies could enable it to compensate for current weaknesses and challenges. For instance, the PLA is interested in leveraging advances in AI/ML to enhance command and control. To prepare to fight and win wars without contemporary experience in combat, it is exploring advances in realistic training that exploit virtual reality and advanced simulations, while also exploring the employment of AI in war-gaming. The Chinese government seeks to “leapfrog” the United States in innovation by developing concepts of operations and emerging capabilities that could be employed asymmetrically.203 Today’s research, development, and experimentation could produce tomorrow’s weapons systems, including swarming, autonomy, decision support, improved intelligence, and information operations. For instance, the 2018 Zhuhai Airshow displayed a UAV command and control system intended to serve as the “strongest brain” to support unmanned operation, enabling integrated situational awareness, coordination in planning, and distributed combat operations.204 The Chinese military and defense industry have been recruiting AI engineers and researchers with an eye toward military AI applications and operations. Notably, the Academy of Military Science, which leads the PLA’s military scientific enterprise, has established the National Innovation Institute of Defense Technology, including research centers focused on artificial intelligence and unmanned systems.205 The Beijing Institute of Technology has also launched a program to train students in the development of intelligent
 Center for Security and Emerging Technology | 31 weapons systems.206 The PLA’s capacity to adapt and innovate will depend on a range of reforms currently underway. Conclusions and Implications for U.S. Policy No single answer exists for the question of comparative advantage in AI, and dynamics can only be evaluated through a series of lenses as complementary as they are contradictory. Chinese and American leaders have articulated parallel objectives to lead the world in AI, launching plans and policies to that end.207 These ambitions merit serious attention, but they must be assessed relative to current advances and long-term potential. It is challenging to evaluate comparative advantage in AI, given that this discipline encompasses such a wide range of techniques and applications, from deep learning to generative adversarial networks. The pace of progress in the field raises questions about the enduring relevance of core elements of AI believed to confer an edge, such as access to large quantities of data. American strategy must be informed by a careful evaluation of relative strengths in research, development, and applications across countries. The United States needs to recognize and reinforce its comparative advantages in order to sustain leadership in AI. In the process, American policymakers must also identify which elements of leadership are vital for U.S. national interests and objectives. The question of which data and metrics best capture progress in AI continues to be subject to debate and could evolve as the field progresses.208 In recent decades the United States has established leadership, even predominance, in science and technology. American advantages in innovation have resulted from the U.S. government’s historical contributions as an engine for scientific progress. The ethos of science as the “endless frontier”—and government as the main driver of this exploration—has animated significant, and often successful, investments in basic research and education.209 For all the contributions of Silicon Valley, the unique role of state support in driving innovation frequently remains unacknowledged, to the detriment of effective policy making.210 With U.S. technological leadership increasingly contested, relying on previously accrued advantages will not necessarily translate into today’s emerging industries and technologies, which rapidly evolve and feature new players and contenders.
 Center for Security and Emerging Technology | 32 American policymakers should consider the following core principles and general directions for policy to sustain U.S. comparative advantages: Invest in core dimensions of U.S. AI capabilities. ● Provide long-term funding to high-risk, high-reward techniques to advance AI research, where there may be inadequate commercial investment. ○ Focus on AI safety and general techniques for testing and verification. ● Promote cross-disciplinary research in fields for which there are potential synergies, such as brain science and biotechnology. ○ Launch new institutes at national laboratories, and fund new programs at public universities. ● Recognize data as a critical strategic resource, and concentrate on ensuring its security and privacy. ○ Continue to expand the availability of data to pursue applications of AI in the public interest, and incentivize companies to make data more available for research purposes. ○ Promote initiatives for data sharing and open government, including for state and municipal governments. ○ Create regulatory frameworks that balance privacy and data security against the benefits of sharing. ● Invest in research on techniques, such as the use of synthetic data, evolutionary algorithms, and training in simulations, that are less dependent on the availability of large amounts of data. ○ Create an IARPA prize challenge involving the use of synthetic data or evolutionary algorithms. ● Sustain and expand initiatives to bolster American advantages in semiconductors, including DARPA’s Electronics Resurgence Initiative.211 ○ Support and fund research for next-generation materials and approaches to AI chips.
 Center for Security and Emerging Technology | 33 ○ Bolster lead in next-generation manufacturing techniques, including prototyping capabilities at the discovery, application, and manufacturing scales. ● Expand public-private partnerships to advance next-generation research in semiconductors and to promote initiatives in talent and training.212 ● Evaluate the risks that come with the globalization of U.S. supply chains and international dependencies in semiconductor manufacturing that could be disrupted by geopolitical contingencies. ○ Explore options to establish mission-critical foundries in the United States and, in collaboration with allies and partners, provide funding and support for the underlying equipment and infrastructure. Promote critical enablers of AI development. ● Increase the quality of STEM education at all levels, including through the provision of support to public schools to hire and retain teachers. ● Provide incentives and opportunities for professors to continue to pursue cutting-edge research in academia; create new mechanisms to provide long-term grant funding for priorities in AI research.213 ● Support the expansion of programs for training and retraining of the U.S. workforce, including through technical schools, apprenticeships, and certification of AI skills. ● Increase the affordability and accessibility of higher education, including through tackling issues of student debt. ● Create new scholarships in AI/ML, and promote pathways to military or government service through easing hiring requirements. ● Establish pilot projects and mechanisms to promote applications of AI that benefit society, including for education, healthcare, and environmental protection. ○ Provide federal grants to state and local governments to launch their own initiatives in AI for public good. Sustain American competitiveness for the long term.
 Center for Security and Emerging Technology | 34 ● Increase total U.S. R&D funding to at least the historical norm of three percent of GDP and consider going beyond that target, provided that investments are linked to a concrete end goal and strategy for engaging the primary sources of U.S. R&D funding and implementation, including the federal government but also other actors like industry and academia.214 ○ Promote the emergence of new tech hubs throughout the United States. ● Explore options to collaborate more extensively with allies and partners on research and development. ○ Launch programs to fund joint research in AI and interdisciplinary applications among scientists and at major universities. ● Remain open to and welcoming of foreign students and high-tech talent through immigration. ○ Raise caps on permanent residence, expand temporary and permanent visa options for tech workers and entrepreneurs, and develop a clear path to permanent residence and citizenship for recent graduates. ● Refine, clarify, and strengthen mechanisms for screening foreign students and researchers seeking visas to better detect and deter the small number of bad actors in the system. ● Institutionalize mechanisms to increase awareness and engagement between academia and law enforcement. ○ Create an advisory board of prominent scientists to consult with and provide an independent perspective on issues of tech transfer in academia. ● Reevaluate force postures and concepts to sustain future military leadership, including expanding initiatives intended to promote innovation and experimentation. ○ Invest in an AI ready force through focusing on talent recruitment and retention and on training opportunities.215 ● Create legal, ethical, and regulatory frameworks for the use of AI within the United States.
Center for Security and Emerging Technology | 35 ○Respond proactively to mitigate the potential for abuses of AI
by the U.S. government, law enforcement, or national securityinstitutions.
●Explore options to promulgate favorable approaches to AIgovernance internationally, in coordination with allies and partners.
○Explore opportunities to deepen engagement across a rangeof multilateral organizations and initiatives, including theOrganization for Economic Cooperation and Development,the Group of Seven, and the Global Partners hip on AI.
○Create a consortium of likeminded democracies to addressissues of human rights in AI.
Neither the United States nor China enjoys a clear or uncontested advantage
in AI. Each country possesses distinct strengths and confronts potential
weaknesses. It is too early to assess whether the United States or China is
leading in AI from the perspective of long-term development in the field, but
both nations are poised to transform and be transformed by AI. In the years
and decades to come, relative progress and strengths across these
dimensions will be important to continue to evaluate.
Acknowledgements
For their insights and feedback, the authors are grateful to Zachary Arnold,
Tarun Chhabra, Saif Khan, Ryan Fedasiuk, Melissa Flagg, Roxanne Heston,
Jason Matheny, Michael Page, Dahlia Peterson, Igor Mikolic-Torreira,
Alexandra Vreeman, Lynne Weil, and Remco Zwetsloot. The authors would
also like to thank Chris Meserole of the Brookings Institution and Paul Scharre
of the Center for a New American Security for providing excellent
suggestions on an earlier version of the paper. The authors are solely
responsible for the opinions and conclusions expressed in this policy brief.
© 2019 by the Center for Security and Emerging Technology. This work is licensed under a Creative
Commons Attribution-Non Commercial 4.0 International License.
To view a copy of this license, visit https://creativecommons.org/licenses/by-nc/4.0/.
Document Identifier: 10.51593/20190047

 Center for Security and Emerging Technology | 36 Endnotes 1 K. A. Konrad, “Dynamic Contests and the Discouragement Effect,” Revue d'Économie Politique (2012); C. Harris and J. Vickers, “Racing with Uncertainty,” Review of Economic Studies 54, 1 (1987); I. K. Wang, L. Qian, and M. Lehrer, “From Technology Race to Technology Marathon: A Behavioral Explanation of Technology Advancement,” European Management Journal 35, Issue 2 (April 2017): 187-197. 2 This policy brief is not intended to be comprehensive, but rather proposes a framework for assessing relevant data and measures that bear on current debates in AI. We are indebted to the robust research and existing literature in the field. See, e.g., Michael C. Horowitz, Gregory Allen, Elsa Kania, and Paul Scharre, “Strategic Competition in an Era of Artificial Intelligence,” Center for a New American Security, July 2018, 8. 3 Deborah J. Jackson, “What is an innovation ecosystem,” National Science Foundation, 1, 2011. On AI in particular, see “AI is a national security priority — here’s how we cultivate it,” The Hill, February 20, 2019, https://thehill.com/opinion/cybersecurity/430765-ai-is-a-national-security-priority-heres-how-we-cultivate-it; “Artificial Intelligence and National Security: The Importance of the AI Ecosystem,” Center for Strategic and International Studies, November 5, 2018, https://www.csis.org/analysis/artificial-intelligence-and-national-security-importance-ai-ecosystem. 4 Andrew Imbrie, “Mapping the Terrain: AI Governance and the Future of Power,” Survival (blog), December 17, 2019, https://www.iiss.org/blogs/survival-blog/2019/12/mapping-the-terrain-ai-governance. 5 See, e.g., Andrew Imbrie, “Artificial Intelligence Meets Bureaucratic Politics,” War on the Rocks, August 1, 2019, https://warontherocks.com/2019/08/artificial-intelligence-meets-bureaucratic-politics/; Michael C. Horowitz and Lauren Kahn, “The AI Literacy Gap Hobbling American Officialdom,” War on the Rocks, January 14, 2020, https://warontherocks.com/2020/01/the-ai-literacy-gap-hobbling-american-officialdom/. 6 “Winning the Future: A Blueprint for Sustained U.S. Leadership in Semiconductor Technology,” Semiconductor Industry Association, April 2019, https://www.semiconductors.org/wp-content/uploads/2019/04/FINAL-SIA-Blueprint-for-web.pdf. 7 We define “AI chips” to include GPUs (Graphics Processing Units), FPGAs (Field Programmable Gate Array), and ASICs (Application Specific Integrated Circuits) specialized for high speed and efficiency for AI algorithms, among others. 8 See, e.g., “Re: ANPRM on Review of Controls for Certain Emerging Technologies (BIS-2018-0024),” Center for Security and Emerging Technology, January 10, 2019, https://cset.georgetown.edu/wp-content/uploads/2019-01-10-Dept-of-Commerce-GU-CSET-ANPRM-on-Export-Controls-for-AI.pdf. For a recent example, see Alexandra Alper, Toby Sterling, and Stephen Nellis, “Trump Administration pressed Dutch hard to cancel
 Center for Security and Emerging Technology | 37 China chip-equipment sale: sources,” Reuters, January 6, 2020, https://www.reuters.com/article/asml-holding-usa-china/rpt-insight-trump-administration-pressed-dutch-hard-to-cancel-china-chip-equipment-sale-sources-idUSL1N29802U. 9 “Trade war forces Chinese chipmaker Fujian Jinhua to halt output,” Financial Times, January, 28, 2019, https://www.ft.com/content/87b5580c-22bf-11e9-8ce6-5db4543da632. 10 For one prominent example, see the case of Fujian Jinhua. Paul Mozur, “Inside a Heist of American Chip Designs, as China Bids for Tech Power,” New York Times, June 22, 2018, https://www.nytimes.com/2018/06/22/technology/china-micron-chips-theft.html. 11 Some U.S. firms made the move abroad in response to export controls. See “U.S.-based chip-tech group moving to Switzerland over trade curb fears,” Reuters, November 28, 2019, https://www.reuters.com/article/us-usa-china-semiconductors-insight/u-s-based-chip-tech-group-moving-to-switzerland-over-trade-curb-fears-idUSKBN1XZ16L. 12 Chris Gillis, “US exporters attempt to head off new content restrictions,” American Shipper, December 9, 2019, https://www.freightwaves.com/news/us-exporters-attempt-to-head-off-new-content-restrictions. 13 Timothy P. Morgan, “Huawei Jumps into the Arms Server Chip Fray,” The Next Platform, January 8, 2019. See also Saif Khan, “Maintaining the AI Chip Advantage of the United States and its Allies,” Center for Security and Emerging Technology, December 2019, https://cset.georgetown.edu/wp-content/uploads/CSET-Maintaining-the-AI-Chip-Competitive-Advantage-of-the-United-States-and-its-Allies-20191206.pdf. 14 “Winning the Future: A Blueprint for Sustained U.S. Leadership in Semiconductor Technology,” Semiconductor Industry Association, April 2019, https://www.semiconductors.org/wp-content/uploads/2019/04/FINAL-SIA-Blueprint-for-web.pdf. 15 ZTE was later removed from this list. “BIS Adds ZTE Corporation and Three Affiliated Entities to the Entity List,” Bureau of Industry and Security, Department of Commerce, https://bis.doc.gov/index.php/oee/9-bis/carousel/1011-bis-adds-zte-corporation-and-three-affiliated-entities-to-the-entity-list; “China’s Huawei, 70 affiliates placed on U.S. trade blacklist,” Reuters, May 15, 2019, https://www.reuters.com/article/us-usa-china-huaweitech/chinas-huawei-70-affiliates-placed-on-us-trade-blacklist-idUSKCN1SL2W4. 16 Lorand Laskai, “Why Blacklisting Huawei Could Backfire,” Foreign Affairs, June 19, 2019, https://www.foreignaffairs.com/articles/china/2019-06-19/why-blacklisting-huawei-could-backfire. 17 Jason Matheny and Carrick Flynn, “ANPRM on Review of Controls for Certain Emerging Technologies,” Center for Security and Emerging Technology, January 10, 2019, https://cset.georgetown.edu/wp-content/uploads/2019-01-10-Dept-of-Commerce-GU-CSET-ANPRM-on-Export-Controls-for-AI-2.pdf.
 Center for Security and Emerging Technology | 38 18 On the obstacles to indigenizing a semiconductor industry in China, see Douglas B. Fuller, “Growth, Upgrading, and Limited Catch-up in China’s Semiconductor Industry,” in Loren Brandt and Thomas G. Rawski, eds., Policy, Regulation and Innovation in China’s Electricity and Telecom Industries (Cambridge: Cambridge University Press, 2019). 19 Doug Fuller, Paper Tigers, Hidden Dragons: Firms and Political Economy of China’s Technological Development (Oxford University Press, 2016), 131. 20 Junko Yoshida, “China Must Go Beyond Big Fund,” EE Times, November 11, 2019, https://www.eetimes.com/china-must-go-beyond-big-fund/#. 21 “The Decline in Semiconductor Manufacturing in the United States,” Center for Public Policy Innovation, June 2010, https://www.cppionline.org/wp-content/uploads/2017/07/The-Decline-of-Semiconductor-Manufacturing.pdf. 22 Will Knight, “China has never had a real chip industry. Making AI chips could change that,” MIT Technology Review, December 14, 2018, https://www.technologyreview.com/s/612569/china-has-never-had-a-real-chip-industry-making-ai-chips-could-change-that/. 23 While valuations are likely inflated due in part to the influence of state-driven investments, these start-ups have achieved notable progress nonetheless. “Chinese AI chip maker Horizon Robotics raises $600 million from SK Hynix, others,” Reuters, February 27, 2019, https://www.reuters.com/article/us-china-tech-semiconductors/chinese-ai-chip-maker-horizon-robotics-raises-600-million-from-sk-hynix-others-idUSKCN1QG0HW. 24 Dan Strumpf, “Huawei Launches AI Chip in Push to Unseat U.S. Makers,” Wall Street Journal, August 23, 2019, https://www.wsj.com/articles/huawei-launches-ai-chip-in-push-to-unseat-u-s-makers-11566556836. 25 “Alibaba’s New AI Chip Can Process Nearly 80K Images Per Second,” Synced, September 25, 2019, https://syncedreview.com/2019/09/25/alibabas-new-ai-chip-can-process-nearly-80k-images-per-second/. Arjun Kharpal, “Alibaba unveils its first A.I. chip as China pushes for its own semiconductor technology,” CNBC, September 25, 2019, https://www.cnbc.com/2019/09/25/alibaba-unveils-its-first-ai-chip-called-the-hanguang-800.html. 26 “Alibaba Open-Sources Its MCU to Boost AI Research,” Synced, October 23, 2019, https://syncedreview.com/2019/10/23/alibaba-open-sources-its-mcu-to-boost-ai-research/. 27 Lorand Laskai and Helen Toner, “Can China Grow Its Own AI Tech Base?”, DigiChina, November 4, 2019, https://www.newamerica.org/cybersecurity-initiative/digichina/blog/can-china-grow-its-own-ai-tech-base/. 28 See, e.g., Data.gov, https://www.data.gov/open-gov/; “Project Open Data,” https://project-open-data.cio.gov.
 Center for Security and Emerging Technology | 39 29 Based on analysis of monthly user data of most valuable U.S. and Chinese tech companies. 30 Tim Wu, The Master Switch: The Rise and Fall of Information Empires (New York: Vintage, 2011), 6. 31 Tim Wu, The Curse of Bigness: Antitrust in the New Gilded Age (New York: Random House Audio, 2018). 32 Theresa Hitchens, “U.S. Military Needs Better Data on Itself to Exploit AI,” Breaking Defense, December 12, 2019, https://breakingdefense.com/2019/12/us-military-needs-better-data-on-itself-to-exploit-ai/. 33 Sydney J. Freedberg Jr., “EXCLUSIVE Pentagon’s AI Problem Is ‘Dirty’ Data: Lt. Gen. Shanahan,” Breaking Defense, November 13, 2019, https://breakingdefense.com/2019/11/exclusive-pentagons-ai-problem-is-dirty-data-lt-gen-shanahan/. 34 “The New Racetrack for Artificial Intelligence: China-U.S. Competition” [人工智能新赛场 -中美对比], CCID, May 2017. 35 For an instructive framework on this issue, see Matt Sheehan, “Much Ado About Data: How America and China Stack Up,” MacroPolo, July 16, 2019, https://macropolo.org/ai-data-us-china/. 36 Celia Chen and Iris Deng, “Tencent seeks to kill silo culture that gave it WeChat as it expands into AI, big data,” South China Morning Post, November 14, 2018, https://www.scmp.com/tech/apps-social/article/2172967/tencent-seeks-kill-silo-culture-gave-it-wechat-it-expands-ai-big. 37 Emily Feng, “In China, A New Call To Protect Data Privacy,” NPR, January 5, 2020, https://www.npr.org/2020/01/05/793014617/in-china-a-new-call-to-protect-data-privacy. 38 “Navigating China’s Data Maze: How Regulations Affect U.S. Companies,” The American Chamber of Commerce in Shanghai, May 2019, https://www.amcham-shanghai.org/sites/default/files/2019-05/Viewpoint%20-%20Data%20%28May%202019%29.pdf. 39 “Interpretation of the Work Plan on Promoting the Development of the Artificial Intelligence Industry through the Opening of Public Data” [关于通过公共数据开放促进人工智能 产业发展的工作方案》政策解读], November 4, 2019, http://jxj.beijing.gov.cn/zcjd/zcjdlb/201912/t20191212\_1088931.html. 40 For a discussion of the challenges and opportunities that big data presents for defense mobilization, see Li Ching [李庆], “Looking at the National Defense Mobilization Big Data
 Center for Security and Emerging Technology | 40 Construction” [冷眼看国防动员大数据建设], China National Defense News [中国国防报], October 24, 2018, http://www.qstheory.cn/defense/2018-10/24/c\_1123606679.htm. 41 “China Tech Talk 76: US vs China—AI asymmetries with Jeffrey Ding,” technode, April 16, 2019, https://technode.com/2019/04/16/china-tech-talk-76-us-vs-china-ai-asymmetries-with-jeffrey-ding/. 42 “Artificial Intelligence Index: 2019 Annual Report,” https://hai.stanford.edu/sites/g/files/sbiybj10986/f/ai\_index\_2019\_report.pdf. 43 Ibid., 18. 44 David Silver, Thomas Hubert, Julian Schrittwieser, Ioannis Antonoglou, Matthew Lai, Arthur Guez, Marc Lanctot et al., “A general reinforcement learning algorithm that masters chess, shogi, and Go through self-play,” Science 362, no. 6419 (2018): 1140-1144. 45 Noam Brown and Tuomas Sandholm, “Superhuman AI for heads-up no-limit poker: Libratus beats top professionals,” Science 359, no. 6374 (2018): 418-424. Alan Blair and Abdallah Saffidine, “AI surpasses humans at six-player poker,” Science 365, no. 6456 (2019): 864-865. 46 Raymond Perrault, Yoav Shoham, Erik Brynjolfsson, Jack Clark, John Etchemendy, Barbara Grosz, Terah Lyons, James Manyika, Saurabh Mishra, and Juan Carlos Niebles, “The AI Index 2019 Annual Report,” AI Index Steering Committee, Human-Centered AI Institute, Stanford University, Stanford, CA, December 2019; Laskai and Toner, “Can China Grow Its Own AI Tech Base.” 47 Field Cady and Oren Etzione, “China May Overtake the US in AI Research,” Medium, March 13, 2019, https://medium.com/ai2-blog/china-to-overtake-us-in-ai-research-8b6b1fe30595. 48 Karen White, “Publications Output: U.S. Trends and International Comparisons,” Science & Engineering Indicators, December 17, 2019, https://ncses.nsf.gov/pubs/nsb20206. 49 “The China New Generation Artificial Intelligence Development Strategic Research Academy released two heavyweight reports” [中国新一代人工智能发展战略研究院发布两份重量级报告], Interface news [界面新闻], May 18, 2019, https://xw.qq.com/partner/wcsbzst/20190518A0EB05/20190518A0EB0500?ADTAG=undefined&pgv\_ref=undefined. 50 China accounts for 17 of the top 20 academic institutions that have been involved in patenting AI, with particular strength in deep learning, according to a study from the World Intellectual Property Organization. See “WIPO’s First ‘Technology Trends’ Study Probes Artificial Intelligence: IBM and Microsoft are Leaders Amid Recent Global Upsurge in AI Inventive Activity,” World Intellectual Property Organization, https://www.wipo.int/pressroom/en/articles/2019/article\_0001.html; “WIPO
 Center for Security and Emerging Technology | 41 Technology Trends 2019, Artificial Intelligence,” World Intellectual Property Organization, https://www.wipo.int/edocs/pubdocs/en/wipo\_pub\_1055.pdf. 51 Sarah O’Meara, “Will China Lead the World in AI by 2030,” Nature, August 21, 2019, https://www.nature.com/articles/d41586-019-02360-7. 52 “Robust Vision Challenge,” http://www.robustvision.net/leaderboard.php?benchmark=stereo. 53 Yu Sun, Shuohuan Wang, Yukun Li, Shikun Feng, Xuyi Chen, Han Zhang, Xin Tian, Danxiang Zhu, Hao Tian, and Hua Wu, “ERNIE: Enhanced Representation through Knowledge Integration,” arXiv preprint arXiv:1904.09223 (2019). 54 “Baidu’s Pre-training Model ERNIE Achieves New NLP Benchmark Record,” Synced, December 11, 2019, https://syncedreview.com/2019/12/11/baidus-pre-training-model-ernie-achieves-new-nlp-benchmark-record/. 55 See, e.g., “Global AI Talent Report 2019,” jfgagne, https://jfgagne.ai/talent-2019/. 56 “AAAI-17 Accepted Papers,” http://www.aaai.org/Conferences/AAAI/2017/aaai17accepted-papers.pdf; Sarah Zhang, “China’s Artificial-Intelligence Boom,” The Atlantic, February 16, 2017, https://www.theatlantic.com/technology/archive/2017/02/china-artificial-intelligence/516615/. 57 “Artificial Intelligence Index,” 87, https://hai.stanford.edu/sites/g/files/sbiybj10986/f/ai\_index\_2019\_report.pdf. 58 Remco Zwetsloot, Roxanne Heston, and Zachary Arnold, “Strengthening the U.S. AI Workforce,” Center for Security and Emerging Technology, September 2019, https://cset.georgetown.edu/wp-content/uploads/CSET\_US\_AI\_Workforce.pdf. 59 Remco Zwetsloot, James Dunham, Zachary Arnold, and Tina Huang, “Keeping Top Talent in the United States: Findings and Policy Options for International Graduate Student Retention,” Center for Security and Emerging Technology, https://cset.georgetown.edu/wp-content/uploads/Keeping-Top-AI-Talent-in-the-United-States.pdf. 60 Ibid. 61 Elias G. Carayannis and David FJ Campbell, eds., Knowledge Creation, Diffusion, and Use in Innovation Networks and Knowledge Clusters: A Comparative Systems Approach Across the United States, Europe, and Asia (Connecticut: Greenwood Publishing Group, 2006); “Rapid Rise of China’s STEM Workforce Charted by National Science Board Report,” American Institute of Physics, January 31, 2018. 62 Wang Cong, “AI race shifts to talent in battle for dominance,” Global Times, March 19, 2019, http://www.globaltimes.cn/content/1142700.shtml.
 Center for Security and Emerging Technology | 42 63 “The China New Generation Artificial Intelligence Development Strategic Research Academy released two heavyweight reports” [中国新一代人工智能发展战略研究院发布两份重量级报告], Interface News [界面新闻], May 18, 2019, https://xw.qq.com/partner/wcsbzst/20190518A0EB05/20190518A0EB0500?ADTAG=undefined&pgv\_ref=undefined. 64 Zwetsloot, Dunham, Arnold, and Huang, “Keeping Top Talent in the United States.” 65 China Institute for Science and Technology Policy at Tsinghua University, “China AI Development Report 2018,” Tsinghua University, July 2018, http://www.sppm.tsinghua.edu.cn/eWebEditor/UploadFile/China\_AI\_development\_report\_2018.pdf. 66 Ibid. 67 Joy D. Ma, “China’s AI Talent Base Is Growing, and then Leaving,” MacroPolo, July 30, 2019, https://macropolo.org/chinas-ai-talent-base-is-growing-and-then-leaving/. By one initial estimate, of the 12,500 AI graduates from Chinese universities to date, reportedly only 31 percent have stayed in China, whereas 62 percent instead departed to the United States. Wang Cong, “AI race shifts to talent in battle for dominance,” Global Times, March 19, 2019, http://www.globaltimes.cn/content/1142700.shtml. 68 Ministry of Education, “Artificial Intelligence Innovation Action Plan for Institutions of Higher Learning” [高等学校人工智能创新行动计划], April 4, 2018, http://www.moe.edu.cn/srcsite/A16/s7062/201804/t20180410\_332722.html. For commentary on the topic, see Elsa Kania, “China’s AI talent ‘arms race,” The Strategist, April 23, 2018, https://www.aspistrategist.org.au/chinas-ai-talent-arms-race/. 69 “This year, colleges and universities have added these specialties: artificial intelligence and big data are the hottest” [今年高校新增这些专业：人工智能与大数据最火], June 12, 2019, http://edu.sina.com.cn/gaokao/2019-06-12/doc-ihvhiews8390284.shtml. 70 “Cross National Comparisons of R&D Performance,” National Science Board, https://www.nsf.gov/statistics/2018/nsb20181/report/sections/research-and-development-u-s-trends-and-international-comparisons/cross-national-comparisons-of-r-d-performance. 71 “2016–2019 Progress Report: Advancing Artificial Intelligence R&D,” November 2019, https://www.nitrd.gov/pubs/AI-Research-and-Development-Progress-Report-2016-2019.pdf; Melissa Flagg, “America’s Future Lies in Technical Alliances,” Center for Security and Emerging Technology (blog), January 8, 2020, https://cset.georgetown.edu/2020/01/08/americas-future-lies-in-technical-alliances/. 72 “National Security Commission on Artificial Intelligence,” Interim Report, November 2019, https://www.nscai.gov/about/reports-to-congress. 73 Ibid.
 Center for Security and Emerging Technology | 43 74 MIT Committee to Evaluate the Innovation Deficit, “The Future Postponed: Why Declining Investment in Basic Research Threatens a U.S. Innovation Deficit,” April 2015, https://dc.mit.edu/sites/default/files/Future%20Postponed.pdf. 75 Jonathan Gruber and Simon Johnson, Jump-starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream (New York: Public Affairs, 2019). 76 Charlotte Yang, “Chart of the Day: Another Record Year for China R&D Spending, Caixin, October 10, 2018, https://www.caixinglobal.com/2018-10-10/chart-of-the-day-another-record-year-for-china-rd-spending-101333479.html. See also “Is China a global leader in research and development,” China Power, https://chinapower.csis.org/china-research-and-development-rnd/l; Dennis Normile, “China narrows U.S. lead in R&D spending,” Science, October 19, 2018, https://science.sciencemag.org/content/362/6412/276. 77 “China’s R&D expenditure is close to two trillion yuan. Which cities have more research investment?” [中国研发经费接近两万亿，哪些城市科研投入多？], CCTV, September 13, 2019, http://news.cctv.com/2019/09/13/ARTIwBtFsNMhTHQ8DXpFQHJR190913.shtml. 78 Teddy Ng and Jane Cai, “China’s funding for science and research to reach 2.5 per cent of GDP in 2019,” South China Morning Post, March 10, 2019, https://www.scmp.com/news/china/science/article/2189427/chinas-funding-science-and-research-reach-25-cent-gdp-2019. 79 “Atlas of national key R & D plan funding allocation” [国家重点研发计划经费分配图谱浮现], Economic Reference [经济参考报], October 14, 2019, http://www.xinhuanet.com/fortune/2019-10/14/c\_1125100297.htm. 80 Ashwin Acharya and Zachary Arnold, “Chinese Public AI R&D Spending: Provisional Findings,” CSET Issue Brief, December 2019, https://cset.georgetown.edu/wp-content/uploads/Chinese-Public-AI-RD-Spending-Provisional-Findings-2.pdf. 81 For instance, in May 2018, the city of Tianjin announced the New Generation Artificial Intelligence Industry Fund, which amounts to 100 billion RMB ($16 billion), based on a combination of state and venture capital funding. “Tianjin established a new generation of artificial intelligence industry fund with a scale of 100 billion RMB” [天津设新一代人工智能产业基金，规模为1000亿人民币], May 16, 2018, https://m.pedaily.cn/news/431332. 82 “The National “863” Plan Computer Subject’s Thirty-Year Anniversary: Leapfrog-Style Development and the Realm of Necessity” [国家“863”计划计算机主题30年拾遗：跨越式发展与必然王国], Science Net, February 8, 2017, http://news.sciencenet.cn/htmlnews/2017/2/367416.shtm. See also “863 Plan” [863计划], China Education and Research Network, http://www.edu.cn/html/rd/b/bls.shtml.
 Center for Security and Emerging Technology | 44 83 Ibid. See also “863 Plan” [863计划], China Education and Research Network, http://www.edu.cn/html/rd/b/bls.shtml. 84 “Our Nation Launched Four Major Science Research Programs” [我国启动四项重大科学研究计划], Science and Technology Daily, November 16, 2006. 85 “The national key R&D plan for next year is basically determined! These industries are the most noteworthy” [国家明年重点研发计划基本确定！这几个产业最值得关注], October 28, 2019. 86 “National Medium and Long Term Science and Technology Development Plan Outline” (2006-2020) [国家中长期科学和技术发展规划纲要], Ministry of Science and Technology, February 9, 2006, http://www.most.gov.cn/mostinfo/xinxifenlei/gjkjgh/200811/t20081129\_65774\_9.htm. https://www.itu.int/en/ITU-D/Cybersecurity/Documents/National\_Strategies\_Repository/China\_2006.pdf. 87 See estimates from the Allen Institute. 88 “2021-2035 National Medium- and Long-term Scientific and Technological Development Plan Basic Science Development Strategy Research Project Launched in Beijing” [2021-2035年国家中长期科技发展规划基础科学发展战略研究专题在京启动], Ministry of Science and Technology Website, May 3, 2019, http://www.gov.cn/xinwen/2019-05/03/content\_5388386.htm. 89 Elsa B. Kania, “Battlefield Singularity: Artificial Intelligence, Military Revolution, and China’s Future Military Power,” Center for a New American Security, November 28, 2017, https://www.cnas.org/publications/reports/battlefield-singularity-artificial-intelligence-military-revolution-and-chinas-future-military-power. 90 Jeffrey Ding, “Deciphering China’s AI Dream,” Future of Humanity Institute, University of Oxford, March 2018, https://www.fhi.ox.ac.uk/wp-content/uploads/Deciphering\_Chinas\_AI-Dream.pdf. 91 “State Council Notice on the Issuance of the New Generation AI Development Plan” [国务院关于印发新一代人工智能发展规划的通知]. “MIIT’s Notice Regarding the Release of the Three Year Action Plan to Promote the Development of New-Generation Artificial Intelligence Industry (2018-2020) [工业和信息化部关于印发《促进新一代人工智能产业发展三年行动计划（2018-2020年）》的通], December 14, 2017, http://www.miit.gov.cn/n1146295/n1652858/n1652930/n3757016/c5960820/content.html. For an English translation of this plan, see Paul Triolo, Elsa Kania, and Graham Webster (translators), “Translation: Chinese government outlines AI ambitions through 2020,” DigiChina, https://www.newamerica.org/cybersecurity-initiative/digichina/blog/translation-chinese-government-outlines-ai-ambitions-through-2020/.
 Center for Security and Emerging Technology | 45 92 “Ministry of Science and Technology Notice Regarding the Issuance of National Key R&D Plan Transformative Technologies and Crux Scientific Problems Key Topic 2017 Program Application Guidelines” [科技部关于发布国家重点研发计划变革性技术关键科学问题重点专项2017年度项目申报指南的通知], Ministry of Science and Technology, September 27, 2017, http://www.most.gov.cn/mostinfo/xinxifenlei/fgzc/gfxwj/gfxwj2017/201710/t20171009\_135224.htm. 93 There might be some debate about the best translations for the terms “重大工程” and “重大项目,” each of which could be rendered major/mega project/program. See National Development and Reform Commission Office Releases Notice Regarding the Implementation of the 2018 “Internet Plus,” Artificial Intelligence Innovation Development, and Digital Economy Experimental Mega-Project Notice [国家发展改革委办公厅关于组织实施2018年“互联网+”、人工智能创新发展和数字经济试点重大工程的通知], National Development and Reform Commission, October 11, 2017, http://www.ndrc.gov.cn/zcfb/zcfbtz/201710/t20171013\_863534.html. 94 “AI Innovation and Development Major Project Application Requirements” [人工智能创新发展重大工程申报要求], NDRC, October 11, 2017, http://www.ndrc.gov.cn/zcfb/zcfbtz/201710/W020171013599553259770.pdf. 95 “56 projects selected as major projects for the ‘Internet Plus,’ Artificial Intelligence Innovation Development and Digital Economy Pilot Megaprojects” [56个项目入选“互联网＋”、人工智能创新发展和数字经济试点重大工程], January 22, 2018, Xinhua, http://www.gov.cn/guowuyuan/2018-01/22/content\_5259438.htm. 96 “State Council Notice on the Issuance of the New Generation AI Development Plan” [国务院关于印发新一代人工智能发展规划的通知]. 97 For examples, see “SDIC’s National Emerging Industry Venture Capital Guidance Fund raised a total of 17.85 billion yuan” [国投创合国家新兴产业创业投资引导基金募集规模达178.5亿元], May 10, 2017, https://www.sdic.com.cn/cn/zxzx/gsyw/2017/06/09/webinfo/phone1495955264137396.htm. “Guohua Military-Civil Fusion Industrial Development Fund Established” [国华军民融合产业发展基金创立],National Defense Science and Industry Bureau, September 7, 2016, http://www.gov.cn/xinwen/2016-09/07/content\_5106111.htm. 98 Paul Triolo, “AI in China: Cutting Through the Hype,” Eurasia Group, December 6, 2017, https://www.eurasiagroup.net/live-post/ai-in-china-cutting-through-the-hype. 99 See the Party’s report from the fourth plenum: “Communiqué of the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China” [中国共产党第十九届中央委员会第四次全体会议公报], Xinhua, October 31, 2019, http://www.xinhuanet.com/politics/2019-10/31/c\_1125178024.htm.
 Center for Security and Emerging Technology | 46 100 “The United States of Artificial Intelligence Startups, CBInsights, November 26, 2019, https://www.cbinsights.com/research/artificial-intelligence-startup-us-map/. 101 Ibid. 102 Joanna Glasner, “AI Companies Raise More Money Across Fewer Rounds,” Crunchbase News, September 9, 2019, https://news.crunchbase.com/news/ai-companies-raise-more-money-across-fewer-rounds/. 103 For one historical perspective, see Linda Weiss, America Inc.? Innovation and Enterprise in the National Security State (Ithaca: Cornell University Press, 2014). 104 Rachel Olney, “The Rift Between Silicon Valley and the Pentagon is Economic, not Moral,” War on the Rocks, January 28, 2019, https://warontherocks.com/2019/01/the-rift-between-silicon-valley-and-the-pentagon-is-economic-not-moral/. 105 “The Contest for Innovation: Strengthening America’s National Security Innovation Base in an Era of Strategic Competition,” Ronald Reagan Institute, December 2019, https://www.reaganfoundation.org/media/355312/the\_contest\_for\_innovation\_report.pdf. 106 Ibid. 107 The levels of funding are high enough that the founder of one Chinese AI start-up characterized this as a negative. As he remarked to one of the authors, there is “too much money chasing too few good ideas.” 108 “China Is Starting To Edge Out The US In AI Investment,” CB Insights, February 12, 2019, https://www.cbinsights.com/research/china-artificial-intelligence-investment-startups-tech/. 109 Jing Shuiyu, “AI startups see record financing in H1,” China Daily, August 3, 2017, http://www.chinadaily.com.cn/business/tech/2017-08/03/content\_30340585.htm. 110 “The China New Generation Artificial Intelligence Development Strategic Research Academy released two heavyweight reports” [中国新一代人工智能发展战略研究院发布两份重量级报告], Interface News [界面新闻], May 18, 2019, https://xw.qq.com/partner/wcsbzst/20190518A0EB05/20190518A0EB0500?ADTAG=undefined&pgv\_ref=undefined. 111 “China VC investment hits record high in 2018: Report,” Xinhua, February 1, 2019, http://www.chinadaily.com.cn/a/201902/01/WS5c53e434a3106c65c34e7cb2.html. 112 See, e.g., “Used cars and AI come out on top as China's startup funding slumps,” Nikkei Asian Review, July 3, 2019, https://asia.nikkei.com/Business/China-tech/Used-cars-and-AI-come-out-on-top-as-China-s-startup-funding-slumps.
 Center for Security and Emerging Technology | 47 113 “China recruits Baidu, Alibaba and Tencent to AI ‘national team,’” South China Morning Post, November 21, 2017, http://www.scmp.com/tech/china-tech/article/2120913/china-recruits-baidu-alibaba-and-tencent-ai-national-team. 114 “Artificial Intelligence Open Platform, Have you Joined?” [人工智能开放平台，你加入了吗-中新网”], China News, December 13, 2018, http://www.chinanews.com/it/2018/10-08/8643974.shtml; “AI “national team” Xiong’nn Debut! Will Change Your Life” [人工智能“国家队”雄安登场！将改变你的生活], Xiong’an, November 30, 2017, http://www.xiongan.gov.cn/2017-11/30/c\_129766243.htm. 115 “Rise Of China’s Big Tech In AI: What Baidu, Alibaba, And Tencent Are Working On,” CB Insights, April 26, 2018, https://www.cbinsights.com/research/china-baidu-alibaba-tencent-artificial-intelligence-dominance/. 116 Patrick Foulis, “Across the West powerful firms are becoming even more powerful,” The Economist, November 15, 2018, https://www.economist.com/special-report/2018/11/15/across-the-west-powerful-firms-are-becoming-even-more-powerful; John Mauldin, “America Has a Monopoly Problem,” Forbes, April 11, 2019, https://www.forbes.com/sites/johnmauldin/2019/04/11/america-has-a-monopoly-problem/; Jonathan Tepper, The Myth of Capitalism: Monopolies and the Death of Competition (John Wiley & Sons, 2018). 117 Mark Z. Taylor, The Politics of Innovation: Why Some Countries Are Better Than Others at Science and Technology (Oxford: Oxford University Press, 2016). 118 Martin Kenney and Urs Von Burg, “Technology, entrepreneurship and path dependence: industrial clustering in Silicon Valley and Route 128.” Industrial and corporate change 8, no. 1 (1999): 67-103; Aaron Chatterji, Edward Glaeser, and William Kerr, “Clusters of entrepreneurship and innovation,” Innovation Policy and the Economy 14, no. 1 (2014): 129-166. 119 Fareed Zakaria, “The Future of American Power,” Foreign Affairs, May/June 2008, https://www.foreignaffairs.com/articles/united-states/2008-05-03/future-american-power. 120 Mariana Mazzucato, “The entrepreneurial state,” Soundings 49, no. 49 (2011): 131-142. 121 MIT Committee to Evaluate the Innovation Deficit, “The Future Postponed: Why Declining Investment in Basic Research Threatens a U.S. Innovation Deficit,” April 2015, https://dc.mit.edu/sites/default/files/Future%20Postponed.pdf. 122 Ding, “Deciphering China’s AI Dream.” 123 For a good analysis on the topic, see Yukon Huang and Jeremy Smith, “China’s Record on Intellectual Property Rights Is Getting Better and Better,” Foreign Policy, October 16,
 Center for Security and Emerging Technology | 48 2019, https://foreignpolicy.com/2019/10/16/china-intellectual-property-theft-progress/. 124 “State Council’s Guiding Opinions on Accelerating the Construction of Mass Entrepreneurship and Innovation Support Platforms” [国务院关于加快构建大众创业万众创新支撑平台的指导意见], September 25, 2016, http://www.gov.cn/zhengce/content/2015-09/26/content\_10183.htm. 125 “The China New Generation Artificial Intelligence Development Strategic Research Academy released two heavyweight reports” [中国新一代人工智能发展战略研究院发布两份重量级报告], Interface News [界面新闻], May 18, 2019, https://xw.qq.com/partner/wcsbzst/20190518A0EB05/20190518A0EB0500?ADTAG=undefined&pgv\_ref=undefined. Estimates often vary depending on what is defined as an “AI enterprise.” 126 Minghe Hu and Zen Soo, “China’s reliance on US-origin platforms for deep learning raises questions about country’s AI push,” South China Morning Post, November 22, 2019, https://www.scmp.com/tech/start-ups/article/3038772/chinas-reliance-us-origin-platforms-deep-learning-raises-questions. 127 “Artificial Intelligence Open Platform, Have you Joined?” [人工智能开放平台，你加入了吗-中新网”], China News, December 13, 2018, http://www.chinanews.com/it/2018/10-08/8643974.shtml; “Five Major National-Level Open Innovation Platforms Revealed” [五大国家级人工智能开放创新平台将集体亮相“], January 18, 2019. See also “Ten Major National New Generation of Artificial Intelligence Open Innovation Platforms Released in Shanghai [十大国家新一代人工智能开放创新平台在沪发布], Science Network, August 29, 2019, http://news.sciencenet.cn/htmlnews/2019/8/429964.shtm. 128 Ministry of Science and Technology Notice on the Publication of the Guidance on National New Generation Artificial Intelligence Open Innovation Platform Construction Work [科技部关于印发《国家新一代人工智能开放创新平台建设工作指引》的通知], September 17, 2019, https://cset.georgetown.edu/wp-content/uploads/Ministry-and-Science-and-Technology-Notice-on-Publication-of-Guidance-1.pdf. 129 Laskai and Toner, “Can China Grow Its Own AI Tech Base.” 130 For updates on its capabilities, see, e.g. “Baidu PaddlePaddle Releases 21 New Capabilities to Accelerate Industry-Grade Model Development,” November 14, 2019, http://research.baidu.com/Blog/index-view?id=126. 131 Chris Udemans, “Alibaba Cloud opens source code for machine-learning platform Alink,” technode, November 28, 2019, https://technode.com/2019/11/28/alibaba-cloud-machine-learning-platform-open-source/. 132 “CSRankings: Computer Science Rankings,” http://csrankings.org/#/index?all.
 Center for Security and Emerging Technology | 49 133 Josef Joffe, The Myth of America’s Decline: Politics, Economics, and a Half Century of False Prophecies (New York: Liveright., 2013), 172-188. 134 John Timmer, “US computer science grads outperforming those in other key nations,” ArsTechnica, March 23, 2019, https://arstechnica.com/science/2019/03/us-computer-science-grads-outperforming-those-in-other-key-nations/. 135 Adam Gamoran and Sarah K. Bruch, “Educational inequality in the United States: can we reverse the tide?” Journal of Education and Work 30, no. 7 (2017): 777-792. 136 Edward Luce, Time to Start Thinking: America in the Age of Descent (New York: Atlantic Monthly Press, 2012). 137 Michael S. Teitelbaum, Falling Behind? Boom, Bust, and the Global Race for Scientific Talent (Princeton: Princeton University Press, 2014); Adams B. Nager and Robert D. Atkinson, “Ten Myths of High-Skilled Immigration,” Information Technology & Innovation Foundation, April 2015, http://www.ilw.com/articles/2015,0420-Atkinson.pdf. 138 Michael S. Teitelbaum, Falling Behind? Boom, Bust, and the Global Race for Scientific Talent (Princeton: Princeton University Press, 2014), https://press.princeton.edu/titles/10208.html. 139 Cary Funk and Kim Parker, “Most Americans evaluate STEM education as middling compared with other developed nations,” Pew Research Center, January 9, 2018, https://www.pewsocialtrends.org/2018/01/09/5-most-americans-evaluate-stem-education-as-middling-compared-with-other-developed-nations/. 140 “Research Reveals Boys’ Interest in STEM Careers Declining; Girls’ Interest Unchanged,” Junior Achievement USA, https://www.juniorachievement.org/web/ja-usa/press-releases/-/asset\_publisher/UmcVLQOLGie9/content/research-reveals-boys’-interest-in-stem-careers-declining-girls’-interest-unchanged; “Survey: Teen Girls’ Interest in STEM Careers Declines,” Junior Achievement, https://www.juniorachievement.org/web/ja-usa/press-releases/-/asset\_publisher/UmcVLQOLGie9/content/survey-teen-girls’-interest-in-stem-careers-declines. 141 Ibid. 142 Normile, Dennis, “One in Three Chinese Children Faces an Education Apocalypse. An Ambitious Experiment Hopes to Save Them,” Science 21 (2017). 143 “Chapter 4: Shanghai and Hong Kong: Two Distinct Examples of Education Reform in China,” in Strong Performers and Successful Reformers in Education: Lessons from PISA for the United States, Organization for Economic Cooperation and Development, http://www.oecd.org/document/13/0,3343,en\_2649\_35845621\_46538637\_1\_1\_1\_1,00.html. 144 “Chinese university graduates rise exponentially, have diverse career options,” Xinhua, June 24, 2019, https://www.chinadaily.com.cn/a/201906/24/WS5d1080bca3103dbf14329e9f.html.
 Center for Security and Emerging Technology | 50 145 For a good overview, see “Seizing the laurels: Tsinghua University may soon top the world league in science research,” The Economist, November 17, 201, https://www.economist.com/china/2018/11/17/tsinghua-university-may-soon-top-the-world-league-in-science-research. 146 For a comparative perspective, see Wang, Yan, Jari Lavonen, and Kirsi Tirri, “Aims for learning 21st century competencies in national primary science curricula in China and Finland,” Eurasia Journal of Mathematics, Science & Technology Education (2018). 147 Ricky Ye, “While US STEM education market declines, China invests heavily,” The Next Web, June 19, 2017, https://thenextweb.com/contributors/2017/06/19/us-stem-education-market-declines-china-invests-heavily/. 148 See initial results reported in a survey from Tsinghua University. China Institute for Science and Technology Policy at Tsinghua University, “China AI Development Report 2018,” Tsinghua University, July 2018, http://www.sppm.tsinghua.edu.cn/eWebEditor/UploadFile/China\_AI\_development\_report\_2018.pdf. 149 Yi-Ling Liu, “China’s AI Dreams Aren’t for Everyone,” Foreign Policy, August 13, 2019, https://foreignpolicy.com/2019/08/13/china-artificial-intelligence-dreams-arent-for-everyone-data-privacy-economic-inequality/. 150 iFlytek, Deeply Ploughing Education for Fifteen Years” [科大讯飞 深耕教育15年] November 21, 2019, Beijing Report [新京报], https://tech.sina.com.cn/it/2019-11-21/doc-iihnzahi2260676.shtml. 151 Nicholas Eberstadt, “With Great Demographics Comes Great Power,” Foreign Affairs, July/August 2019, https://www.foreignaffairs.com/articles/world/2019-06-11/great-demographics-comes-great-power. 152 Zwetsloot, Heston, and Arnold, “Strengthening the U.S. AI Workforce.” 153 Ibid., 5. 154 “Fewer foreign students coming to the United States for the second year in row, survey finds,” Reuters, November 13, 2018, https://www.nbcnews.com/news/asian-america/fewer-foreign-students-coming-united-states-second-year-row-survey-n935701; Zachary Arnold, Roxanne Heston, Remco Zwetsloot, and Tina Huang, “Immigration Policy and the U.S. AI Sector: A Preliminary Assessment,” Center for Security and Emerging Technology, September 2019, 2-4, https://cset.georgetown.edu/wp-content/uploads/CSET\_Immigration\_Policy\_and\_AI.pdf. 155 Ibid., Section 3. 156 Alana Semeuls, “Tech Companies Say It’s Too Hard to Hire High-Skilled Immigrants in the U.S. — So They're Growing in Canada Instead,” Time, July 25, 2019,
 Center for Security and Emerging Technology | 51 https://time.com/5634351/canada-high-skilled-labor-immigrants/. 157 Zwetsloot, Heston, and Arnold, “Strengthening the U.S. AI Workforce.” 158 At present, China’s fertility rates are below replacement levels, and even the recent changes to the one-child policy won’t compensate for these adverse trends. See also Nicholas Eberstadt, “With Great Demographics Comes Great Power,” Foreign Affairs, July/August 2019, https://www.foreignaffairs.com/articles/world/2019-06-11/great-demographics-comes-great-power. 159 Ding, “Deciphering China’s AI Dream.” 160 William Hannas and Huey-meei Chang, “China’s Access to Foreign AI Technology: An Assessment,” Center for Security and Emerging Technology, September 2019, https://cset.georgetown.edu/wp-content/uploads/CSET\_China\_Access\_To\_Foreign\_Technology.pdf. 161 Meng Jing, “Chinese firms fight to lure top artificial intelligence talent from Silicon Valley,” South China Morning Post, April 2, 2017, http://www.scmp.com/tech/china-tech/article/2084171/chinese-firms-fight-lure-top-artificial-intelligence-talent-silicon. 162 Remco Zwetsloot and Dahlia Peterson, “The US-China Tech Wars: China’s Immigration Disadvantage,” The Diplomat, December 31, 2019, https://thediplomat.com/2019/12/the-us-china-tech-wars-chinas-immigration-disadvantage/. 163 See MIT’s description of these engagements: Adam Conner-Simons, “CSAIL launches new five-year collaboration with iFlyTek,” MIT News, https://news.mit.edu/2018/csail-launches-five-year-collaboration-with-iflytek-0615. 164 Hal Brands and Peter D. Feaver, “What Are America’s Alliances Good For?” Parameters 47, Issue 2 (Summer 2017): 15-30. 165 Anne-Marie Slaughter, The Chessboard and the Web: Strategies of Connection in a Networked World (New Haven: Yale University Press, 2017). See also Niall Ferguson, “The False Prophecy of Hyperconnection,” Foreign Affairs, September/October 2017, https://www.foreignaffairs.com/articles/2017-08-15/false-prophecy-hyperconnection; Emilie M. Hafner-Burton, Miles Kahler, and Alexander H. Montgomery, “Network Analysis for International Relations,” International Organization 63, Issue 3 (July 2009): 559-592, https://www.cambridge.org/core/journals/international-organization/article/network-analysis-for-international-relations/DE2910979C1B5C44C4CC13F336C5DE97. 166 Anne-Marie Slaughter, “America’s Edge,” Foreign Affairs, January/February 2009, https://www.foreignaffairs.com/articles/united-states/2009-01-01/americas-edge. 167 Ibid.
 Center for Security and Emerging Technology | 52 168 James Carse, Finite and Infinite Games (New York: Free Press, 1986); Robert Wright, Nonzero: The Logic of Human Destiny (New York: Vintage Books, 2001). 169 “China AI Development Report 2018,” China Institute for Science and Technology Policy at Tsinghua University. 170 See, e.g., Felicia Schwartz and Dov Lieber, “Chinese Investment in Israel Raises Security Fears,” Wall Street Journal, February 11, 2019, https://www.wsj.com/articles/chinese-investment-in-israel-raises-security-fears-11549881000. 171 “Artificial Intelligence and National Security,” Congressional Research Service, January 30, 2019, https://fas.org/sgp/crs/natsec/R45178.pdf. 172 For context, see “CFIUS Reform: Foreign Investment National Security Reviews,” Congressional Research Service, October 3, 2019, https://fas.org/sgp/crs/natsec/IF10952.pdf. 173 Michael Brown and Pavneet Singh, “China’s Technology Transfer Strategy: How Chinese Investments in Emerging Technology Enable A Strategic Competitor to Access the Crown Jewels of U.S. Innovation,” January 2018, https://admin.govexec.com/media/diux\_chinatechnologytransferstudy\_jan\_2018\_(1).pdf. 174 China and the Philippines established a “Data port” in September 2018. China also initiated the Digital Silk Road International Industry Alliance. For more information, see “China's big data companies embark on the “Belt and Road”” [中国大数据企业走上“一带一路”], Xinhua, December 14, 2018, http://news.xinhuanet.com/globe/2018-12/14/c\_137663769.html; “Digital Economy and Digital Silk Road International Conference proposes to jointly build digital silk road,” Zhejiang Daily, September 19, 2018. 175 See, e.g., “BRI helps participating countries with technological innovation,” People’s Daily, April 26, 2019, http://en.people.cn/n3/2019/0426/c90000-9572518.html. 176 Elizabeth C. Economy, “China’s New Revolution,” Foreign Affairs, May/June 2018, https://www.foreignaffairs.com/articles/china/2018-04-17/chinas-new-revolution. 177 “China and France’s top universities build ‘AI Alliance’ to promote artificial intelligence international cooperation,” Xinhua, January 18, 2018. 178 “AI, Another Breakthrough in Sino-UK Innovation Cooperation” [ 人工智能 中英创新合作又一风口], People’s Daily, November 3, 2018, http://world.people.com.cn/GB/n1/2018/1103/c1002-30380012.html. 179 “China and Russia big data base will be built in Harbin at the end of the year” [中俄大数据基地年底将在哈尔滨建成], Harbin Daily, March 11, 2018, https://web.archive.org/save/https://zj.zjol.com.cn/news.html?id=890364. The project has been successfully supported by the 2017 National Development and Reform Commission Digital Economy Pilot Major Project. a major project of Heilongjiang Province
 Center for Security and Emerging Technology | 53 180 “Lecture Series on “China-Russia Economic and Trade Cooperation Database and Russian-Chinese Intelligent Integrated Service Platform”” [“中俄经贸合作数据库及俄汉语智能化综合服务平台”项目系列讲座中俄经贸合作数据库及俄汉语智能化综合服务平台], November 1, 2018, https://web.archive.org/save/http://yuyanziyuan.blcu.edu.cn/info/1066/1259.htm. 181 Miles Brundage et al., “The Malicious Use of Artificial Intelligence: Forecasting, Preventing, and Mitigation,” February 2018, https://arxiv.org/pdf/1802.07228.pdf. 182 Andrew Imbrie and Elsa B. Kania, “AI Safety, Security, and Stability Among Great Powers: Options, Challenges, and Lessons Learned for Pragmatic Engagement,” Center for Security and Emerging Technology, December 2019, https://cset.georgetown.edu/wp-content/uploads/AI-Safety-Security-and-Stability-Among-the-Great-Powers.pdf. 183 William J. Burns, “The Demolition of U.S. Diplomacy,” Foreign Affairs, October 14, 2019; Ronan Farrow, War on Peace: The End of Diplomacy and the Decline of American Influence (New York: W.W. Norton & Company, 2018). 184 Elsa B. Kania,” The Right to Speak: Discourse and Chinese Power,” Center for Advanced China Research, 27, 2018. See also Joel Wuthnow, “The concept of soft power in China’s strategic discourse,” Issues & Studies 44, no. 2 (2008): 1-28. 185 Kristine Lee and Alexander Sullivan, “People’s Republic of the United Nations: China’s Emerging Revisionism in International Organizations,” Center for a New American Security, May 14, 2019, https://www.cnas.org/publications/reports/peoples-republic-of-the-united-nations. 186 See, e.g., Elsa B. Kania, “China’s play for global 5G dominance—standards and the ‘Digital Silk Road’,” The Strategist, ASPI, June 27, 2018, https://www.aspistrategist.org.au/chinas-play-for-global-5g-dominance-standards-and-the-digital-silk-road/. 187 Graham Webster, Rogier Creemers, Paul Triolo, and Elsa Kania, “China’s Plan to Lead in AI: Purpose, Prospects, and Problems,” New America, August 1, 2017, https://www.newamerica.org/cybersecurity-initiative/blog/chinas-plan-lead-ai-purpose-prospects-and-problems/. 188 For authoritative reporting on these issues, see Paul Mozur, “One Month, 500,000 Face Scans: How China Is Using A.I. to Profile a Minority,” New York Times, April 14, 2019, https://www.nytimes.com/2019/04/14/technology/china-surveillance-artificial-intelligence-racial-profiling.html. 189 “Beijing AI Principles,” May 29, https://www.baai.ac.cn/blog/beijing-ai-principles. See also “China Hosts Conference to Promote Ethical AI Standards,” China Daily, June 19, 2019, http://global.chinadaily.com.cn/a/201906/19/WS5d098cdfa3103dbf14329084.html; Will Knight, “Why Does Beijing Suddenly Care About AI Ethics?” MIT Technology Review,
 Center for Security and Emerging Technology | 54 https://www.technologyreview.com/s/613610/why-does-china-suddenly-care-about-ai-ethics-and-privacy/. 190 See, e.g., “World Artificial Intelligence Conference,” http://www.worldaic.com.cn/portal/en/index.html; “Global Artificial Intelligence Conference,” https://gaitc.caai.cn/en. 191 See, e.g., “Countering High-Tech Illiberalism,” https://www.cnas.org/press/press-release/countering-high-tech-illiberalism. See also Freedom House, “Freedom on the Net 2018: The Rise of Digital Authoritarianism,” https://freedomhouse.org/report/freedom-net/freedom-net-2018/rise-digital-authoritarianism. For a policy brief on the topic, see Alina Polyakova and Chris Meserole, “Exporting digital authoritarianism,” Brookings Institution, https://www.brookings.edu/wp-content/uploads/2019/08/FP\_20190826\_digital\_authoritarianism\_polyakova\_meserole.pdf. 192 Samantha Hoffman, “Managing the State: Social Credit, Surveillance and the CCP’s Plan for China,” in Nicholas D. Wright, ed., AI, China, Russia, and the Global Order: Technological, Political, Global, and Creative Perspectives, A Strategic Multiyear Assessment Periodic Publication, 2018, 42, https://nsiteam.com/social/wp-content/uploads/2018/12/AI-China-Russia-Global-WP\_FINAL.pdf. 193 Stephen G. Brooks and William C. Wohlforth, “The Once and Future Superpower,” Foreign Affairs, May/June 2016. 194 However, the realization of this potential advantage requires the effective use of this data. 195 Brooks and Wohlforth, “The Once and Future Superpower.” 196 Ibid. 197 Brooks and Wohlforth, “The Once and Future Superpower”; Andrea Gilli and Mauro Gilli, “Why China Has Not Caught Up Yet: Military-Technological Superiority and the Limits of Imitation, Reverse Engineering, and Cyber Espionage,” International Security, 43, Issue 3 (Winter 2018/19): 141-189. 198 “Costs of War,” Watson Institute, Brown University, https://watson.brown.edu/costsofwar/. 199 See the Defense Innovation Board’s project and report on the topic: “Software is Never Done: Refactoring the Acquisition Code for Competitive Advantage,” May 13, 2019. “Software Acquisition and Practices (SWAP) Study,” https://innovation.defense.gov/software/. 200 “Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States,” Report to President Donald J. Trump by the Interagency Task Force in Fulfillment of Executive Order 13806, September 2018, https://media.defense.gov/2018/Oct/05/2002048904/-1/-1/1/ASSESSING-AND-
 Center for Security and Emerging Technology | 55 STRENGTHENING-THE-MANUFACTURING-AND%20DEFENSE-INDUSTRIAL-BASE-AND-SUPPLY-CHAIN-RESILIENCY.PDF. 201 Xi Jinping Discusses Military-Civil Fusion” [习近平谈军民融合], Seeking Truth [求是], October 16, 2018, http://www.qstheory.cn/zhuanqu/rdjj/2018-10/16/c\_1123565364.htm. See also Elsa B. Kania, “In Military-Civil Fusion, China is Learning Lessons from the United States and Starting to Innovate,” The Strategy Bridge, August 27, 2019, https://thestrategybridge.org/the-bridge/2019/8/27/in-military-civil-fusion-china-is-learning-lessons-from-the-united-states-and-starting-to-innovate. 202 Ibid. 203 Elsa B. Kania, “Chinese Military Innovation in Artificial Intelligence,” Testimony to the U.S.-China Economic and Security Review Commission, June 2019, https://www.cnas.org/publications/congressional-testimony/chinese-military-innovation-in-artificial-intelligence. 204 CETC Military-Civil Fusion Network Information Systems Appear at Zhuhai Airshow [中国电科军民融合的网络信息体系亮相珠海航展], February 25, 2019, http://www.cetcd.cn/html/2019-02/7435.html. 205 Ibid. 206 Ibid. 207 State Council Notice on the Issuance of the New Generation AI Development Plan” [国务院关于印发新一代人工智能发展规划的通知], July 20, 2017, http://www.gov.cn/zhengce/content/2017-07/20/content\_5211996.htm; Graham Webster, Rogier Creemers, Paul Triolo, and Elsa Kania, “Full Translation: China's ‘New Generation Artificial Intelligence Development Plan’ (2017),” New America, https://www.newamerica.org/cybersecurity-initiative/digichina/blog/full-translation-chinas-new-generation-artificial-intelligence-development-plan-2017/; “Executive Order on Maintaining American Leadership in Artificial Intelligence,” White House, February 11, 2019, https://www.whitehouse.gov/presidential-actions/executive-order-maintaining-american-leadership-artificial-intelligence/. 208 For an excellent resource on the topic, see the 2019 AI Index Report. This Index provides tools and datasets to evaluate progress in AI, which is available through Stanford’s initiative on Human-Centered Artificial Intelligence. For more information, see “Artificial Intelligence Index: 2019 Annual Report,” https://hai.stanford.edu/ai-index/2019. 209 Vannevar Bush, Science, the Endless Frontier (Ayer Company Publishers, 1995). 210 Mariana Mazzucato, The Entrepreneurial State: Debunking Public vs. Private Sector Myths. Vol. 1 (Anthem Press, 2015). 211 For context, see “DARPA Electronics Resurgence Initiative,” https://www.darpa.mil/work-with-us/electronics-resurgence-initiative.
 Center for Security and Emerging Technology | 56 212 Such an initiative could build upon antecedents. See “Public-Private Partnerships for Semiconductor Research,” https://www.nist.gov/industry-impacts/public-private-partnerships-semiconductor-research. 213 See future research forthcoming from CSET by Remco Zwetsloot et al. that will provide a more detailed analysis of this policy issue. 214 Eliezer Geisler and Wagdy Abdallah, The Metrics of Science and Technology (Quorum Books, 2000); OECD Science, Technology, and Industry Outlook, 2014 (OECD Publishing, 2014). 215 For an excellent overview of this issue, see “Campaign for an AI Ready Force,” https://media.defense.gov/2019/Oct/31/2002204191/-1/-1/0/CAMPAIGN\_FOR\_AN\_AI\_READY\_FORCE.PDF.