Global Supply Chain Challenge: China Leverages its Advantage in Artificial Intelligence

While the United States holds an early lead in the development and use of artificial intelligence (AI), China is mounting a strong challenge on several important fronts. Meanwhile, the European Union is faltering, according to report recently released by the Center for Data Innovation.

The report assesses the AI capabilities of the United States, China, and the EU using 30 metrics across 6 categories representing the essential building blocks for national success in AI: human talent in the field, research activity, commercial development activity, hardware infrastructure, AI adoption rates, and data availability.

On a 100-point scale, the United States leads, with an overall score of 44.6 points, followed by China with 32.0 and the European Union with 23.3. These overall results are similar to findings the Center first reported in 2019, but with notable shifts in key areas—including the quantity and quality of AI research being conducted, software and computer services firms’ expenditures on research and development, the number of advanced supercomputers, and the quantity of data being generated—suggesting that the Chinese government’s concerted policies to make AI a top strategic priority are bearing fruit, and that the EU and United States should respond.

“The Chinese government has made AI a top priority and the results are showing,” says Daniel Castro, director of the Center for Data Innovation and lead author of the report. “China is gaining on the United States in key areas, and it is far outpacing the EU. This issue is more than just a point of pride. The United States and European Union need to pay attention to what China is doing and respond, because nations that lead in the development and use of AI will shape its future and significantly improve their economic competitiveness, while those that fall behind risk losing competitiveness in key industries.”

The Center’s new report finds that since 2019 China has closed the gap or extended its lead over the United States in more than half of the updated metrics. For example, China now has nearly twice as many supercomputers ranked in the top 500 for performance as the United States, and it has surpassed the EU as the global leader in AI research publications, while also increasing its research quality. In contrast, the EU has made progress relative to the United States in only slightly more than a quarter of the updated metrics, and it has fallen further behind in the number of AI-related venture funding deals, AI firm acquisitions, and AI start-ups that have raised at least $1 million.

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