China’s AI Industry Shows Resilience Amid Western Restrictions

China’s AI sector displayed strong confidence this week at a major fair in Shanghai, demonstrating its ability to overcome Western-imposed restrictions by unveiling cutting-edge products developed by a burgeoning pool of young talent.

Explosive Growth in Generative AI

The country’s generative AI industry has experienced rapid growth, with the United Nations noting that China has been the leading filer of patents for AI software in recent years. This software creates a range of outputs, from illustrations to computer code.

Showcase at World AI Conference

At the World AI Conference in Shanghai, exhibitors showcased various generative AI products. One stall featured realistic “watercolours” and sci-fi-themed illustrations produced by AI software. Additionally, a group of humanoid robots, developed by nearly a dozen Chinese organizations, performed for attendees, synchronously raising their hands and waving.

Talent Pool Advantage

Ethan Duan, an employee of a startup incubator, highlighted China’s potential advantage due to its large population of tech talent, despite Western restrictions. He mentioned that while a sudden loss of access to OpenAI’s API might pose challenges, the long-term impact remains uncertain. Duan’s optimism is supported by statistics indicating that China has significantly expanded its domestic AI talent pool to support its burgeoning industry.

Increasing AI Talent

A global AI tracker by MacroPolo, the think tank of the Chicago-based Paulson Institute, reported that in 2022, China had almost 47% of the world’s top AI researchers, up from 29% in 2019.

Western Measures and China’s Response

Despite the upbeat atmosphere in Shanghai, there is increased suspicion and restrictive measures from the United States and other countries targeting China’s AI industry. OpenAI, the US company behind ChatGPT, has accused China of using its language models for influencing social media sentiment and will cease providing its app programming services to Chinese developers next week. Furthermore, the US government has revoked export licenses for certain American chips used by Chinese smartphone giant Huawei.

Resilient Industry Amid Restrictions

Interest in AI products was evident at the Shanghai fair, with large crowds eager to explore the exposition hall and engage with interactive exhibits. Shi Yunlei, founder and CEO of an AI-equipped health equipment company, shared that visitors at previous industry fairs had already shown interest in purchasing his exercise machines, even though they are not yet in mass production.

Lyu Meixiu, a representative of software company OpenCSG, expressed confidence in China’s AI capabilities, stating that her firm was not significantly affected by US restrictions and was expanding its operations abroad. She believes that while the US currently leads in technology, China is rapidly closing the gap and may eventually surpass it.

Official Endorsement

The conference was inaugurated by a speech from Li Qiang, China’s second-ranking official after President Xi Jinping. Premier Li emphasized the country’s commitment to AI technology and urged nations to adopt more open mindsets regarding AI, promoting the free movement of data across borders, free trade of equipment, and connectivity of infrastructure.