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China's Plan for World Domination in AI Isn't So Crazy After All

  • China has key AI ingredient: a vast well of government data
  • Big companies, startups, nation plowing money into field

Xu Li’s software scans more faces than maybe any on earth. He has the Chinese police to thank.

Xu runs SenseTime Group Ltd., which makes artificial intelligence software that recognizes objects and faces, and counts China’s biggest smartphone brands as customers. In July, SenseTime raised $410 million, a sum it said was the largest single round for an AI company to date. That feat may soon be topped, probably by another startup in China.

The nation is betting heavily on AI. Money is pouring in from China’s investors, big internet companies and its government, driven by a belief that the technology can remake entire sectors of the economy, as well as national security. A similar effort is underway in the U.S., but in this new global arms race, China has three advantages: A vast pool of engineers to write the software, a massive base of 751 million internet users to test it on, and most importantly staunch government support that includes handing over gobs of citizens’ data –- something that makes Western officials squirm.

Data is key because that’s how AI engineers train and test algorithms to adapt and learn new skills without human programmers intervening. SenseTime built its video analysis software using footage from the police force in Guangzhou, a southern city of 14 million. Most Chinese mega-cities have set up institutes for AI that include some data-sharing arrangements, according to Xu. "In China, the population is huge, so it’s much easier to collect the data for whatever use-scenarios you need," he said. "When we talk about data resources, really the largest data source is the government."

This flood of data will only rise. China just enshrined the pursuit of AI into a kind of national technology constitution. A state plan, issued in July, calls for the nation to become the leader in the industry by 2030. Five years from then, the government claims the AI industry will create 400 billion yuan ($59 billion) in economic activity. China’s tech titans, particularly Tencent Holdings Ltd. and Baidu Inc., are getting on board. And the science is showing up in unexpected places: Shanghai’s courts are testing an AI system that scours criminal cases to judge the validity of evidence used by all sides, ostensibly to prevent wrongful prosecutions.

“Data access has always been easier in China, but now people in government, organizations and companies have recognized the value of data,” said Jiebo Luo, a computer science professor at the University of Rochester who has researched China. “As long as they can find someone they trust, they are willing to share it.”

The AI-MATHS machine took the math portion of China’s annual university entrance exam in Chengdu.

Every major U.S. tech company is investing deeply as well. Machine learning -- a type of AI that lets driverless cars see, chatbots speak and machines parse scores of financial information -- demands computers learn from raw data instead of hand-cranked programming. Getting...