Digital Ventures

Back to blog

Measure the Potential for AI: China moving alongside the USA as leaders

DIGITAL VENTURES March 07, 2019 4:35 PM


Digital Ventures continues to share stories about Artificial Intelligence development as it is a deep technology that will surely affect our lives in the near future. Countries that have outstanding AI R&D is the USA and China. All eyes are on both countries’ comparable AI development plan as both countries are competing to become the world leader in this industry. However, if we compare the USA and China’s approach, we will observe interesting differences. Today, Digital Ventures will compare the recent approach and potential for AI development in the two countries.



Overview of AI research in China and the USA

Before going into details, let us look at the overview of AI development in both countries from the recent 2018 investment and talents data.

  • Investments from the USA extend broader. CB Insights reports that for the 2018 global AI startup investment, 30% is from the USA while 10% is from China.
  • China’s investment value is higher. In terms of AI investment value, China shares 48% while 38% belongs to the USA.
  • Few AI talents with more in the USA. In terms of talents, a 2018 Tsinghua University survey states that the USA houses 28,536 talents with China has 18,232. However, when compared to both country’s current urgency to develop the industry, the number of talents is clearly below the market demand. 



China’s outstanding factors

In less than a decade, China moved from being an outsource manufacturer to an innovation producer and the AI achievements didn’t take long. Let us review the factors contributing to China’s journey to the top.

  • China’s researchers are in the industrial and business sector. China’s innovation derives from the challenge to seek solutions for the business sector. This process fits the massive Chinese market that uses market competition to encourage new solutions. Surely, the education sector plays a part in in-depth research, but the effects are incomparable to what the business sector has accomplished during these couple of years.
  • Regulations that fit technology research. Both China’s economy and technology policies support AI development. Examples are the Made in China 2025, Science and Technology Innovation 2030, and financial support by that the government at 30 billion USD.
  • Late mover advantage. China only began AI development a decade ago which is slower than in the USA that began in the 80s. Yet, a late mover is quite advantageous as pioneers have completed research that can be further explored, and technology has been familiarized by the market and trendsetters. Therefore, China focuses on applied rather than in-depth research and rapidly stepped up alongside a pioneer like the USA.


USA’s outstanding factors

The USA is a leader in various sectors, especially technology. This is a result of long R&D support. In terms of AI, the USA is among the first developers of the world. Aside from the timing, what other factors contribute to the USA’s position as a world leader in this industry. 

  • More top research talents. The USA has always been an innovation leader and they have nurtured numerous top talents. Kai-Fu Lee, AI master, wrote in the AI Superpower that in 1,000 top research experts, 60% is from the USA.
  • USA has in-depth AI technology. Aside from the great number of researchers, the USA’s tech development derives from the education sector, thus, there is more in-depth research. The 2017 US-China AI VC Report by IT Juzi and Tencent shows that the USA has more in-depth AI then China. They have a total of over 600 startups and enterprises who develop Natural Language Process, machine learning application, and computer vision while China only has around 300 of such startups.
  • A world-class, solid ecosystem. Another factor favoring the USA in the game of AI research is the long-standing, strong and complete ecosystem. An example is at the Silicon Valley where leading organizations and world-class education is present. Although government support is incomparable to China, a strong ecosystem can interestingly encourage R&D.


The world wins regardless of the leader

While two countries are determined to become the AI leader and other countries are rooting for the winner. Kai-Fu Lee, leading AI expert and venture capitalist, shares that China and USA’s AI development will contribute to the rapid growth and widespread of this technology. This is because one country is focusing on applications in businesses while the other is into in-depth research for new possibilities. Thus, regardless of the leader, the world will have new AI solutions, and this will surely be beneficial.

It may be too soon to say who is the AI leader at the moment, but we can observe the uniqueness in AI development from two powerful players. Digital Ventures has more trending stories about deep tech and finance, follow us for more updates.

Thank you for the information from,,, and