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The Cold War of Artificial Intelligence

Updated: Oct 31, 2022

Image credits: the Intercept


The 21st Century will be the century of technology. We will have more technological advancement in the next ten years than we have had in the last 50 years. The driver of this rapid technology change is Artificial Intelligence. The command and control of Artificial Intelligence will determine who controls the 21st century, and the undeclared war between the two most significant powers on the face of the earth has already begun. Data drive’s this race. The oil for Artificial Intelligence is data. The more data one has, the more powerful and faster the AI gets. In the race of data collection, China’s mega surveillance system is already beating the American system.

Since the Snowden leaks, Americans have been more restricted in their approach to data collection. Data leads to faster machine learning, but it is not all about data. The other factor in AI is speedier innovation and quality. This factor is where the race gets complex for the Chinese, but they are catching up. America’s big prestigious institutions like MIT, Harvard, and Stanford provide the nation with some of the world’s finest brains. This, mixed with outside talent pouring in from India and European countries, has given the American silicon-valley an edge, but this dominance is fading.

Many Chinese students learn from American universities and return to China with their expertise and find Shenzhen and Shanghai more lucrative than Bayside California for cheaper and accessible materials in the former. The race is significantly shifting. The primary role of the government of China is critical too. Chinese have made it clear that Artificial Intelligence Supremacy is what they strive to achieve. In the 21st century, guns won’t be as lethal as big data and machines are with higher thinking capacity. The race has just started.


There are many places where Americans remain the Global leaders. The biggest of them all is Chip development. Americans have a colossal semiconductor development power. Although they do lack the raw materials and outsource the manufacturing, what they are good at is developing fast chips that are very powerful and fast. Companies like Intel, Apple and Qualcomm have clear dominance in Chip development. More than a majority of chips are from these companies. These small nano-sized chips are trillions of times powerful. They carry out activities from 5G, processing to computing for the majority of electronic devices nowadays. Without semiconductors, devices are lifeless. Apple’s recent M1 chip is faster than many powerful Intel processors and is smaller than many. These Chips are where China is still trying to gain ground.

China has set up commissions and is spending billions of dollars to create a semiconductor manufacturing and development sector, but there has been no substantial result. The semiconductor industry is seen as strategic in today’s world, where the majority of trade is supported by online means, and technology is the most significant contributor to rapid industrialisation. These Chips have AI support and processing in them. Many companies are trying to create an ecosystem of all devices with these AI chips. But there are other areas where China has had a Great Leap Forward and possibly overtook the USA more than ten times. These areas are the surveillance system, online payments market and cheap 5G manufacturing.


The biggest driver of AI and data will be faster connectivity which 5G brings in. Chinese tech giant Huawei has already started rolling out its cheap 5G modem and is also getting into agreements with many nations in Europe, Africa, and Asia to manufacture and set up their 5G infrastructure. Many of these deals came in review after the American sanctions and the pandemic. No company in the market provides quality and cheap 5G modems in a faster time than Huawei. This is because they have cheaper labour, an intelligent on-campus crowd, manufacturing infrastructure, fast delivery infrastructure and raw material availability. All this is what silicon valley lacks.

The American government has to provide manufacturers like Intel and Qualcomm to win the 5G race- which it is already losing and one can also say has already lost. 5G will control faster AI devices and lead to more data learning, but if a company like Huawei manages the 5G infrastructure worldwide, America and its allies are in serious trouble. AI will be 5G driven, but also because Huawei has links with the Chinese government and the National Security Laws of China require every company in China to comply with the government’s demands if the need arises. This can be detrimental to the security of the West and the world. The kill switch of the world’s entire modern economic structure can be in Beijing under the desk of CCP if a conflict between the powers arises. This is not an exaggeration; tech and security experts have raised alarm bells regarding this. Moving on from 5G are AI-driven Drones, Robots and Self-driving cars.


The Chinese in the area of drones are slaughtering the Americans. Chinese drone manufacturer Da-Jiang Innovations (DJI) owns more than 70% of the global consumer drone market share. Their drones are cheap, quality made and premium too. Many drones that they manufacture are now coming with AI capabilities. Drones are not only going to be used for photography and videography, but their use is extensive from surveillance, delivery, medical assistance, security, facial recognition and, in the future, even commuting. This is a race where the Americans have been defeated in battle badly. Cheaper manufacturing and availability of resources is a significant factor in this lead for the Chinese.

The other field is Self-driving cars - this industry of the future would dominate the auto industry for a long time. AI is going to power these cars, which are going to be on their own. Although the race gets tight as companies like Tesla, Google, Apple, and Facebook are some of the leaders, the Chinese companies like Didi, Pony.AI, Baidu’s Apollo and Auto X are catching up fast. Many Chinese cities have already started to bring regulations and make infrastructure Self-driving friendly.


The Chinese are world leaders in the arena of Facial Recognition. Their surveillance state infrastructure has given them the big data that they need to drive their AI machine. AI learns more when fed more data, and with a population of more than five times than that of the United States, they already have more data than America to run their machine learning systems perfectly. There are also constitutional restrictions in democratic states like the United States and the Western nations. Still, there are no restrictions on the extent to which a state can interfere with an individual’s life in China. Facial Recognition will be important in the future for Security, Social credit, but it is also needed for smooth online payments and for oiling the AI machine. This is a race where the Americans have lagged far behind the Chinese, and overtaking the Chinese looks way too complicated.

FINTECH is another AI-driven thing. This financial technology is the online mode of payment, lending and receiving. China is leading FINTECH. FINTECH, when mixed with AI, will change the international economic and financial structure. Things like Robo-asset managers are the things of the future that are being integrated into FINTECH systems. Chinese companies like Ali Baba and tech giant Tencent’s WeChat have become FINTECH goliaths. Alipay by ANT GROUP saw more than 15 trillion dollar transactions in 2019. This number shows that FINTECH is the future of finance and is enormous. The Chinese government is also going all-in with the digital Yuan. If credit and debit cards were dominant in the last 20 years, online lending and paying would be prevalent in the future. The one who dominates the FINTECH now dominates the future of finance in the 21st century, and Alipay and WeChat are defeating Apple pay. Unlike the Chinese, America does not have both the infrastructure and population to topple them in FINTECH for now.

Image credits: Sunidhi Illustrations


The Chinese may be winning in the games of the 21st century like Facial recognition, 5G, and now even the race for 6G has started and Consumer drone manufacturing, but we need to be clear on the fact that there is a long way to go. The Americans on their military AI capabilities are still long ahead of the Chinese and still retain their crown of the top spotter in the sector of innovation. The new Biden administration has shown a bipartisan consensus in the United States to be in tough competition with China and prevail. Americans are bringing in plans like buying and building in America and increasing the Research and Development spending in the United States. On the other hand, the Chinese are not ready to back down either.

The Chinese government is spending billions in R&D, space, the semiconductor industry, FINTECH, facial recognition and the drone industry. The Cold War between the two giants has just started to gain heat. The race is not about winning against each other, but about who wins and commands the future.




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