“I don’t think any US government official expects to keep China from developing AI—they are doing quite well—but they don’t want companies like Google or Microsoft helping them,” says James Lewis, senior vice president of the Center for Strategic & International Studies, a Washington DC think tank.Lewis says US companies might respond to the new export controls by looking to shrink their operations in China. “If you start to see Microsoft and Google beginning to retrench, then you’ll know which way we are going,” he says.
AI has become a lightning rod for economic and political tension between the US and China over the past few years. The field is racing ahead rapidly and there are big economic benefits and strategic advantages to be gained on both sides. China’s ambitious national AI plan, announced in July 2017, led local governments and businesses to pour billions into AI projects. Both countries are working hard to harness the technology for military ends .The export rules are also the latest spanner to be thrown into the machinery of US-Chinese relations. It follows restrictions placed on business dealings with Chinese AI companies , tighter visa vetting for Chinese researchers, and public pushback over US companies acquiescing to Beijing’s demands.
Google established an AI research center in Beijing in 2017, noting at the time that a significant number of AI research landmarks and papers now came from China. The company said the team there would do basic AI research, organize conferences, and collaborate with Chinese researchers. “China is home to many of the world's top experts in artificial intelligence (AI) and machine learning,” reads the blog post announcing the lab.The decision seemed especially significant given that Google pulled its search engine from the country in 2010 in protest over government censorship and spying. This year, Google was forced to scale back efforts to build a modified version of its search product suitable for the Chinese market amid protest from employees, politicians, and the public. It is unclear how many people currently work at Google’s lab in Beijing.
Other US tech companies, like Facebook, are effectively blocked from operating in China, and have watched home-grown rivals, like the mobile app WeChat, grow to dominate the market in recent years. Efforts to replicate and replace US technology are now intensifying as the US government seeks to block technology transfer. In December, for instance, China’s central government reportedly ordered officials to remove foreign PCs and software from their offices within three years.Lewis says companies that have established a foothold in China may be forced to accept that the tech superpowers are now decoupling. “Someone at one of these companies told me they have maybe a seven-year lifespan left in China,” he says. “Although a lot depends on how quickly the Chinese can build competing products.”
US outposts in China are more than just a symbol of cooperation. Bill Gates recognized China’s potential as a research hub in 1998, establishing the first big US research lab there, Microsoft Research Asia. The lab quickly proved its worth, and over time it has contributed to key commercial projects including Windows, Office, Xbox and Bing. The lab was also quick to adopt advances in AI from the US, demonstrating a near real-time English to Chinese translation system in 2012. Apple also has several research facilities in China. Amazon established a research lab in Shenzhen, a manufacturing powerhouse in southern, China this year.