By Oren Etzioni
Trump and Xi are talking – but the US and China are facing an AI collision
President Trump spoke on the phone with his Chinese counterpart Xi Jinping on Monday, November 24th and later posted on Truth Social: “Our relationship with China is extremely strong!” The warm feelings from Washington followed as the two leaders recently held a productive meeting in Korea and scheduled several more meetings in the coming year.
But beneath the surface, there is a rivalry between the two countries over the most important technology of the 21st century: artificial intelligence.
To understand the rivalry, consider a recent announcement from the U.S. Department of Justice: On November 20, two Americans and two Chinese nationals were charged with conspiring to illegally export approximately 400 high-performance graphics processing units (GPUs) to China. Federal law requires obtaining a license to export these technologies that can be used to develop and strengthen AI.
The co-conspirators did not have a license – and never applied for one. In fact, they lied about the destination of the GPUs during shipping. And for their services, they received a whopping $3.89 million in remittances from China.
The background to this smuggling is that Beijing has set the goal of China becoming the world leader in artificial intelligence by 2030. And it has made significant progress. “China is the world leader in AI research publications and is on par with the US in generative AI,” emphasizes the Information Technology and Innovation Foundation. It adds that China is “making rapid progress in AI research and application, challenging the United States’ dominance in this critical area.”
This progress is due to massive investments by the Chinese government in the 21st century. From 2000 to 2023, venture capital funds affiliated with the Chinese government made $184 billion in investments in China-based companies in the AI sector, according to a study published last year by professors at Harvard, MIT and Oxford.
In an amusing coincidence of timing, the day after the smuggling indictment, Huawei – a leading Chinese technology company – announced a tool called Flex:ai that supposedly “improves the use of artificial intelligence-based chipsets.” The announcement also included the obligatory nod to corporate civic engagement, saying that the technology will “accelerate the democratization of AI.” But the company buried the lede, as they say in journalism, saving the most important detail – strangely attributed to “sources” – for the last sentence: “The new software tool will help China develop an analog AI chip that is 1,000 times faster than Nvidia’s chips.”
Huawei is not just any company. It is the world’s largest manufacturer of telecommunications equipment. And it was also involved in the kind of grave-digging that led to the recent indictment. In 2020, the U.S. Department of Justice filed charges against the company and four of its subsidiaries. The charges centered primarily on attempts to steal trade secrets from U.S. companies.
The company used a variety of tactics, but perhaps the most brazen of all was that it paid employees bonuses if they obtained confidential information from rival companies. And when U.S. law enforcement investigated Huawei, the company told its employees not to comply.
Suffice it to say, there are good reasons not to trust the Chinese government and its proxy companies like Huawei.
The Trump administration recognizes the threat. In late June, it wisely approved a merger between two American companies that compete with Huawei: Hewlett Packard Enterprises and Juniper Networks. A senior U.S. security official told Axios: “Given significant national security concerns, an agreement … serves the interests of the United States by strengthening domestic capabilities and is critical to countering Huawei and China.” The official said blocking the deal would have “hindered American companies and empowered Chinese competitors.”
Given the economic importance of AI to countries around the world, the competition between the United States and China is unfortunate. But it’s also probably inevitable. China is not abiding by the rules that are supposed to govern the global economy. And it is using AI, the Justice Department says, to strengthen its military, test weapons of mass destruction and increase surveillance.
Sometime next year, President Trump is scheduled to pay a state visit to Beijing and Xi is scheduled to come to Washington. They’re destined to focus on the cooperative parts of the relationship, but you don’t have to ask ChatGPT to see that the two countries are on a collision course when it comes to AI. Buckle up.
Oren Etzioni is Professor Emeritus of Computer Science at the University of Washington. He is the founding CEO of the Allen Institute for Artificial Intelligence (AI2), a 501(c)(3) nonprofit scientific research institute founded by the late Microsoft co-founder and philanthropist Paul Allen.
This article was originally published by RealClearDefense and made available via RealClearWire.
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