AI Industry Review in 2024 Part Two: The AI Battle: US Leadership vs. China's Ascent

by Anthony Law    2024-12-15

In today's rapidly advancing technological landscape, artificial intelligence (AI) undoubtedly stands out as one of the most prominent fields. As 2024 comes to a close, we embark on a series of reviews of this year's AI industry. This is the second of three articles focusing on the comparative development of AI in the United States and China.

US AI Research: A Dual Engine of Funding and Innovation

• Increased Government Investment: In the 2024 fiscal year, the US allocated $3.1 billion for artificial intelligence research, with $1.9 billion dedicated to "core AI" research and $1.2 billion for "cross-disciplinary AI" research.
• Outstanding Achievements from Leading Institutions: OpenAI released the Sora video generation model, showcasing significant advancements in AI's ability to understand real-world scenarios.
• Close Integration of Academic Research and Industry: The collaboration between Google DeepMind and a team from Stanford University resulted in the Mobile ALOHA robot, capable of cooking and performing household tasks, demonstrating the close ties between academic research and practical applications.

China's AI Innovation: Comprehensive Breakthroughs from Vertical Fields to Fundamental Research

• Innovation in Vertical Domain Models: Fudan University and the Shanghai Academy of Science and Technology jointly launched a series of groundbreaking vertical domain scientific models, including Planet Intelligence @ Climate and various Nuwa models that cover climate science, drug development, genomic research, and more.
• Deepening Fundamental Research: Continuous in-depth research in traditional AI fields like natural language processing and computer vision has led to achievements that meet international standards, providing technical support for AI product innovation.

Product Applications: Who is Leading the Trend?

• Video Generation Field: OpenAI's Sora can generate a seamless 60-second video, showcasing immense potential in film production and education by providing creative visualization for filmmakers and intuitive knowledge presentation for educators.
• Humanoid Robotics: Tesla's Optimus demonstrated advancements in "limb coordination," while NVIDIA's Project GR00T aims to enhance the "foundational logic capabilities" of humanoid robots.

US Chip Export Restrictions: How China Responds to Challenges

In 2024, the US decided to restrict exports of AI chips primarily due to national security concerns regarding China's growing technological capabilities in artificial intelligence. This decision stemmed from worries within the US government about China's rapid advancements in high-tech fields, with fears that these technologies could be used for military purposes. Additionally, there were concerns that chips might be resold to China through other countries, prompting stricter export controls.

China's Countermeasures: A Multi-Faceted Approach to Export Restrictions

In response to these restrictions, China implemented several strategies to reduce reliance on US high-end chips and enhance its independent research capabilities:

• Strengthening Independent R&D Investment: Domestic companies such as the Chinese Academy of Sciences' "Loongson" and Huawei's "Ascend" increased their R&D investments to advance chip technology and narrow the gap with international standards.
• Finding Alternative Suppliers and Domestic Substitutes: Actively seeking chip suppliers not affected by US export restrictions while accelerating domestic chip R&D and production to increase market share.
• Policy Support and Industry Collaboration: The government introduced a series of policies to support local chip industry development, including financial assistance and tax incentives, while promoting collaborative innovation among industry, academia, and research institutions to enhance chip R&D efficiency.

Visible Results: How China is Narrowing the Gap

While China still lags behind the US in high-end chip technology, these countermeasures have begun to show results. As independent R&D capabilities improve, companies like Huawei and the Chinese Academy of Sciences are gradually closing the technological gap and gaining market share domestically. Moreover, China is actively seeking cooperation with other countries to stabilize its semiconductor supply chain. Despite external pressures, China is striving for technological self-sufficiency through a multi-faceted strategy to strengthen its position in global tech competition.

Comparing US-China AI Applications and Business Models

• Leading Commercialization of Large Models: OpenAI's GPT series continues to evolve; after the release of ChatGPT 4.0, its advantages in natural language processing have expanded further. It is widely applied in text generation, dialogue systems, and has achieved breakthroughs in multimodal tasks such as speech and image generation.
• Diverse Application Scenarios: Beyond traditional tech companies, AI technology in the US is increasingly applied across finance, healthcare, law, and other industries. For example, AI is utilized for risk assessment and investment decisions in finance; in healthcare, it aids diagnostics and drug development.

Effectiveness Comparison: How China is Catching Up

In the US, OpenAI's ChatGPT has gained significant user acceptance globally, becoming one of the most visited AI applications. Its success underscores the effectiveness of large model commercialization and strong market demand. In contrast, while China's AI industry demonstrates vibrant application scenarios, it still faces challenges regarding slower technological iteration speeds.

Although numerous innovative applications have been launched by Chinese companies, their market penetration rates and user acceptance have yet to reach comparable levels. Recent data indicates that while China's number of AI unicorns has grown rapidly, its influence in international markets still requires improvement.

Assessing Market Data on US-China AI Penetration

In terms of published research papers, statistics indicate that as of 2024, the US continues to dominate with around 35% of global publications related to AI. Meanwhile, China's contributions are also significant at approximately 28%, particularly excelling in application-oriented research within sectors like manufacturing and agriculture.

Regarding researcher numbers, China boasts over 500,000 individuals engaged in AI research and development due to its large population base. In contrast, the US has about 250,000 researchers but includes many top-tier experts who lead core directions in global AI research.

From a market size perspective, China's domestic AI market has surpassed several hundred billion dollars by leveraging its vast population size and rapidly developing digital economy. It enjoys a broad user base in consumer-level applications such as smart voice assistants.

The US also maintains a substantial market size estimated at several hundred billion dollars but dominates in enterprise-level applications like intelligent decision-making systems.Investment totals indicate that the US maintained high levels of investment in AI during 2024 with over $50 billion directed towards venture capital and strategic corporate investments across various sectors including chip development and foundational algorithm research.

Meanwhile, China's total investment reached approximately $40 billion focusing on expanding application scenarios and tackling key technological challenges.

In conclusion, while the US excels in high-end research leadership and enterprise-level applications within AI markets, China showcases remarkable vitality regarding human resources as well as consumer market scale.

Risks and Opportunities in AI Development for Both Countries

The US faces numerous risks related to ethical considerations and regulatory frameworks as AI technologies permeate various societal levels; issues such as misinformation dissemination and privacy violations are increasingly prominent.

Consequently, there are growing calls for regulatory measures across American society—striking a balance between fostering innovation while implementing effective policies poses a significant challenge.

However, opportunities abound; its robust research ecosystem continues attracting top global talent—Silicon Valley remains a hub for elite minds driving breakthroughs forward. Furthermore, America's dominant position within global tech industries grants it considerable influence over international standards setting for AI development.

China also encounters risks; critical technological bottlenecks such as advanced chip manufacturing techniques remain unresolved—constraining high-end industrial growth prospects.

Additionally, data security concerns arise amidst explosive data volume increases—ensuring compliance during data collection processes demands urgent attention.

Yet opportunities are substantial; China's vast domestic market provides fertile ground for iterative advancements alongside business model innovations—companies can swiftly adapt based on feedback received from consumers.

Moreover, China leads globally within emerging application scenarios like mobile payments combined with AI technologies or smart city initiatives—these developments could serve as launching pads toward establishing competitive clusters capable of achieving rapid advancements within global landscapes.

Conclusion

In summary, during the 2024 US-China AI showdown, America retains its leading position in foundational research while launching influential products within large models and generative AI domains. Conversely, China demonstrates strong vitality alongside potential breakthroughs across specific industry applications despite challenges posed by export restrictions impacting high-end chips—these constraints prompt accelerated efforts toward self-reliance through innovation initiatives overall reflecting an intense competitive landscape characterized by both nations’ unique strengths amid evolving opportunities ahead.