The Economist January 22nd 2022 55
BusinessArtificialintelligenceIn search of mastery
“S
outh of theHuai river few geese can
be seen through the rain and snow.”
In classical Chinese this verse is a break
through—not in literature but in comput
ing power. The line, composed by an artifi
cial intelligence (ai) language model called
Wu Dao 2.0, is indistinguishable in metre
and tone from ancient poetry. The lab that
built the software, the Beijing Academy of
Artificial Intelligence (baai), challenges
visitors to its website to distinguish be
tween Wu Dao and fleshandblood 8th
century masters. Anecdotal evidence sug
gests that it fools most testers.
The system, whose name means “en
lightenment” and which can emulate low
lier types of speech, derives its power from
a neural network with 1.75trn variables and
other inputs. gpt3, a similar model built a
year earlier by a team of researchers in San
Francisco and deemed impressive at the
time, considered just 175bn parameters. As
such Wu Dao represents a leap in this type
of machine learning, which tries to emu
late the workings of the human brain. That
delights fans of classical literature—but
not as much as it does the Communist authorities in Beijing, which have put aiat
the heart of China’s technological and eco
nomic master plan first set out in 2017. It
spooks Western governments, which wor
ry about ai’s less benign applications in
areas like surveillance and warfighting.
And it intrigues investors, who spy a huge
business opportunity.
On the face of it, the plan is off to a good
start. The logistics arm of jd.com, an e
commerce group, operates one of the
world’s most advanced automated ware
houses near Shanghai. In May Baidu, Chi
na’s search giant, launched driverless taxis
in Beijing. SenseTime’s “smart city” aimodels—urban surveillance cameras that
track everything from traffic accidents to
illegally parked cars—have been deployed
in more than 100 cities in China and over
seas. China has been deploying more ai
assisted industrial robots than any other
country. And in 2020 it surpassed America
in terms of journal citations in the field.
The five most prominent listed Chinese
aispecialists are collectively worth nearly
$120bn(see chart 1 on next page). The big
gest of them, Hikvision, has a market value
of $60bn. SenseTime, which went public in
Hong Kong on December 30th, is worth
$28bn. Two more are expected to list soon.
In 2020 investments in unlisted aistart
ups reached $10bn, according to the aiIn
dex compiled by researchers at Stanford
University. In its prospectus SenseTime
forecasts that revenues from aiassisted
imagerecognition and computervision
software, the most mature part of the mar
ket, could hit 100bn yuan ($16bn) by 2025,
up from 24bn yuan in 2021 (see chart 2).
Look beyond the headlines or Wu Dao’s
elegant verses, however, and things look
more complicated. Yes, China has made
progress on ai, and even the occasional big
splash like Wu Dao. But it almost certainly
still lags behind America in terms of both
investment and cuttingedge innovation.
In 2020, three years into the master plan,
privately held Chinese aifirms received
less than half as much investment as their
American counterparts. And a lot of the
public and private money pouring into the
sector may end up being wasted.H ONG KONG
China wants to create a world-beating aiindustry. Don’t hold your breath→Alsointhissection
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