The effect of chip sanctions was to create a Chinese chip industry which now controls the low-end of the chip market, and which is coming on strong. The effect of Huawei sanctions was to make Huawei stronger, end Android support and gut Apple’s market share in China.
Now we have this brilliance from “Open AI”, presumably at US government behest:
Chinese attempts to lure domestic developers away from OpenAI – considered the market leader in generative AI – will now be a lot easier, after OpenAI notified its users in China that they would be blocked from using its tools and services from 9 July.
“We are taking additional steps to block API traffic from regions where we do not support access to OpenAI’s services,” an OpenAI spokesperson told Bloomberg last month.
OpenAI has not elaborated about the reason for its sudden decision. ChatGPT is already blocked in China by the government’s firewall, but until this week developers could use virtual private networks to access OpenAI’s tools in order to fine-tune their own generative AI applications and benchmark their own research. Now the block is coming from the US side.
Generative AI isn’t like lithography machines. It takes vast amounts of data and a bunch of coders and scientists, and China has plenty of both. In fact, it’s limited mostly by access to data: social media, websites, books, art work and so on.
There’s no particular reason to think China can’t catch up and exceed in generative AI.
It’s interesting, though, that China’s government was already blocking Chat-GPT. Clear protectionism meant to help the internal market. China’s decoupling as much as America is.
My guess is that in five to ten years the most advanced generative AI will be in China. Just as Tesla was once the world leader in electric-vehicles, then Chinese companies ate its lunch (you can get a decent EV for 14K$ in China and at each price point the quality is better than Tesla), Chinese AI companies will out-perform Open AI.
It’s China’s world now. We just live in it.
Daniel Lynch
Meh, AI is not new, and is not going to revolutionize the world. It is massively overhyped.
Humans have been programming computers to make decisions or create things or do things for as long as there have been computers. That’s all fine and dandy, but it’s not new, it’s merely incremental.
AI would be great if it took over drudge work, but instead much AI seems aimed at taking over activities that humans enjoy. I.e., if someone develops an AI that writes essays on how the world works, will Ian benefit from that? Or would Ian benefit more from an AI that cleaned his bathroom and cooked his dinner while Ian wrote essays on how the world works?
Sure, China is rising while the West seems to be falling. Or maybe the West was never all that special to begin with and we’re just now realizing it?
david lamy
The U.S. had a period of affluence at the end of WWII. It took advantage of that period of time to hone its propaganda and self-promotion skills. It did not keep its industry.
Industrial production talks and our bullshit walks. I expect the previous sentence to become literal.
Mark Pontin
Ian W: ‘Just as Tesla was once the world leader in electric-vehicles, then Chinese companies ate its lunch … Chinese AI companies will out-perform Open AI.’
Sure. The question is: How much will AI really matter?
It’ll matter some. But within the 5-10 year time frame almost certainly nowhere much as is hyped, unless someone somewhere has some amazing breakthrough in an area that’s not generative AI as currently constituted.
See forex this Goldman-Sachs market report ‘Gen AI: Too Much Spend, Too Little Benefit.’
https://www.goldmansachs.com/intelligence/pages/gs-research/gen-ai-too-much-spend-too-little-benefit/report.pdf
The interviews with Daron Acemoglu, MIT economist, and Jim Covello, a GS tech analyst, are worth glancing at. Acemoglu sees AI increasing US productivity by only 0.9% over the next decade. Covello is even more down on it because of the massive energy spend.
Indeed, Altman has gone in as an investor on Oklo Nuclear, a would-be SMR company.
https://www.nbcnews.com/tech/tech-news/nuclear-power-oklo-sam-altman-ai-energy-rcna139094
‘The AI industry is pushing a nuclear power revival — partly to fuel itself’
As investment opportunity and change factor, AI’s impact is likeliest to be in the realms of energy — as in small modular reactors — and Nvidia-style GPUs.
StewartM
(you can get a decent EV for 14K$ in China and at each price point the quality is better than Tesla)
Well, when your company’s mantra is “never let the stock price fall” and that trumps making actual better products, what do you expect? China, by contrast, has show itself willing to crush its own housing market, for the benefit of everyone, which our economists mis-read as a sign of impending doom.
Western economics is fixated on money, not wealth, as you have said, and forgotten that making goods and delivering true services (the ones that customers want, not what are forced on them by rentier capitalists) underlies it all.
Oakchair
List of the wonderous things AI is doing for humanity:
-Telling you what the oligarchs want you to know
-Helping corporations sell you shit you don’t need
-Write clunky papers of middle school quality
-Help corporations sell product by calling it “AI”
-Making it easier to spy on the populace
How many hours of work would it be worth to have
an AI dishwasher that learns from each wash? What will it learn about you, and then sell to the highest bidder?
Purple Library Guy
My first takeaway was “OMG, China will be shut out of the ‘stupid AI tricks’ market!”
No doubt China will develop its own AI stuff, and maybe it will be some use for something, but they can only benefit from being firewalled away from the hype so they’re less likely to go all in on all the places AI is being used where it actively makes things worse.
Senator-Elect
OMG, this whole article and all the comments are great. Thanks for the perceptive analysis!
Someone might also note that the reason AI is targeting symbol manipulation tasks is because its developers are symbol manipulators, not labourers. Write what you know, as they say.