The AI China Report #12 🇨🇳
Your executive summary on the geopolitics of AI - Issue #12
Last week was busy for AI and geopolitics. The UAE picked a side in the global AI race, the House of Representatives proposed new rules for tech exports to China, and the EU reached agreement on the Artificial Intelligence Act. Let’s dive in.
QUOTE OF THE WEEK
“AI and national security are very important together. … In order to maintain U.S. leadership in AI, we must provide robust investments to grow the AI industry, including more funding for research, development and procurement of AI technologies.”
- Senate Majority Leader Chuck Schumer at the 8th bipartisan AI Insight Forum
ONE BIG STORY: G42 HAS PICKED A SIDE
G42, the leading AI company out of the Middle East, that has been working with both Chinese and American tech giants, said it is cutting ties with Chinese tech giant Huawei. The move comes after The New York Times report on US government concerns about G42’s relationships with the Chinese government and major tech companies.
G42 CEO Peng Xiao told the Financial Times “For better or worse, as a commercial company, we are in a position where we have to make a choice. We cannot work with both sides. We can’t.”
G42 will be phasing out 5G infrastructure, servers, and data center tools from Huawei, which currently sit at the core of its infrastructure, in favor of US-made tech. Xiao also made it clear that G42 would work closely with the US to comply with export regulations on AI chips. Additionally, he emphasized that G42 never had “deep AI research relationships” with Chinese companies.
However, industry leaders think that G42 completely severing ties with Chinese partners seems very unlikely. G42’s technology developments and investments in AI are seen by many UAE officials as the country’s future, potentially becoming one of its primary exports as they look to diversify from an oil-driven economy.
G42, despite severing its connections with Huawei, continues to maintain partnerships with other significant Chinese entities. These include Sinopharm, the pharmaceutical company responsible for manufacturing and distributing the Covid vaccine in the UAE, and BGI, a genomics research organization that collaborated with G42 in establishing Covid detection centers. Subsidiaries of BGI were put on a Commerce Department blacklist by the Biden administration earlier this year for “posing a significant risk of contributing to monitoring and surveillance by the government of China.”
While G42 may be cozying up to the US now to get its hands on the best AI chips, the UAE doesn’t want to put itself in a position where it is overly reliant on the US. It has been persistent in diversifying its technology partners, recently signing a deal with Swedish telecom giant Ericsson.
This move reflects a broader strategy by the UAE to reduce reliance on any one country. Loyalty shouldn’t be expected. China is the second biggest playing in the global AI arena. It would be difficult for any nation looking to become a leader in AI to do so without support from China’s supply chain. While G42 has chosen a side today, expect alliances to shift over time as the UAE aims to bolster its position as a global power.
NEWS ROUNDUP
The EU reached a provisional agreement on the AI Act - a legal framework limiting how AI can be used across industries that would identify risk factors for AI frameworks handling sensitive data. The agreement will require AI-generated content, deepfakes, and chatbots to be labeled so that people know when they are interacting with AI-generated content. You can read the full press release here.
The Biden administration ordered Prosperity7, a venture capital subsidiary of Saudi Aramco (the national oil company of Saudi Arabia) to sell its shares of US AI startup Rain AI after a review by the US Committee of Foreign Investment. The move signals that the Biden administration is still operating with caution when it comes to the UAE. (Bloomberg)
The U.S. House of Representatives released a report on Thursday urging immediate action to stop the transfer of sensitive U.S. technology to China, recommending stricter enforcement and expansion of existing rules, including blocking US cloud service providers from selling to Chinese companies on the Commerce Departments trade restriction list. (Reuters)
Microsoft President Brad Smith met with China's Commerce Minister Wang Wentao to discuss topics like artificial intelligence and trade relations, signaling China's interest in maintaining positive relations with American businesses amidst ongoing U.S.-China tensions. (CNBC)
China has unveiled a new supercomputing system, "Tianhe Xingyi," which surpasses the capabilities of its predecessor Tianhe-2, which was ranked the fastest supercomputer from 2013-2016. (Reuters)
The Beijing Internet Court made a groundbreaking ruling recognizing the copyright of an AI-generated image, emphasizing the human creator's original intellectual input. This decision marks a significant step in defining copyright laws for AI-generated content and sets a precedent in the legal treatment of AI content in China. (SCMP)
Nvidia CEO Jensen Huang said his company is working “very closely” with the US government as they develop new AI chips for the China market to comply with October’s new export restrictions. (Reuters)
AI is helping Chinese online literature reach a wider audience. Last year China’s online literature industry saw a 40% jump in overseas sales thanks to AI tools rapidly translating novels into different languages. (SCMP)
DATA TO USE
The US and China are home to more than half of all the AI companies in the world.
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