The AI China Report #9 🇨🇳
Your executive summary on the geopolitics of AI - Issue #9
Welcome back to The AI China Report. The AI world imploded over the weekend with the abrupt firing of Sam Altman from OpenAI, which you’ve undoubtedly read about in every other AI newsletter. Our favorite summary is here if you want to catch up on the news.
We’re covering the outcomes of the Biden and Xi Jingping meeting in San Francisco last Wednesday and what it means for US-China relations moving forward in the global AI race.
QUOTE OF THE WEEK
“For two large countries like China and the United States, turning their back on each other is not an option. It is unrealistic for one side to remodel the other."
- Chinese President Xi Jinping during his meeting with Biden in San Francisco
ONE BIG STORY: BIDEN & XI MAKE PROGRESS
President Biden and Xi Jinping had their first face-to-face meeting in over a year last Wednesday. It was a productive meeting that yielded agreements to resume military communications, which China cut off last August after Nancy Pelosi’s visit to Taiwan, and open up a presidential hotline between the two leaders for immediate direct communication at the highest level.
Despite reports from both US and Chinese news outlets last week on a potential agreement to limit the use of AI in nuclear weapons, there was no formal agreement made. The conversation on AI was underwhelming. The leaders did discuss AI, releasing a statement after the meeting that they agreed to “address the risks of advanced AI systems and improve AI safety through U.S.-China government talks.” No additional details on the AI discussions have been released.
Biden didn’t back down on US sanctions blocking the export of powerful semiconductor chips used for AI development, saying that they are not likely to change any time soon.
Ian Bremmer, head of global politics research firm Eurasia Group, spoke at the summit warning political leaders in the audience: “The United States and China for now appear to be heading toward a technology cold war. That has not been fixed, that has not been addressed.”
Still, shares of major US tech companies like Nvidia and Google rose late last week signaling optimism from the tech community as a result of the meeting.
There were positive outcomes in non-tech diplomacy. Xi agreed to go after Chinese chemical companies that are exporting fentanyl-related products to the US & Mexico, one of Biden’s top priorities going into the meeting to curb the opioid crisis in America.
Biden pushed for “peace and stability” in Taiwan while Xi agreed that this was important for the short-term, there needed to be a “peaceful resolution” for the reunification of Taiwan as a part of China.
When asked if he still viewed Xi Jinping as a dictator, Biden responded:
"Well, look, he is. I mean, he’s a dictator in the sense that he is a guy who runs a country that is a communist country," Biden said.
Overall, the meeting was fruitful for US-China relations, and a relief for both countries as tensions have been rising over the last year. Developing the best tech will continue to be a top priority for both countries as we head into an AI cold war, but for now, the communication lines are open and tensions have slightly diffused.
NEWS ROUNDUP
Altman is out at OpenAI, which exploded over the weekend when CEO Sam Altman was abruptly fired by the board over a video call, prompting other senior executives and key employees to resign. It was announced today that Altman would be joining Microsoft (OpenAI’s biggest investor). You can read a summary of the weekend drama here.
China's Ministry of State Security warned of the national security risks posed by artificial intelligence, including data leaks, cyberattacks, and data manipulation, calling for tighter laws and global governance. (SCMP)
Chinese tech giants are now openly admitting that US semiconductor sanctions are hurting them. Both Alibaba and Tencent issued statements that sanctions were significantly disrupting business operations, with Alibaba abandoning a plan to spin off its cloud computing division into a separate entity. (ET)
Meta has introduced a new policy requiring advertisers to disclose the use of AI-generated or altered content in ads related to politics, social issues, and elections on Facebook and Instagram. The policy, effective next year, mandates disclosure for ads with "realistic" digital alterations but exempts minor edits like cropping or color correction, and will include flagging such ads in Meta's database. (The Verge)
Robin Li Yanhong, co-founder of Baidu, criticized the excessive development of large language models (LLMs) in China, calling it a "huge waste of resources" and urging a focus on developing practical AI applications. At the X-Lake Forum in Shenzhen, he highlighted that while China has launched 238 LLMs, there are very few successful AI-native applications familiar to the public. Li emphasized the need for policy support in creating more AI-native applications. (SCMP)
China announced the establishment of the National Data Administration (NDA). Beijing officials stated that the growth of AI prompted the creation of the agency. The agency will act as a coordinator between government departments and is tasked with creating standard and blueprints for data sharing and the “digitalization” of public services. (SCMP)
DATA TO KNOW
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