Comparing AI in China and the US

Tonya Hall sits down with Kai-Fu Lee, CEO of Sinovation Ventures, to talk about what artificial intelligence can and can't do.

Comparing AI in China and the US

Tonya Hall interviews executives for our sister site ZDNet, and we're running a selection of some of her most viewed videos. The following is an edited transcript of her conversation with Doctor Kai-Fu Lee, Chairman and CEO of Sinovation Ventures, and author of AI Superpowers. To watch more of her videos, check out The Tonya Hall Show on ZDNet's YouTube channel.

Hall asks Lee questions that are on all of our minds, including: Who is ahead of the tech game and in AI: China or the US? And, what jobs will be obsolete, and which ones will be in demand?

Tonya Hall: A new book from an artificial intelligence pioneer. I'm Tonya Hall for ZDNet and TechRepublic, and joining me is Dr. Kai-Fu Lee, the chairman and CEO of Sinovation Ventures and author of AI Superpowers. Welcome Dr. Lee.

Kai-Fu Lee: Thank you, thank you very much.

Hall: You're a pioneer in technology, holding senior positions at Apple, Microsoft, Google, and others. Give us a brief summary of your resume.

Lee: Sure, I have my PhD in Speech Recognition in 1988. It was the first speech-system that worked for speaker independence, speech recognition. Then, I worked for Apple, Microsoft, SGI, in the ... basically, in the U.S., running technology groups as a vice president. I started Microsoft research in China, which is one of the top research firms ... research institutes in Asia today. And then, I started Google China. Since 2009, I left Google for Sinovation Ventures, a venture capital firm I run. It's a top AI investment firm, and we manage about $2 billion dollars.

SEE: Artificial intelligence: A business leader's guide (free PDF) (TechRepublic)

Hall: You just published a book titled, AI Superpowers: China, Silicon Valley, and the New World Order. Coming from the book, what was China's "Sputnik moment?"

Lee: It was when AlphaGo defeated Lee Sedol, because Go was an ancient Chinese game. It shocked everyone, that this western AI could beat one of the best players in the world.

Hall: What happened in 2013 to create China's alternate internet universe, and what is the state of China's internet today?

Lee: Well, China actually started its internet industry back in the late 90s, but back then it was all copycats. But, through copycatting, Chinese entrepreneurs have become very, very powerful, strong, tenacious, and hard working. And, because of the huge market, so much capital flew in ... came in to help the Chinese entrepreneurs develop their own set of innovations. So, over the past 15 or 20 years, Chinese entrepreneurs have gone from copycat to innovators, and the copycat was the perfect practice they needed, but now those who continue to copy of course get nowhere, as we would expect. But those, who through copying learn the art of developing products for users, and then they benefited from a large market with a huge amount of data, which was perfect for AI and therein developed the secret recipe for the Chinese internet companies and Chinese AI companies, which benefited from a lot of data.

They came up with new products that were perfect for developing countries, and figured out how to make money, and developed an entirely different business model than Silicon Valley. Rather than developing light-tech companies, Chinese companies have developed very heavy, hard-to-replicate companies--companies built on operational excellence, and built on complicated software and human labor combined... that makes it very difficult to copy.

So, as a result, some of the emerging Chinese companies, like DiDi, are worth more than Uber. Meituan is worth 10 times more [than] companies like Yelp or Groupon, because they built really stronger products with a completely different business model, with AI powering it all.

SEE: Artificial intelligence: Trends, obstacles, and potential wins (Tech Pro Research)

Hall: The US and China are fierce competitors in many domains. How does artificial intelligence compare between the two counties?

Lee: [The] US is well ahead in the research. Universities in the US are leaps and bounds better than the Chinese universities. But, by and large, professors publish openly, so China has the implementation edge, and the Chinese companies are able to find ways to make money. They have a larger market to build from, and AI gets better with data, and in the age of AI data is the new oil and China is the new Saudi Arabia. So with these advantages Chinese implementation and monetization and valuation of the companies have already started to eclipse the US, and probably will have a larger leap unless there is a big breakthrough in the US, which might change the whole equation here.

Hall: The book contains interesting graphics called "The Risk Of Replacement" graphs. Tell us about what AI can and actually can't do.

Lee: Sure. AI is very good when trained on large amount of data for a single domain to do better predictions and decisions, so jobs that are routine, such as customer service, telemarketing, dishwashing, assembly line, will be displaced by AI over the next 15 years or so. So, one has to wonder, with so many job displacements, what should people aspire to, and what are jobs that will become open that AI cannot do?

Certainly, one possibility is a job of creativity, jobs requiring strategic thinking and conceptual thinking. But there aren't that many such jobs. The other category that AI cannot do are jobs which have empathy and compassion. So essentially, service jobs that have a large human-to-human interaction component. So jobs like nurses and nannies and tour guides... jobs like concierge, bartender, masseuse--these are the jobs that can be growing in number... in particular, jobs in education and healthcare. I think we don't nearly have enough workers there to deliver one-to-one comfort, from a healthcare sense, elder-care sense. We don't have nearly enough workers as teachers to give more personalized education, which will become ever more important in the age of AI.

So, my thinking is that, just as we went through agriculture to manufacturing job transition in the past two centuries, we will now go through a routine job to empathetic job transition in the next 20 years.

SEE: IT leader's guide to deep learning (Tech Pro Research)

Hall: How do differing attitudes towards privacy and government involvement in markets affect the progress of AI between the two counties?

Lee: China's privacy rules are more at the you cannot sell user data to another entity, so actually, it's stronger than in the US, like in the Cambridge Analytica case. But, it's also true that Chinese companies collect a lot more data, with user consent. Chinese users use a lot more services, digitally. For example, in China, there are basically no credit cards and no cash anymore. So imagine if you will, the equivalent of Facebook and Amazon, in China, are the credit cards, the Visa and Mastercard. So they've got a lot of data, and they'll use that data to provide a better product experience for the user and also to make money for themselves. And the government takes a very techno-utilitarian approach, which means they'll let software companies play credit cards and banks for a while, until there is a proven need for regulation, then they'll step in.

In the particular case of digital money and mobile payments, the two companies Tencent and Ali Baba did such a great job, the government just let them keep going, so much so that, it's pretty much squeezed cash and credit cards out of usage and created tremendous convenience, and removed the 2 to 3% charge that credit cards get, so China now has leapfrogged the US in its mobile payment to provide convenience for the users, leveraging data, getting more data, and getting support from the government to try without massive lobbying or issues that may have been raised by banks or credit card companies.

SEE: AI will impact 100% of jobs, professions, and industries, says IBM's Ginni Rometty (ZDNet)

Hall: So what should individuals do today to better position themselves for the implementation age of AI?

Lee: For the professionals and creatives, watch for tools and start to use them. Just as journalists use Word and photographers use Photoshop, I think every profession--doctors, lawyers, research analysts, financial planners--will have AI tools. And for people in routine jobs, I think it's time to start thinking that these jobs will disappear, and you'll be well advised to think about more empathetic jobs.

Hall: Doctor Kai-Fu Lee, Chairman and CEO of Sinovation Ventures, author of AI Superpowers, which I highly recommend, it's a great read. If somebody wants to connect with you Dr. Lee, how can they do that?

Lee: There is a website,, and I answer all the emails.

Hall: Alright, thanks again for your time and if you want to find more of my interviews you can do that on ZDNet or TechRepublic or visit my website I've got links to all my social channels. Thanks for watching.

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