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The Rise of Silicon China

Key features of Chinese history and culture have put it in a position to become the global leader in artificial-intelligence technologies, surpassing even the tech giants of Silicon Valley. But to do so, China will need to overcome economic hurdles – both at home and abroad – that could stand in its way.

CAMBRIDGE – In the future, if not already, the Silicon Valleys of artificial intelligence (AI) will be in China. The tech firms Xiaomi, Baidu, Didi Chuxing, Meituan, and Toutiao are all headquartered in Beijing. Alibaba, China’s e-commerce giant, is based in Hangzhou. And Tencent, a multinational conglomerate that is investing heavily in AI, is in Shenzhen. Tencent already has a market capitalization higher than General Electric, and Baidu is larger than General Motors.

China has a chance to lead in AI because it has managed to adopt new technologies very quickly. Just as millions of consumers in India went directly from no phones to smartphones – skipping landlines and flip phones altogether – Chinese consumers are now doing the same, and across a wide range of new technologies. For example, Chinese shoppers have skipped credit cards and gone straight to using e-payment platforms. While Apple Pay is struggling to gain momentum in the United States, Tencent is already facilitating more than 600 million cashless transactions every day.

Tencent and other Chinese firms’ massive centralized platforms give them an edge in AI research and development, by allowing them to generate and collect huge stores of data with which to train their machine-learning algorithms. These platforms also enjoy near-monopolistic power, which will help them monetize AI applications in the future.

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