Why China Has An Edge In the A.I. Arms Race

June 25, 2018, 12:00 PM UTC

STEP ASIDE, SHERLOCK. Detectives in China say they can catch criminals using artificial intelligence—and if you don’t believe them, consider the case of the potato thief at the pop concert.

Officials in the eastern Chinese city of Jiaxing in May used A.I.-powered facial-recognition technology to nab the alleged tater taker from a crowd of more than 20,000 people attending a performance by Hong Kong crooner Jacky Cheung. Moments after passing through the concert’s security system, the unsuspecting suspect was busted: An algorithm matched his face with an image from a database of “most wanted” mug shots. Authorities seized the man on charges of stealing $17,000 worth of potatoes.

The thief was the third fugitive to be arrested at a Jacky Cheung concert in as many months using software developed by Beijing’s Megvii, among the many Chinese groups pioneering ways to combine A.I. and facial-recognition capabilities. Alibaba Group mobile payments affiliate Ant Financial uses a “smile to pay” feature to facilitate purchases at KFC. A high school in Hangzhou monitors students’ attentiveness in class. Traffic police in Shenzhen and other cities spot jaywalkers and reckless bike couriers. A park near Beijing’s Temple of Heaven uses the technology in a public restroom to stop patrons from stealing toilet paper.

All of this hints at the extraordinary zeal with which the world’s second-largest economy has embraced A.I. President Xi Jinping vows China will become the global leader in artificial intelligence by 2030, creating a domestic industry worth nearly $150 billion.

Should the rest of the world be alarmed by China’s A.I. dreams? Perhaps not. Implicit in most assessments of the country’s efforts, whether by U.S. officials or Chinese analysts, is the shared assumption that the programs will perform as advertised. Though Xi has certainly stepped up support for state-owned enterprises, tightened restrictions on foreign firms, and doled out massive subsidies to key sectors, his country’s future A.I. supremacy is far from guaranteed. “Many of the challenges of A.I. are global in nature,” reads a June report from McKinsey on the subject, and “not for government to solve alone.”

Kai-Fu Lee, the former head of Google China, argues that A.I. is shifting from a U.S.-led Age of Discovery to an Age of Implementation in which China enjoys significant “structural advantages.” The main drivers? Data, computing power, and competent engineers—all of which favor the world’s most populous nation.

Yet proponents of artificial intelligence warn that it could wipe out millions of jobs, a troubling prospect in a country that remains so heavily dependent on repetitive manufacturing jobs. How will China cope? Deep learning, it seems, can also raise deep questions.

A version of this article appears in the July 1, 2018 issue of Fortune with the headline “’Black Mirror,’ Slightly Broken.”

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