Data Sheet—How China’s Rise as AI Superpower Could Reshape the World

Within a decade, China will overtake the United States as global leader in artificial intelligence, and the two nations will square off as “AI superpowers,” forcing smaller countries to align behind them in rival techno-blocs. That’s the alarming prospect sketched by former Google China chief Kai-Fu Lee in AI Superpowers: China, Silicon Valley, and the New World Order, a provocative book released this week.

I’ve written elsewhere in Fortune about Lee’s thesis. The author himself offers an excellent summary in this essay in The New York Times. But the book is well worth reading in full. Lee knows his stuff. Born in Taiwan and educated at Carnegie Mellon, he is an accomplished AI scientist and has become one of China’s top venture capitalists.

AI Superpowers challenges the conventional wisdom that China, which now lags the U.S. in AI, can’t match Silicon Valley’s unique capacity to attract the best minds and encourage them to think freely. In Lee’s view, vision and moonshots are over-rated because AI is shifting from an “Age of Discovery,” in which the advantage lies with brilliant researchers and breakthrough insights, to an “Age of Implementation,” in which engineers need only be competent, not geniuses. What matters most for AI innovation these days, he argues, is access to vast quantities of data—where China’s advantage is overwhelming.

That’s partly because of China’s size; the nation claims more than 800 million Internet users, about three times the U.S. population. It’s also because Chinese consumers channel more of their daily activities through mobile phones than U.S. counterparts (thus generating greater and richer data per user), and seem to have fewer qualms about trading privacy for convenience. Lee also thinks China’s “hypercompetitive business landscape,” combined with state support for the industry’s development will tip the scale decisively in China’s favor.

Lee positions himself as a techno-optimist. In one chapter, he offers suggestions for how AI can help us “double-down on what makes us human.” But he also suggests AI has worrisome geopolitical implications. “Whatever gaps exist between China and the United States,” he warns, “those differences will pale in comparison between those two AI superpowers and the rest of the world.” Other nations “will be left to pick up the scraps while these AI superpowers will boost productivity at home and harvest profits from around the globe.” Lee sees American companies laying claim to developed markets “while China’s AI juggernauts will have a better shot at winning over Southeast Asia, Africa, and the Middle East.” As if relations between the two nations weren’t complicated enough already…

NEWSWORTHY

Panel overload. At Fortune's Brainstorm Reinvent conference ongoing in Chicago, Jennifer Bailey, Apple vice president of Internet services and Apple Pay, explained that the company was never trying to disrupt the credit card industry and bragged that 60% of U.S. retail outlets will be compatible by year end. AT&T unit CEO John Donovan dismissed concerns about the government still trying to block the company's acquisition of Time Warner. And a few more links from the conference are below.

It's not about the money. Following yesterday's surprise news that Instagram founders Kevin Systrom and Mike Krieger were resigning from Facebook, additional reporting uncovered more of the reasons why. And WhatsApp co-founder Brian Acton did an interview with Forbesexplaining why he quit the social network last year (and left almost $1 billion on the table).

Start your Xerox machines, courtroom edition. The seemingly endless legal battle between Apple and Qualcomm has really only been running for under two years, but it shows no signs of slowing. Qualcomm filed new charges in its 2017 lawsuit against Apple, claiming the iPhone maker shared trade secrets and confidential info with rival chipmaker Intel.

Status quo no go. A host of top tech companies will appear on Capitol Hill today to discuss privacy. Starting at 10 a.m., the Senate Commerce Committee is scheduled to hear from execs of Amazon, Apple, AT&T, Charter Communications, Google, and Twitter. Lawmakers are considering how, if at all, to proceed with privacy legislation. Meanwhile, in another part of the city, top state and federal antitrust regulators met at the Justice Department on Tuesday to discuss going after big tech companies like Amazon and Google. Attorney General Jeff Sessions wanted to focus on whether the big tech platforms were biased against conservatives, the Washington Post reported. Other attendees wanted to talk more about antitrust and privacy concerns. And the Department of Commerce on Tuesday also put out a request for public comment on possible privacy regulations.

Survey says. Another tech IPO will start trading on Wednesday. SVMK Inc, a.k.a. SurveyMonkey, priced its shares at $12, above a projected range of $9 to $11. The share will trade on the Nasdaq under the symbol SVMK.

Are you following me? After some users got upset that a new version of Google's Chrome browser was automatically signing them in to the browser's account if they logged into any Google site, the company is changing its policy—sort of. An upcoming update will let users change a setting to require separate signs ins for Google services and the browser.

Are you following me? Southeast Asia edition. India's Supreme Court upheld the government's creation of a vast biometric identification database of citizens known as Aadhaar, but said private entities like banks should be prohibited from requiring customers to hand over their Aadhaar numbers. Use of the ID system for national security and educational purposes was also restricted.

FOOD FOR THOUGHT

The batteries we use to power everything from our smartphones to our electric cars are filled with toxins and difficult to recycle. So what about a battery made out of paper with embedded bacteria providing the charge? That's the concept being developed by Seokheun Choi, a professor of electrical and computer engineering at the State University of New York in Binghamton. He calls the incipient field "papertronics" and explains:

Papertronics can be particularly useful in remote areas with limited resources because they’re powered by bacteria that can inhabit even the most extreme of conditions and break down nearly any material to produce electrons. They don’t need a well-established power grid, either. In addition, though paper batteries are designed to be disposable after they’re used, their materials are recyclable—and new batteries can be created from recycled paper.

As revolutionary as paper-based bio-batteries are for future electronic devices, they’re fairly straightforward to make. The polymers and bacteria can be blended with paper in traditional manufacturing processes, including roll-to-roll printing and screen printing—or even be painted or poured right onto paper.

Other materials can also be added to the paper batteries—like metals, semiconductors, insulators, and nanoparticles. These and other substances can add more properties and capabilities to paper-based devices, opening new doors for the next generation of electronics.

IN CASE YOU MISSED IT

Brainstorm Reinvent: The King of Online Dating's 3 Innovation TipsBy McKenna Moore

Brainstorm Reivent: How the Auto Industry Is Driving Itself Into the FutureBy Lisa Marie Segarra

Brainstorm Reinvent: Goldman Sachs Wants to Be a Tech Company. Here’s Why It Won’t Be EasyBy Lucinda Shen

Salesforce Co-CEO Marc Benioff Distances Himself From the 'Techlash'By Jonathan Vanian

Amazon's Alexa Fund Makes Its First Investment in a Prefab Homebuilder, Hoping to Make Alexa the Voice of Smart, Futuristic HomesBy Kevin Kelleher

Former Cisco CEO John Chambers' New Book Rings Alarm Bells on U.S. EconomyBy Michal Lev-Ram

Ride-Hailing Drivers Have Lost Half Their Income in the Last Five Years, Study ShowsBy Don Reisinger

BEFORE YOU GO

Just before the Green Bay Packers football team partnered with Microsoft to create a project called Titletown Tech, a couple of Packers fans registered the domain name Titeletowntech.com. The Packers, without disclosing their identity, offered $5,000.

The couple, once they discovered what was up, asked for $750,000 plus eight lifetime Green Bay Packers box seats, two parking passes, and eight Microsoft Surface Pros. You may not be surprised to learn that an administrative panel for the World Intellectual Property Organization ruled in favor of the team, and the fans got nothing.

Still not as great a story as this video gem of a couple of Boston guys who "found" a Red Sox championship banner. They, too, got nothing.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.