China in Search of AI Supremacy Published March 12, 2021 By Capt Stephen Fuller Wild Blue Yonder -- In order to totally understand the need of the United States to maintain and compete for artificial intelligence (AI) supremacy over our near peer threat, China, we must first look at the Chinese Communist Party’s (CCP) militarily goals and what makes them unique in their pursuit. According to the Department of Defense’s (DOD) 2000’s Annual Report on Military and Security Developments Involving the People’s Republic of China, the People’s Liberation Army’s (PLA) ground, air, and naval forces were sizable but mostly obsolete. Their cyber capabilities were rudimentary, and its use of information technology was well behind the curve.1 China’s defense industry was struggling to produce high-quality systems. Flash forward two decades and the PLA’s objective is to become a “world-class military” by the end of 2049; this per the DOD’s Military and Security Developments Involving the People’s Republic of China, 2020. How does a country once floundering by the wayside with obsolete weaponry and technology make such dramatic leaps to be able to announce their intentions of becoming a “world-class” military by the end of 2049? In just a short 20 years, the Chinese are already surpassing us, the mightiest military in the world, in shipbuilding, land-based conventional ballistic and cruise missiles, and integrated air defense systems. Alongside conventional warfare, the CCP is investing heavily in technology innovations and has specifically mentioned AI as a paramount part of their National Defense Strategy. Why is AI so important? What is AI? AI can be thought of as the ability of an artificial agent to achieve goals in a “wide range of environments.”2 What China is interested in is more in line with the deep learning aspect of AI. Deep learning, now popularly associated with artificial intelligence, is a technique that harnesses neural networks to train algorithms to do specified tasks, such as image recognition.3 With this deep learning, there are many military applications such as automating military equipment to perform a task(s) while learning better strategies to simply taking more and more of the human element out while the AI makes decisions based on the algorithms that are input into the system(s). While focusing on how it will benefit China economically and socially, they will also be utilizing technology, specifically AI to improve their military efforts; no real line between them in the Chinese construct. Although China is not yet up to par with the rest of the—primarily Western—world, they are putting significant capital in its progress. A perfect example of how serious China is in investing in AI is the AI startup SenseTime. In a four-year span, it went from an academic project to becoming the world’s most valuable artificial intelligence company with a current valuation of $4.5 billion. SenseTime is now the largest algorithm provider in China, as well as the fifth largest AI platform. Along with other tech titans, SenseTime is working with the Chinese government on Made in China 2025, an initiative to make the country economically autonomous.4 Made in China 2025 states the strategic goals of turning China to a major manufacturing power. By 2020, their goal was to consolidate manufacturing power and increase manufacturing digitalization. By 2035, Chinese manufacturing will reach an intermediate level among manufacturing powers. By 2049, China’s manufacturing sector status will become more consolidated, and China will become the leader among the world’s manufacturing powers.5 In order to accomplish this, the Chinese are relying on technology innovations from AI companies such as SenseTime. This brings us to the why and how China is able to rely on civilian innovation as much as it does for not only the social and economic benefits but also the direct alignment of military goals. ”Military-Civil Fusion, or MCF, is an aggressive, national strategy of the CCP. Its goal is to enable the PRC to develop the most technologically advanced military in the world… Under MCF, the CCP is systematically reorganizing the Chinese science and technology enterprise to ensure that new innovations simultaneously advance economic and military development.”6 As a national strategy, military-civil fusion traces roots to the Maoist idea of “people’s warfare,” which prescribed a “whole-of-society” approach to military mobilization, and builds on industrial policy to drive military modernization.7 While civilian companies, such as SenseTime and Ali-Baba, are working to improve the social and economic functions of China; they are also directly in line with the CCP to improve the innovations and the capabilities of the PLA. Unlike the United States, there is no clear line or delineation between the government and its civilian counterparts. The partnership goes both ways; not only do the civilian entities in China share technology and AI algorithms with the government but the CCP ensures that there is plenty of capital invested in the civilian sector, primarily to the companies and entities that have a direct role in achieving the ambitious plans of the CCP. When searching for MCF, the number one topic that comes up time and time again is that of AI. Chinese firms and research institutes are advancing uses of AI that could undermine US economic leadership and provide an asymmetrical advantage in warfare. Chinese military strategists see AI as a breakout technology that could enable China to rapidly modernize its military, surpassing overall US capabilities and developing tactics that specifically target US vulnerabilities.8 The CCP is rapidly growing its arsenal, whether it be conventional warfare items or aggressively investing in technology and innovations. Although the PRC does not have the technology and the assets, the engineers, or the capabilities that we have right now, they are pumping all the resources they can to ensure that they reach their end state of being a player that everyone has to recognize on an equal playing field. What can a country such as the United States do when we have moral obligations that the CCP does not have, nor institutes? Having a gray area between the civilian sector and the military gives them a clear advantage as there is no such thing as a separation of government and the civilian sector. Our government has some leeway in pushing tax dollars towards certain functions that will improve our overall social and economic structure but crossing the line of government versus private sector is still a clear boundary that most will not cross. We have a democracy as to where our government can change greatly every two to four years, whereas the Chinese have a government that is setup to exist generationally and even past that. Our greatest asset of Democracy might also be the reason that the CCP and the PLA can gain on us in the future, possibly. The greatest advantage that the United States has over China is our free market system. We enable companies to compete for monetary advantage and with only little government interference/oversight unlike China, which consistently monitors all businesses and citizens. In 2019, privately held AI companies attracted nearly $40 billion in disclosed equity investment—defined as venture capital, private equity, and mergers and acquisitions—across more than 3,100 discrete transactions. US companies attracted most of this investment: $25.2 billion in disclosed value (64 percent of the global total) across 1,412 transactions.9 What does this tell us? Well, China has not attracted the investment that most think; if $25.2 billion or 64 percent of the global total is still coming from the United States, then maybe the competition is not as close as most think it is. Our military depends greatly on our private companies coming up with usable applications for civilian purposes and then the military legally purchases or contracts the item for military use. We do not stifle civilian innovation; we tend to reuse the items in different manners but depend on that civilian innovation for the next greatest thing in technology. Nothing is owed to the United States government and the civilian companies can negotiate the value of their AI product. Although China is focusing more internally on their own startups, their AI narrative, and it seems to not be at the level that our AI innovation is, we must continue to proceed with caution. As soon as we let down our guard, China may surpass us and could possibly one day become the world’s AI leader. Captain Stephen Fuller, ANG Captain Fuller’s (MS, Tarleton State University; BS, University of Phoenix) research interests include Artificial Intelligence, Cyber capabilities/emerging technologies, and near peer threats. He is an ANG Cyber Operations Officer serving as the Director of Operations of the Base Communications Flight at Will Rogers, ANGB. Notes 1Office of the Secretary of Defense, “Military and Security Developments involving the People’s Republic of China 2020,” 21 August 2020. 2 Shane Legg and Marcus Hutter, “Universal Intelligence: A Definition of Machine Intelligence,” arXiv, (December 2007): 12, https://arxiv.org/. 3 Robert D. Hof, “Deep Learning,” MIT Technology Review (2013), https://www.technologyreview.com/; Anh Nguyen, Jason Yosinski, and Jeff Clune, “Deep Neural Networks Are Easily Fooled: High Confidence Predictions for Unrecognizable Images” (Paper presented at the Institute of Electrical and Electronics Engineers conference on computer vision and pattern recognition, 2015), https://arxiv.org/. 4 Bernard Marr, “Meet the World's Most Valuable AI Startup: China's SenseTime,” Forbes (2019), https://www.forbes.com/. 5 State Council, Made in China 2025《中国制造 2025》(2015), http://www.cittadellascienza.it/. 6US Department of State, “Military-Civil Fusion and the People’s Republic of China,” https://www.state.gov/. 7 National Commission on Service, Hearing on Future Mobilization Needs of the Nation, written testimony of Elsa Kania, 24 April 2019, 7; Tai Ming Cheung et al., “Planning for Innovation: Understanding China’s Plans for Technological, Energy, Industrial, and Defense Development,” University of California Institute on Global Conflict and Cooperation (prepared for the U.S.-China Economic and Security Review Commission), 28 July 2016, 27–29. 8 U.S.-China Economic and Security Review Commission, 2020 Annual Report to Congress (2020) “Emerging Technologies and Military-Civil Fusion: Artificial Intelligence, New Materials, and New Energy,” https://www.uscc.gov/. 9 Zachary Arnold, Ilya Rahkovsky and Tina Huang, “Tracking AI Investment: Initial Findings From the Private Markets,” 2020, https://cset.georgetown.edu/.