Is China ahead of the US in the AI battle?

US - China AI battle

According to Pentagon’s former Chief Software Officer, Nicolas Chaillan, the US has already lost the artificial intelligence (AI) battle against China. “We have no competing fighting chance against China in 15 to 20 years. Right now, it’s already a done deal; it is already over in my opinion,” Chaillan told to UK’s daily The Financial Times early this week.

Many may disagree or question what Chaillan had said in that interview. But new research from GlobalData somewhat reflects Chaillan’s claim of the US is not competitive against China on the technology front.

The AI battle: China vs the US
Certainly, it is hard to know which country is actually leading or lagging in this AI battle between China and the US. Probably, the number of AI startups that have turned into unicorns and their valuations in recent years could give some sense of how these two nations have been faring on the AI front.

In total there are 45 AI unicorns globally, amongst them, China has the biggest share with 19 AI unicorns, collectively valued at $43.5 billion claimed the GlobalData’s latest research. However, the company’s count of 45 AI unicorns across the globe seems to be not true.

Against China’s 19 unicorns, the US has 32 AI unicorns and there are several other nations such as the UK, Canada, France, Israel and a few more that have AI unicorns between one and five.

China’s AI
Valuation in $Billions US’AI
Valuation in $Billions
Hesai Tech$1.05Sift$1
Mininglamp Technology$1.19Groq$1
SmartMore$1.2Standard Cognition$1
Aibee$1.2o9 Solutions$1
DeepBlue Technology$1.35Globality$1
Black Sesame Technologies$2SoundHound$1
XtalPi$2Vectra Networks$1.2
4Paradigm$2MOLOCO AI$1.5
YITU Technology$2.17Rebellion Defense$1.15
Horizon Robotics$5Hive$2
Indigo Ag$3.5
Automation Anywhere$6.8
Scale AI$7.3
Argo AI$7.25
Total -19
$43.5 billionTotal – 32 Unicorns$92.07 billion

China’s AI unicorns
“China is a leading player in AI, with a number of established companies such as Baidu, Hikvision, iFlytek, Tencent, and Alibaba. The country also has a strong AI startup ecosystem, which is evident from a large number of AI unicorns (a privately held startup valued at  $1billion or more),” said Priya Toppo, GlobalData’s Analyst of Thematic Research.

China is leading in certain key themes such as computer vision and facial recognition via startups such as SenseTime, Cloudwalk, Megvii, and Yitu Technology. These companies are commonly referred to as the ‘Chinese AI dragons’.

SenseTime is currently the biggest AI unicorn in China with a $12 billion valuation and a total of $2.6 billion funding to date. Second to SenseTime is Cloudwalk – an AI unicorn valued at $3.3 billion with total funding of $500 million.

Following is another AI unicorn Megvii with a $4 billion valuation and Yitu Technology valued at $2.2 billion. Horizon Robotics is another notable unicorn, whose valuation has touched $5 billion.

While these AI unicorns continues to enjoy very high valuations among investors, they have been under the scrutiny of Chinese authorities and regulators.

“Chinese AI companies have faced several regulatory challenges but have emerged even stronger. The companies are well placed in key themes such as computer vision, deep learning technologies, smart cities, and autonomous vehicles,” commented Toppo.

SenseTime and Cloudwalk have already filed for IPOs in Hong Kong and Shanghai, respectively. Megvii also has a Shanghai IPO plan in the pipeline. This will be Megvii’s second attempt to list after the first attempt was cancelled in February 2020 due to the COVID-19 pandemic. Yitu Technology is also considering an IPO in Hong Kong at a projected $4billion $4bn.

The Chinese AI ecosystem will become even stronger as leading companies go public and are able to invest the significant amounts of new capital raised, concluded Toppo.

The US’ AI unicorns
Probably, GlobalData’s list of AI unicorns seems to be not as comprehensive as CB Insights’ because the UK based data and analytics company’s analyst hasn’t shared any insights on the AI startup ecosystem in the US.

In fact, going by CB Insights’ list of AI unicorns, perhaps China lags behind the US in terms of the total count of AI unicorns and their collective valuations.

Compared to China’s 19 AI unicorns with collective valuations of $43.5 billion, the US has 32 AI unicorns with their collective valuations of $92.07 billion. Going with the stats, it would be appropriate to say that the US still has some edge over China with more AI unicorns.

But the question remains. Will the US be able to main that edge over Chine in the coming years or decades?

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