The American AI Initiative Highlights the Need for AI Governance on a Global Scale

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1Q 2019 | IN-5408

On February 12, President Trump signed an executive order on artificial intelligence (AI). As the first executive order on AI since the new president took office, the American AI Initiative is very clear in its objectives to maintain the United States’ leadership in AI and acknowledges the importance of AI to the country’s economy, social fabric and national security. What is more interesting is with the timing of the release of this Initiative. At present, the tech industry is facing tremendous uncertainty over the United States’ attempt to push international curbs on Huawei and other Chinese technology suppliers. The United States expresses its concerns 5G equipment supplied by Chinese vendors may expose American interests into potential cyber security risks or even cyber espionage. Underlying all these activities is the United States’ attempt to gain competitive edge in the brewing technology arm race between nations. Losing this arm race can be politically and economically painful.

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An Initiative to Maintain U.S. Leadership

NEWS


On February 12, President Trump signed an executive order on Artificial Intelligence (AI). As the first executive order on AI since the new president took office, the American AI Initiative is very clear in its objectives to maintain the United States’ leadership in AI and acknowledges the importance of AI to the country’s economy, social fabric and national security. What is more interesting is with the timing of the release of this Initiative. At present, the tech industry is facing tremendous uncertainty over the United States’ attempt to push international curbs on Huawei and other Chinese technology suppliers.  The United States expresses its concerns 5G equipment supplied by Chinese vendors may expose American interests into potential cyber security risks or even cyber espionage. Underlying all these activities is the United States’ attempt to gain competitive edge in the brewing technology arm race between nations. Losing this arm race can be politically and economically painful.

ABI Research strongly believes that both 5G and AI bring great economical and societal impact. These two technologies are one of the most innovative technologies out there, enabling substantial economic growth across various industries. Moving beyond the wireless industry, the combination of 5G and AI provides distributed intelligence and enables highly automated environment in many industries, leading to higher productivity through better yield per capita. ABI Research estimates the total output of the AI and 5G combinations to the global economy to reach US$17.9 trillion by 2035 or 9.7% of the global GDP. These two technologies will serve as a catalyst to many other technologies and business models and will have tremendous value on the overall productivity cross different industries and markets.

Among all industries, industrial manufacturing, automotive and transportation, and retail and the wholesale trades are the three key markets to be most impacted. Manufacturers can not only deploy AI-enabled mobile robots that can work alongside human workers and augment their productivity, but also meet the demands of shorter product lifecycle by relying on reconfiguration production lines that operate fully on 5G technology. The combination of 5G and AI will bring autonomous vehicles to fruition, and car sharing will be the norm in many metropolitan areas as well as AR-based navigation, autonomous driving, cooperative mobility, truck platooning, automated traffic management, and mobility management services. Retailers can use AI and 5G to create highly personalized shopping experience to consumers, while enabling in-house and backend innovations such as customer service robot, robotics shopping carts, line management, point-of-sales terminals and automatic warehouse and logistics. Disruptions are right at the corner for all these industries.

This is exactly why advanced nations are investing massively on the two technologies and competing fiercely to position themselves as pioneers in the next wave of economic growth fuelled by the next industrial revolution.

Who is Who in the AI World War?

IMPACT


It becomes now obvious that the leading nations are competing to establish themselves as pioneers in the AI revolution, with China increasing its investments in the technology and the United States trying to protect its leadership and intellectual property in this space. However, there are many questions to be answered when it comes on establishing AI governance and its ethical use. Different nations want to exploit their leadership to influence AI rules and regulation. President Trump has signed an executive order last week with exactly this in mind. The significance of President Trump’s executive order needs to be contextualized with the ongoing trade war between the leading nations, notably China, Europe, And the USA. These nations, each has unique programs and ambitions on how the two technologies should be used to fuel economic growth. 

The United States:President Trump is right to say the country is the leader in AI. For decades, US-based companies have invested heavily in R&D and commercialization of AI technologies. Global internet giants, such as Amazon, Google, Facebook, Microsoft and IBM, have large team of AI researchers working on various AI projects and been actively contributed to the open source communities around the world, which is a key driving force behind the democratization of AI. Rivals are catching up rapidly, though. Chinese cloud giants, as indicated below, have gained significant momentum in recent years and Chinese startup scene has become as robust as that of the United States.

That said, according to a recent report by the World Intellectual Property Organization (WIPO), IBM has the largest portfolio of AI patent applications with 8,290 inventions, followed by Microsoft with 5,930. Both companies’ portfolios span a range of AI techniques, applications and fields. In addition, hardware and chipset innovation from the likes of Intel, Qualcomm, NVIDIA and Xilinx have provided the raw computational power required to perform machine learning and, more recently, deep learning which forms the foundation of many current AI models. As compared to China and EU, US has no large home-grown 5G equipment vendors, but its two national carriers, Verizon and AT&T, are considered to be the most advanced and influential in the industry.

China: In 2017, China has laid out a development plan to become the world leader in AI by 2030. While the AI industry grows in a more organic manner in the US and EU, China has chosen to focus on mature AI applications with strong commercial viability and successful use cases, with supports from both public agencies and private enterprises. The aforementioned WIPO report indicates that Chinese universities and public research organizations account for more than one-fifth of the top 500 patent applicants. According to ABI Research, In 2017, China AI startups overtake their US peers for the first time in VC investment with a total of US$5 billion in investment. This has resulted in the emergence of several world leading AI startups, such as SenseTime, Megvii and YITU in machine vision, Cambricon and Horizon Robotics in AI chipset and Bytedance in social media. Meanwhile, Huawei and ZTE have been very active in driving 5G innovation and China is in prime position to ripe benefits from both 5G and AI.

EU: In December 2018, the European Commission announced that it will be investing EUR1.5 billion, or US$1.7 billion by 2020 to support startups and innovators in AI and blockchain. Another EUR7 billion, or US$7.9 billion, will be invested from 2021 to 2027. Europe seems to have long-term strategic objectives as far as AI investments are concerned. Startups in the region have diversified interests across different industries and verticals, mainly for use cases such as cybersecurity, digital ID, public safety, healthcare, and IoT. Europe also boasts two global 5G equipment vendors in Ericsson and Nokia, but both have been in struggle lately in the face of fierce competition and declining average revenue per users (ARPU) in the wireless industry.

Clearly, the difference in approaches and view-points on how to advance AI and, to a certain extent, 5G, greatly concerns the United States. Civil liberty, national security, privacy and values are repeated many times in the executive order, highlighting US view to promote the use of AI in an ethical and transparent manner. Aside from ensuring scientific discovery and economic advancement, the government is concerned about vulnerability that will lead to attacks from malicious actors and keen to develop international standards to safeguard safety, security, privacy, and confidentiality of all end users.

How to Establish AI Governance?

RECOMMENDATIONS


Not limited to the United States, establishing international standards and best practices in AI seems to be the key agenda of many countries. As the development of AI has largely been left for open source communities and private enterprises, governments across the world are rightfully worried. Recent Facebook scandals shed light on how AI could be potentially misused and brings disruptions to social harmony and stability. In January 2018, The United Kingdom announced its intention to become the world’s leader in ethical AI by ensuring the industry focuses on safe, ethical and ground-breaking innovation. A year later, Singapore became the first country in Asia to release an AI governance framework.

ABI Research would therefore like to propose the industry to come together and establish a global AI governance framework. Given the impact of AI, it is unwise to enforce AI governance by resorting to punitive actions, such as international curbs, economic sanctions and retaliations. The growth of AI has historically been based on open dialogue, collaboration and the pursuit of scientific discovery and technological advancements in good faith. By bringing all key actors onto the discussion table, this will ensure the standards will be inclusive and accepted by all parties.

That said, this process will not be easy at all. Such framework must be enacted by an international body whose members include all key AI developers, vendors, and users, including public agencies, private businesses, civil groups and association, and open source communities. Key economies, including the US, UK, China, Japan and the EU, must set aside their differences and adopt a more collaborative and conciliatory approach. This will ensure the framework to be free of political and economic agenda and focus solely on formulating industry-wide best practices and standards that are agreeable and enforceable by all jurisdictions and governing bodies. This arrangement will also ensure future updates and amendments to any aspect of AI need to be approved and agreed upon by all key stakeholders, ensuring transparency, national security and user protection.