The Intersection of Culture & Business Pt. 1: China's AI Advantage

The intersections of culture & business run deep and have never been as relevant than in the global conversation around artificial intelligence.

In AI Super-Powers, Kai-Fu Lee lays the foundation for what is already becoming a monumental shift in power from Silicon Valley to the East Coast of China:

The West may have sparked the fire of deep learning, but China will be the biggest beneficiary of the heat the AI fire is generating. That global shift is the product of two transitions: from the age of discovery to the age of implementation, and from the age of expertise to the age of data.

Is there something unique to our respective cultures in how we perceive, influence or attract innovation and discovery? Perhaps the culture of Silicon Valley was unique to the first phase of AI development; you needed the culture of radical innovation, the best engineers from all over the world flocking to the West Coast to build the internet and the incredible amount of investment coming out of Menlo Park. This was the age of discovery and expertise.

Is it possible that the culture best suited to lead the first phase of AI development is not the culture best suited to lead the next? As Kai-Fu Lee explains, we’re now in the age of implementation & data.

Perhaps the innovators and early builders are not the same as those who will now implement and drive growth via big data.

Implementation is what makes academic advances meaningful and what will truly end up changing the fabric of our daily lives.- Kai-Fu Lee

Kai-Fu Lee paints the picture of a leveling out phenomenon; at a certain point it is just about computing power and data when it comes to AI.

What we’ve focused on for decades has been corporate culture; Silicon Valley is famous for it, for better or for worse.

What we will undoubtedly now see is the emergence of national culture in tech adoption and implementation as technology is embedded in our lives and bodies. The Americans will form ideas around what is appropriate business practice. The Indians will take bits and pieces and then add their own. The Europeans may show flavors of East & West and the Chinese may decide to up-end the apple cart entirely.

Jack Ma, founder of the e-commerce giant AliBaba, recently discussed the 9-9-6 culture of China; 9:00am to 9:00pm, 6 days per week; corporate culture on steroids.

I can tell you that Silicon Valley looks downright sluggish compared to its competitor across the Pacific.

China’s successful internet entrepreneurs have risen to where they are by conquering the most cutthroat competitive environment on the planet. They live in a world where speed is essential, copying is an accepted practice, and competitors will stop at nothing to win a new market. Every day spent in China’s startup scene is a trial by fire, like a day spent as a gladiator in the Coliseum. The battles are life or death, and your opponents have no scruples.

This rough-and-tumble environment makes a strong contrast to Silicon Valley, where copying is stigmatized and many companies are allowed to coast on the basis of one original idea or lucky break.

That lack of competition can lead to a certain level of complacency, with entrepreneurs failing to explore all the possible iterations of their first innovation. The messy markets and dirty tricks of China’s copycat era produced some questionable companies, but they also incubated a generation of the world’s most nimble, savvy, and nose-to-the-grindstone entrepreneurs.

These entrepreneurs will be the secret sauce that helps China become the first country to cash in on AI’s age of implementation. - Kai-Fu Lee

That’s a lot to take in but let’s look at two things; copying and speed.

There is undoubtedly a cultural gap, West to East, when it comes to copying. China’s manufacturing boom produced knock-off everything but this period and attitude towards competition does incubate a certain mood. Protect ideas with your life and move fast. Move fast because being first is important and the company down the road could poach your IP and your engineers if the moat isn’t wide enough.

As the West aims to decentralize and distribute, this does not appear to be a feature of current Chinese culture, politically or economically.

Kai-Fu Lee describes in-depth how WeChat took over modern life in China; ‘…sending text and voice messages to friends, paying for groceries, booking doctor’s appointments, filing taxes, unlocking shared bikes and buying plane tickets, all without ever leaving the app.”

It brought together a grab bag of essential functions that are scattered across a dozen apps in the United States and elsewhere. - Kai-Fu Lee

Will America follow suit or is the new culture of distribution and decentralization too powerful? Does this give China the runway to ruthlessly advance while the Americans sort out the dismantling and distribution of monopolies? This could have huge knock-on effects at scale when it comes to the rate of creating new AI products & services.

Perhaps the most interesting (and potentially insidious) aspect of the AI revolution is data. Google may be in the lead for the time being; inserting slick AI research into our everyday lives in the West. You know when you get asked to prove if you are human by selecting all of the frames that have a street sign? You think you’re proving you’re really you and that’s what Google cares about, but what you’re actually doing is training their AI how to recognize and adapt to the human world. Feel creeped out? That isn’t the half of it.

China is building what some have not-so-lovingly called a Surveillance State. Social Credit Scores and facial recognition technology make 1 citizen feel like a new, stable, ordered world is upon us and another feels like their living in Orwell’s uncanny predictions.

China’s alternate digital universe now creates and captures oceans of new data about the real world. That wealth of information on users-their location every second of the day, how they commute, what foods they like, when and where they buy groceries and beer-will prove invaluable in the era of AI implementation.

This unparalleled trove of real-world data will give Chinese companies a major leg up in developing AI-driven services.- Kai-Fu Lee

In other words for us common-folk; the Chinese already know what you want and they know it better than you do, pal.

In a world where computing power & data are the key drivers of change; we’re in for a roller-coaster.

In Pt. 2 we will take a step back and look at the parts of the world that are leapfrogging in the tech world.