China's new data exchange has the potential to transform the global economy. Credit: Illustration.

Is China winning the AI war?

Officials at the US National Counterintelligence and Security Center (NCSC) certainly think so, and they are sounding the alarm.

According to a report by Trevor Filseth at National Interest, China’s pursuit of artificial intelligence (AI) technology could have major implications for the future of the military and economic competition between the two nations.

Among other topics, the warnings restated US concerns regarding private companies in key areas allowing Chinese investment or expertise, urging them to take significant precautions in protecting their intellectual property. 

Officials stressed that they are not advocating that industry and researchers “decouple,” or cut all ties with these entities, but they say they want people to understand that the Chinese government has a sweeping national plan to dominate in these fields.

Under the Trump and Biden administrations, relations between Washington and Beijing have steadily become more acrimonious, with increasing consensus from America’s national security agencies that China represents a strategic threat to the United States, the report said.

Although President Biden has made statements advising against the creation of a “new Cold War” with China, relations have still remained tense — particularly since the onset of the coronavirus pandemic, when the US reproached China over for its failure to share certain information about the virus’s origins.

For its part, Beijing has accused Washington of acting in bad faith. 

Artificial intelligence has taken on a particularly prominent role in the Chinese government, which has pushed it, along with other high-tech industries such as robotics, as part of its “Made in China 2025” development strategy.

It is beyond dispute that much of the know-how for these projects was obtained, licitly or illicitly, from the United States, which by the Trump administration’s estimate loses US$600 billion of intellectual property to China each year, the report said. 

The acting director of the NCSC, Michael Orlando, told reporters in a rare press conference that the US could “not afford to lose” the race to develop new technology with China in key high-security areas, including AI technology, quantum computing and semiconductors. 

“If we lose supremacy in these areas . . . we could be eclipsed as an international superpower.”

MICHAEL ORLANDO

Orlando, however, stopped short of advising businesses to ban Chinese investment or recommending other policies to reverse the loss of intellectual property. 

One area of particular concern to the NCSC has been biotechnology and pharmaceuticals, where China has made considerable acquisitions in the past two years.

The agency has warned that Chinese-linked firms in the US benefit from American medical data, which is returned to Beijing, the report said. 

Orlando underlined that these developments had to be understood as part of Beijing’s desire to expand its technical knowledge, rather than the initiative of individual Chinese corporations, which were subservient to the state.  

Beijing’s strategy includes acquiring data and know-how, not just through hacking and other illicit acts but also through legal means such as acquisitions, investments and partnerships that businesses and researchers may not realize pose risks, NCSC officials said.

“We think there’s a lot at stake with a lot of these technologies,” said Orlando. “If we lose supremacy in these areas . . . we could be eclipsed as an international superpower.”

Chinese President Xi Jinping has repeatedly urged scientists to make advances that can help ensure the country’s self-reliance, The Washington Post reported.

In a speech a year ago, he called for efforts “to foster strategic emerging industries such as quantum communications to gain an upper hand in international competition and build new advantages for development.”

In what US officials call the “bioeconomy,” the Chinese are targeting genomic technology that can be used to design disease therapies and identify genetic vulnerabilities in a population, said Edward You, the national counterintelligence officer for emerging and disruptive technologies.

He pointed to China’s largest genomics company, BGI, which purchased the US firm Complete Genomics in 2013.

Over the years, BGI has made inroads in American hospitals and health-care institutions, offering inexpensive large-scale DNA sequencing, he said.

Providing such services is not illegal, but at the same time, You said, BGI is gaining access to massive amounts of Americans’ genetic data.

“Unbeknownst to patients, your data might be transferred to the Chinese government.”

You said the risk is not just to privacy but also to national security.

If China can pair such genetic data sets, including the data authorities are already gathering domestically, with artificial intelligence and quantum computing, he said, it may be able to advance to the point where it is first to market with cures for diseases.

“Because of our shortsightedness, we might wake up one day and we’ve become health-care crack addicts and China’s become our pusher,” he said.

Meanwhile, the Pentagon’s first chief software officer said he resigned in protest at the slow pace of technological transformation in the US military, and because he could not stand to watch China overtake America.

Nicolas Chaillan told the Financial Times that the failure of the US to respond to Chinese cyber and other threats was putting his children’s future at risk.

“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,” he said, adding there was “good reason to be angry.”

Chaillan, 37, who spent three years on a Pentagon-wide effort to boost cyber security and as first chief software officer for the US Air Force, said Beijing is heading for global dominance because of its advances in AI, machine learning and cyber capabilities.

He argued these emerging technologies were far more critical to America’s future than hardware such as big-budget fifth-generation fighter jets such as the F-35.

“Whether it takes a war or not is kind of anecdotal,” he said, arguing China was set to dominate the future of the world, controlling everything from media narratives to geopolitics. He added US cyber defences in some government departments were at “kindergarten level.”

Sources: National Interest, The Washington Post, The Financial Times