J.Murphy AI Research Report

Researching Artificial Intelligence - Why AI continue to grow in the United States and China. Author : John Murphy

T​able of Contents. 1.0 Executive Summary…………………………………………………………….…….4 2.0 What is Artificial Intelligence?...........................................................................5 3.0 What industries is AI taking off in China and the United States? ………............... 3.0 Warehouse/Law Industry…………………………..……………….............6 3.0 Autonomous Vehicle…………………………………………………………7 3.0 Banking……………………………………………………………………….8 3.0 Healthcare/ Alexa & Siri……………………………………………………9 3.0 Business and Marketing…………………………………………………..10 3.0 Agriculture, Construction and Accommodation…………………………10 4.0 Why have China got so heavily involved in Artificial Intelligence? ……………11 5.0 Comparing China to the United States in Artificial Intelligence…………………12 6.0 Is China using America’s own plan to control the future of AI? ……………13, 14 7.0 Conclusion…………………………………………………………………...….…….15 8.0 References…………………………………………………………………. ….…….16

1.0 Executive Summary This report is going to provide an insight into the future of Artificial Intelligence (AI) and what it means for the everyday worker going forward. China is attempting to overtake the United States as the number one leader on how to implement (AI) into their economy.

2.0 What is Artificial Intelligence? Artificial Intelligence (AI) is the ability of a digital computer or computer – controlled robot to perform tasks commonly associated with intelligent things. ​1​ [B.J Copeland 2018] The digital computer was developed in the 1940’s and they have been programmed to undertake various duties such as playing chess. IBM developed a computer called Deep Blue which was able to play chess and in May 1997 it defeated the then world chess champion Garry Kasparov who had openly stated that he would never lose to a machine. Artificial Intelligence all began at a conference called the Dartmouth Summer Research Project on AI (DSRPAI) which was hosted by John McCarthy and Marvin Minsky in 1956. The conference didn’t go exactly to plan but there was an acknowledgement that Artificial Intelligence could be accomplished in the future. There was rapid progress over the next twenty years as technology drastically improved. Computers became more common, they ran quicker and had the capacity to store more data and lastly algorithms were upgraded so this helped users get a greater understanding of how to solve their issue. There was still a dip in the research and funding of AI in the 1970’s due to the belief that computers were still too weak to display its intelligence. This all changed again in the 1980’s after nearly ten years of very little development when further investment was provided. Some of the success stories in the 1980’s were when John Hopfield and David Rumelhart discovered “Deep Learning” techniques which permitted computers to learn using experience. Also Edward Feigenbaum released “Expert Systems” which replicated the decision making procedure of a human. Edward’s programme helped non experts receive advice, this was possible as an expert would have already provided advice on it. Even without Government funding and public promotion Artificial Intelligence still grew during the 1990s and the noughties. Currently there isn’t the drawback of having limited computer storage so as memory and speed continues to increase there is a lot less of a downside and it will continue to grow now there is nothing holding AI back technology wise.

3.0 What industries is AI taking off in China and the US? Artificial Intelligence is on the verge of penetrating every major industry from healthcare to advertising, transportation, finance, legal, education, and now inside the workplace. 2​ ​ [Jeanne Meister 2017] Recent developments in how w​ arehouses o​ perate means the day to day role of a warehouse operator could soon be changing but firstly the data is required. Once companies embrace AI and automation starts to kick in then the supply chain will reap the benefits with increased productivity, efficiency and acceleration as technology becomes even more advanced. For AI to successfully be embedded into an organization it is imperative that applications are guided by key performance indicators (KPIs), this will improve order accuracy, safety and most importantly productivity and profit. A warehouse has a lot of data as its disposal already and Artificial Intelligence can provide assistance here by undertaking automation. Picking orders in a warehouse is where productivity and distribution takes place. The warehouse operator picks the order, ticks off what is required for that particular order and then leaves it at the collection point for the lorry to transport it and distribute it to the store. AI through the use of algorithm will have data stored that will sort the orders in the fastest way that they are picked and this will help other employees with their picking. The warehouse order picker is just one example of where AI can make a difference to the worker’s day to day role but also the employers. There will be many instances in the future where AI will replace the role of the worker but not in every case. Automation will play a pivotal role in the L​ aw industry​ because there is so much manual work that is done on a daily basis. For instance lawyers have to study each case thoroughly, then research it, and read through lots of paperwork. For smaller cases a machine could provide the answer if it has the correct data stored and this will save money and time. In the Law industry Artificial Intelligence should be embraced because there are a lot of mundane tasks such as contracts that need to be completed daily by a human. Junior Lawyers generally are given these tasks as they are tedious and no one else wants to perform them having previously done in their early careers. Artificial Intelligence is not intended to frighten a Law worker but merely free them up from time consuming duties so that they can provide a first class service to clients. One thing that AI can’t compete with that every human has in their armor is empathy. A machine can fire out information, provide near instant data for results, cases, times etc. but it can’t display human empathy in serious situations.

3.0 What industries is AI taking off in China and the US? The United States and China are both competing to be the standout leader in Artificial Intelligence. For a considerable amount of time companies based in the United States have led the way with (AI) mainly down to funds and the incredible amount of data that they have access to. With large companies such as Facebook and Google who both have so much information and the revenue to back it up, they can afford to pay for top scientists to study the research and development of AI. The same level of interest in Artificial Intelligence doesn’t appear to be shared by the US Government currently. Treasury Secretary Steve Mnuchin stated that widespread AI in the workplace was not even on his radar screen, and the budget for the National Science Foundation which covers AI development has remained stagnant, after the House of Representatives rejected President Trump’s attempts to cut it by over 11%. 3​ [​ Molly McParland February 8​th​ 2018]. A frosty relationship between US admin and Silicon Valley certainly hasn’t helped matters due to tech companies that are based in the United States unwilling to assist the National Security with certain requests. The United States is ahead of their rivals when it comes to autonomous vehicles because of the eagerness in Silicon Valley to develop the best technology. Self-driving regulations in the US has also benefited them as the market leader for self-driving cars but China isn’t far behind in this sector. The success story of Uber has played a key role in the rising popularity of these cars along with the continued progress of (AI). Tech companies take the development of ​autonomous vehicle​ technology seriously because the stakes are high, this is not a recommendation engine for Netflix, the AI has to be spot on, that means it requires extreme computing power and a lot of code. ​4​ [Danny Shapiro 2017 University of Pennsylvania] Danny is a senior director of automotive at chipmaker Nvidia. Front facing cameras that are built inside the cars can already see who is present in the vehicle and study the driver’s eyes for example if he/she became distracted or were fatigued. Safety is the major goal here and on the exterior of the car messages can be sent advising the driver if something was to happen like someone drove through a red light. This takes place with the help of cameras and sensors. Potential accidents like this is all down to human error and with (AI) on board this can potentially greatly reduce the amount of time incidents that take place on roads due to careless driving. There are sceptics who won’t believe this technology can advance enough to be safe, especially after the Tesla’s autopilot car crash in California on March 23​rd​ of this year. This was the second accident after an Uber vehicle tragically killed a lady in Arizona.

3.0 What industries is AI taking off in China and the US? Now turning to the world of (AI) in​ Banking​ is something that is only going to grow and grow. The days of traditional banking are sadly coming to an end. In Ireland retail banking has changed dramatically in the last few years. Cashiers and customer service representatives have been replaced by computers, machines and telephones. This must be very frustrating for the older generation who weekly would call to their local branch to pay their bills and make a withdrawal transaction. This would have become part of their weekly routine, like a social event nearly of some sort. This is the downside of technology and where (AI) could lead to a distant memory for the customer to bank staff interaction in their local bank. Suddenly technology changes, banks invest in their technology and they want to see a return. Staff either retire and are not replaced or are offered voluntary redundancy which means the workforce is reduced and there is savings in overhead. Investment banks are also improving their technology, their logic is now why should the bank pay for someone who inputs data into a computer manually when potentially the employee could enter the wrong amount into the system which leads to discrepancies. Automation comes in and replaces the day to day inputter by knowing what amount to send, what account to send it from and what account the funds will be transferred to. Automation has a distinct advantage here in the sense a payment can go out at any time over the last 24 hours, for example on a bank holiday but when it’s entered manually by an employee the payment can only be processed between working hours. Banking is not only changing in retail, for payments JP Morgan Chase only a few months ago released a “Contract Intelligence (COiN) system” which examines legal documents. This platform has dramatically reduced the amount of time it takes to review the documents from thousands of hours to seconds which is extraordinary. Another platform used by JP Morgan is the “Emerging Opportunities Engine” which through automation can recognize clients who are most suited for extra equity takings. Wells Fargo have gone down a different route with their Artificial Intelligence Enterprise Solutions team which specializes in predominantly payments. Wells Fargo has collaborated with Facebook for close to ten years now and recently set up an (AI) chatbot through Facebook Messenger. Chatbot is virtual and can communicate back and forth with whoever is interacting with the service. Wells Fargo chatbot is programmed so that it can reset passwords for customers who have locked their accounts and provide some account details.

3.0 What industries is AI taking off in China and the US? Another sector where Artificial Intelligence can succeed and have a major impact is the H​ ealthcare industry. Saving lives is what’s most important and the fact it is a robot and not a surgeon performing the surgical procedure might become the norm. Since 2014 Intuitive Surgical Inc’s use a robotic surgery system called Da Vinci that actually assists surgeons. The robot hand has more flexibility than the human hand and is able to reach different parts of the human body. Machine Learning and Automation can be used to free up time for doctors and surgeon’s to investigate new cures and the discovery of new treatments. Artificial Intelligence would be able to provide results from previous patient’s cases and this would help new patients who might be suffering with the same symptoms. This would be hugely beneficial to the medical team and also the patients as diagnoses can be even more accurate. Analyzing organic tissue is important with regards to the diagnosis of cancer. This can be an extremely tedious task due to the fact the cells are so alike and also adding in the attention to detail is vital but humans can make mistakes and can become fatigued from doing the same task. (AI) doesn’t have this issue because it’s a machine so tiredness or attention to detail isn’t relevant so results would be even more accurate. AI is able to achieve these fascinating results by analyzing gigapixels. (AI) can also provide answers by combining medicines and this could be different from a doctor who might prioritize health. Artificial Intelligence already plays a key role in the day to day life of a normal civilian already, probably unknowingly to some people. Apple customers will have used​ Siri ​before, whether they chose to use it again is another thing. Siri has some impressive features, you can ask Siri to wake you up the following morning at a particular time, and Siri can also advise you of the weather outside and lastly advise you of a place to eat. The fact that these services can all come from a mobile phone of someone who is lying in bed is mind blowing. Alexa​ is the Amazon version of Siri and this can feed back pretty cool information such as providing match results of a previous night’s football game, set reminders to pick up someone or if you don’t know the name of a song Alexa can give the user the answer. Alexa can also do the shopping bizarrely enough and dim the lights in a user’s home once it’s connected to a smart home. The days of the blackboard in education is coming to an abrupt end. Students are becoming more advanced and tech savvy as they now are growing up in a very different world to that of 15 years ago when it was dial up internet. Computers are cheaper, faster and have more memory than ever before. Schools can utilize this to their advantage, for example it can be tough for a teacher to explain a topic to thirty school kids. Some students will pick up what the teacher is saying straight away, others will struggle to understand what message the teacher is trying to relay. Having an (AI) machine in place could help the students who are struggling, and a machine can alter the speed and the way something is taught.

3.0 What industries is AI taking off in China and the US? Business and Marketing​ companies are a no brainer for wanting to improve in an ever changing and competitive market. A good example of (AI) already in place is after a user starts using Netflix, their algorithms then commence and provide the customer with content that it feels they might want to watch. For those who aren’t familiar with Netflix they will have come across Google’s AI which improves search results by the power of machine learning. The last two sectors which Artificial Intelligence will play a part is A​ griculture​ and C​ onstruction.​ In Agriculture where farmers are struggling with more severe winters and climate control is never far from discussion. Drones continue to prove their investment and worth by now making it achievable to test plants and the water levels they receive. Less manual work is required now that machines can pick fruit. During the initial cost of a construction job between the QA and Architect estimation can generally fall below what the price of the job might actually turn out to be. There is a hotel in Japan called Huis Ten Bosch Henn na Hotel which is the first hotel operated with advanced technologies. At the reception desk instead of staff to greet the guests they are met by multi lingual robots. The robots can also assist the guest with check in/check out and even store luggage. What is even more impressive is facial recognition is used to identify each guest so it saves the customer from having to carry around a key. China has a hotel that opened in August 2017 and that is a voice controlled hotel, it hasn’t the same technology as Huis Ten Bosch but robots greeting guests will be next possibly.

4.0 Why have China got so involved in AI? In July 2017, China’s State Council published an ambitious policy blueprint calling for the country to become “the world’s primary AI innovation center by 2030. ​5 [​ Matthew Leonard St Andrews Angels February 27t​ h​ 2018]. They have set out an ambitious plan to expand the countries Artificial Intelligence and with the population and data at their disposal, it's hard to argue with a figure like $63 billion growth by 2025 is feasible. China has also announced it plans to build an Artificial Intelligence technology park in Beijing at a cost of over $2billion. This is a massive statement of intent by China of where technology is going in the future and no stone is left unturned as they cover many different parts of IT. China also has a distinct advantage over their rivals from having data not in the public domain and the fact their population is bigger than the United States and Europe combined. China can boast that over three quarters of a billion people are online, this astronomical figure proves every time a Chinese person based in China shops online or uses a service like Didi which is their version of Uber that this data is all recorded. Baidu is the Chinese equivalent of Google and a couple of years ago the company decided to add (AI) technology that permitted a user to take a picture of a piece of retail for the search engine to recognize and then it would check for a cost and save this data. One person who possess great knowledge with regards to (AI) is Kai Fu Lee. Kai was born in Taiwan but was educated in the United States and on his resume there are previous roles with Apple and Microsoft where he worked as a scientist before gaining a promotion and switching to Google to head their Chinese operation. He has since left the role with Google and now resides in Beijing where he invests in Chinese (AI) research. This tells a great deal about how much progression is happening in Artificial Intelligence. A technology that has caused a lot of commotion in numerous countries is facial recognition, this is too much for a lot of people but Kai Fu Lee says “Chinese consumers are more willing to trade privacy for safety or convenience. 6​ ​[Rory Cellan –Jones BBC 19t​ h​ January 2018] Facial recognition is commonly used already in China for example in KFC a customer can pay for a meal by facial scan and also at the airport thanks to Baidu technology a customer’s identity can be recognized at certain gates. These two examples are significant breakthrough boundaries in technology when you consider contactless payment cards have only become popular in Ireland for the past few years. Students in China are also aware of the heavy investment and how a career in (AI) can potentially become very rewarding. If the expenditure is to continue than their needs to be a skilled workforce in place to be able to meet the demands. China has only a very small percentage of workers in this field compared to the US who will possibly next year not be far off a million employees. As soon as technology companies begin visiting Universities and advertising open days only then may there be an increase in the influx of students who would like to forge a career in this new age technology. With the backing of the Government and the private state it’s easy to see why China can win the war on AI and the future is their younger generation.

5.0 Comparing China to the United States in AI There are differences in the way the two countries view Artificial Intelligence and that is probably down to different cultures. On the previous page it was mentioned how China are embracing (AI) technology by using facial recognition at some airport gates but when this plan was put forward by U.S Customs and Border Protection last year there was public dismay as they found it to be very intrusive. Passengers who fly from Miami International since October 2017 have been stopped and are led to a small camera similar to an IPhone, this camera takes facial scans. A Georgetown University Legal Team raised concerns over these actions and called the program a “solution in search of a problem and say that “neither Congress nor DHS have ever justified the need for the program” 7​ [​ Jerry Iannelli January 3r​ d​ 2018]. The Chinese Government has deployed facial recognition tech in Western China in a known area to where trouble has arisen in the past. Facial recognition is already installed at petrol stations and shopping centers and for criminals this isn’t something they want to deal with. Only last week it was announced that Amazon are assisting the US law by selling them a facial recognition technology called Rekognition. Police were able to upload images from their database into Rekognition and then attempt to identify suspects. This was met with disgust by the ACLU which stands for The American Civil Liberties Union. “Given an image, it will return a list of labels, given an image with one or more faces it will return bounding boxes for each face, along with attributes. 8​ [​ Jeff Barr Amazon Chief Evangelist for AWS 2016] The (ACLU) group share the same views as a lot of people in the fact that people should be able to move around freely without being monitored but there is also the counter argument that if a person has nothing to hide then they have nothing to worry about. Alibaba probably the world’s largest online shopping company advised that they planned to invest heavily in Artificial Intelligence and they would build seven labs in four countries and this investment could total around $15billion. When a company who can boast that their sales for the previous year were higher than Amazon and Ebay combined it really tells you where the future lies. Companies as big as Alibaba don’t just throw around expenditure, research and development would have gone into this. In the 2017 Association for the Advancement of Artificial Intelligence (AAAI) worldwide conference which recognizes the achievements of the world’s Artificial Intelligence Leaders it advised that 23% of the authors of academic papers were based from China. This was a massive leap in terms of research output, considering that Chinese AI researchers only contributed 10 % of the research output in the 2012 (AAAI). ​9  [Simon Alvarez February 19​th​ 2018] .American had a greater number of authors than China but the report showed a decrease from 41% back in 2012 to 34% in 2017. This shows that China is making rapid progress on the United States and the fact that China announced plans to build a huge AI center that would bring together companies that take part in (AI) under one roof as such speaks volumes of the confidence they have. While the United States are lacking a national center and there are no immediate plans to build once so it looks like China is stealing a march here so to speak. The late Stephen Hawking raised his concerns on many occasions about Artificial Intelligence having said before that it could be “either the best, or the worst thing ever to happen to humanity”. ​10 ​[Rajiv Rao for New Tech for Old India April 28t​ h​ 2017 quote Stephen Hawking].

6​ .0 Is China using America’s own plan to control the future of AI? On the 20t​ h​ of December 2016 the White House released a report under the then President Obama stating that Artificial Intelligence will transform their economy for many years to come. The report had three hopes about machine learning, technology and (AI). Then seven months later in July 2017 China produced nearly an identical report called “Next Generation Artificial Intelligence Development Plan” with the same outlines. China’s plan is to overtake and exceed other competitor countries when it comes to AI by 2030. They also agreed with their US counterparts that a long term investment in Artificial Intelligence Research and Development would be a wise move. Both technology rivals agreed that promoting collaboration on AI between private tech companies and their own government would be beneficial and finally to investigate the potential hazards and risks of implanting Artificial Intelligence. Both documents side by side could be mistaken for one another but what is really important is that policies are implemented correctly and this is the foundation. When Barack Obama was in charge at the White House, the plan was to increase support for research and development but when President Donald Trump came into power the funding was cut by 10% allegedly. China on the other hand aren’t afraid to put serious expenditure into (AI) having promised to spend $150 billion four years ago and having already being true to their word by providing a third of that amount already. Baidu is the number one Chinese company for embracing AI and it has totally reinvented itself by having 1,300 employees working as part of a team which included success stories such as developing software that’s more enhanced than human’s speech. Baidu is opening a second site in Silicon Valley, the hub of technology. Companies from China fully believe that by switching staff between Silicon Valley and their US staff to Chinese offices they feel there is a competitive advantage in reaching parity with the United States in regard to Artificial Intelligence Technology. The two setbacks for China is their workforce size for AI is still considerably lower than the US and half of the major successful employers who are thriving with AI talent are US companies based in China such as Microsoft. The other worry is for the everyday worker because increased automation reduces the demand and needs for workers across many different areas. This is where the Chinese government would need to step in and make a stand because it could cost them more if workers are no longer skilled and are than seeking social welfare. With the backing of the Chinese government AI strategy looks in a strong place going forward while the United States plan has kind of taken one step forward under Obama but now two steps back under President Trump’s leadership and the worry might be that they won’t catch China such is their expenditure and planning. One area where China is now leading the way is in the funding of Artificial Intelligence startups. In 2017, China had 48% funding while the US had 38%. A contributor to the funding for China is the chip sector. Processors are getting manufactured to keep up with the demands of machine learning.

6.0 Is China using America’s own plan to control the future of AI? There is always planning for the future, for instance, there is a shortage of workers with AI experience in China. It is a really competitive market especially when companies like Google are also based in China. There is a belief that talent is walking out of universities without them completing their university courses due to the temptation of working for a multinational company and earning a high wage at a young age. Peking University was the first college to introduce an AI related course almost 15 years ago and now close to 30 universities have implemented a similar programme. Google has also set up its own research center in Beijing to entice students to come work for them and not a rival company, this is what gives them a competitive edge. There is also the lure of working abroad for an international company, opportunity to travel and experience a new culture so there are more challenges than ever before for companies to retain their staff. For those who can’t afford third level education there are online courses available. China is still behind the United States but they are closing the gap substantially.

7.0 Conclusion The conclusion of the research conducted in this report is the below; ● China has overtaken the US in the funding of Artificial Intelligence startups. ● China overall funding for 2017 was 48% compared to the United States 38% ● China has a population larger than the United States and Europe combined. ● China is ahead of the US in terms of dollar value of funding. ● Chinese government continues to support and fund AI while the US has cut their expenditure by 10% since Donald Trump took over as President. ● There is a more relaxed approach to regulation in China compared to the United States for example with regards to facial technology. China are still somewhat behind the United States in terms of technology mainly thanks to the success of Silicon Valley but the US can’t rest on their laurels and take this for granted. China’s tech companies are extremely powerful, but they lack the international support American companies like Facebook and Google who have more than two billion users, this thwarts the population of China. Both countries are creating exciting new technology and the United States should be very fearful at the rate of progress the Chinese Artificial Intelligence is growing.

8.0 Referencing [1] ​https://www.britannica.com/technology/artificial-intelligence [2] https://www.forbes.com/sites/jeannemeister/2017/11/09/the-future-of-work-how-artificial-intelli gence-will-transform-the-employee-experience/#50ae1ed423c9 [3] ​https://globalriskinsights.com/2018/02/china-artificial-intelligence-market-leader/ [4] ​http://knowledge.wharton.upenn.edu/article/ai-tipping-scales-development-self-driving-cars/ [5] h​ ttps://venturebeat.com/2018/02/27/inside-chinas-race-to-become-an-ai-superpower/ [6] ​http://www.bbc.com/news/technology-42745218 [7] http://www.miaminewtimes.com/news/homeland-security-face-scanners-at-mia-airport-likely-ill egal-9958436 [8] http://fortune.com/2018/05/23/critics-ask-amazon-to-stop-selling-facial-recognition-technology-t o-police/ [9] ​https://www.teslarati.com/china-overtake-us-ai-research/ [10] https://www.zdnet.com/article/stephen-hawking-issues-familiar-warning-against-ai-at-its-emergi ng-power-center-china/