Asia is aggressively pursuing artificial intelligence. Across the whole region, companies with an AI-focus are raising more money than ever before, with many Asian companies largely leading the way. In particular, while China has been making waves with some of the most eyebrow-raising investments in AI, South Korea is becoming increasingly visible and bullish on its own investments in AI as well.
What makes China a contender in AI, are some of the same reasons South Korea is heating up. Both governments are heavily investing in AI. A little over a year ago, China released a three step program outlining their plan on how it will become a world leader in A.I. by 2030. South Korea’s government also released an AI strategy and wants to be a top 4 contender in AI by 2022. China’s plan includes pushing for greater use of and heavy investment of AI in a number of areas such as the military and smart cities. The Chinese government plans to spend $2.1 Billion for an AI-focused technology research park. South Korean government agencies and major tech companies have pledged similarly large-sized investments in their AI industry. Are we looking at a growing regional rivalry for AI dominance?
South Korea another strong contender
South Korea has AI capabilities and ambitions of their own and is looking to strategically position themselves as a global contender. In 2016 South Korea famously hosted the match where DeepMind’s AlphaGo defeated Go’s world champion Lee Sedol, a Korean-native. They are also known throughout the world for their strong semiconductor, automotive, and electronics industry, as well as their use of industrial robotics technology. The country is home to many large well established tech companies such as Samsung, LG, and Hyundai, that have each shown significant appetite to invest in AI.
In response to a shortage of AI engineers in the country, the Korean government plans to to create at least six new AI schools by 2020, and educate more than 5,000 high quality Korean engineers. It also plans to invest in AI on a national level. An R&D challenge similar to those developed by the US Defense Advanced Research Projects Agency (DARPA) as well as funding AI projects related to areas such as public safety, medicine, national defense are also in the plans. Many in the country see the creation and development of AI startups and businesses is also vital to building a strong AI ecosystem, and as a result the government is supporting the creation of an AI-oriented startup incubator to help develop emerging AI businesses and funding for the creation of AI semiconductors by 2029. Clearly, the government and Korean companies alike think that AI is an important technology for the country.
Despite this intense investment in AI, South Korea faces some sizable challenges to long term growth of the local AI ecosystem. The country doesn’t have a well-developed venture capital ecosystem and has a small number of significant AI focused startups. South Korea’s current AI efforts are almost entirely concentrated in the activities of the major technology incumbents already in the market and government initiatives and funding. In addition, like most countries, South Korea faces an engineering talent gap for experienced, skilled AI talent. As such, the country is focused on building AI capabilities and skills through its education system, but this will take time to reap rewards.
Another Regional AI Rivalry: Japan
Just across the Korea Strait is Japan, a longtime leader in the robotics industry, that also sees AI as a technology of the future. Releasing an AI strategy in March of 2017, Japan sees focusing on R&D for AI, collaboration between industry, government, and academia to advance AI research, and addressing areas related to productivity, welfare and mobility as ways to move their AI strategy forward. In this strategy plan, the Japanese government lays out an Industrialization Roadmap that focuses the development of AI into three phases: the “utilization and application” of AI through 2020, the public’s use of AI from 2025-2030, and lastly an “ecosystem built by connecting multiplying domains.” Japan also continues to exhibit dominance in robotics and other AI related fields and has one of the most active VC powerhouses in Softbank, which has raised over $100 billion for its “Vision Fund.”
However, the Japanese ecosystem faces challenges to its continued AI industry growth. The country has an aging population causing a shortage in available workforce, which is expected to get worse over time. On the other hand, the adoption of AI and robotic technologies can be seen as a solution to alleviate issues related to their aging population and labor shortages making AI technologies of great value and an inevitable necessity to the country. This explains the country’s dominance and fascination with robotics. It’s also important to point out that while Softbank is a Japanese firm, many of the companies and startups they invest in are not Japanese, and therefore, so much of the investment is not remaining within Japan’s own AI industry or larger Japanese economy.
Could China lose it’s strong hold on AI?
In this most recent wave of AI interest, AI funding is coming from many diverse sources: venture capital, government investment, corporate investment, and academic sources. Certainly there’s no sign that any of these sources of capital and interest will slow any time soon. This should send positive signs for AI industry growth. Governments, especially in China, are still funding companies. Corporations are also heavily investing both internally on their own AI R&D, technologies and AI-related products, as well as through venture arms many large tech companies now have. Most notably, VC funds are heavily investing in AI startups at increasingly eye-watering levels.
Right now China is leading the race with the most funded startups in terms of both quantity of funding and quantity of startups. The government is outspending rivals and supporting its ecosystem in ways that are unrivaled by other countries. None of these trends show signs of slowing down anytime soon. As such, while South Korea, Japan, and other nations might give China a run for its money in the region, the final winners are still yet to be determined in the long race towards artificial intelligence leadership.
