The race to be the AI leader between China and the United States is the subject of heated debate. The more important strategic question is whether China is creating the metaverse.
The metaverse is based on infrastructural technology like AI. It refers to the wide variety of digital ecosystems and experiences, including e-commerce, entertainment, and social media, that make up the majority of our daily lives. It will soon be difficult to imagine a world where many of our economic and social lives are not governed by the rules of metaverse. The opportunity to create rules for their own benefit is available to the builder.
Both the U.S., China, and other actors are trying to claim the metaverse. However, they don't have enough control over the core technologies that make it possible.
These core technologies include AI and 5G, end-user device, and sector-straddling superapps that bring everything together, as well as related technologies like smartwatches, eyewear, and smartwatches. These four criteria are what could give China an unbeatable advantage over the U.S. when it comes to building the future virtualized human experience.
Chinas AI advantage
The Chinese leadership recognizes that AI is changing almost all aspects of society, including consumption. The Chinese government calls for China to make major breakthroughs in AI by 2025, so that it can be the world's leader in AI by 2030.
The future of society and the economy will depend on who and how the metaverse is built.
In 2017, the Chinese government's New Generation Artificial Intelligence Development Plan outlined the strategy. Since then, it has sparked both new policies as well as billions of dollars in R&D investments by ministries, province governments, and private companies.
China's AI initiatives have caused the American advantage in this sector to slowly erode. In 2017, the U.S. held a 11x lead over China. But, by 2019, it had fallen to 7x. The U.S. had a narrow lead in the sector of 6x by 2020. This lead is not certain. The ex-chief software officer at the Pentagon said that China had an unsurmountable lead on AI and machine learning.
Some also question the American leadership in the area of training data availability. The U.S. tends toward privacy in the privacy versus the public good debate. China, however, has long used government intervention to maintain a civil society that is a public good.
Finally, China has vast data sets available to train AI. This is a strategic advantage considering China's large population of 1.4 million.
The devices are made in China
China's unrivaled and long-standing dominance in consumer device manufacturing is the key to the ability to build and eventually become the dominant force in the metaverse. Chinese manufacturers produce the most variety and largest number of devices needed to access social media and digital platforms. These include smartphones, notebooks, AR and VR headsets as well as notebooks and smartphones. Shenzhen is home to the most advanced design and manufacturing capabilities.