In the past years, China has actually constructed a solid foundation to support its AI economy and made significant contributions to AI internationally. Stanford University's AI Index, which examines AI advancements worldwide across numerous metrics in research study, advancement, and economy, ranks China among the top 3 nations for global AI vibrancy.1"Global AI Vibrancy Tool: Who's leading the global AI race?" Expert System Index, Stanford Institute for Human-Centered Artificial Intelligence (HAI), Stanford University, 2021 ranking. On research, for example, China produced about one-third of both AI journal papers and AI citations worldwide in 2021. In economic financial investment, China represented nearly one-fifth of global personal investment funding in 2021, bring in $17 billion for AI start-ups.2 Daniel Zhang et al., Artificial Intelligence Index report 2022, Stanford Institute for Human-Centered Artificial Intelligence (HAI), Stanford University, March 2022, Figure 4.2.6, "Private investment in AI by geographical area, 2013-21."
Five types of AI companies in China
In China, we find that AI companies normally fall under among 5 main classifications:
Hyperscalers develop end-to-end AI technology capability and team up within the environment to serve both business-to-business and business-to-consumer business.
Traditional industry companies serve customers straight by developing and adopting AI in internal change, new-product launch, and customer support.
Vertical-specific AI business develop software application and solutions for particular domain use cases.
AI core tech providers supply access to computer system vision, natural-language processing, voice recognition, and artificial intelligence capabilities to develop AI systems.
Hardware companies offer the hardware facilities to support AI need in calculating power and storage.
Today, AI adoption is high in China in financing, retail, and high tech, which together represent more than one-third of the country's AI market (see sidebar "5 types of AI business in China").3 iResearch, iResearch serial market research study on China's AI market III, December 2020. In tech, for example, leaders Alibaba and ByteDance, both household names in China, have become understood for their highly tailored AI-driven consumer apps. In fact, many of the AI applications that have been widely adopted in China to date have remained in consumer-facing markets, moved by the world's biggest web consumer base and the ability to engage with consumers in new methods to increase client commitment, revenue, and market appraisals.
So what's next for AI in China?
About the research study
This research is based on field interviews with more than 50 professionals within McKinsey and across industries, along with comprehensive analysis of McKinsey market evaluations in Europe, the United States, Asia, and China specifically in between October and November 2021. In performing our analysis, we looked outside of commercial sectors, such as financing and retail, where there are currently fully grown AI use cases and clear adoption. In emerging sectors with the highest value-creation capacity, we concentrated on the domains where AI applications are currently in market-entry stages and could have an out of proportion effect by 2030. Applications in these sectors that either remain in the early-exploration stage or have mature market adoption, such as manufacturing-operations optimization, were not the focus for the purpose of the study.
In the coming decade, our research study suggests that there is remarkable chance for AI development in new sectors in China, including some where development and R&D costs have actually typically lagged international counterparts: automotive, transport, and logistics
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The next Frontier for aI in China might Add $600 billion to Its Economy
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