China is close to becoming a global leader in AI by 2030, in a battle in one of the most crucial technology wars in the world. By the end of the decade, the two nations could be equals in AI leadership as China continues to build its dominance in other sectors like robotics and energy storage, according to a new Bloomberg Intelligence forecast.
The prediction is not an absolute one, as it does not imply China is definitely out of the race for dominating the US in all fields of AI. Instead, it is a shift in the competitive environment where complex AI models, less expensive software, manufacturing capacity, and hardware supporting AI systems will all be important.
China’s AI ambitions are moving beyond chatbots
China may be on the path to dominate eight of 17 key technology sectors by 2030, according to a Bloomberg Intelligence report on October 28, with large language models (LLMs) among the areas expected to be among the most prominent. These are the AI systems that power tools that can answer questions, write content, analyze information, and generate computer code. The prediction is part of China’s overall efforts to make technological advances a reality in products and production. Chinese businesses aren’t just trying to out-compete others to develop the best AI models; they’re also trying to make AI cheaper and easier to run and use in business.
This distinction may have a significant impact. An AI model doesn’t have to excel at every test and competition to gain the customer. If it provides any value at a lower cost, companies can consider it an appealing choice.
Eight industries that could reshape the competition
This prediction is not limited to AI chatbots. According to Bloomberg Intelligence, there are a number of strategic sectors where China could be a leader:
- Large language models: Artificial Intelligence systems that enable chatbots, coding assistants and other generative AI applications.
- Optical networking equipment: Devices that use light to carry data, which are used to link computing systems and data centers.
- Humanoid robots: Robots that are shaped like humans, used to do work in a factory.
- Commercial shipbuilding is an existing industrial sector of a medium scale which is able to sustain China’s international manufacturing position.
- Autonomous and connected vehicles: Vehicles that utilise software, sensors and artificial intelligence to help with driving and/or communications.
- Energy storage: Storage of electricity for future use, in accordance with the power grid and renewable energy.
- Green hydrogen: Hydrogen generated with low emissions, which can be used for industrial energy supply.
- Biopharmaceutical manufacturing: Contract Development and Manufacturing Services for medicines and biological treatments.
The biggest challenge may be turning progress into profit
Creating competitive technology is just one component of the problem. They also need to attract customers, make a profit, and remain competitive without slashing their prices until they become so low that they lose profit. Competition in the Chinese marketplace is fierce, and the China-US trade war could restrict access to top-of-the-range components and overseas markets. Another significant hurdle for semiconductor manufacturing is the reliance on advanced AI systems, which rely on sophisticated chips and equipment.
Another limitation is the economic conditions. Bloomberg Economics is predicting an average 3.6% annual increase in growth through the decade ahead for China’s economy versus 5.2% over the last three years. While the pressures from a dwindling workforce may be alleviated by the adoption of AI and automation, the country’s overall economic challenges are not likely to be solved by this technology.
Why the next four years matter
The more intense rivalry between the Chinese and American AI companies may lead to better options and lower costs for users. There is potential for reduced-cost AI services to benefit businesses, and for more capable robotics and automation systems to benefit manufacturers.
But it will take more than technology to get the result. The success of companies will depend on access to computing hardware, energy, investment, international markets, and paying customers. The top learning is that the race may not have a single “winner” in the AI race. The Bloomberg Intelligence projection suggests a future where the US is at an advantage in frontier artificial intelligence while China is steadily gaining ground in all models of AI, hardware, and industrial use. As the decade goes on, it will be evident whether those hoped-for benefits will contribute to a long-term global leadership role.
