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MIT Study: 5 Takeaways on the Global AI Competition Between the U.S. and China

In data, AI, artificial intelligence, data governance, China No Comments
March 21, 2019

We’re continuing to look at the results of the MIT and Boston Consulting Group (BCG) studies on artificial intelligence (AI) that were released late last year. In the first part of this blog series, we looked at five ways businesses can reap value from AI. We debunked the myth that the U.S. is sure to win “the battle for world dominance of AI.” In fact, China is ahead of its peers—both in artificial intelligence adoption and also, with the centralized data governance that makes AI possible. As the study says:

“Because AI engines learn by ingesting training data—the more the better—companies should centralize the housing and governance of data, and Chinese Pioneers do this particularly well. For example, 78% maintain their corporate data in centralized data lakes, compared with only 37% and 43% of European and U.S. pioneers, respectively.”

In this blog, we will take a quick look at what Chinese companies are doing differently when it comes to AI. As a result, we hope U.S. companies in all industries reflect on how some of these lessons can be applied to their own operations. The most important takeaway: if you want to be part of the AI revolution, make data governance a priority at your business.

Now, let’s take a look at how China approaches AI.

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1. The Chinese government has an AI-first strategy.

The first big difference between the two countries is that the Chinese government has an AI-first strategy. From the central government to provincial governments on down to companies, artificial intelligence is a priority in China. While the U.S. government recently made AI a priority through an executive order, no funds were set aside for research and development and a detailed plan was not put into place. Some businesses believe that a more aggressive, organized approach must be implemented by the government in order to compete with China. Aside from political priorities, here are three other takeaways.

2. Chinese companies are investing more heavily in AI.

In a survey that compares responses from 300 Chinese executives with 3,000 respondents from 126 countries, MIT and BCG found that 91% of Chinese respondents are investing in AI more this year than they were last. Compare this number to 74% of U.S. and European companies and you can see one reason China is outpacing the United States. Chinese companies are also transforming their business models to include artificial intelligence.

3. More Chinese businesses are modifying their business models to include AI initiatives.

Companies in China aren't only dabbling in AI projects. They are actually transforming their business models to reflect how artificial intelligence is adding value to the organization as a whole. 60% of Chinese respondents say they have modified their business model in last three years and 12% plan to in next 5 years. In the U.S. and Europe, only half of companies say they have modified their business model. While the numbers aren’t too far apart, the 10% gap in transformation could put Chinese businesses at a greater advantage in the race to AI.

Source: MIT webinar entitled AI in Business: Myths, Reality, and How to Reap Value

4. Chinese pioneers lead in data governance and centralization.

Artificial intelligence researchers agree that in order to succeed at implementing AI, companies must centralize data governance, management, and expertise. Chinese companies do this exceptionally well. AI requires large amounts of clean, well-organized data. Instead of siloed data running on different applications, companies must consider all streams of data and optimize how they are governed.

According to the MIT study, nearly 80% Chinese AI respondents locate their data in centralized data lakes, as opposed to 40% of respondents, on average, from the U.S. and Europe. The same percentages hold for centralization where 80% of Chinese respondents say they centrally own and manage their own data.

Has your organization talked about making data a priority? Fairway is happy to provide support to companies who would like to optimize their data streams and prepare for AI. At no cost, we can do an in-depth analysis on your organization and provide you with a customized plan on how to become a data-driven business. Let us know if you have any questions!

For the full webinar from MIT, AI in Business: Myths, Reality, and How to Reap Value, click here.

Source: MIT webinar entitled AI in Business: Myths, Reality, and How to Reap Value

 

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