In the past years, China has actually constructed a strong foundation to support its AI economy and made considerable contributions to AI globally. Stanford University's AI Index, surgiteams.com which assesses AI developments worldwide across numerous metrics in research study, development, and economy, ranks China among the top three countries for worldwide AI vibrancy.1"Global AI Vibrancy Tool: Who's leading the worldwide AI race?" Artificial Intelligence Index, Stanford Institute for Human-Centered Artificial Intelligence (HAI), Stanford University, 2021 ranking. On research study, for example, China produced about one-third of both AI journal papers and AI citations worldwide in 2021. In financial financial investment, China represented nearly one-fifth of international personal financial investment financing 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 geographic area, 2013-21."
Five kinds of AI companies in China
In China, we find that AI companies typically fall into among five main categories:
Hyperscalers develop end-to-end AI innovation ability and work together within the community to serve both business-to-business and business-to-consumer business.
Traditional market business serve consumers straight by establishing and embracing AI in internal transformation, new-product launch, and client service.
Vertical-specific AI business develop software application and services for specific domain usage cases.
AI core tech providers provide access to computer vision, natural-language processing, voice recognition, and artificial intelligence capabilities to develop AI systems.
Hardware companies offer the hardware infrastructure to support AI need in computing power and storage.
Today, AI adoption is high in China in finance, retail, and high tech, which together account for more than one-third of the nation's AI market (see sidebar "5 types of AI business in China").3 iResearch, iResearch serial marketing research on China's AI market III, December 2020. In tech, for example, leaders Alibaba and ByteDance, both family names in China, have become known for their extremely tailored AI-driven customer apps. In reality, the majority of the AI applications that have been commonly embraced in China to date have actually remained in consumer-facing industries, propelled by the world's biggest web customer base and the capability to engage with customers in new ways to increase customer commitment, profits, 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 throughout markets, in addition to extensive 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 mature AI use cases and clear adoption. In emerging sectors with the greatest value-creation capacity, we concentrated on the domains where AI applications are presently in market-entry phases and could have a disproportionate impact 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 research study.
In the coming decade, our research study suggests that there is significant opportunity for AI development in brand-new sectors in China, including some where innovation and R&D spending have actually generally lagged global equivalents: automotive, transportation, and logistics
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The next Frontier for aI in China could Add $600 billion to Its Economy
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