In the past years, China has built a strong foundation to support its AI economy and made significant contributions to AI globally. Stanford University's AI Index, which assesses AI improvements around the world across different metrics in research study, advancement, and economy, ranks China amongst the leading three nations for global AI vibrancy.1"Global AI Vibrancy Tool: Who's leading the global AI race?" Artificial Intelligence Index, Stanford Institute for Human-Centered Artificial Intelligence (HAI), Stanford University, 2021 ranking. On research, for instance, China produced about one-third of both AI journal papers and AI citations worldwide in 2021. In financial investment, China accounted for nearly one-fifth of global personal investment funding in 2021, attracting $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 financial investment in AI by geographical location, 2013-21."
Five types of AI business in China
In China, we discover that AI companies generally fall into one of five main categories:
Hyperscalers establish end-to-end AI innovation capability and collaborate within the community to serve both business-to-business and business-to-consumer companies.
Traditional industry business serve customers straight by establishing and embracing AI in internal change, new-product launch, and consumer services.
Vertical-specific AI companies establish software and options for specific domain use cases.
AI core tech companies supply access to computer vision, natural-language processing, voice acknowledgment, and artificial intelligence abilities to establish AI systems.
Hardware companies offer the hardware facilities 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 country's AI market (see sidebar "5 types of AI companies 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 home names in China, have ended up being known for their extremely tailored AI-driven consumer apps. In truth, many of the AI applications that have actually been widely adopted in China to date have remained in consumer-facing markets, propelled by the world's biggest web consumer base and the ability to engage with consumers in new ways to increase consumer loyalty, income, and market appraisals.
So what's next for AI in China?
About the research
This research is based on field interviews with more than 50 specialists within McKinsey and throughout industries, along with comprehensive analysis of McKinsey market evaluations in Europe, the United States, Asia, and China particularly between October and November 2021. In performing our analysis, we looked beyond business sectors, such as finance and retail, where there are already mature AI use cases and clear adoption. In emerging sectors with the highest value-creation capacity, we focused on the domains where AI applications are presently in market-entry stages and could have a disproportionate effect by 2030. Applications in these sectors that either remain in the early-exploration phase or have mature market adoption, such as manufacturing-operations optimization, were not the focus for the function of the study.
In the coming years, our research study shows that there is tremendous chance for AI growth in new sectors in China, consisting of some where innovation and R&D spending have traditionally lagged worldwide equivalents: automobile, transportation, and logistics
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The next Frontier for aI in China might Add $600 billion to Its Economy
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