In the past years, China has built a strong structure to support its AI economy and made significant contributions to AI globally. Stanford University's AI Index, which examines AI advancements around the world across numerous metrics in research study, development, and economy, ranks China amongst the top three nations for international AI vibrancy.1"Global AI Vibrancy Tool: Who's leading the international AI race?" Expert System 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 documents and AI citations worldwide in 2021. In financial investment, China represented almost one-fifth of worldwide private investment financing 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 kinds of AI companies in China
In China, we discover that AI companies usually fall under one of 5 main classifications:
Hyperscalers establish end-to-end AI technology capability and team up within the ecosystem to serve both business-to-business and business-to-consumer business.
Traditional market companies serve customers straight by establishing and embracing AI in internal transformation, new-product launch, and customer care.
Vertical-specific AI business develop software and options for specific domain use cases.
AI core tech service providers provide access to computer vision, natural-language processing, voice recognition, and artificial intelligence capabilities to establish AI systems.
Hardware business offer the hardware facilities to support AI need in computing power and storage.
Today, AI adoption is high in China in financing, retail, and gratisafhalen.be high tech, which together represent more than one-third of the nation's AI market (see sidebar "5 kinds of AI business in China").3 iResearch, iResearch serial market research study on China's AI industry III, December 2020. In tech, for instance, leaders Alibaba and ByteDance, both home names in China, have become understood for their highly tailored AI-driven customer apps. In fact, the majority of the AI applications that have been in China to date have actually remained in consumer-facing markets, moved by the world's largest web consumer base and the capability to engage with customers in brand-new methods to increase customer loyalty, revenue, 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 professionals within McKinsey and throughout markets, in addition to comprehensive analysis of McKinsey market assessments in Europe, the United States, Asia, and China specifically between October and November 2021. In performing our analysis, we looked beyond commercial sectors, such as finance and retail, where there are already fully grown AI usage 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 an out of proportion 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 years, our research study indicates that there is incredible opportunity for AI growth in new sectors in China, including some where innovation and R&D costs have actually typically lagged worldwide equivalents: automotive, transport, and logistics
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The next Frontier for aI in China could Add $600 billion to Its Economy
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