Investing in AI will determine future world superpowers

Shehab Al-Makahleh
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The world is witnessing a "cold technological war" between major powers that want to control the globe "digitally". International powers are trying to use their Artificial Intelligence (AI) capability to profit and accumulate wealth at the expense of other countries in economic, military and information fields. They are benefitting from the Fifth Generation Technology (G5) which is the source of strength for countries that look forward to ruling the world as this new field is the next axis of competition between international forces.

The volume of international investments in artificial intelligence varies from one country to another. The volume of international investments in AI has increased by about 60 percent since 2010. Global AI investments are estimated to contribute $ 15.7 trillion by 2030, and reach $89.9 billion by 2025. Many countries around the world are confident that artificial intelligence technologies will be the main driver of economic growth over the next few years and that countries will not be able to attract quality investments if they do not create a favorable infrastructure for this hi-tech field.

The coming era is not the epoch of powerful armies but rather, the eon of advanced technologies and smart applications that serve civilian and military objectives since future wars will not be fought by humans, but rather, by AI applications.

Shehab Al-Makahleh

Cold War indicators

AI can transform the productivity and potentials of the world’s GDP based on strategic investment in different types of artificial intelligence technology. This can be conducive to improve labor productivity as AI technologies help perform tasks and duties better. Research reveals that up to 46 percent of total economic gains will come from product improvements and stimulating consumer demand through AI by 2030 as artificial intelligence will lead to greater product diversity, with increased customization, allure and affordability over time.

China will top the list as the most to benefit from artificial intelligence as this will add 27 percent to its GDP by 2030, while North America will be second with 15 percent. The volume of AI businesses at the global level is estimated at 20 world economies by the end of 2018. This ratio will increase GDP by 14 percent in 2030. Hypothetically, AI might broaden gaps between countries, buttressing the current digital gulf. Countries might require diverse strategies as AI implementation rates differ.

Developed nations, who are spearheading the adoption of AI, could upturn their lead over developing states by capturing an extra 25 percent in net economic gains. On the other hand, developing nations might only acquire less than five percent. As many developed nations are gearing towards higher productivity growth ratios to GDP, the developing states have to live up to the challenges and adopt the new technological means to not only develop their industries, but also their GDPs by replicating others’ experiences in advanced countries.

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The developing countries can win over the developed nations, which have a severe issue with an aging population. More than 70 percent of the population of the developing nations are young generations whose age is less than 33 years old. This can be a very positive leverage to fill the gap between the developed and developing countries in terms of AI adoption.

The major users of AI applications are the moguls of the internet industry such as Google, Baidu (which is a Chinese technology company), Yandex (a Russia technology network company), and others. They have invested more than $39 billion on technology in 2018. Other sectors such as energy, financial services including banking and stock markets, automotive firms, media, transport and logistics entities come next in AI investment. In 2018, developed nations invested more than $10 billion in machine learning, which is part of AI.

Features of the new Cold War

The United States and China are currently the two main research and development powers for AI. Recently, the United States has focused on the establishment of one of the largest academic forces in AI, which is a largely private sector dominated by military or intelligence agencies, such as the IARPA (Advanced Intelligence Research Projects) and the Defense Advanced Research Projects Agency (DARPA). The evidence is not far from Trump’s claims that, since he came to power, he has expressed his intention to develop AI to improve the economy, but also use it for national security purposes.

China has chosen to maintain a strong public investment, estimated at about $7 billion a year in AI projects as part of an ambitious national plan of action to create a $150 billion industry by 2030.

Israel has the third-largest market share of AI applications in the world with direct investments estimated at $1 billion in 2017, a year in which seven Israeli-owned companies were listed among the world’s most advanced AI companies. The relationship exists traditionally between the Israeli army and the country’s technological industries as well as the academic structure.

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Japan’s budget for AI was estimated at $1 billion in 2018. Canada has embarked on a public and private sector financing route to promote and set up entrepreneurship opportunities in the area of AI, and to develop training, qualifications and research under the responsibility of the Ministry of Finance.

Russia has allocated a budget of $15 billion for AI research in order to develop its civil and military sectors. The European Union will be responsible for the development of AI based on a project entitled ‘Horizon 2020.’ French President Emmanuel Macron also announced an investment of $2billion euros by 2020 in the field of AI.

In April of 2018, German Chancellor Angela Merkel confirmed Germany’s intention to enter the arena of AI by setting up a framework for foreign investment funds led by Amazon. The UK allotted $200 million to support AI projects. Spain is one of the countries that has developed a strategy and budget, and has been working since 2017 on drafting a white paper on AI.

If the developing nations are not ready for the upcoming challenges of technology, they will be lagging behind in their economies and will be following the advanced communities for decades to come. The coming era is not the epoch of powerful armies but rather, the eon of advanced technologies and smart applications that serve civilian and military objectives since future wars will not be fought by humans, but rather, by AI applications.

Shehab Al-Makahleh is Director of Geostrategic Media Center, senior media and political analyst in the Middle East, adviser to many international consultancies. He can be reached at: @shehabmakahleh and @Geostrat_ME.

Disclaimer: Views expressed by writers in this section are their own and do not reflect Al Arabiya English's point-of-view.
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