Governments want access to AI chips and software built in their own countries, and they are shelling out billions of dollars to make it happen.
What’s new: Nations across the world are supporting homegrown AI processing and development, The Economist reported.
How it works: Governments want AI they can rely upon for state use. The U.S. and China each promised to invest around $40 billion in the field in 2023. Another 6 countries — France, Germany, India, Saudi Arabia, the UAE, and the UK — pledged a combined $40 billion. Different governments are emphasizing different capabilities.
- The U.S., home to tech powers like Amazon, Google, Microsoft, and OpenAI, has left the software sector largely to its own devices. However, the federal government has subsidized the semiconductor industry with a five-year commitment to spend $50 billion on new factories and devoted much smaller amounts to research.
- China also seeks to bolster its semiconductor industry, especially in the face of U.S. export restrictions on AI chips. The government spent $300 billion between 2021 and 2022 trying to build a domestic chip manufacturing industry. In addition, the state cracked down on some tech areas (such as video games) to redirect economic resources toward higher-priority areas, established data exchanges where businesses can make data available for AI development, and created public-private partnerships that support development of advanced technology.
- Saudi Arabia and the UAE are buying up GPUs and investing in universities like Abu Dhabi’s Mohamed bin Zayed University of Artificial Intelligence and Thuwal’s King Abdullah University of Science and Technology to attract global engineering talent. The UAE plans to make available national datasets in sectors like health and education to local startups such as AI71.
- France, Germany, India, and the UK are supporting their own AI startups. France provides public data for AI development. India is courting cloud-computing providers to build data centers in the country and considering a $1.2 billion investment in GPUs.
Behind the news: Even as governments move toward AI independence, many are attempting to influence international politics and trade to bolster their positions.
- As EU lawmakers negotiated the final details of the AI Act, France, Germany, and Italy managed to relax the Act’s restrictions on foundation models. These countries worry that strong restrictions would hamper domestic developers such as France’s Mistral and Germany’s Aleph Alpha and stifle innovation and open source more broadly.
- In September 2022, the U.S. government blocked exports of advanced GPUs and chip-making equipment to most Chinese customers. The sanctions threaten even non-U.S. companies that try to circumvent the restrictions. Consequently, in December, the UAE-based AI developer G42 cut ties with Chinese equipment suppliers. Earlier, the U.S. had extended the restrictions to some Middle Eastern countries including the UAE and Saudi Arabia.
Why it matters: AI has emerged as an important arena for international competition, reshaping global society and economics, generating economic growth, and affecting national security. For engineers, the competition means that governments are competing to attract talent and investment, but they’re also less inclined to share technology across borders.
We’re thinking: We understand governments’ desires to ensure access to reliable AI, but focusing on sovereignty above all is misguided. In a networked world, developments can’t be contained to one country. Cooperation ensures that development proceeds at a rapid pace and benefits everyone.