In this episode of the McKinsey Global Institute's Forward Thinking podcast, host Michael Chui speaks with Jeffrey Ding, researcher and founder of the ChinAI Newsletter, about information asymmetry in artificial intelligence between China and the West. They cover why data may not be like oil, the Chinese industry adage on products, platforms, and standards, "unsexy AI," and more. An edited transcript of this episode follows. Subscribe to the series on Apple Podcasts, Google Podcasts, Spotify, Stitcher, or wherever you get your podcasts. Anna Bernasek, co-host: Michael, there's a lot of talk right now about artificial intelligence, or AI, and what it means for global competition. I'm really glad we've got a guest today that can talk to us about what's really going on, particularly when it comes to the US and China. It definitely is a fascinating topic--at least, I find it personally. I'm a former AI practitioner and more recently, at the McKinsey Global Institute, have been able to study the impact of AI on business and more broadly. And one of the reasons I'm so excited about today's conversation is because it's with somebody you probably don't know yet but probably should. He's famous in certain corners of the internet but his work, it turns out, is relevant everywhere.

Members get 60 days free site access, $6.95/article thereafter. In 2017, the Chinese government announced plans to "lead the world" in artificial intelligence by 2030. The announcement has fed considerable uneasiness in the United States and elsewhere about the scope of China's aspirations and the extent to which the country might use AI to tighten control over its citizens and develop more sophisticated military capabilities. However, the anxiety over China's plans for AI may be overblown, says Jeffrey Ding, an economics and technology researcher at the University of Oxford's Future of Humanity Institute. Yes, there are many signs that China is making huge investments in AI, and it leads the world in AI-related patent filings and publications -- in 2017 alone, it won some 900 patents related to facial recognition, compared with fewer than 150 in the United States.

China's best known AI companies are Sensetime, Megvii, Cloudwalk, Yitu, ByteDance, and the BAT companies -- China's first generation of internet giant: Baidu, Alibaba and Tencent. But there's another giant of artificial intelligence that is rarely discussed in the same breath as the companies mentioned above. The state-owned electric utility monopoly State Grid Corporation of China (hereafter State Grid) is the largest utility company in the world, ranking second on the 2018 Fortune Global 500 List. Less celebrated is that State Grid was the only Chinese company ranked in the top 20 in artificial intelligence (AI) patent applicants, per the World Intellectual Property Organization. In an article (in Chinese) published last year titled "State Grid Corporation of China: A hidden giant in AI," Lǐ Shāng 李熵 gives a portrait of a company whose AI initiatives could change the world.

"In January 2018, advocates for data privacy celebrated when the Chinese government released a new national standard on the protection of personal information, which contains more comprehensive and onerous requirements than even the European Union's General Data Protection Regulation, per analysis by some experts." In the decades ahead, the countries that dominate AI in any domain could influence how our world is shaped. Jeff Ding leads research on China's development of artificial intelligence at the Future of Humanity Institute's Governance of AI Program at Oxford University. He's been interested in studying China since his high school years. Ding says that once he realized the potential of AI, he became more interested in China's investment in this area. Ding's new study, Deciphering China's AI Dream, is a detailed analysis of the country's AI strategy moving forward.