The competition was one of many examples cited in a report by a U.S.-based think tank about how China’s military might leverage its country’s rapid advances in artificial intelligence to modernize its armed forces and, potentially, seek advantages against the United States.

“China is no longer in a position of technological inferiority relative to the United States but rather has become a true peer (competitor) that may have the capability to overtake the United States in AI,” said the report, written by Elsa Kania at the Center for a New American Security (CNAS) and due to be released on Tuesday.

Future U.S.-China competition in AI, Kania wrote, “could alter future economic and military balances of power.”

Alphabet Inc’s Executive Chairman Eric Schmidt, who heads a Pentagon advisory board, delivered a similar warning about China’s potential at a recent gathering in Washington.

Schmidt noted that China’s national plan for the future of artificial intelligence, announced in July, calls for catching up to the United States in the coming years and eventually becoming the world’s primary AI innovation center.

Eoin Treacy's view

Developing hardware is technically difficult and requires highly specialized machinery which a relatively small number of countries control the manufacture of. That has precluded China from developing a domestic semiconductor business despite the fact it is a major assembler of computing products. Software is not subject to those kinds of limitations.

At its base level artificial intelligence is about developing macros to perform predictable tasks. The grunt work of creating libraries of images, labelling and cataloguing so a program can learn to identify idiosyncrasies between different dogs etc. is something that was outsourced to emerging markets years ago and therefore China will have no problem replicating and accelerating that work.

Additionally, the fact so much of what is considered creative is in fact derivative in some way also opens up the potential for programs to take what they know and come up with novel solutions. Again, that is not a factor of importing hardware but of hard graft in terms of programming hours and human ingenuity. Therefore, it is eminently possible that China has the potential to rival the USA in artificial intelligence based purely on a weight of numbers and capital question.

Baidu is leading the charge for China’s development of artificial intelligence. The share broke out of a well-defined range in July and has been consolidating above the trend mean since October. A sustained move below it would be required to question medium-term scope for additional upside.