AI Superpowers

Chapter 1 starts with an anecdote about Chinese teenager Ke Jie playing Go (a Chinese strategy game similar to chess) against an AI called AlphaGo. In 2017, Ke was the Go world champion. AlphaGo was created by Google to play Go at the master level. Over three matches, AlphaGo defeated him easily.

While AIs have been defeating human experts at strategy games since the 1990s, they were limited in what they could do. AlphaGo is powered by deep learning, which Lee describes as “turbocharged” and “groundbreaking.”

Lee argues that AlphaGo’s heavily publicized victory over Ke Jie sparked a cultural fervor in China, which he dubs a “sputnik moment,” referencing the Soviet earth satellite Sputnik 1. The original sputnik moment triggered the Space Race, a decade-spanning rivalry between the US and the USSR. The Soviets’ initial success motivated Americans to innovate and win the “race” to the moon. Lee writes that China’s sputnik moment with AlphaGo has sparked a similar AI race between the US and China.

Lee outlines a brief history of deep learning. AIs have been in development since the 1950s. They have gone through phases of speedy progress followed by barren “AI winters” in the 1970s and 1990s. According to Lee, most 20th-century AI researchers were split into two camps: the “rule-based” approach and the “neural-based” approach. The rule-based camp tried to teach AIs to think by teaching them logical rules, while the neural-based camp attempted to build programs that worked like human brains. Lee has been a proponent of the neural-based approach since the 1980s. Today, most AIs are trained with this approach, now called deep learning.

Lee identifies China and the US as the world’s current leaders in AI development and implementation. Initially, the US—specifically Silicon Valley—took a “commanding lead” in the AI race. However, Lee argues that the invention of deep learning has caused two “global shifts” that give China the upper hand.

Lee concludes this section with an overview of the major topics explored in later chapters.

In “China’s Sputnik Moment,” Lee likens Chinese entrepreneurs to gladiators fighting to the death and using dirty tactics to get ahead. “Copycats in the Colosseum” focuses on explaining this assertion. Lee uses entrepreneur and computer engineer Wang Xing’s career as a microcosm for Chinese tech culture and its evolution from the 1990s to the 2010s. While Wang began his career mimicking successful western websites like Facebook and Twitter, this process helped him build wildly successful products that made him a world-class businessman.

Lee sets up his exploration of China’s entrepreneurial landscape by pointing out some cultural differences between Silicon Valley and the Chinese tech industry. While Silicon Valley’s entrepreneurs are hardworking, he asserts that Chinese entrepreneurs work twice as hard and are willing to use “dirty tactics” to achieve success. He attributes this discrepancy to the cultural differences between the Valley and China. While Lee sees the Valley as a land of abundance and intellectualism, the Chinese tech world is predicated on “a cultural acceptance of copying, a scarcity mentality, and the willingness to dive into any promising new industry” (38).

Though westerners may look down on copying as unimaginative and dishonest, Lee sees it as an engrained part of China’s academic culture. He compares the Chinese tech copycats to historical Chinese “copycat clockmakers,” who studied European clocks by reproducing them, ultimately learning their techniques and applying them to distinctly Chinese designs. Lee sees this strategic mimicry as a symbol of Chinese ingenuity.

Lee demonstrates the copycat entrepreneurs’ power with a series of anecdotes. He tells the story of a scandal that occurred at Google China while he was one of the company’s top executives. A copycat mimicked Google’s site design so perfectly that even Google employees couldn’t tell it was a forgery. He discusses the “battle” between eBay and its Chinese counterpart: Jack Ma’s Alibaba. Though Alibaba was originally an eBay knockoff, it proved more successful in China. When eBay attempted to gain traction in China, it refused to localize for Chinese users. According to Lee, Alibaba chased eBay out of the Chinese market because it was designed to appeal to Chinese consumers.

This chapter delves into China’s digital and economic ecosystems in the 2010s. While Lee’s “copycat era” is defined by Chinese imitation of Silicon Valley’s products, the 2010s saw China’s internet culture develop into an “alternate universe,” distinct from its western counterpart. Lee exemplifies his alternate universe assertion by centering the Chinese “super-app” WeChat (owned by Chinese tech conglomerate Tencent), which he likens to both a Swiss army knife and a universal remote control. WeChat performs functions that are “scattered across” roughly a dozen American apps and “dominates” its users’ lives both online and offline. WeChat can be used to manage money, book appointments, hail transportation, and more.

Lee writes that WeChat Wallet (Tencent’s digital wallet app) became the “top dog” in digital finance by launching its “red envelope” feature:

Chinese tradition calls for the gifting of “red envelopes,” small, decorative envelopes with cash inside, during the Lunar New Year. That cash is the Chinese equivalent of a Christmas present, something usually given by older relatives to children, and by bosses to employees. Tencent’s innovation was so simple—and such pure fun for users—that it masked the magnitude of the power grab. WeChat gave its users the ability to send out digital red envelopes containing real money to WeChat friends near and far (69).

While apps from the West are attuned to Western sensibilities, WeChat is designed specifically for a Chinese userbase. It is suited to China’s cultural touchstones and urban environments. It also conforms to the way Chinese people typically use the internet. Some of these differences stem from the different histories of internet use in the two countries. In the 1990s, home computers became popular in the US, but they remained scarce in China. When smartphones hit the market in 2007, Americans adjusted to using them after developing digital literacy on computers. Chinese users, meanwhile, skipped home computers and learned to use the internet on smartphones.

Another difference between the Chinese and American tech ecosystems is the way its denizens typically manage their money. In the 1960s, Americans transitioned from using cash to debit and credit cards. Chinese buyers largely stuck with cash until the 2010s, when they shifted to using digital payments. Because cards remain convenient in the US, Americans have been slower to adopt digital wallets.

Lee writes that China has developed its own alternate version of Silicon Valley: Chuangye Dajie (The Avenue of Entrepreneurs). While the Valley’s tech culture developed naturally, the Avenue was specifically created to foster Chinese business ventures and is supported by the Chinese government. The Avenue was developed and rolled out in 2014 by government official Guo Hong (with help from Lee) under the banner of “mass innovation and mass entrepreneurship” (63). The first Avenue of Entrepreneurs was established on a street in Zhongguancun, but several similar locations have popped up in other parts of China.

Lee compares the typical American and Chinese businesses’ approach to providing their products. He writes that Americans tend to “go light” where the Chinese “go heavy”:

American internet companies tend to take a “light” approach. They generally believe the internet’s fundamental power is sharing information, closing knowledge gaps, and connecting people digitally. […] In China, companies tend to go “heavy.” They don’t want to just build the platform—they want to recruit each seller, handle the goods, run the delivery team, supply the scooters, repair those scooters, and control the payment. And if need be, they’ll subsidize that entire process to speed user adoption and undercut rivals (80).

Lee sees the willingness to go heavy as an advantage. He writes that it has the power to shape economic trends, labor markets, and consumers’ daily lives.