For decades the The U.S. government has let the private sector and the free market do their jobs, betting that this is the surest way to spur innovation and spark the progress needed to keep the U.S. economy on top of the world.
Now with Chinese ascendant, the approach is starting to change. Washington is taking small steps towards something closer to central planning – seeking to inspire, guide and protect advances in key areas such as artificial intelligence, biotechnology, and quantum computing.
The final proof of a change in mentality is the final report of the National Security Commission on Artificial Intelligence (NSCAI). The commission was created by the Pentagon in 2018 to study the implications of AI and related technologies on national security and outline a plan to keep the United States ahead.
“If we keep it as it is, China will surpass us,” says Gilman louie, a venture capitalist who co-founded In-Q-tel, the investment arm of the CIA, and a member of the NSCAI. “We don’t have this national strategy.”
The final version of the report, released on Monday, calls for major changes in the government’s approach to innovation and technology. The recommendations include doubling federal non-military spending on AI research to $ 32 billion per year by 2026; strengthen the United States’ ability to manufacture semiconductors; create a national AI research network for university and industrial researchers; step up efforts to train and retain AI talent; and the creation of a Technology Competitiveness Council – encompassing AI and other emerging technologies such as biotechnology and quantum computing – under the leadership of the Vice President.
Another sign of change, President Biden last week ordered a review of the US supply of semiconductors, pharmaceuticals, high capacity batteries and rare earths. The United States relies heavily on China for these products, and a recent chip shortage has plagued the American auto industry.
Louie says it’s not just about catching up with China when it comes to AI; it is also that technology will be essential to national interests. “Artificial intelligence will not only be a driver of things like the economy, quality of life and national security,” he says. “It will be the thing that nation states want to make sure they control – and a competitive space for the world’s two greatest powers.”
Louie argues that the United States and its allies cannot afford to rely on the AI developed by a political and ideological rival like China. “Anyone who knows anything about AI will tell you that it’s hard to develop algorithms that don’t imprint your culture,” Louie says. “Authoritative nations have different priorities than democratically ruled nations.”
The idea of government guiding technological or economic progress through industrial policy has been out of fashion in the United States for decades. But that is changing due to the competitive threat posed by a nation with a huge economy, a burgeoning domestic tech industry, and a government strategy that emphasizes technological advancement and dominance. Critics of China also point to rules forcing U.S. companies to share technology and state-sponsored espionage.
Tackling China was a priority for the Trump administration, which has taken aggressive action against Chinese companies such as Huawei and TikTok. Biden has proceeded with less force, but also seems determined to take on China.
Some quarters of the industry are calling for more government assistance. On February 11, the Semiconductor Industry Association asked the president increase funding for semiconductor manufacturing. The letter notes that the United States’ share of global chip manufacturing has fallen to 12 percent, from 37 percent in 1990. “Our technological leadership is under threat in the race for the preeminence of future technologies,” including artificial intelligence, advanced cellular networks, and quantum computing, ”the association wrote.