This appeared a few days ago:
China narrows gap on US in AI arms race as Australia stands idle
Paul Smith Technology editor
Jan 24, 2025 – 5.30pm
As the world waited for Donald Trump to unleash a trade war on China after his inauguration, it was a $US500 billion ($792 billion) artificial intelligence scheme called Stargate that demonstrated where the digital battleground will be contested.
The AI war is being fought on two fronts: infrastructure capacity and the level of sophistication of the AI models built. The US has been leading in both, but the symbolic importance given to Stargate by its presidential announcement comes as China is catching up fast.
Australia, meanwhile, occupies the sidelines wondering where it will fit into the AI world order.
Stargate tackles the infrastructure side of the AI war by pledging to build huge data centres at a rapid clip to house the servers, Nvidia chips and other tech smarts needed to develop technology that is smarter than humans.
China is also spending billions on infrastructure, and reports suggest that its AI models are rapidly catching, and even surpassing, some of those built by OpenAI, Anthropic and Google.
Despite Mr Trump’s presence at the announcement, Stargate is an entirely commercial endeavour, largely boosting the efforts of ChatGPT maker OpenAI. It is funded by OpenAI and Oracle, Japan’s SoftBank and Abu Dhabi-based technology investment firm MGX.
US media has calculated that the $US500 billion investment would cost more than NASA’s Apollo program in the 1960s when factoring in inflation.
Microsoft (a big backer of OpenAI) has also launched its own $US30 billion AI infrastructure fund, alongside fund manager BlackRock, and plans to spend $US80 billion this year on data centres alone.
This sits alongside big investments from other companies such as Amazon Web Services and Elon Musk’s xAI. Earlier this month, Macquarie Asset Management looked to repeat its successful investment in Australian data centre builder AirTrunk with up to $8 billion backing the plans of Nasdaq-listed company Applied Digital.
‘It’s the opposite of the Cold War’
China had to think fast. Restrictions on the sale of AI chips from the likes of Nvidia to China are a hurdle it must overcome, but official data reported by the South China Morning Post on Thursday showed about 250 advanced data centres and other computing facilities were being completed or under construction in mainland China as of June last year.
“The battle over AI is critical, as it determines the future for the economy, and for defence. The US and China are putting billions in because they each identified a decade ago that their sovereignty depends on having world-leading AI,” the chief scientist at the University of Adelaide’s Australian Institute for Machine Learning, Anton van den Hengel, said.
“It’s the opposite of the Cold War, where neither side could use their nuclear arsenals without incurring a high risk of being annihilated. This time the commercial application technology is out in the open.”
US-China tech tensions were high before Mr Trump’s election, and a move in December by the US to tighten restrictions on chips and semiconductor equipment, coupled with the addition of 140 Chinese tech firms to its restricted entity list, marked a significant escalation.
China responded by launching an antitrust probe into Nvidia, while Chinese industrial associations issued warnings about the reliability of US chip supplies. It also banned exports of critical minerals to the US and sanctioned 13 US defence companies.
Professor Van den Hengel said he was frustrated that Australia was not making moves to ramp up AI capability in the form of infrastructure and local large language models to serve as an alternative to those from US giants such as OpenAI, Anthropic and Meta.
“The challenge for Australia is that we are a decade behind the US and China, and we still haven’t started building our own sovereign capability,” he said.
“We face cyber threats right now, and the US is never going to give us their best technology as it would undermine their own defences. You don’t buy AI, you rent it. Microsoft isn’t offering to sell OpenAI to us, they’re offering to give us access. We can’t operate a sovereign economy when a critical part of the infrastructure is owned by a multinational from a foreign country.”
My expectation is that we’ll end up with two AI worlds like we ended up with two internets either side of the ‘Great Firewall of China’.
— Toby Walsh, UNSW AI Institute
The results of all this investment in terms of building the best AI capabilities are still unclear. The US was out of the blocks fastest, but concerns have emerged that the rate of improvement in the AI models underpinning services such as ChatGPT is slowing.
China has its own tech titans to rival the US, in the form of Alibaba, Baidu, Tencent and emerging AI names such as DeepSeek and Zhipu AI, which perform strongly against American bots in some of the tests used to gauge efficacy.
This week, a Chinese-built AI “reasoning” large language model called DeepSeek-R1 had AI analysts talking when it demonstrated it could be a credible rival to OpenAI’s latest o1 model. It thinks through problems step by step, and takes its time to come up with solutions to complex problems.
Unlike OpenAI, it is open source, meaning it is freely available for academic and commercial use, and could potentially become an influential model outside China. That being so, the AI cold war would invariably limit its use in Western business and research.
“DeepSeek is the most impressive, but some of the largest AI models today are Chinese,” said Toby Walsh, the chief scientist at UNSW’s AI Institute.
“My expectation is that we’ll end up with two AI worlds like we ended up with two internets either side of the ‘Great Firewall of China’.
“There will be the US AI world, and there will be the Chinese one. In one, you’ll not be able to prompt about Tiananmen Square, but it will be seamlessly integrated into your WeChat. In the other, it will be one of the US tech giants that owns your data.”
Here is the link:
One really does get the feeling that it is in this domain that WWIII will be played out!
Sadly I fear Australia will wind up being a non-playing spectator – and as time passes, without some real effort we will slip endlessly behind. Right now there is little evidence I can see that our politicians are in any way on top of this field….
$700
Billion is a huge sum and shows just how serious this is IMVHO! It is staggering that Meta alone is planning to spend $100B on the effort!
It will be exciting to watch and I hope OZ can find some useful ways to be involved and learn!
David.
3 comments:
I am not a fan of AI because it dumbs us down and it cannot really innovate, however its very electricity dependant so given our power generation issues and the high cost of electricity in Australia it's unlikely we could run it anyway, unlike China that's building hundreds of coal fired power stations and also has nuclear power stations. We should perhaps ask ChatGPT for advice on building mud huts while we still can?
The problem has just changed under our feet.
What is DeepSeek, the Chinese AI startup that shook the tech world?
https://edition.cnn.com/2025/01/27/tech/deepseek-ai-explainer/index.html
...as foreseen by Mustafa Suleyman (CEO of Microsoft AI) in his excellent book "The Coming Wave".
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