Australia and the AI race : Part 1


Photo by Pietro Mattia on Unsplash


Recently I have been involved in a project, along with Callum Bir, to try and create an AI Studio in Sydney. It’s a common rule of thumb that any tech venture hub only works well if there a healthy mix of commercial, government and academic involvement, but in order to try and convince these disparate interests to get involved we need to rationalise why should Australia increase its engagement into AI, why should AI attempt to take part in the AI race?

Part 1: Why would we care about the AI Race?

This article will firstly focus on why we should care about creating a healthy AI industry. The next part will focus on what are other nations doing (the competition) and in the third part will be  about where Australia is placed in this global endeavour. The fourth part deals with how we might structure an AI venture Hub to help catalyse a vibrant AI community and be part of the AI race.

What is the AI race?

It is an overt attempt by nations to invest in and lead, research, development and commercialisation of AI. “Lead” implies competition, leading, or being a front runner in the race, with the further implication that performing well in the race brings rewards that are significantly greater than what the losers (or the observers) receive.

The word “AI race” maybe overly emotive, that doesn’t mean that it isn’t happening.

The term AI race has been used by many world leaders such as Putin and Trudeau, where they emphasise the need to not only be front runners but actually winning the race. Many government policies are being created to try an assert their nations position in the AI Race. China has for example planned “to be the global leader in the development of artificial intelligence theory and technology” (Wikipedia, Artificial Intelligence Industry in China).

Europe has also joined the race : ‘the ambition is for Europe to become the world-leading region for developing and deploying cutting-edge, ethical and secure AI.’ (European Commission 2018)

The huge (absolute and per capita) AI investments by US and many smaller nations like Canada, Israel, Switzerland, Sweden and Norway, which will be discussed further in the next article, also suggest how important these nations think AI is.

Books have been written about the AI Race – for example “AI Superpowers: China, Silicon Valley, and the New World Order” by Kai-Fu Lee. And there are dozens of articles (see the references below) highlighting the race and the need to be in the race.

So to sum up, there is an AI race, and many nations are convinced that it is important to be in that race.

Why be in the Race?

There has been so much written about why we (Australia or any nation really) should be in the AI race, for example here, here, and here, that you would think by now it would be pretty obvious. Here is a list of points and quotes that summarise the above articles:

  • Whoever leads AI “will become the ruler of the world.” (LeVine 2018)
  • One of the most urgent themes in technology is the global rivalry for dominance of the evolving sector of artificial intelligence — geopolitical and economic supremacy is said to be at stake. (LeVine 2018)
  • The outcome of this race, to become the global leader in AI, will affect the trio’s [US, China, EU] future economic output and competitiveness, as well as military superiority. (Castro et al 2019)
  • ‘Australia should be in the race because AI is a foundational technology that can boost competitiveness, increase productivity, protect national security, and help solve societal challenges. (Williams 2019)
  • Artificial intelligence (AI) is poised to disrupt humanity, society, industries, local, national and global economies and politics by fundamentally transforming how people perceive, feel, reason and interact with the physical and digital worlds, shaping human experiences, beliefs and choices. (Williams 2019)
  • Australia’s major trading partners have already declared their ambitions to be AI leaders: they are developing strategies, roadmaps and making substantial investments in AI. (Williams 2019)
  • Nations wherein firms fail to develop successful AI products or services are at risk of losing global market share. (Castro et al 2019)
  • As Andrew Moore .. the current head of Google Cloud AI stated, this part of the race will determine “who will be the Googles, Amazons, and Apples in 2030.” (Castro et al 2019)

Why be in any technology race?

“The United States reaped tremendous economic benefits from the last wave of digital innovation, becoming home to some of the world’s most successful tech companies, such as Amazon, Apple, Facebook, Google, Intel, and Microsoft. Meanwhile, many parts of the world, including the European Union, paid an economic price staying on the sidelines.”

(Castro et al 2019)”

We have an intuitive feeling as to why a healthy and globally competitive AI ecosystem is important, but can we elucidate better why communities and nations benefit from such an investment? One reason, as mentioned above by Castro et al, is that we can see the most successful companies in the world come out of the US, largely because of its huge investment into hardware and software over the last 50-60 years.

Large and successful companies help drive growth and revenue locally, they develop talent, they develop accompanying complementary businesses and technologies, and they often re-invest in the local economy in multiple ways.

We have lots of other anecdotal evidence of how technology investments have brought about massive changes in a nations standard of living (for example Finland in telecommunications and software, and India in IT consulting), what else can we lean on the get a picture of why these sorts of investments helps a nation compete?

Thirty years ago Michael Porter wrote a book (and an article here ) and he said:

“National prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists. A nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.”

I will come back to Porter in a future article, where we can use his frameworks to try and get a handle on how we in Australia can improve our performance in AI.


The AI race is about public and private investments in research, startups and other commercial endeavours. If it wasn’t enough that many national leaders and many governments are emphasising their intense focus on AI because of its potential to change the world, there is also a lot of historical examples and research on how nations have in the past strongly benefited from their focus on advanced technologies, creating growth, improving standards of living, catalysing globally successful companies and a building a sophisticated and expert workforce. In the next part, part two, I will cover what the global competitors are doing in the AI race.

If you are interested in discussing this further, or you are interested in my services, please don’t hesitate to get in touch.


Wikipedia, Artificial Intelligence Industry in China

European Commission, 2018, Member States and Commission to work together to boost artificial intelligence “made in Europe, &

Elliot 2019,

A $23 trillion opportunity: Why Australia must embrace the AI revolution ,

Petrara 2019, ABI Research,

China’s AI Ambition Gets A Reality Check As the USA Reclaims Top Spot in Global AI Investment,’s-AI-Ambition-Reality-Check-USA-Reclaims

Snyder 2019,

Who is winning the artificial intelligence race?

Biddle 2019 ,

Why an “AI Race” Between the U.S. and China Is a Terrible, Terrible Idea ,

Forthomme 2019, 

The Race for Artificial Intelligence: China vs. America,

Qu 2019,

Beijing’s hopes for AI dominance may rest on how many US-educated Chinese want to return home,

2019 Sherman,

Is China gaining an edge in artificial intelligence?

Williams 2018,

Can Australia lead the AI race?

Wiliams 2019,

The Artificial Intelligence race: will Australia lead or lose?

Castro et al 2019,

Who Is Winning the AI Race: China, the EU or the United States?

LeVine 2018,

The stakes for who wins the AI race.

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