Us Investment: The Power Of Will And The Need For More

In March 2021, a 750-page report by the National Security Commission on Artificial Intelligence, chaired by former Google CEO Eric Schmidt, warned that China will dominate AI unless the US invests more. The report, which was addressed to Congress and the White House, stated that China has the might, talent, and ambition to surpass the United States as the world's leader in AI in the next decade if current trends do not change.

The report also emphasised the need for the US to maintain its lead in other key technologies, such as quantum computing, robotics, 3D printing, and 5G. While some have criticised the report's findings, arguing that the US is already too far behind, others have expressed concerns about the ethical implications of AI integration in the military.

The US risks falling behind in key technologies such as quantum computing, robotics, 3D printing and 5G

The US is at risk of falling behind in several key technologies, including quantum computing, robotics, 3D printing, and 5G. In the case of quantum computing, the US has invested in developing this technology, but other countries, particularly China, are making larger investments and could surpass the US in this area. This is a concern because quantum computing has the potential to transform national security, cybersecurity, and communications infrastructure. While quantum computers are incredibly complex and expensive, they can perform certain calculations much faster than traditional computers. This gives them the potential to break encryption and compromise sensitive data. As a result, the US government has implemented measures to protect its quantum technologies and block Chinese access to American innovations. However, the US needs to do more to maintain its competitive advantage.

Robotics is another area where the US risks falling behind. While the US has made some advancements, other countries, such as China, are investing heavily in robotics and artificial intelligence. This could lead to a situation where the US is dependent on foreign technology, compromising its national security and economic competitiveness. Additionally, the US has fallen behind in the development of 5G technology. Chinese firms, particularly Huawei, have taken a dominant global position in the provision of 5G networking equipment. This has raised security concerns, as having Chinese-made equipment serve as the backbone of sensitive communications technology could create an espionage or security risk. As a result, the US and its allies have mounted a global campaign to block the installation of Huawei's equipment, even if it causes significant delays in the rollout of 5G service.

3D printing is another technology that has the potential to revolutionize manufacturing, but the US risks falling behind in its adoption and utilization. While there was initially a lot of hype around 3D printing, the growth rates in recent years have been low. However, this is starting to change, and the industry is now experiencing double-digit growth rates. The machines have improved significantly, becoming bigger, faster, and capable of working with more materials. While 3D printing is not yet widely used for final parts manufacturing, it is expected to become more prevalent in the future. To avoid falling behind, the US needs to invest in and adopt these new technologies, as well as develop the necessary workforce skills to utilize them effectively.

Overall, the US risks falling behind in several key technologies, including quantum computing, robotics, 3D printing, and 5G. These technologies have the potential to significantly impact the global economy and national security. To maintain its competitive advantage, the US needs to increase its investments and develop strategies to harness the benefits of these technologies while mitigating the associated risks.

The US needs to integrate AI into the military

The US military has been integrating AI into its operations, with the Army and Air Force using machine learning and artificial intelligence to enhance training and the Department of Defense investing in AI-related technologies. However, to maintain its global military dominance, the US needs to further invest in and integrate AI into its military.

AI is becoming integral to military operations globally, with the quality of a nation's algorithms being a key factor in determining military superiority. The US faces significant competition from countries like China and Russia, who are rapidly advancing their military AI capabilities. China, in particular, has been identified as a potential threat to US dominance in the AI sphere, with its ambitious goal of becoming "the world's primary AI innovation center" by 2030.

To maintain its competitive edge, the US must continue to invest in and develop its military AI capabilities. This includes allocating more resources to AI-related projects and ensuring that AI is integrated across all branches of the military.

The US has already made significant strides in this area, with the development and utilization of Project Maven, an AI system that uses computer vision algorithms to identify targets on the battlefield. This system has been used to locate rocket launchers in Yemen, vessels in the Red Sea, and to narrow targets in Iraq and Syria. Additionally, the US Army's 18th Airborne Corps has been utilizing Maven to strike targets from bombers, fighter jets, and drones, showcasing the system's versatility and potential.

However, to stay ahead of its competitors, the US must continue to innovate and expand its use of AI in the military. This includes exploring new applications of AI beyond target identification, such as processing weapons-sensor data and planning resupply routes for ammunition.

In conclusion, while the US has made progress in integrating AI into its military, more investment and development are needed to maintain its global military superiority. The US needs to recognize the critical role of AI in future warfare and act decisively to integrate this technology across its armed forces.

The US risks losing its competitive advantage in the semiconductor manufacturing industry

The US is at risk of losing its competitive edge in the semiconductor industry, a sector it once dominated. This is a critical issue as semiconductors are integral to almost all electronic products, and the country's economy, military, and political system depend on them. The US currently has an 8% share of the world's semiconductor fabrication capacity, down from 100% historically.

Reasons for the Decline

The primary reason for the US's decline in the semiconductor industry is its pursuit of short-term profits, which led to the offshoring of manufacturing and a loss of expertise. The Boston Consulting Group's matrix, which categorised businesses into Stars, Cash Cows, Dogs, and Question Marks, influenced the US to outsource consumer electronics production to Asia, including Japan, South Korea, Taiwan, and China. This resulted in the loss of a critical customer base for semiconductors.

Strategies for Regaining Competitiveness

To regain its position, the US needs to invest significant amounts of money in the semiconductor industry. The recently enacted CHIPS Act committed $52 billion over five years for research and development, but this amount is insufficient compared to the funding required to be competitive. Additionally, the US should focus on inshoring the manufacturing of electronic products to ensure a domestic market for semiconductors and gain insights into future chip design.

Implications of Losing Competitive Advantage

If the US loses its competitive edge in the semiconductor industry, it risks becoming subservient to its competitors economically, politically, and militarily. China, in particular, poses a significant threat, with its talent, ambition, and rapid advancements in AI and other key technologies. Maintaining a technological lead is crucial for the US to preserve its democratic values and avoid dire consequences.

The US needs to double its research spending to keep up with China

The US is no longer the 'uncontested leader' in science and research funding, with China rapidly closing the gap. In 2018, US government advisers predicted that China's research and development (R&D) spending would soon surpass that of the US to claim the top spot globally. While this has not yet happened, recent reports indicate that China's R&D spending is rapidly approaching and, in some sectors, has already overtaken that of the US.

US vs China R&D Spending

In 2021, the US spent $806 billion on R&D, while China spent $668 billion. From 2000 to 2015, China's R&D spending soared by an average of 18% annually, while US spending rose by about 4%. This trend continued, and in 2019, the US spent $656 billion on R&D, while China spent $526 billion, accounting for approximately half of all global R&D spending. China's high annual R&D growth, averaging 10.6% from 2010 to 2019, greatly exceeds that of the US, which averaged 5.4% during the same period.

Global Competition

The US is still the largest supporter of science and technology, but China is rapidly catching up and making significant commitments to the future. The US must maintain its leadership role in innovation and global competitiveness by increasing its investment in basic research and development. While the US has seen a recent surge in corporate spending on R&D, particularly in IT and pharmaceuticals, federally funded R&D has remained relatively flat as a proportion of the economy.

Impact of Reduced US Spending

A decline in US R&D spending could have significant implications for the country's economy, national security, and global competitiveness. Reduced spending on basic research could also impact graduate student training, as many students in science, technology, engineering, and mathematics (STEM) fields are supported by federal R&D funding. Additionally, the US risks losing global market share in advanced industries as Chinese companies continue to expand their R&D investment with government support.

Recommendations

To maintain its position, the US should consider implementing the following strategies:

• Increase R&D tax incentives for businesses
• Double the Alternative Simplified Credit rate to 28%
• Restore full expensing of R&D expenditures
• Expand programs that fund joint industry-university research

By doubling its research spending, the US can ensure it keeps pace with China and remains a global leader in innovation and technology.

The US needs to focus on maintaining its lead in AI and other key technologies

To maintain its leadership position, the US must increase its investments in AI and other key technologies such as quantum computing, robotics, 3D printing, and 5G. Former Google CEO Eric Schmidt, who chaired the commission, emphasized the importance of competitiveness over conflict, stating, "We don't have to go to war with China... We don't have to have a cold war. We do need to be competitive."

The US military's integration of AI is also crucial. Schmidt highlighted the potential benefits of AI-guided weapons and computer vision technology, which can enhance the military's ability to analyze drone and satellite footage. However, he also acknowledged the challenge of ensuring that other countries adhere to ethical standards in weapons development and use.

Additionally, the US needs to focus on maintaining its competitive edge in semiconductor manufacturing. Intel is currently the only US company focused on leading manufacturing technology in this sector, and it is struggling to keep pace with competitors like Samsung and TSMC. To address this, the report calls for the US to maintain a two-generation advantage over China in semiconductor manufacturing.

Moreover, the report emphasizes the importance of doubling research spending each year until it reaches $32 billion. This investment is vital to ensure the US remains at the forefront of AI and key technology sectors, driving innovation and economic growth.

In conclusion, the US must prioritize investments and strategic initiatives to maintain its lead in AI and other critical technologies. By doing so, it can secure its global competitiveness, strengthen its military capabilities, and drive economic growth through innovation.

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