Cool story bro, but the US patent office and UN WIPO beg to differ.
MAY 17, 2018
China Leads The U.S. In Patent Applications For Blockchain And Artificial Intelligence
The number of China’s blockchain and crypto patents has grown about five times since 2016 to just over 1,500.
Visitors enjoy an artificial intelligence robot’s performance during the 2018 Exposition on China’s Indigenous Brands at Shanghai Exhibition Center on May 10, 2018 in Shanghai. (Photo by VCG/VCG via Getty Images)
China, thanks to its 1.37 billion residents, leads the world on a number of counts. The smartphone user population totaled 663 million last year, more than anywhere else, and its internet penetration stood at 751 million.
Now China ranks first in the world in the number of patent applications from two heavily watched, fast-growing areas of high tech: cryptocurrency and artificial intelligence, claims American startup ecosystem research organization Startup Genome in a 2018 report. Chalk that up to active government support, domestic demand for new technology and, per one study, a more relaxed patent regime.
“Artificial intelligence and blockchain are both mentioned in several of China’s government reports recently as important new technologies that will receive support from the country,” says Felix Yang, an analyst with the financial advisory firm Kapronasia in Shanghai. Beyond that, he says, “the consumers and businesses became more demanding for services received in recent years.”
China had four times as many artificial intelligence-related patent applications and three times as many blockchain and cryptocurrency-related patents as of last year compared to the second-ranked United States, the report says. It had surpassed the United States on both counts by 2015 and the trend became obvious over the next two years. The number of China’s blockchain and crypto patents has grown about five times since 2016 to just over 1,500.
State support
Chinese startups are improving largely because of government support. Central government subsidies have already helped advance the Chinese semiconductor industry. Now state agencies are directing capital and policy support to artificial intelligence (AI): teaching machines to process commands or read data as humans do.
In late 2017, for example, a Chinese government-backed venture capital fund helped lead a $460 million investment in the domestic facial recognition startup Megvii. Government incubators are also among the plethora that have opened in China to foster new technology.
In 2016, the government set up 324 funds with a target size of $272 billion, the Ministry of Science and Technology says. The government will invest heavily in the internet of things and “smart appliances” as they help manufacturers get ahead, the State Council in Beijing adds. Outside the capital, 15 provinces have drawn up plans for AI development for potential market size of 429 billion yuan ($67.3 billion) by 2020.
China wants to be the AI world leader by 2030, according to this Forbes report.
‘The government has been quite supportive when it comes to finding capital for Chinese startups,” said Lee Cheng-hwa, senior industry analyst with the Market Intelligence and Consulting Institute in Taipei.
Consumer demand
Chinese consumers, from the everyday office worker to massive manufacturers, also expect enough from their technology that service providers are paying attention. Those expectations help drive progress in AI and blockchain technology.
“AI has been very commonly used for everyone’s daily life,” says Kitty Fok, China managing director with market research firm IDC. “Blockchain is starting as the focus for investors this year.”
More on Forbes: The Impact Of Artificial Intelligence On The Future Of The Digital Agency
Automated customer service agents, sales automation and emergency response AI systems in particular are gaining favor in China, Fok says. Chinese e-commerce giant Alibaba and its affiliates handle 90% of AI-enabled customer inquiries in China. More than 200 blockchain-related startup companies operate now in China as well, IDC estimates.
The Alibaba affiliate Ant Financial is focusing on blockchain development and has a stack of related patents, this industry news report says. In March the company said it would use blockchain, a public ledger for digital transactions, to help Chinese liquor distiller Kweichow Moutai prevent its rice wines from being counterfeited.
Liberal patent procedures?
Chinese developers may be accumulating patents across industries faster than people from other countries because China issues them more liberally than places such as Japan and the United States, the ChinaPower project under U.S. think tank Center for Strategic and International Studies says in a report.
Ant Financial Vice President Peng Yijie speaks in April 2018 during the 1st Digital China Summit in Fuzhou, China. (Photo by VCG/VCG via Getty Images)
Chinese nationals who filed for tough-to-get triadic patents, meaning joint applications to Japan, the United States and the European Union, fall short of their U.S. peers, ChinaPower says. The United States has received at least 10,000 triadic patents every year since 1990, while China has never gotten more than 2,000 triadic patents in a year.
Patents often take longer to get and cost more overseas because award selections are more rigorous, ChinaPower says. The Sino-U.S. comparison of triadic patents indicates that “patents do not hold up under the more stringent requirements of the international patent system,” the report says.
