One of the leading news in recent days is the upward trend of Chinese investments in startups, that are researching and developing artificial intelligence. Of course, there are some conditionals, which are related to the interpretation of the open data.

The latest analysis that deserves our attention comes from a research paper by CB Insights [1], which reports that China has overtaken the US in the funding of AI startups.

In 2014, China held only one spot and 28% of the combined valuation among the top 10 most valued startups in the world. The US, by contrast, held eight (65% of value). India laid claim to the final spot (7%).

The situation has changed a lot in 2017 and China now holds four spots and accounts for 48% of the combined valuation for the top 10 most valuable unicorns . [2]

China’s proportion of global AI startup funding as a percentage of dollar value. Image: CB Insights

The analysis estimates that China will surpass the US by the end of 2017, if it continues the same rate of growth from the last four years.

When looking at the full list of the world’s unicorns, however, Silicon Valley still accounts for a higher share of their combined valuation. While China produces companies that are more valuable on average, the Valley continues to win on quantity—with most US-based unicorns hovering at $1 billion.

total valuation ($ billion) tally of unicorns average valuation ($ billion)
US 402.4 105 3.8
China 207.6 31 6.7
Other 76.4 33 2.3

The bottom line is that China is ahead when it comes to the dollar value of AI startup funding, which CB Insights says shows the country is “aggressively executing a thoroughly-designed vision for AI.”

China’s natural advantages in AI are well-documented. Compared to the US, it has a huge population (1.4 billion), which offers a wealth of data and opportunity for companies to scale quickly. Its AI sector also has the backing of a central government that’s able to quickly shift resources (as opposed to the missing-in-action White House), and the country’s looser approach to digital regulations means companies can experiment more freely.

China’s advantages in the development of AI are easily identifiable. Four times bigger population (1.4 billion) compared to the US, offering a huge amount of data and opportunities for companies to grow very quickly. AI sector has the support of a central government that’s able to quickly transfer resources (as opposed to inability and/or willingness of the White House), and last but not least, the more liberal approach of the country toward digital regulations, which means that companies can experiment more freely.


[2] А start-up company valued at more than a billion dollars, typically in the software or technology sector.