The Hollywood version of artificial intelligence is Scarlett Johansson’s disembodied, Siri-like voice learning to fall in love. But artificial intelligence in the real world looks more like TikTok, a blaze of algorithms calculating dance and music video preferences.

At its core, artificial intelligence is advanced machine learning, an emerging technology that encompasses natural language processing, facial recognition, robotics and autonomous vehicles. That also makes it a tool or weapon and thereby places it at the center of the increasingly contentious digital arms race now playing out between the U.S. and China.¹Several Chinese AI firms, including SenseTime and iFlytek, are on the U.S. Entity List, meaning American firms are restricted from exporting to them. The firms were sanctioned because of their ties to the Chinese military or surveillance operations targeting ethnic minorities in China’s western region of Xinjiang. But it’s not nations that are leading the charge to innovate but businesses and entrepreneurs, in the U.S., China, Israel and elsewhere — the world’s technology hotbeds.

This week, The Wire looks at the world’s most valuable artificial intelligence companies to see how China and the United States match up and what the top 50 enterprises do. We also zoom in on one A.I. startup, a chip firm co-founded by a pair of talented brothers who in less than five years, with backing from the Communist Party, have built a $9 billion enterprise.

The U.S. Is (Not Leaps and Bounds) Ahead

There’s no easy way to categorize A.I. firms, since Google, Facebook, Alibaba and Baidu all run on AI capabilities. But we built a list of 50 artificial intelligence firms cited by CB Insights, Crunchbase and Pitchbook, and sorted them by nation and market value. Roughly two-thirds of them are American. But the total value of Chinese and U.S. startups are roughly equal — due in large part to the skyrocketing value of ByteDance, China’s social media powerhouse.²The company’s valuation could jump to as much as $180 billion, according to recent reports, if it secures another funding round from Sequoia Capital and KKR.

There are indicators, of course, that China is catching up to, and may even surpass, the U.S. in A.I. capabilities. In 2020, for instance, China for the first time filed more A.I. patents than the U.S. While analysts say China lags behind the United States in talent and hardware, recent reports say it has an overwhelming advantage in the volume and quality of data that companies can work with — widely seen as the key to training and unlocking significant gains in artificial intelligence applications.

Putting direct U.S.-China competition aside, the larger story may be how the two countries, together, are far ahead of other major powers in the race to develop artificial intelligence companies — only 5 of the top 50 are based outside of the U.S. and China. A 2019 report from the Brookings Institution said about half of the world’s roughly 4,500 artificial intelligence companies are based in the United States while a third are headquartered in China. Brookings researchers cited “world-class research expertise, deep capital pools, data abundance, largely supportive policy environments, and highly competitive innovation ecosystems” as key drivers in both countries.

Driving Towards Funding

Not all A.I. is created equal — the functions and potential applications run the gamut from the mundane to the science fiction. Young A.I. companies are soaking up billions in venture capital every year in areas ranging from employee efficiency analysis, to social media algorithms, to 3D printing of rocket engines.

A pursuit of seemingly endless interest, in both the United States and China, is self-driving cars. Nine companies of the top 50 companies are devoted to developing the technology. If it became widespread, autonomous driving would have far-ranging effects, from disrupting the trucking industry with self-driving delivery trucks to creating driver-less ride-hailing services. Autonomous driving isn’t just a fascination for startups — global firms like Intel and BMW are getting into the field too, and the autonomous driving company Waymo is a Google spinoff.³Waymo remains under parent company Alphabet

Major efforts are also underway to improve internal operations at companies, healthcare services from the patient and provider perspectives, and automate industrial processes.

The Brothers Who Turned Chips Into Billions

Cambricon Technologies falls into another lucrative sub-category: A.I. tech that supports other A.I. tech. Cambricon’s smart chips are more efficient processors, cutting down on the amount of power needed for machine learning and artificial intelligence–related endeavors. Several other top-50 companies, like Scale AI, Horizon Robotics, and Graphcore, all trade in supporting the development or operation of artificial intelligence ventures.

Major funds and ownership stakes are tied to the Chinese government. Founding brothers Chen Tianshi and Chen Yunji⁴Read the South China Morning Post profile of them here studied at one of China’s elite science and technology universities, and then joined the Chinese Academy of Sciences (CAS), a government research institute, before founding Cambricon. Just weeks after starting their endeavor, CAS gave the startup a seed grant worth several million dollars.

In fewer than five years, Cambricon has gone from a startup to a company that sells to Huawei and is now listed on the Shanghai Stock Exchange’s STAR Market. Its market cap is now more than $9 billion.

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