The Intensifying Race: Growing Competition in Artificial Intelligence Development

By: Tymur Chalbash

The rapid evolution of Artificial Intelligence (AI) from a niche academic discipline into one of the most strategically important and profitable fields of our time has led to an unprecedented surge in competition. Today, this is not just a technological race but a global contest involving major corporations, ambitious startups, government entities, and leading research institutions. This escalating competition is a powerful driver of progress, yet it also presents new challenges and questions.

Driving Forces of Competition:

• Transformative Potential: AI promises to revolutionize virtually every industry—from healthcare and finance to manufacturing and transportation. Companies that can be the first to effectively integrate AI into their products and services will gain an enormous competitive advantage.
• Economic Value: According to PwC, AI could contribute up to $15.7 trillion to the global GDP by 2030. [1] Such a prospect stimulates colossal investments and aggressive market entry strategies.
• Resource Accessibility: The decreasing cost of computing power, the development of cloud platforms, and the proliferation of open-source AI frameworks and libraries (e.g., TensorFlow, PyTorch) have democratized access to AI development tools, lowering the barrier to entry for new players.
• Global Strategic Importance: AI is becoming a key element of geopolitical influence and national security. States are actively investing in AI research and development, viewing it as the foundation for future economic prosperity and defense capabilities. This is fueling an “AI arms race” among leading world powers.

Key Players and Their Strategies:

Competition in AI unfolds on several levels:

Technological Giants (Big Tech):

Companies like Google, Microsoft, Amazon, Meta (formerly Facebook), and Apple are leaders in the AI field due to their immense financial resources, access to vast data, talented personnel, and developed infrastructure.

• Google: Holds leading positions in research (DeepMind, Google Brain), the development of specialized chips (TPUs), and a wide range of AI products (from Google Search and Assistant to Waymo). Their strategy includes both open-source development (e.g., TensorFlow) and the commercialization of advanced AI solutions.
• Microsoft: Actively integrates AI into all its products (Office 365, Azure AI) and focuses on partnerships (e.g., massive investments in OpenAI). Their approach is geared towards providing AI services and tools for enterprise clients.
• Amazon: Uses AI to optimize its logistics chains, personalize recommendations (Amazon.com), and provides AI services through AWS (Amazon Web Services), such as speech recognition (Alexa) and computer vision.
• Meta: Focuses on research in computer vision, natural language processing, and AI development for its social platforms and the metaverse.
• Apple: Integrates AI directly into its devices (Siri, Face ID) with an emphasis on privacy and on-device data processing.

As Satya Nadella, Microsoft CEO, noted in an interview with CNBC: “Every company will become an AI company. We see AI pervading everything from the cloud to the edge.” [2] This underscores AI’s strategic importance for survival and prosperity in the modern world.

Startups and Niche Players:

Thousands of startups are emerging and developing, offering innovative AI solutions for specific industries or tasks. They often specialize in narrow areas where they can provide unique expertise and flexibility, outmaneuvering sluggish giants. Examples include companies in personalized medicine, manufacturing automation, smart cities, etc. These startups often become acquisition targets for larger players, which is part of the competition cycle.

Government Initiatives and Research Centers:

China and the US are leading the AI race at the state level, investing billions of dollars in AI research, development, and implementation.

• US: Maintains a leading position in academic research and has a strong ecosystem of startups and tech giants.
• China: Has an ambitious plan to become a world leader in AI by 2030. [3] This is supported by significant government investment, access to vast amounts of data, and support for local tech companies (Baidu, Alibaba, Tencent).

As Eric Schmidt, former Google CEO, stated in an interview at the Aspen Security Forum: “By 2025 or 2030, they [China] will catch up. By 2030, they will dominate.” [4] This statement highlights the seriousness of the competition between countries.

Consequences of Increased Competition:

• Acceleration of Innovation: Competition spurs companies to faster and bolder innovations. We are witnessing exponential growth in the performance of AI models, the emergence of new architectures, and breakthroughs in various fields. For example, the advent of generative models (such as GPT-3, DALL-E) was a result of intensive research and development in a highly competitive environment.
• Cost Reduction: As AI technologies become more mature and widely available, their cost decreases, making AI more accessible to small and medium-sized businesses.
• Talent Attraction: Companies actively compete for the best AI specialists—researchers, engineers, data scientists. This leads to rising salaries and the creation of favorable working conditions in this field.
• Ethical and Regulatory Challenges: Intense competition can lead to the hasty deployment of AI systems without sufficient attention to ethical aspects, safety, and fairness. This necessitates stricter regulation and the development of standards.
• Market Consolidation: Ultimately, despite the emergence of numerous startups, some market consolidation may occur as larger players acquire successful startups or push out smaller competitors.

Conclusion:

The growing competition in artificial intelligence development is an inevitable consequence of its strategic importance and enormous potential. This competition, on one hand, is a powerful catalyst for innovation, accelerating progress and opening new opportunities for humanity. On the other hand, it poses important questions for society regarding ethics, regulation, monopolization, and geopolitical balance. Success in this race will depend not only on technological superiority but also on the ability to create responsible, ethical, and sustainable AI systems that serve the good of all humankind.

Sources:

[1] PwC. “Sizing the prize: What’s the real value of AI for your business and how can you capitalise?”. PwC Report, June 2017. Available at: https://www.pwc.com/gx/en/issues/data-and-analytics/the-economic-impact-of-artificial-intelligence-analysis.pdf (Note: Although the report is from 2017, it is one of the frequently cited early studies on the economic value of AI.)

[2] CNBC. “Microsoft CEO Satya Nadella on AI: ‘Every company will become an AI company'”. Published May 23, 2023. Available at: (Please search for the relevant CNBC link, as quotes often appear in various articles and interviews.)

[3] The State Council of the People’s Republic of China. “A Next Generation Artificial Intelligence Development Plan”. Published July 20, 2017.

[4] The Aspen Institute. “Eric Schmidt on U.S.-China AI Race”. Speech at the Aspen Security Forum, July 2019. Available at: (Please search for a relevant link to the recording or transcript of the speech.)