All the mainstream press seems to care about is the trade dispute between these two rival superpowers.
But as Daily Cut regulars know, this masks an even more decisive battleground – tech.
Both sides have their eyes on the same prize – advanced artificial intelligence (AI).
And it’s no wonder. Advanced AI is a geopolitical game changer.
You’ll get why when you’re through with today’s dispatch. I (Chris) will also show you what it means for you as an investor.
If you read our Legacy Inner Circle advisory, you already know what I’m talking about.
I recently talked in detail with our go-to tech expert, Jeff Brown, about this. (Inner Circle subscribers can catch up in full here.)
And he told me that advanced AI is a key technology for both sides…
For the U.S. and China, this is about global supremacy. Whoever has the most powerful AI will have an unbeatable edge over any rival.
AIs can figure things out on their own. That includes figuring out the best way to make weapons systems impervious to cyberattacks. Or figuring out how to launch an unstoppable cyberattack against a rival’s weapons system.
AIs can make weapon targeting more accurate… save the lives of wounded soldiers on the battlefield (via robot surgeons)… even predict what the enemy will do next. Remember, AIs excel in spotting predictive patterns in data.
And that’s a worry. Because according to tech billionaire Peter Thiel, Google could be passing on all this bleeding-edge tech to America’s main rival.
He’s the billionaire founder and CEO of data-mining company Palantir. He’s also on the board of Facebook.
And during a speech at the National Conservatism Conference in Washington on Sunday, he dropped a bombshell about Google.
Thiel claimed Chinese intelligence may have agents inside Google’s AI division, DeepMind.
Thiel demanded answers from Google to three questions…
Number one, how many foreign intelligence agencies have infiltrated your Manhattan Project for AI?
Number two, does Google’s senior management consider itself to have been thoroughly infiltrated by Chinese intelligence?
Three, is it because they consider themselves to be so thoroughly infiltrated that they have engaged in the seemingly treasonous decision to work with the Chinese military and not with the U.S. military… because they are making the sort of bad, short-term rationalistic [decision] that if the technology doesn’t go out the front door, it gets stolen out the backdoor anyway?
Thiel then urged the FBI and CIA to investigate Google for that “seemingly treasonous” behavior. Something President Trump is on board with…
That’s a reference to an Allies project during World War II to build the first nuclear weapons.
You see, the DeepMind AI team is top notch. It’s responsible for one of the most stunning breakthroughs in AI to date – AlphaZero.
As we showed you here, AlphaZero is unlike other AIs, which “learn” from vast troves of existing data.
The only input the DeepMind team gave AlphaZero was the rules of three different games – chess, Shogi (Japanese chess), and Go (a Chinese strategy game).
After a few days, AlphaZero learned to play each game at such a high level it defeated not only the best human players… but also the best AIs.
DeepMind’s AIs can even work in teams…
And these teams of AIs can outthink human teams at other strategic tasks.
For instance, DeepMind AI learned to play capture-the-flag matches in the popular first-person multiplayer game Quake III. Then it teamed up with other AIs to outwit human players.
In short, Google’s AI is the most advanced in the world right now. It would be bad news if the Chinese had access to it via a mole at DeepMind.
That’s why Thiel is worried. As he put it…
If you say you’re building a Manhattan Project for AI, don’t you think that would attract the interest of foreign intelligence agents?
Last year, we told you Google was working with the Chinese regime to create a censored version of its search engine. Under pressure from U.S. lawmakers, it confirmed on Tuesday it had ditched the project.
But Google kept a presence in China. It has an AI research center in Shanghai.
So the real surprise would be if foreign agents hadn’t tried to penetrate the company.
It knows the U.S. can’t afford to fall behind China in AI. If it does… it can kiss its status as top dog goodbye.
That, says Jeff, should be enough to keep the U.S. ahead in the race for AI supremacy. It also means you can expect big bucks to flow into AI research over the next several years. Jeff…
There’s going to be a flood of funding into AI projects – from both the Chinese and the Americans. And that’s good news for investors.
The analogy I like to use is the Space Race between the U.S. and the Soviet Union during the Cold War. The scale of the U.S. effort was incredible. By the end of the Apollo program, the U.S. had spent the equivalent of $100 billion in today’s dollars.
Beyond spaceflight, it was the birth of the satellite industry and global communications technologies like GPS. Today, GPS is used in every smartphone and every modern car or truck on the planet.
Even simple things we use daily – like water purifiers, smoke detectors, modern tires, and cordless devices – all resulted from the investments made during the Space Race.
And something similar will happen with AI… as governments realize this race is even more critical than the race to put men into space.
Already, we’re seeing billions in government money pour into AI R&D. Jeff again…
Last year, the U.S. Department of Defense said it would put up $2 billion to advance AI over the next five years. And this past February, Trump signed an executive order to create the American AI Initiative. The goal is to reallocate R&D funds into AI. We’re going to see more on that this year. The White House recognizes the importance of it.
And in China, the government’s latest venture capital fund is expected to invest more than $30 billion. This will go into Chinese state-owned firms that are developing AI.
It’s why Jeff is so excited about AI right now. We’ll leave him with the last word…
All told, the revenue from the AI market was estimated to be $7.4 billion in 2018. And that figure is expected to grow to $89.8 billion by 2025. That’s a compound annual growth rate of 42%.
We have reached an inflection point with this technology. We are on the cusp of explosive growth. Few realize it, but in a matter of a few years, artificial intelligence will be as commonplace as the internet. AI won’t just improve today’s technology. It will reinvent it.
Jeff is hosting a free tech-investing summit on July 24. It has to do with a strategy he’s been working on for the past five years…
It’s an entirely new way to invest in bleeding-edge tech that doesn’t involve the regular stock market.
This new strategy is so powerful that Jeff reckons it could help you take a small initial stake and turn it into an extra $151,740 every year… for life.
If you’re interested in attending, make sure to secure your place. You can do that right here.
Regards,
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Chris Lowe
July 18, 2019
Lisbon, Portugal