An employee works at a logistics centre in Langfang, Hebei province, November 10, 2015. REUTERS/Jason Lee/File Photo - S1BETXEFDBAB
An employee sorts internet-ordered goods at a warehouse in Langfang, eastern China. Forty per cent of global ecommerce takes place inside China, mostly via Alibaba, Tencent and Baidu, the country's big three tech companies © Reuters

Sixty years ago Russia shocked the world with the launch of the Sputnik satellite. Donald Trump was 11 years old. That display of superiority jolted America to outspend the USSR in a drive that produced the internet and the global positioning system. Today’s Sputnik moment, by contrast, appears to have bypassed America’s 71-year-old president. China openly plans to dominate artificial intelligence by 2030. Mr Trump appears too busy tweeting to have noticed.

Yet China’s AI ambitions pose a greater long-term threat to US security than North Korea’s nuclear reach. Pyongyang can probably be contained by the guarantee of annihilation. There is no obvious barrier to China’s aim of leapfrogging the US. “Whoever becomes the leader in [AI] will become the ruler of the world,” Russia’s president, Vladimir Putin, said recently. His observation followed China’s announcement that it intends to draw even with the US by 2020, overtake it by 2025 and dominate global AI five years after that. America’s leading technologists believe China’s ambitions are plausible. “Just stop for a sec,” said Eric Schmidt, executive chairman of Alphabet, last week. “The Chinese government said that.”

Unlike Sputnik, there is no single Chinese action that is likely to drive the threat home. But the trend lines are stark for those who care to look. President Xi Jinping has broadcast China’s AI superiority as a strategic goal. Mr Trump has said nothing about America’s ambitions. But his budget proposal speaks volumes. He wants to cut US public funding of “intelligent systems” by 11 per cent and overall federal research and development spending by almost a fifth. Nasa’s budget would also shrink.

Likewise, Mr Trump wants to halve the inflow of legal immigrants, which would hit America’s ability to recruit the brightest researchers. It would make far more sense to offer them a green card. Chinese students often win Google’s coding competitions. “If you have any kind of prejudice . . . that somehow their educational system is not going to produce the kind of people that I’m talking about, you’re wrong,” said Mr Schmidt.

Can America prevail in spite of Mr Trump’s myopia? That is quite possible. The big US tech companies remain world leaders. But the gap is narrowing. China has two key advantages. The first is that more of its economy is online than America’s. Forty per cent of global ecommerce takes place inside China, mostly via Alibaba, Tencent and Baidu, the big three Chinese tech companies. Their ability to manipulate vast troves of data faces few legal limits. Likewise, their scale is daunting. Last week, Tencent overtook Facebook to exceed a market capitalisation of $500bn. In some areas, such as online payments, visual recognition and voice software, China is already ahead of its Silicon Valley counterparts. It is fast catching up on autonomous driving. Almost all such technologies have military application. Think of swarm drone warfare.

Second, China’s private sector is hand in glove with government. That might seem like a handicap to libertarians. But people have short memories. Just as Dwight Eisenhower underwrote the rise of Silicon Valley, so Beijing is subsidising China’s mastery of deep learning machine technology. Moreover, its digital sector is increasingly self-sufficient. With the exception of microprocessors, which remains US-led, most of China’s capacities are produced at home. It is decreasingly vulnerable to disruptions in the global supply chain. Should a global trade war break out, China could press on largely unhindered with its AI development. There is the reason China has locked out Google, Facebook, Twitter and others.

The same applies to China’s space technology. Last weekend, John Hyten, the general in charge of US nuclear weapons, caused a stir when he said he would resist an “illegal” order by the president. But he was simply reiterating the rule book. More ominous were his comments on China’s big leaps in 21st-century warfare technology. When someone suggested China’s space threat was as hyped as the infamous “missile gap” with the Soviets, Gen Hyten said: “What I see is very aggressive [Chinese and Russian] actions to build a force structure that would counter our entire space capabilities.”

If you want to read a nation’s priorities, look at its budget. Mr Trump’s main ambition is to cut the US corporate tax rate to 20 per cent. During Eisenhower’s time, the marginal income tax rate was above 90 per cent. That did not stop US public and private ingenuity from racing ahead of the Soviets. Today America is the world’s technological leader. With Mr Trump in the cockpit, tomorrow may look very different.

This column has been amended to correct Eric Schmidt’s designation

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