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China no match for US unicorns in AI, big data and robotics as it continues to play catch-up in R&D, says Credit Suisse

  • China’s share of hi-tech unicorns of 14 per cent versus 40 per cent for the US has much to do with the country’s inadequate advanced R&D capability
  • China accounts for almost 30 per cent of the world’s unicorns, which have an overall valuation of more than US$1 trillion

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A screen shows a demonstration of Chinese AI firm Horizon Robotics’ facial recognition software. A Credit Suisse report said that most of China’s R&D spending is in experimental development. Photo: Reuters
Georgina Lee

China lags far behind the US in producing genuine hi-tech unicorns in artificial intelligence, robotics and biotech as it is still paying catch-up in scientific research, according to Credit Suisse.

In a report released on Tuesday titled “China Unicorns, preparing to gallop”, Credit Suisse said that although China accounted for nearly one third of the world’s 326 start-ups valued at US$1 billion or more, its share of unicorns in sectors requiring more advanced scientific research capability such as artificial intelligence (AI), big data, robotics and software was just 14 per cent, compared to 40 per cent in the US.

“It is fair to say that … there are probably more genuine hi-tech companies among US unicorns at this stage,” said the report’s authors.

But the gap between unicorns from the two countries specialising in AI is expected to narrow in the next three to five years, said Vincent Chan, managing director of research, markets for Asia-Pacific at Credit Suisse.

Chan said with the rolling out of 5G mobile network in China, the market potential for AI-focused companies will grow on the mainland, as they could potentially participate in the development of the network infrastructure.

China is expected to be the first country globally to roll-out 5G in 2020.

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