In AI, the race is between America and China, and China may win. For the same reason, Germany is likely to lose.

(Source: AP) Greeting the future – late.

There is only one thing worse than being talked about, as Oscar Wilde noted, and that is not being talked about. That should give Germans pause. In the global conversation about a crucial technology and industry of the future -- Artificial Intelligence (AI) -- Germany is not being talked about.

The conversation is instead almost entirely between and about two innovation superpowers: America and China. Take it from Kai-Fu Lee. He is a Taiwanese-American whiz who earned his PhD in AI in the 1980s; has worked for Apple, Microsoft and Google; and now runs a Chinese venture-capital fund in Beijing. Nobody is deeper inside the subject than he is. And he has a new book out: “AI Superpowers: China, Silicon Valley and the New World Order.”

The thesis is simple: America, with its excellent research universities, may have had the edge during the “discovery phase” of AI. But as the technology shifts into the “implementation phase,” China will seize the advantage. One reason is that China gathers and deploys vastly more of AI’s vital resource: data. There are 1.4 billion Chinese, and they pay with WeChat and run their lives online. The Chinese produce and share -- often enthusiastically, sometimes involuntarily -- more data than any other culture. And data is what trains and refines algorithms. The more data, the more “intelligence.”

Another reason is regulation. China’s government has decided to support AI in every way it can. Entire cities are being built specifically to be friendly for self-driving cars, with roads and traffic lights that have sensors, and so forth. Laws are constantly being tweaked to support new AI applications (and, yes, sometimes Big Brother too).

Data and regulation are two of the reasons why Mr. Lee thinks that China will beat America. But America will still be fine. The question is: Where in all this is Germany? Precisely nowhere. Germans are data slouches. They pay with cash, fear self-driving cars, and think data sharing (even when anonymized) is one step away from Stasi methods. The other day, I hopped on a Mobike, those cute orange rental bikes (from China), to visit a Berlin think tank. Ironically, I was going there to give a talk about AI. A young lady greeted me outside, and was horrified: “I would never!” she gasped. “They just want to get your data!”

There is a place for caution. But the best way to tame future abuses of our data is to be among the players as rule makers, not rule takers. Germans, however, prefer to wallow in paranoid visions of digital dystopia. They should be aware of the costs. Germans are living in a comfortable present, oblivious to an uncertain future. Sure, it’s nice to have a Mittelstand that makes the world’s best ventilators, ball bearings, and screws. And next?

To subscribe to this newsletter or check out our other newsletters, click here.