In the spring of 2016, an artificial intelligence system called AlphaGo defeated a world champion Go player in a match at the Four Seasons hotel in Seoul. In the US, this momentous news required some unpacking. Most Americans were unfamiliar with Go, an ancient Asian game that involves placing black and white stones on a wooden board. And the technology that had emerged victorious was even more foreign: a form of AI called machine learning, which uses large data sets to train a computer to recognize patterns and make its own strategic choices.

Still, the gist of the story was familiar enough. Computers had already mastered checkers and chess; now they had learned to dominate a still more complex game. Geeks cared, but most people didn’t. In the White House, Terah Lyons, one of Barack Obama’s science and technology policy advisers, remembers her team cheering on the fourth floor of the Eisenhower Executive Building. “We saw it as a win for technology,” she says. “The next day the rest of the White House forgot about it.”

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In China, by contrast, 280 million people watched AlphaGo win. There, what really mattered was that a machine owned by a California company, Alphabet, the parent of Google, had conquered a game invented more than 2,500 years ago in Asia. Americans don’t even play Go. And yet they had somehow figured out how to vanquish it? Kai-Fu Lee, a pioneer in the field of AI, remembers being asked to comment on the match by nearly every major television station in the country. Until then, he had been quietly investing in Chinese AI companies. But when he saw the attention, he started broadcasting his venture fund’s artificial intelligence investment strategy. “We said, OK, after this match, the whole country is going to know about AI,” he recalls. “So we went big.”

In Beijing, the machine’s victory cracked the air like a warning shot. That impression was only reinforced when, over the next few months, the Obama administration published a series of reports grappling with the benefits and risks of AI. The papers made a series of recommendations for government action, both to stave off potential job losses from automation and to invest in the development of machine learning. A group of senior policy wonks inside China’s science and technology bureaucracy, who had already been working on their own plan for AI, believed they were seeing signs of a focused, emerging US strategy—and they needed to act fast.

In May 2017, AlphaGo triumphed again, this time over Ke Jie, a Chinese Go master, ranked at the top of the world. Two months later, China unveiled its Next Generation Artificial Intelligence Development Plan, a document that laid out the country’s strategy to become the global leader in AI by 2030. And with this clear signal from Beijing, it was as if a giant axle began to turn in the machinery of the industrial state. Other Chinese government ministries soon issued their own plans, based on the strategy sketched out by Beijing’s planners. Expert advisory groups and industry alliances cropped up, and local governments all over China began to fund AI ventures.

China’s tech giants were enlisted as well. Alibaba, the giant online retailer, was tapped to develop a “City Brain” for a new Special Economic Zone being planned about 60 miles southwest of Beijing. Already, in the city of Hangzhou, the company was soaking up data from thousands of street cameras and using it to control traffic lights with AI, optimizing traffic flow in much the way AlphaGo had optimized for winning moves on the Go board; now Alibaba would help design AI into a new megacity’s entire infrastructure from the ground up.

On October 18, 2017, China’s president, Xi Jinping, stood in front of 2,300 of his fellow party members, flanked by enormous red drapes and a giant gold hammer and sickle. As Xi laid out his plans for the party’s future over nearly three and a half hours, he named artificial intelligence, big data, and the internet as core technologies that would help transform China into an advanced industrial economy in the coming decades. It was the first time many of these technologies had explicitly come up in a president’s speech at the Communist Party Congress, a once-in-five-years event.