The ‘splinternet’: How China and the US could divide the internet for the rest 
of the world

Published Sun, Feb 3 2019 • 10:25 PM EST By Arjun Kharpal
https://www.cnbc.com/2019/02/04/the-splinternet-an-internet-half-owned-by-china-and-the-us.html

Key Points

* The future could see Chinese and American apps and services dominate half of 
the internet each,
   leading to a split internet, according to Kaifu Lee, CEO of Sinovation 
Ventures
* Commentators have dubbed this the “splinternet.”
* Lee also said that China could be ahead of the U.S. in artificial 
intelligence in five years.


Two internets could emerge in the next five years — one led by China and one 
led by the United States — a top venture capitalist has predicted, adding to a 
growing chorus of voices suggesting such a development could take place.

The concept has been dubbed the “splinternet,” and it refers to a future in 
which the internet is fragmented, governed by separate regulations and run by 
different services.

A unified definition is still unclear, but one suggestion is that the future 
could see Chinese and American apps and services each dominate half of the 
internet. That concept was the topic of much discussion at the World Economic 
Forum in Davos, Switzerland, last month.

And while there may be two internets coming, “it will not be China and the rest 
of the world. It will be China and countries that adopt Chinese apps, and 
countries that adopt American apps,” Kaifu Lee, the CEO of China-based venture 
capital firm Sinovation Ventures, told CNBC at Davos.

“While Chinese apps will have a hard time getting adopted in U.S. and Europe 
and English-speaking countries, I think they’re proving their rapid acceptance 
in India, Southeast Asia, South America, Middle East and even a little bit in 
Africa. So I think in five years, if you look at all the people in the world 
that took their phone and counted how many Chinese apps and American apps, I’d 
say it would be fifty-fifty, ” added Lee, who prior to his current job was the 
head of China for Google.

   “China has more data, more users, more usage per data. And there’s very 
pro-AI government
    policies. So these things cause China to be ahead in AI implementation, 
despite not being ahead
   in AI research”

   Kaifu Lee
   CEO, Sinovation Ventures

Indeed, companies like Alibaba and Tencent are already expanding their services 
abroad and acquiring or investing in companies across Asia. For example, 
Alibaba owns a majority stake in Southeast Asian e-commerce firm Lazada, while 
Tencent has an investment in Indonesian ride-hailing firm Go-Jek. Chinese 
technology giants are continually looking to spread their tentacles abroad.

Lee is among a number of voices predicting that a so-called splinternet will 
come into being. Last year, former Google CEO Eric Schmidt said he foresaw a 
“bifurcation into a Chinese-led internet, and a non-Chinese internet led by 
America.”
Is China taking the lead on AI?

The United States and China are battling for dominance not just when it comes 
to the internet, but other, interrelated technologies including 5G and 
artificial intelligence.

AI in particular is a technology that is seen as crucial to supporting future 
industries and one that will partly shape the way the internet looks in the 
future. AI is a broad term that encompasses the development of algorithms that 
are able to adapt and learn, which could boost the automation of many tasks. AI 
can be applied to many industries globally.

A number of commentators have suggested the U.S. could be behind China in the 
AI race. That includes Fred Kempe, CEO of U.S. think tank the Atlantic Council, 
who said in a CNBC op-ed that “China was on track to take the commanding 
heights of AI and that the consequences could be historic in nature.”

Lee said that right now, the U.S. is stronger in AI research, while China is 
moving forward with the actual implementation of artificial intelligence 
technology. But that could change very soon.

“It’s (China) arguably ahead of U.S. in some areas behind in others, maybe neck 
and neck. But at the current trajectory, China will probably be ahead of U.S. 
in five years,” Lee said.

“China has more data, more users, more usage per data. And there’s very pro-AI 
government policies. So these things cause China to be ahead in AI 
implementation, despite not being ahead in AI research,” he added.

The government of the world’s second-largest economy emphasized the development 
of AI in its “Made in China 2025” plan — the country’s official blueprint for 
dominating various areas of technology in the future. And in 2017, China laid 
out plans which it hopes will make it the world leader in AI by 2030.

Both the U.S. and China have been aggressive in developing AI, and recent 
findings show a split between the U.S and China when it comes to patent filings.

A study from the U.N. World Intellectual Property Organization (WIPO) published 
last week found that American firms IBM and Microsoft are the two organizations 
in the world with the most AI-related patent filings. But among research groups 
and universities, Chinese organizations hold 17 of the top 20 spots in terms of 
total patent filings.

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