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AI companies in China aim for innovation despite U.S. restrictions on access to parts

STEVE INSKEEP, HOST:

With a story of the tech war between the United States and China, we visited a Chinese company that's been targeted by the U.S. This company helps to illustrate the larger conflict between two high-tech economies. Some of the offices of iFlytek are in the giant city of Shanghai, and one of its executives met us outside the building right next to a sculpture of two giant white letters - AI.

DUAN DAWEI: Welcome to iFlytek.

INSKEEP: Thank you. Thank you for the invitation. I appreciate it. It's good to be here.

We shook hands and walked inside with Duan Dawei, a senior executive with iFlytek.

DUAN: Here is the exhibition room of our Shanghai office.

INSKEEP: The company is noted for speech recognition, which can pick up 60 languages and also translate.

DUAN: (Speaking Mandarin).

AI-GENERATED VOICE #1: Welcome, friends from the United States.

INSKEEP: We walked through a room looking at handheld devices and oversized screens. On one screen, an AI-generated woman in a pink suit stood ready to answer my questions.

How is the economy of Shanghai doing in recent years?

AI-GENERATED VOICE #2: Shanghai has a highly diversified and dynamic economy.

INSKEEP: The company traces its history back to the 1990s. Two college students started it. It eventually made voice recognition software the kind that hears you if hypothetically, you tell a smart speaker to play NPR. In 2017, it conducted a famous publicity stunt, creating an AI-generated video of then-President Trump.

(SOUNDBITE OF ARCHIVED RECORDING)

AI-GENERATED VOICE #3: (As Donald Trump) It's a great thing to build a better world with artificial intelligence.

INSKEEP: First, speaking English and then breaking into Chinese.

(SOUNDBITE OF ARCHIVED RECORDING)

AI-GENERATED VOICE #3: (Speaking Mandarin).

INSKEEP: Today, the company offers a range of products. In the iFlytek lobby in Shanghai, we looked at desktop devices that offer to personalize lesson plans for kids in school or give a medical consultation to people who live too far from a doctor.

I'm just reading the floor. Create a better world with artificial intelligence.

DUAN: Yes.

UNIDENTIFIED PERSON: Yes.

DUAN: Yes, this is our philosophy. Science for good.

INSKEEP: We pulled up chairs near that slogan on the floor and had a talk. The U.S. government asserts this company's work is not entirely for good. In 2019, the U.S. placed iFlytek on an entities list. This list names companies, governments and institutions alleged to work against U.S. security interests or take part in human rights violations. IFlytek once promoted a product that could identify and listen to a single voice in a crowded room.

The United States government said that you worked with the Chinese government, and your technology was used for surveillance. Is that allegation true?

DUAN: We think if American government says so, it's better to ask them. Let them provide more details.

INSKEEP: He says, American friends, as he called them, made a mistake. IFlytek's appearance on the entities list made it harder to access sophisticated U.S. technology unless it gets a special license. Duan insists that just means the company doesn't spend money in America, and he even cast the listing as a badge of honor, which it shares with other Chinese firms.

DUAN: It is a standard for ordinary people to check a company. Whether this company is a real hi-tech company or not a real hi-tech company, it's not a joke.

INSKEEP: Meaning you're a real high-tech company...

DUAN: Yeah, real tech company.

INSKEEP: ...If you're on the entities list?

DUAN: Yeah.

INSKEEP: Do you work with law enforcement, police, intelligence agencies? They could certainly have good use of voice recognition software.

DUAN: No, no.

INSKEEP: In no way?

DUAN: No.

INSKEEP: Americans will hear that you have very good voice recognition software. Could it be used to spy on someone?

DUAN: The technology has different functions, like nuclear. You can make it as a bomb, and also you can use it as energy resources.

INSKEEP: What Duan Dawei said there is the essence of this story - technology can be used for good or ill. Whether iFlytek acknowledges working with the government or not, the tech in some sophisticated products can be used by governments, too. It's dual use. For an assessment of what we saw in Shanghai, we returned to the United States and met with an American who studies the issue.

GREGORY ALLEN: I'm Gregory C. Allen, and I'm the director of the Wadhwani Center for AI and Advanced Technologies at the Center for Strategic and International Studies.

INSKEEP: Which is a think tank back here in Washington.

ALLEN: IFlytek is an actually quite impressive AI technology company.

INSKEEP: One with powerful products. The U.S. government alleges the company's technology helped to monitor the Uyghur population in the far western province of Xinjiang.

ALLEN: IFlytek is one of the key technological enablers of the ubiquitous surveillance that the Chinese government has set up in Xinjiang.

INSKEEP: How so? Because voice recognition can be used to monitor who says what in...

ALLEN: Yes.

INSKEEP: ...A room?

ALLEN: The way that they do it is, number one, they're recording absolutely everything. So if you think that your phone call might be tapped in Xinjiang, err on the side of it's being tapped. And when you normally try to tap every single phone call in an entire province, you would think, well, there's not enough people to listen to all of these wiretaps, so what's the point? Well, there's enough AI to listen to all of these phone calls.

INSKEEP: Phone calls can be transcribed, and transcripts are easily searchable.

So that's why they got on the list. As far as you can tell from a distance, has it harmed their business to be on that entities list?

ALLEN: Yes, I mean, in 2020, IFlytek had a partnership with MIT. I mean, this is the leading U.S. university in many domains of AI research. They were looking at the high-quality stuff that iFlytek was putting out and saying, we want to work with these folks just on a technical excellence type of relationship. And once they're on the entity list, the United States government has put itself out there as saying, what this company is up to is not consistent with our views about universal human rights, and it's also just not in the United States' national security interest for universities like MIT to be helping companies who work directly for Chinese intelligence services.

INSKEEP: The U.S. has now placed multiple limitations on Chinese tech firms, including a broad ban on the highest-quality computer chips that extends to the whole country. But there is at least a potential way out. IFlytek still has access to the tech from other Chinese firms. Last year, it announced a collaboration with a different company that is also targeted by the United States.

ALLEN: The CEO of iFlytek announced that his firm was now using the updated version of Huawei's AI chips.

INSKEEP: Huawei is a giant company that builds 5G cellphone networks. The U.S. warned against security threats from its technology and severely damaged its global business - yet Huawei remains in business. It develops computer chips, and it's now collaborating with iFlytek in a bid to work around the pressure that both face from the United States.

(SOUNDBITE OF MADVILLAIN, ET AL.'S SONG, "GREAT DAY (FOUR TET REMIX)") Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Steve Inskeep
Steve Inskeep is a host of NPR's Morning Edition, as well as NPR's morning news podcast Up First.

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