Perhaps Liu Qingfeng knew something the rest of us didn’t. Or perhaps he is just lucky. Either way, when the chairman of iFlytek, one of China’s leading artificial intelligence companies, took to a Beijing stage on July 15, 2021, to announce his company’s newest innovation, his timing could not have been better. 

Standing in a navy blue suit, Liu invited audience members to join him in heralding a “new era of AI education.” By grading tests, essays and homework, as well as offering corrections and tailored study plans, the iFlytek “T10 AI Learning Machine,” a $1,000-tablet computer, would change the way that Chinese students study and learn, he said.

“We need to reduce the burden on children and improve their academic performance,” Liu said, adding that in the two years since iFlytek released its first learning machine, “breakthroughs in AI technology have made large-scale personalized learning a reality.”

Of course, ‘educational’ toys, games and apps have long promised a kind of cheat-code for learning. But iFlytek’s tablet is something different. It can only be used for lessons — entertainment apps and games are blocked — and its lessons are synced up with textbooks, ensuring that what’s taught is closely aligned with a student’s official curriculum. The tablet’s cameras help teachers grade papers, and when in ‘dictation mode,’ it can even administer and grade tests that assess a student’s recall of Chinese characters. The device is also bilingual, and offers English lessons taught by an “AI virtual foreign teacher,” who can “see” students’ lip shape to help correct pronunciation. 

But perhaps the best feature the tablet had going for it is that, just nine days after it was introduced, it became one of Chinese parents’ only options to get their children ahead in school. 

On July 24, 2021, China’s Ministry of Education announced sweeping restrictions on China’s for-profit education sector, turning the education system on its head. The policy, known as Double Reduction, demanded the reduction of homework and prohibited private education firms from operating for profit — decimating the lucrative off-campus tutoring industry. 

Overnight, the share prices of some of China’s largest education companies, which made billions running after-school tutoring centers, plummeted. So total was the wipeout that within six months, founders like New Oriental’s Yu Minhong proclaimed that China’s “era of private tutoring has ended.” 

The spectacular fall of these lucrative companies, once darlings of venture capitalists in both China and Silicon Valley, has meant that the story of China’s Double Reduction policy has been dominated by its biggest losers. Less understood is the companies that have prospered. 

On the day Double Reduction was announced, iFlytek’s T10 tablet sold out. Soon, it was running advertisements that asked: “What should we do if our children don’t go to tutoring classes? Just use iFlytek’s AI learning machine. AI learning makes learning easier!” And on an earnings call a month after the policy was announced, Liu hinted that the policy was “a great benefit” for iFlytek.

Indeed, stamping out private tutoring companies was only one part of Double Reduction. The same month the policy was introduced, the Ministry of Education released a major plan to create a “new education infrastructure” for its public schools, calling for the broad rollout of AI throughout the system and setting a 2025 target for China to use AI to “digitally transform” education.

In the three years since, Beijing has made clear it intends to be the global leader in implementing AI into its massive education system. For top education officials, AI is seen as a shortcut to advancing sorely-needed educational reforms; the hope is that the technology can address China’s infamously inflexible and regimented education system by providing personalized guidance while also narrowing the gap between China’s most privileged and disadvantaged students.

Much of the initiative has been driven by the minister for education himself, Huai Jinpeng. A computer scientist by training, Huai was installed as the head of the ministry in August 2021, just a month after the Double Reduction policy was announced. For almost a decade, Huai has publicly advocated for the government to support private enterprises “taking a leading role” in developing AI for China’s education system. Rather than allow private companies to charge relatively well-off families for extra after-school learning, the idea was to partner with private AI companies and fold their efforts into the public school system.

For many in the west, iFlytek may seem like an odd choice for a partner. The company is a leader in voice recognition technology, and it is mostly known as one of the first Chinese tech companies to be sanctioned by the U.S. government for its alleged involvement in surveilling Muslims in Xinjiang. 

The 2019 sanctions, however, have overshadowed the fact that iFlytek has actually been in the edtech business for two decades, and it is increasingly betting on the value of AI in the classroom. In 2023, education products accounted for 30 percent of the company’s revenue, eclipsing sales from its ‘smart city’ surveillance business. iFlytek’s hi-end AI tablets now rank first in China’s domestic market share, and its AI edtech products cover 30 provinces, nearly 300 districts and counties, and serve more than 12,000 schools.

iFlytek seems to be very much ‘leaning in’ to the idea that its technology can directly address the issues that Double Reduction sought to tackle. It seems to have flipped the narrative, positioning AI as part of the solution, not the problem.

Jeremy Knox, a professor of digital education at the University of Oxford

And it is not the only company doubling down on AI for public education. Another longtime player in this sector, Shanghai-based Squirrel AI Learning, pivoted from after-school services to partnering with Chinese public schools after Double Reduction was introduced. 

“The introduction of the ‘Double Reduction’ policy did indeed shift the landscape for many edtech companies in China,” says Joleen Liang, Squirrel AI’s co-founder, in an email to The Wire. “However, it’s important to note that smart learning tablets, like those we develop at Squirrel AI, are not regulated by the Double Reduction policy. In fact, this policy has strengthened our development efforts.”

Even the traditional for-profit tutoring companies are following iFlytek and Squirrel AI into the sector. Earlier this year, for example, China’s internet regulator approved new AI algorithms being developed by New York Stock Exchange-listed TAL Education Group and Gaotu Techedu.

Thanks to these firms, China has emerged as a global edtech leader — a country that is actively welcoming AI into the classroom rather than fighting it. Alarmed by the potential for cheating and plagiarism, many schools around the world are viewing apps like ChatGPT with apprehension and skepticism. iFlytek, by contrast, envisions a future where its AI assists not only with book learning, but in gym class and even with mental health counseling. 

“iFlytek seems to be very much ‘leaning in’ to the idea that its technology can directly address the issues that Double Reduction sought to tackle,” says Jeremy Knox, a professor of digital education at the University of Oxford and author of a book on AI and education in China. “It seems to have flipped the narrative, positioning AI as part of the solution, not the problem.”

And it’s a narrative that China seems keen to export. In January, Minister Huai announced that China is ready to begin “integration, intelligence, and internationalization,” signaling that China’s edtech companies are looking for opportunities abroad. The question now is if the rest of the world is interested in learning from China.

iFLYTEK FINDS ITS VOICE

Liu Qingfeng began his career by turning down the largest company in the world. It was 1999, and Liu, then a doctoral student, had led his engineering team from the University of Science and Technology of China — sometimes referred to as China’s CalTech — to victory in a national competition for synthesizing computer text into human speech. Recognizing his talent, Kai-Fu Lee, the renowned AI investor who had just started Microsoft Research China, offered Liu a scholarship to work at Microsoft. Liu declined. 

“He was determined to start his own company,” recalled Lee in a 2012 blog post. “Starting a company in 1999 in China was no easy task, but Qingfeng was determined, and [he] started iFlytek, a speech recognition company.”

Driving Liu was a conviction in the commercial potential of speech-to-text software, even as iFlytek’s first product almost drove the company into bankruptcy. At that time, few people in China were interested in the software, and fewer still were willing to pay for it — rampant piracy meant an estimated 94 percent of all computer software used in China in 2000 was unlicensed. 

With iFlytek hemorrhaging money and barely able to pay its staff, an employee suggested at one meeting that the company might be better off pivoting into real estate. Liu immediately shot back: “If you are not optimistic about voice technology, you can leave.”

At that fateful meeting, which would be cemented in company lore, Liu and his co-founders doubled down on their belief that artificial intelligence had the potential to be a $10 billion industry — and that iFlytek would be the number one company in the field. 

Although consumers showed little interest in buying iFlytek’s speech recognition software, Huawei, one of China’s largest telecom companies, saw potential in integrating the technology into its systems, and signed a cooperation agreement in 2000. iFlytek also became the first recipient of funds from Lenovo Capital, Lenovo’s new venture capital arm, in 2001. Slowly, the fledgling startup found its voice.

“Most of the billion-dollar Chinese software companies rode the exponential growth of the Internet, but iFlytek did it the hard way,” said Lee. “They built the best technologies for speech recognition, found early adopters, and created a market that would otherwise be non-existent.”

In 2004, that market grew to include education. That year, a senior official with the Ministry of Education visited the company to inquire about using its technology to score mandatory oral exams in Mandarin. The government, the official explained, was spending a lot of money to manually score the tests and was looking for a more efficient way. For iFlytek, which was eager to help, it marked the beginning of a highly profitable partnership. 

“After entering into the education industry, we found that there was more demand in this market,” Jiang Tao, senior vice president of iFlytek, said in a 2018 interview with the Cheung Kong Graduate School of Business. “For example, many teachers in areas with strong local dialects have poor Mandarin Chinese pronunciation. Our speech technology allows the teachers to have an in-classroom assistant that helps correct their pronunciation.”

With several big-name customers now on its books, iFlytek held its initial public offering on the Shenzhen stock exchange on May 12th, 2008. And by 2010, the Ministry of Education had adopted iFlytek’s testing technology nationwide. (It has since been used by over 70 million test takers.)

It was around this time that the company began working with education officials in Xinjiang, the semi-autonomous region that maintains Uyghur as an official language, alongside Mandarin. In 2009, iFlytek established a training lab with Xinjiang University to research “multi-ethnic speech and language core technology,” and it rolled out an “intelligence teaching aid system” for bilingual teaching at a “large scale,” according to iFlytek’s 2010 annual report.

Then, in 2013 and 2014, a series of attacks by Uyghur separatists led Xi Jinping’s government to launch the “People’s War on Terror” — a brutal crackdown on the Uyghur minority. As Beijing set about instituting a sprawling surveillance apparatus, iFlytek offered its services. Starting in 2013, the company touted on its website its cooperation with China’s Ministry of Public Security to build China’s first “mass automated voice recognition and monitoring system.” The following year, Liu delivered a speech urging authorities to “use big data to fight terrorism as soon as possible, speed up the construction of a voiceprint database, and ensure national security through data.” 

“One of the earliest needs in the Xinjiang campaign was the need to detect the Uyghur language in order to automate transcription and translation of it,” says Darren Byler, an associate professor at Simon Fraser University and an author of a book on Xinjiang’s hi-tech surveillance system. “iFlytek was one of the pioneers of that technology. They basically decoded the Uyghur language for the state and for tech companies who needed it for censorship.”

For its contributions, iFlytek was named one of four AI ‘national champions’ by the Ministry of Science and Technology, alongside tech stalwarts Baidu, Alibaba and Tencent — a privileged position that makes it more likely to win government procurement contracts.

In the west, meanwhile, while there were early concerns about the surveillance applications of its technology, iFlytek was also recognized as an AI innovator. In one publicity stunt, the company showed off its speech-synthesis AI by having former President Donald Trump “speak Chinese.” In June 2018, The Massachusetts Institute of Technology’s Computer Science and Artificial Intelligence Laboratory (CSAIL) announced a five-year partnership with iFlytek, focused on AI and language processing research. 

But that same year, both the U.S. government and NGOs like Human Rights Watch started to issue more full-throated condemnations of Beijing’s policies in Xinjiang. And U.S. media and think tanks began focusing on the role of private tech firms like iFlytek in Beijing’s surveillance state.

Less scrutinized was the company’s quiet expansion into Xinjiang’s school system, which Interim China Director of Human Rights Watch Maya Wang calls “mission creep.” In 2019 iFlytek signed numerous agreements with the Ministry of Education to use its AI technology to “promote and popularize” Mandarin amongst minority students. Cities and counties throughout Xinjiang were using tools like iFlytek’s Changyan intelligent learning platform. According to Byler, the use of these technologies was “an extension of the broader campaign to transform the Uyghur population by assimilating them into the Chinese mainstream.” 

By October of 2019, the Trump administration had added iFlytek to the Commerce Department’s Entity List alongside SenseTime and Hikvision, with then-Commerce Secretary Wilbur Ross saying that the U.S. “cannot and will not tolerate the brutal suppression of ethnic minorities within China.” By February 2020, MIT had dropped its partnership with iFlytek.

But for iFlytek, the U.S. actions were more of a speedbump than a dead-end. In 2019, the company raised $407 million from a state-backed industry fund and provincial government funds, including an investment fund for state-owned companies, and iFlytek’s sales rose 29 percent in the year after the sanctions. Its government subsidies also ballooned to over 1 billion RMB in 2020, a three-and-a-half fold increase from 2018. 

In an open letter to company employees, Liu Qingfeng struck a strident tone: “We have the world’s leading artificial intelligence core technology, all of which come from our independent research and development, and we have independent intellectual property rights. We will not be strangled.” 

Indeed, when Covid came around, suddenly forcing China’s 200 million students to attend classes from home, iFlytek was well positioned to quickly adapt to the environment and cater to China’s needs. The company had just released its first AI-powered educational tablet, the X1 Pro, which used AI to offer personalized recommendations for individual learners — an innovation from previous educational devices. The company pitched its tablets as the ideal devices to help children “study at home.”

It wasn’t the only one. Squirrel AI, which was founded in 2014, was the closest competitor to iFlytek and also marketed its smart devices to parents as teaching aids. But moreso than iFlytek, Squirrel AI honed in on the after-school segment and set up physical tutoring centers where students would use its technology to learn English and math. As a result, the company was hammered when the Double Reduction policy was announced in July 2021, banning after-school tutoring centers.  

Dan Bindman, who was chief data scientist at Squirrel AI at the time, described the company’s seesawing fortunes during that tumultuous period: “One day, it was like we were almost closing down because of the pandemic. Then, over the pandemic, business went through the roof. Then, [with Double Reduction], suddenly, it all stopped.” (Bindman left the company at the end of 2021.) 

…the Party-state wants to harness AI in the same way it did the Internet in the late 1990s. If the leadership can tame AI, this might further empower their push for social and political stability in the 21st century.

Alex Colville, a writer for China Media Project

Private, after-school tutoring services were the largest target of Double Reduction because they had exploded in China’s wealthiest cities. By one 2020 estimate by the Shanghai Consumer Council, more than three-quarters of parents in Beijing, Shanghai and Shenzhen had paid for such programs in the past year, raising concerns that China’s richest and poorest children have vastly different educational opportunities. 

They were also more difficult for the party to control — a real concern for Xi Jinping’s tight grip on ideology. “The off-campus training institutions must be regulated by the law so that they can return to the normal track of educating people,” Xi said, according to a speech published in Xi Jinping: The Governance of China, Volume Three. 

But even as the Ministry of Education brought the hammer down on tutoring companies, it made it clear that it was still interested in using AI to bridge the gap between rural and urban schools. In 2022, Huai, the new education minister, announced a ‘National Smart Education Platform,’ a repository of online resources, which he pledged would be used to “deepen” Double Reduction.

“The massive number of active users — the Ministry of Education has claimed billions of visits — has presumably generated huge volumes of data, which is precisely what is needed to train AI,” says Oxford’s Knox.

Perhaps no AI system more than iFlytek’s. In 2023, the company signed an agreement to pilot after-school services for primary and secondary schools. And today, the edtech giant has a market capitalization of $13 billion. 

‘TAMING AI’

It hasn’t been all smooth sailing for iFlytek, however. In October, Chinese social media honed in on an article in iFlytek’s learning machine that appeared to criticize Mao Zedong, describing him as a “very talented person and a great man,” but also “a person without magnanimity” who “tortured people” during the Cultural Revolution. 

The backlash was swift. Even though iFlytek quickly retracted the article, the company was accused of disparaging “the Great Man.” Its shares plunged 10 percent. 

The problem of censorship is a tricky one for China’s AI education goals. Just this week, Alex Colville, a writer for China Media Project, attempted to get iFlytek’s chatbot to discuss Tiananmen Square. After asking it to give a list of events that happened in China in 1989, it seemed like the chatbot might “take the bait.” 

“It began generating a list of ‘important events’ that happened in China between 1988 and 1991, with bullet points,” Coleville wrote. “Then suddenly it paused in mid-thought, so to speak — as though some new safety protocol had been triggered invisibly. Spark’s cursor first paused on point 2, after making point 1 a response about rising inflation in 1988. ‘Stopped writing,’ a message on the bottom of the chat read.”

Eventually the chatbot apologized for not being able to answer the question. Colville told The Wire that “the Party-state wants to harness AI in the same way it did the Internet in the late 1990s. If the leadership can tame AI, this might further empower their push for social and political stability in the 21st century.”

But the question of if China can “tame” AI the way it did the Internet remains an open one. Some argue that by censoring the information the systems are trained on, they will never be as smart as they should be; while others note that censoring the information after the system already “knows” it is a risky gamble for Beijing, as iFlytek’s Mao example showed. 

But despite the censorship handicap — or perhaps because of it — China remains determined to go all-in on AI in its schools. As Graham Webster, editor-in-chief of Stanford University’s DigiChina Project, notes, China’s leadership has a “fixation on not falling behind” countries like the U.S. when it comes to AI. There’s also a “dreamy, futurist” hope, he says, that AI will be able to solve intractable problems. 

For China’s rural schools, an AI panacea would certainly be nice. As of 2022, approximately 40 percent of China’s eligible youth population did not go on to attend high school. “The gap is not only in attendance,” Scott Rozelle argues in his 2020 book, Invisible China: How the Urban-Rural Divide Threatens China’s Rise. “Urban children also consistently perform far better on academic tests. China’s human capital crisis is a rural problem.”

But some observers aren’t convinced AI can help close the gaps in China’s education system. “I think these AI systems are very good at teaching to the test,” says Oxford’s Knox. “However, I’m pretty skeptical that they can enhance and improve education.”

Others doubt that AI can be effectively used in rural schools. “It’s often said that as long as we put computers in rural schools, students can get the same quality of resources as students in good schools in Beijing and Shanghai,” says Li Yuan, an education researcher at Beijing Normal University in Zhuhai. “But the reality is this depends on whether the teacher has the skills to implement these resources in the right context, whether students can use the resources, and whether parents will embrace the technology.”

And parents, it seems, may be bristling at Beijing’s embrace of private companies like iFlytek. After iFlytek’s partnership with the Ministry of Education to provide after-school services was announced in 2023, some angry parents complained on social media that the policy forced them to purchase iFlytek-branded AI devices or services.

“This is a typical example of backdoor dealing and unfair resource distribution,” one complainant wrote. “Is there an open bidding process for this cooperation? The Ministry of Education represents the interests of citizens and cannot decide on cooperation at will. It must follow procedures. Otherwise, it is illegal.”

Eli Friedman, a professor of international and comparative labor at Cornell University, who has studied China’s education system, notes that there is reason for skepticism. “I could see the appeal of tech companies providing the solution,” he says, “but there is a more cynical interpretation, that this is just a transfer of wealth of public resources to the private sector. Tech companies know that if they can get their products into the hands of China’s school system, they have millions of captive consumers.” 

Jason Luo, a Stanford researcher working on China’s AI procurement, adds that the state-driven funding for AI remains “notoriously bad for rampant inefficiency.” Many schools throughout China, he says, still have “no idea what they really need [from AI] or what these technologies really do.”

At the end of the day, Cornell’s Friedman says, technology is just a stopgap measure for improving education. “The thing that makes the biggest difference is teacher-student ratios and teacher training,” he says. “Only when technology is integrated well with people who know how to use it can we fully realize its potential.”

While this golden standard surely holds as true in the U.S. as it does in China, China’s full-court press on AI-assisted education is already being felt in American classrooms. Given its sanctions, iFlytek’s tablets aren’t likely to show up in U.S. schools, but Squirrel AI, which is privately owned and has offices in Seattle, has long had its sights set internationally. 

“Our primary emphasis lies on after-school programs, leveraging our successful franchise model from China. This model entails setting up offline self-study learning centers furnished with our smart learning tablets,” says Squirrel AI co-founder Liang. “Additionally, we are pursuing a strategy to bolster our presence in in-school learning environments through collaborations with prestigious educational institutions, as well as with district and public schools.”

… I think the opportunity for U.S.-China cooperation is quite narrow. There’s no way that the countries will allow the other’s AI products in.

Tom Nunlist, an Associate Director at Trivium China

That is an audacious strategy in the current climate. TikTok owner ByteDance recently drew attention for another one of its apps, Gauth, which solves math problems and is currently the seventh most-downloaded free education app on the U.S. iOS app store. The TikTok divestment bill signed by President Biden in April similarly forces ByteDance to either sell or face a U.S. ban on Gauth.

Liang remains optimistic about Squirrel AI’s chances, saying that the company’s “U.S. operations are entirely independent” and that it is “committed to upholding the highest standards of data privacy and security.” 

But AI is already a flashpoint between the U.S. and China. Some observers note that when you add education in — itself a political minefield — the stakes are raised.

“Sadly, I think the opportunity for U.S.-China cooperation is quite narrow,” says Tom Nunlist, an Associate Director at Trivium China. “There’s no way that the countries will allow the other’s AI products in. The U.S. is worried about TikTok, a leisure app, potentially brainwashing kids. You take that to the next level when we’re talking about education.”

---