Putin wants Russia and Sberbank to work with China on AI to break US dominance

President Vladimir Putin ordered the Russian government and the country’s biggest bank, Sberbank, to build cooperation with China in AI, to limit Western dominance.

The instructions were made public on Wednesday through the Kremlin’s website, about three weeks after President Putin announced that his country would collaborate with BRICS partners and other countries to develop AI.

Russia seeks to limit Western-led AI dominance 

The BRICS bloc is a group of emerging economies often portrayed as a counterweight to the Western-led world order. Russia has been looking for tech alternatives since it invaded Ukraine, and Western sanctions limited the country’s access to high tech.

“Ensure further cooperation with the People’s Republic of China in technological research and development in the field of artificial intelligence.”

~ President Vladmir Putin

Major world producers of microchips halted exports to Russia due to Western sanctions. These sanctions were intended to restrict Moscow’s access to the technologies it needs to sustain its war against Ukraine, severely limiting its AI ambitions.

According to Reuters, a former Russian finance official told the news agency that the country would be using second-grade technology for years and spending huge resources to recreate what already exists. Goods heavily impacted by Western sanctions include semiconductor chips, aviation parts, and medical products.

Besides the AI chips sale embargo, the trade restrictions have also hit Russia’s access to financial payment technologies, prompting the country to seek substitutes in the form of parallel import and domestic substitutes.

Graphics processing units (GPUs), microchips essential for AI development, have been difficult for Russia to replace, according to the chief executive of Sberbank German Gref in 2023.

Russia PM to lead the initiative with Sberbank CEO 

As a way to ensure action is being taken, President Putin delegated Prime Minister Mikhail Mishustin and Gref to lead the AI effort. The appointees are expected to come back with a progress report by April 2025.

However, finding technology alternatives to Western products has not been easy so far for the country.

UK-based Tortoise Media Global AI Index ranks Russia at 31 out of 83 countries by AI implementation, innovation and investment. The ranking has Russia well behind the US, China, and other BRICS members – India and Brazil.

The first deputy chief executive of Sberbank, Alexander Vedyakhin, in December 2024 said that Russia was six to nine months behind the US and China in AI in a range of parameters. He said Russia would focus on developing large language models rather than building massive data centers.

In dealing with the BRICS and other non-western countries, Russia is seeking to challenge US dominance in one of the most promising and crucial technologies of the 21st century.

Sberbank claimed that AI associations from Brazil, China, India, and South Africa had already created a network after President Putin on December 11, 2024, said that he wanted to develop a new AI Alliance Network with the BRICS members and other interested countries.

On December 31, 2024, Chinese President Xi Jinping exchanged New Year greetings with President Putin saying, “The political mutual trust and strategic coordination between the two sides have continuously marched to a higher level under the strategic guidance of the two leaders.”

This comes as the Chinese have continued to deny accusations of supporting Russia’s military efforts.

A potential Russia-China partnership in AI could cause concerns beyond sanctions skirting. China’s foray into AI is raising concerns about censorship in the country, where expression is tightly controlled.

According to a Financial Times report in July 2024, Chinese officials have tested Chinese large language models to ensure they embody core socialist values.

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