Putin Directs Russia’s Top Bank to Team up With China in AI Push

• Russian President Vladimir Putin ordered his government and a big bank to work with China on AI.
• Russia has been seeking tech alternatives post-Ukraine invasion due to Western sanctions.
• A Russia-China AI partnership could raise concerns over censorship, among other issues.

Russian President Vladimir Putin continues seeking to expand his challenge of the West’s order — this time in tech.

The Russian leader has ordered his government and Russian banking giant Sberbank to work with China on artificial intelligence, according to a December 30 post on the Kremlin’s website.

Putin instructed his government and Sberbank to “ensure further cooperation with the People’s Republic of China in conducting technological research and development in the field of artificial intelligence,” according to the Kremlin’s post. It was published three weeks after Putin announced a BRICS AI Alliance Network.

Putin delegated Prime Minister Mikhail Mishustin and Sberbank CEO German Gref to lead the AI effort. A progress report is expected by April.

Russia’s building parallel systems to the West

Putin’s instructions came 34 months after Russia’s full-scale invasion of Ukraine, which triggered sweeping Western sanctions against his regime.

The trade restrictions have hit Russia’s access to financial payments technologies, prompting the country to seek substitutes in the form of parallel imports and domestic substitutes.

Russia has also been setting up alternative systems to process payments transactions and ship sanctioned oil around the world.

However, finding tech alternatives to Western products has not been easy.

A former top Russian finance official told Reuters in September 2022 that Russia would be using second-grade tech 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.

Sberbank CEO Gref said in April 2023 that graphics cards for AI and supercomputers were the hardest to substitute.

The US has restricted sales of advanced computer chips to Russia since 2022 and further tightened restrictions on third-party chip exports to Russia last year.

Alexander Vedyakhin, the first deputy CEO of Sberbank, told Reuters last month that Russia was six to nine months behind the US and China in AI in a range of parameters.

Vedyakhin told the news agency that Russia would focus on developing large language models rather than building massive data centers.

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.

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