China is widely referred to as a global leader in artificial intelligence (AI) but just 14% of companies in the country are actively using AI software, according to Alain Bénichou, CEO of IBM's Greater China business.
"There is a long way to go," Bénichou said Tuesday at CNBC's East Tech West conference in the Nansha district of Guangzhou, China. "When you think about cognitive-savvy companies, it is only 14% of the companies that really are actively using AI in everything they do."
China and the U.S. produce more AI specialists than any other country, but Bénichou claims there's a lack of talent across Chinese companies.
There is a "problem with skills," said the French businessman, adding that people need to be up-skilled or retrained. "You don't have the skills, so it is a really skill trap here," he told CNBC's Nancy Hungerford.
Many Chinese companies are also struggling to move beyond the proof of concept stage, Bénichou said, arguing that they "don't know the business case" or how to "instil value" in the data they have.
A lack of trust in AI is also holding back some Chinese companies, said Bénichou, adding that enterprise AI systems need to be explainable and transparent.
"If you don't have trust you won't have AI that are really pervasive, and really adding," said Bénichou, who believes that companies should use AI to augment their workforce, not replace them.
"Once we overcome these barriers, we can take advantage of AI," Bénichou later told CNBC in a TV interview.
Globally, 10% of companies are adopting AI, according to Bénichou, who said that companies in countries like the U.S. and Japan are also using AI more than companies in other countries.
AI is being hailed as the fourth industrial revolution and a technology that's going to change the way people live and work. IBM is just one company that generates revenue by helping companies to embrace the new technology.
Researchers have been working in the field of AI for decades but advances in computer processing power and the increasing availability of reliable data sets in the last few years have resulted in a number of milestones being passed by researchers from companies like IBM, Google and Facebook.
"There is a craving for AI," said Bénichou. "The problem is how to get there."