The US and China are locked in a tight technology race, with artificial intelligence (AI) emerging as a key area of competition. US President Donald Trump recently stated that the US is leading China in AI and wants to maintain that edge, highlighting the stakes in this tech competition. The US has a strong foundation in AI, with pioneering labs, advanced chips, and deep-pocketed investors. However, China is rapidly narrowing the technology gap and championing a more open ecosystem centered on accessibility and lower costs.
China has launched the World Artificial Intelligence Cooperation Organization, a rival grouping to the Pax Silica alliance formed by Trump last year. The new organization has recruited 29 countries, including Russia, Indonesia, and Pakistan, to its vision of open models that allow users to freely download, customize, and run AI systems without paying hefty fees to American firms. This approach may be more compelling for many countries, particularly in the Global South, where developers may find inexpensive Chinese models more useful than slightly more capable US systems that require expensive subscriptions and access to foreign cloud providers.
The US-China tech competition has become a key focus of high-level diplomatic talks, including the recent Trump-Xi summit. Xi emphasized the need for cooperation and dialogue on AI, suggesting that the two sides should "draw on each other's strengths, not guard against each other." However, the summit yielded little progress on AI beyond a formal dialogue and a bilateral communication channel, reflecting entrenched mutual mistrust amid contrasting visions on AI.
China's embrace of open systems has been driven in part by US export controls on advanced chips and smaller capital markets, which have pushed Chinese developers toward open models as a way to compete with leading US proprietary systems. This shift has proved effective, with Chinese models' global usage skyrocketing from less than 15% to over 54% in just a year, led by companies like DeepSeek. Even American firms, such as Airbnb and DoorDash, have tapped into the advantages of open systems, including lower costs and greater flexibility for customization.
The appeal of Chinese models may depend on the extent to which they remain accessible without restrictions. While Xi has called for greater openness and collaboration in AI, he has also stressed the need for regulation to keep it under human control. Experts warn that the more capable Chinese models become, the less likely it is that Beijing will leave them unrestricted, citing national security concerns.
The meaning of winning the AI race is also poorly defined, with different metrics yielding different results. Some experts suggest that the likely outcome of the AI race may mirror Apple's case in the mobile phone market, where the US holds the profits while China accumulates the users. As AI capabilities continue to advance, the differences between the most advanced models and slightly less capable systems may become less noticeable to most people and businesses.
Global developers and governments are taking advantage of Chinese open models to push for sovereign AI development and avoid picking a side in the US-China tech competition. However, they now face concerns about how long those models may stay open, as China may be compelled to limit their deployment due to national security concerns. Experts predict a mixture of both open- and closed-source AI from China, as both serve the country's national interests.
Key points
- US President Donald Trump says US leading China in AI, wants to keep it that way
- China has recruited 29 countries to its World Artificial Intelligence Cooperation Organization
- Chinese AI models' global usage has skyrocketed from less than 15% to over 54% in just a year
