As discussions about artificial intelligence (AI) in Washington intensify, attention is increasingly focused on how the United States can secure its position as the leader in AI technology as it competes against China. President Donald Trump initiated his second term by signing an executive order aimed at sustaining and enhancing America’s global dominance in AI. Furthermore, Vice President JD Vance expressed the administration’s commitment to maintaining ‘American AI technology as the gold standard worldwide’ at the Paris AI Action Summit in February. In May, David Sacks, the AI and crypto czar in the Trump administration, emphasized the necessity of excelling in the AI race as a rationale for exporting advanced AI chips to nations in the Middle East like the United Arab Emirates and Saudi Arabia.
The widespread belief that AI has the potential to reshape power dynamics and national prosperity in the coming decades underscores the significance of winning this technological contest. However, defining what it means to ‘win’ the AI race is complex and varies across different fronts of competition.
Many define victory as being the first to achieve artificial general intelligence (AGI)—an AI system that can perform tasks at least as well as top human experts across various cognitive tasks. The potential breakthroughs that AGI could enable in technologies, science, and economic productivity contribute to the fierce rivalry between the leading nations. The nation that accomplishes this feat first may enjoy significant strategic advantages.
While the race to AGI captures substantial attention, it is not the only critical aspect of the AI competition. Military and intelligence sectors also face the pressing challenge of effectively leveraging AI’s transformative capabilities while mitigating its potential disruptions. Competitiveness can also be enhanced through large-scale adoption of AI across economic sectors and society. Moreover, determining the standards and infrastructure that will form the foundation of the global technological ecosystem is a crucial battleground, as countries strive to establish control and regulate AI.
Considering these multifaceted competitions reveals the precariousness of the United States’ position in the AI realm. Though U.S. companies maintain a leading edge in AI research and development, there are significant threats posed by China’s rapid advancements and willingness to circumvent limitations, coupled with a lack of both superpowers’ cooperation to avert potential crises. This situation raises the stakes immensely, as failure to secure a leading position in AI could leave the U.S. economically dependent, militarily vulnerable, and relegated to diminished global influence.
Addressing these challenges necessitates a coherent AI strategy from the United States, one that emphasizes innovation, the integration of AI technologies across various sectors, and proactive risk management to leverage the nation’s significant technological capabilities into a lasting strategic advantage.
The most overt and immediate competition within the AI arena is the race to achieve AGI. Companies such as OpenAI, Anthropic, and Google DeepMind in the U.S., as well as DeepSeek in China, are in a rapid push for AI innovation—with backing from their respective governments. The pathway of technological evolution remains uncertain, whether large language models signal the onset of AGI or if a breakthrough can arise with a sudden jump across a threshold.
American AI laboratories currently exhibit a noticeable edge fueled by semiconductor export controls intended to uphold the country’s computational superiority over China. However, this lead is fragile; China’s domestic innovation capabilities, alongside systemic issues like intellectual property theft, keep it remarkably close to the U.S. Companies like DeepSeek are developing technologies that only trail their American competitors by a matter of months. Moreover, Beijing’s centralized and strategically unified approach may enable it to nurture private-sector innovations at a pace that surpasses its counterparts in Washington.
Conversely, the open nature of the U.S. system fosters creativity yet leaves it open to espionage and the swift proliferation of technological breakthroughs. If alternative paradigms for AI development emerge, the primacy of U.S. semiconductor dominance may decline, which would allow Chinese AI laboratories the chance to outpace U.S. competitors. The Trump administration’s pivot away from basic research investment, alongside barriers to attracting foreign talent, could hinder American advancements in AI in the years to come.
Moreover, the U.S. private sector is often driven by commercial motivations that may not align with national interests. For instance, AI companies may gravitate towards locations with advantageous energy infrastructures, irrespective of their origin in the U.S. The construction of the world’s first five-gigawatt AI data center cluster in the UAE—facilitated by the recent export of high-end AI chips to Abu Dhabi—demonstrates this shift. While the U.S. benefits directly from this ecosystem, the offshore relocation of essential infrastructures risks undermining American technological security and opens avenues for competitors like China to access advanced resources.
Even if the U.S. manages to sustain its edge in innovation, it may not guarantee comprehensive superiority. Current market dynamics indicate that frontier AI models are becoming more ubiquitous and indistinguishable, diminishing any single entity’s technological superiority. Such trends could diminish American leadership when AGI finally materializes; effective deployment and integration of AI will therefore become paramount, with no certainty that the U.S. will remain at the forefront.
In the arena of national security, adept AI integration is crucial for maintaining a strategic military advantage. Capitalizing on AI’s potential can enhance intelligence insights, enable quicker decision-making driven by data, streamline logistics and resource distributions, facilitate complex autonomous systems, and potentially lead to the emergence of advanced weaponry capable of debilitating adversaries.
Currently, however, collaboration between the U.S. government and private industry remains alarmingly inadequate. National security agencies are often not privy to the latest AI advancements, slowing down the effective integration of modern technologies within operational structures. Partnerships are only beginning to develop between leading AI institutions and Pentagon agencies. Bureaucratic red tape, entrenched policies that resist transformative shifts, infrastructural and data deficits, and unclear notions of AI capabilities—whether they are overstated or understated—hinder the military’s adoption of state-of-the-art innovations.
In contrast, China’s more centralized governance model allows for easier civil-military integration, giving it a competitive advantage in AI utilization. Systematic mandates ensure rapid transition of technological progress into military applications, as sectors like the People’s Liberation Army actively pursue contributions from the commercial and academic landscapes. By leveraging competitions and platforms aimed at accelerating the translation from civilian AI research to military capabilities, China aims to introduce advanced military strategies, including capabilities centered on algorithmic and network-centric warfare, by 2030. The U.S. could excel in scientific and technological advancements, but its bureaucratic limitations might prevent it from recognizing and exploiting strategically disruptive paths that rapidly arise.
Integration of AI technology across various sectors, including education, energy, finance, healthcare, logistics, and manufacturing, is crucial for the winning nation. The U.S. advantages—such as innovative technology companies, a vibrant venture capital landscape, high levels of digital literacy, and a robust digital infrastructure—offer significant opportunities. However, there is no guarantee that the advantages will translate into official success.
A lack of corporate governmental incentives and public trust in AI could jeopardize the private sector’s ability to harness the enhancements provided by AI in productivity and value creation. Furthermore, there is the accompanying risk of widespread unemployment due to job displacement resulting from AI, with estimates suggesting that AI could eliminate as much as 20 percent of U.S. jobs within the next five years. Such a scenario could have destabilizing consequences for the economy and society.
China, on the other hand, may surprisingly excel in the economic adoption of AI. Chinese enterprises appear increasingly focused on practical applications rather than theoretical model building. DeepSeek’s efforts to open-source its AI models substantially reduce costs, enabling numerous Chinese businesses to explore innovative implementations of the technology. Consequently, China’s seamless integration of AI stands to yield groundbreaking products. The Chinese regime is likely less inhibited by the societal and political ramifications of AI taking over jobs, viewing technology as capable of resolving its labor shortages due to an aging populace.
The United States could parallel China’s aggressive AI economic integration, but a comparative edge might slip away if China successfully utilizes AI advancements, particularly in the manufacturing sector, where China dominates in industrial robotics and automation through state-driven industrial policies. In 2024 alone, Chinese manufacturers accounted for half of the global demand for industrial robots, and companies in China are leading in density of robots per employee, far surpassing global averages. The accelerated shift towards extreme automation in production—evidenced by companies like Xiaomi running fully automated ‘dark factories’—could mean that China outpaces the U.S. not just in software, but in more physical industrial applications as AI technology evolves to enhance machine spatial reasoning and intelligence.
Meanwhile, the world’s tech giants are racing to establish the digital infrastructure that will support global AI adoption and use across many sectors. While the U.S. and China are at the forefront of this competition, other nations—including France, Japan, the Netherlands, South Korea, Taiwan, and the UK—are also vying for influence. Their objective is to wrest control over data, chips, and data centers while shaping international standards and norms for AI use. As emphasized by Sacks, if the global majority utilizes American tech, it’s a sign of victory; should China dominate this sphere, it’d represent a significant loss.
The export controls on semiconductor chips not only provide the U.S. with a strategic edge but also position American companies to leverage the technology and remain competitive. The strategy of saturating the market with U.S. chips and infrastructure in allied nations like Saudi Arabia and the UAE aims to ensure U.S. technology remains the preferred choice in investment-heavy digital ecosystems.
However, this strategy may fall short in lower-income regions where infrastructure is limited and operational barriers high. Countries in Africa, Latin America, and parts of Asia are increasingly turning toward AI for growth, and in this context, China is well-equipped to present attractive AI solutions—offering adequate alternatives at much lower costs, complemented by investments in essential infrastructure. While China still lacks the ability to provide top-tier chips, its offerings of lower-quality yet functional models could gain traction among developing nations seeking accessible and effective AI solutions. As such, relinquishing ground in these emerging markets could not only diminish American global influence and economic opportunities but also lead to a world where Chinese values and political narratives are further normalized through technology, increasing the risk of digital authoritarianism.
The potential consequences of ceding AI leadership to China extend beyond merely lost economic opportunities and influence; they raise fundamental questions about governance and the democratization of technology. U.S. models generally advocate for transparency, user choice, data privacy, and protections against government overreach, in stark contrast to Chinese algorithms that often serve to consolidate state control and promote propaganda objectives. As U.S. technology evolves, it is essential for Washington to encourage investments by AI firms into infrastructure development in less-developed nations to align technology innovation with democratic values.
To avoid falling behind in the essential battle over global AI infrastructure, the U.S. must navigate the landscape with careful policy and strategic action. Overly stringent export controls can push allies to seek alternatives, while lenient regulations can open avenues for adversarial countries to acquire advanced technologies. It is vital that the United States articulates a compelling vision for technological governance, one that balances national security, economic growth, and the adherence to democratic principles to ensure potential partners remain engaged.
Currently, both the U.S. and China face the reality that the rapid engagement with AI encompasses risks that could lead to catastrophic accidents. It is crucial that both superpowers act responsibly in their AI development endeavors, ensuring that the race does not compromise safety or lead to disastrous outcomes. The immediate risks from nonstate actors obtaining advanced AI to orchestrate large-scale malicious acts, including cyberattacks and biological threats, are rising and should be taken seriously.
The potential for superintelligent systems—unintentionally misaligned with human values or intents—remains another pressing concern. As evidence mounts that advanced AI models are exhibiting deceptive behavior and complexity, the urgency to address safety and alignment becomes ever more critical.
Both Washington and Beijing must recognize the shared responsibility to mitigate AI-related risks, which can foster cooperation amid intense competition. Finding common ground can prompt meaningful discourse on best practices concerning AI safety and control, laying down frameworks for risk management and response.
The implications of winning or losing the AI race extend far beyond technological specifications; they encompass broader national security, economic stability, and the future geopolitical landscape. The U.S. must take decisive action to ensure comprehensive strategies address AI challenges across various sectors.
For holistic success in navigating the multi-faceted AI race, Washington ought to engage in extensive dialogues with industry leaders to remain informed on AI advancements and their strategic applications.
Moreover, the U.S. government must facilitate a supportive environment for AI development in the private sector. Ensuring access to necessary resources for model development, from semiconductors to high-quality training data, is imperative. Additionally, advancements in cleaner energy technologies should be pursued to prevent AI’s growing energy consumption from worsening climate issues.
Maintaining U.S. technological superiority requires rigorous enforcement of export controls on advanced technologies—such as semiconductors and AI infrastructure—to prevent unauthorized access and intellectual property infringement. Protecting infrastructures from espionage and requiring rigorous user verification for sensitive platforms is crucial for securing competitive advantages.
To balance public and private interests, the U.S. should develop frameworks that encourage cooperation between government entities and companies working on advanced AI applications, promoting national security interests while securing industry viability. AI firms can benefit from greater access to national intelligence while the government at large can leverage enhanced AI applications for national security.
To pressure AI adoption in critical sectors, policymakers must consider initiating an ‘industrial AI’ project to accelerate investment and innovation in manufacturing, logistics, and energy sectors. By offering tax credits and public-private collaboration opportunities, the government can inspire businesses to adopt AI technologies into their operations, thereby bolstering industrial productivity and competitiveness in a rapidly changing global market.
Recognizing that AI will traditionally displace human labor requires immediate action to assist workers affected by job loss. Investments in retraining, STEM education, and vocational training programs are paramount to ensure accessibility in transitioning roles. Furthermore, labor regulations require modernization to facilitate fair and transparent practices given the shifting landscape brought about by AI.
The U.S. must attract investments to establish advanced AI frameworks in developing countries that can compete competitively with China’s offerings. Implementing partnerships to extend access to U.S. cloud infrastructure and introducing financial incentives for digital infrastructure development can catalyze AI opportunities in emerging markets. These steps will be essential for both minimizing poverty through technology empowerment and countering Chinese influence in these regions.
Lastly, the United States needs a proactive approach toward worst-case scenario preparedness, understanding that the misapplication of AI technology can lead to dire consequences. Conducting simulations and risk analyses regarding AI-related crises will enhance preparedness against unforeseen challenges.
Both the U.S. and China face an obligation to regulate and manage the emerging AI landscape for mutual benefit and global stability. Lessons learned from historical military tensions imply the necessity of forging pathways for dialogue, such as bilateral agreements centered on sharing AI incident information and addressing misalignment risks. This effort could create a framework within which both nations can navigate their ambitions while safeguarding global interests.
In conclusion, the idea of an unmistakable AI race simplifies the intricacies of the global competition unfolding between the U.S. and China. It is not merely about winning a single contest; it is the navigation of a complex and interdependent set of technological and strategic challenges with lasting implications. To emerge victorious in this constant state of evolution, the United States must strategize holistically, addressing each competition without neglecting the others to maintain its global status and technological leadership.
image source from：foreignaffairs
