The Shadow
The United States still leads the global AI race, with greater investment, infrastructure and superior AI models, but the gap is closing fast. Chinese models like DeepSeek-R1 and the recent Kimi K2 Thinking model have an edge over American models in cost efficiency and certain analytical functions.
The United States’ status as the leading technology and innovation superpower has never been more uncertain. With the future of innovation in medicine, cybersecurity and defense hinging on the victor of the global AI race, U.S. policymakers must do all they can to ensure America does not squander its lead.
Beijing undoubtedly wants to see China become the global AI superpower. The Chinese government has offered significant state-backed incentives to companies developing AI models and boosted energy subsidies for data centers. Similarly, funding is being poured into data-center projects, with a planned $37 billion investment in the 760-acre “data island” in Wuhu.
After AI development was prioritized in China’s 15th Five-Year Plan, Goldman Sachs forecast that Chinese cloud service providers will increase capital expenditures by 65 percent in 2025, with $70 billion being invested to support development.
Dividends have already been paid, with Moonshot AI’s language model, Kimi K2-thinking, outperforming OpenAI’s GPT-5 and Anthropic’s Claude Sonnet 4.5 in key tests. Worse still for the U.S. AI industry, these models are much cheaper to develop in China than they would have been in America.
The Chinese government’s interest in the future AI field is not just bad news for the American economy. Beijing intends to place AI systems at the core of its future national security and defense strategies.
Last year, researchers at Shanghai Jiao Tong University won a government contract after researching how artificial intelligence could be used to deploy weapons in automated “kill webs” that adjust in real time during combat at sea.
Similarly, in Xinjiang, law enforcement uses AI surveillance tools to map out and assess the suspicion levels of individuals based on behavioral and personal data, before passing information to authorities. Citizens were at risk of being reported for as little as using a VPN.
To maintain its lead in the global AI race, the United States must create an attractive environment for AI companies, where low regulation and government support enable innovation to flourish. This is already happening, with OpenAI developing a $500 billion data center in Texas that dwarfs the investment in the Wuhu center. Congress needs to pass the 10-year ban on state-level AI regulation that was removed from the Tax Cut and Spending Bill in July. Over-regulation stifles American growth and aids China in this crucial race for global strength.
Home to the world’s most powerful AI chip, the Nvidia Blackwell, the United States must continue restricting access to its technology. Without the most powerful chips, China may struggle to overtake the United States in AI innovation and power. DeepSeek has already faced this problem. Not having access to Nvidia’s strongest chips delayed the release of one of its models, as the domestic chips did not perform as well as the American ones.
The AI race is fundamentally about the future of global power, in arenas from defense and security to healthcare. In some instances, China has weaponized AI usage, setting a potentially dangerous precedent. The United States is still in the lead, but will only maintain it if policymakers continue to act.
Congress should refrain from passing measures that hinder progress through regulation and ensure China does not gain access to vital U.S. technology.
ABOUT THE WRITER
Samuel Field is a policy fellow at the Pinsker Centre, a British-based foreign policy think tank focusing on the Middle East and wider international affairs. He wrote this for InsideSources.com.
