Introduction to China’s AI Ambitions
Artificial intelligence (AI) is the new currency of global power, and China is building it on a massive scale. In 2017, China declared its goal to become the world’s leading AI power by 2030 and has invested billions to spur domestic innovation. In 2025 alone, the country is expected to spend almost $100 billion on AI between the government and the private sector.
Breakthroughs in Chinese AI
So far this year, China has stunned the global tech community with the rise of DeepSeek, a startup whose large language model (LLM) competes with leading Western brands such as ChatGPT and Grok. DeepSeek offers broadly comparable performance at a fraction of the cost and computing power. E-commerce giant Alibaba, meanwhile, has launched a powerful new AI model and announced plans to build more data centers around the world. This shows that China’s largest tech companies are serious about challenging the US’s AI dominance. Tencent added momentum to the race this year with the release of the Hunyuan-A13B, an AI model designed to be faster, smarter and open to developers.
Closing the AI Gap
With over a billion people online, China’s massive population acts as a built-in testing ground, enabling the rapid spread of new AI products across consumers, services and industries. Because Chinese models are also designed to run on cheaper hardware, they are far more cost-effective to deploy. According to Pedro Domingos, a computer science and engineering professor at the University of Washington, "China is now moving at the same speed as the US. They have caught up over the years and are now at the top and trying to go far forward." Domingos also noted that there is a "misconception" that the U.S. has been far ahead in major language models.
Open Source Solutions
By providing powerful models such as DeepSeek, Qwen-3 and Kimi K2 as open source solutions, Chinese companies are giving developers free access to state-of-the-art tools. Western rivals often keep their products locked behind paywalls. Domingos said, "American companies have previously openly disclosed their AI methods, driving progress. Now they are secret for competitive reasons, which is bad for innovation." China watchers have noted the intense competition between Chinese AI companies, with over 1,500 large language models released as of last July.
Filling the Gap Created by the US Chip Ban
Despite its rapid AI advances, China still lags behind in the advanced chips needed to rapidly train LLMs. U.S. export controls have blocked China’s access to cutting-edge semiconductors and chip-making tools, forcing domestic companies to rely on older, less efficient hardware. In response, Beijing has banned imports from key US suppliers such as Micron Technology and stepped up the development of its own chip industry. Chinese NVIDIA rival Cambricon Technologies reported a 14-fold increase in quarterly revenue last week, after posting a 44-fold rise in the first half of the year.
The USA and China’s AI Strategies
The U.S. continues to lead the AI race in pioneering research, figuring out how to build systems that understand language better, follow instructions more reliably and avoid harmful behavior. US technology companies are also exploring advanced AI for images and videos and can even make decisions on their own. However, China is gaining real-world influence and international reach by exporting AI infrastructure and open source models to developing countries that want digital infrastructure. Companies like Alibaba and Huawei are building data centers and cloud platforms in Asia, Africa and Europe, offering cheaper alternatives to US providers.
The Global AI Governance Framework
Beijing is also pushing its own AI governance framework internationally, aiming to shape global standards according to its national interests. By promoting models based on Chinese data and values, the government aims to influence how AI systems interpret history, culture and truth themselves. As Domingos put it, "Whoever controls the large language models controls the past and the future… Large language models shape reality and China wants models that reflect their version of it." The AI race is being described as a "new form of Cold War," with the country that can develop and maintain the greatest lead in artificial intelligence winning the war.
