Xi Jinping's Plan to Beat America at AI

On May 15 Trump brokered an AI deal with UAE he said would ensure US "dominance in AI"

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On May 21st J.D. Vance, America's vice-president, described the development of artificial intelligence as an "arms race" with China. If America paused out of concerns over AI safety, he said, it might find itself "enslaved to PRC-mediated AI". The idea of a superpower showdown that will culminate in a moment of triumph or defeat circulates relentlessly in Washington and beyond.

This month the bosses of OpenAI, AMD, CoreWeave and Microsoft lobbied for lighter regulation, casting AI as central to America's remaining the global hegemon. On May 15th President Donald Trump brokered an AI deal with the United Arab Emirates he said would ensure American "dominance in AI".

America plans to spend over $1trn by 2030 on data centers for AI models.

The "DeepSeek moment" in January, when the Chinese firm unveiled a large-language model (LLM) matching the capabilities of an OpenAI model, confirmed that China is snapping at the heels of America. Yet a recent meeting of the Communist Party's leadership suggests it is preparing for a different kind of strategic race. "American firms focus on the model, but Chinese players emphasize practically applying AI," says Zhang Yaqin, a former boss of Baidu, a tech giant, now at Tsinghua University.

This focus on practical applications—in factories and for consumers—is how China stole a lead in e-commerce and e-payments. On May 19th Jensen Huang, the boss of Nvidia, a chip firm, warned America could be left behind again. If American firms do not compete in China as it builds a "rich ecosystem", Chinese technology and leadership "will diffuse all around the world", he told Stratechery, a newsletter.