Xi Jinping's Plan to Beat America at AI

China's leaders believe they can outwit American cash and utopianism.

- 

On May 21, Mr. J.D. Vance, America's vice-president, described the development of artificial intelligence (AI) 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," referring to the People's Republic of China.

The idea of a superpower showdown that will culminate in a moment of triumph or defeat circulates relentlessly in Washington and beyond.

In May, 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 15, US President Donald Trump brokered an AI deal with the United Arab Emirates that he said would ensure American "dominance in AI." America plans to spend over US$1 trillion (S$1.28 trillion) by 2030 on data centers for AI models.

The "DeepSeek moment" in January, when the Chinese company 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 Professor Zhang Yaqin, a former boss of tech giant Baidu, 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 19, Mr. Jensen Huang, the boss of chip giant Nvidia, warned that 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.