POWERING THE AI RACE

Two centuries ago, the steam engine converted heat into motion - and remade the global economy. Today, AI is transforming electricity into cognition, and whoever masters both will again rewrite the rules of progress

- Jeffrey Wu

The next stage of the global AI race will be decided not by algorithms or chips, but by electricity — and that puts China at a distinct advantage.

While Western tech giants are emphasising closed, capital-intensive models that demand enormous computing power, China is embracing open-source AI and massively expanding its renewableand nuclear-energy capacity, thereby positioning itself to deploy powerful AI technologies at scale without breaking the bank.

These differences reflect a more fundamental split. Whereas the United States and its allies have treated AI as a proprietary technology, China has approached it as public infrastructure, building an open AI ecosystem that reflects the same philosophy it applied to manufacturing: broad adoption, fast iteration, and relentless cost reduction. Chinese open-source models like DeepSeek, Qwen, and Kimi are not just scientific achievements; they are strategic instruments designed for participation, and they are transforming the economics of AI.

DeepSeek’s latest version reportedly matches the capabilities of frontier systems, like those being developed by US companies, at a fraction of their compute cost. Qwen and Kimi’s API prices have fallen by orders of magnitude. In purely economic terms, the marginal cost of “thought” is collapsing. The inference costs of some Chinese models are a tenth or less of those incurred by OpenAl’s GPT-4.