{"id":132819,"date":"2026-08-07T12:07:19","date_gmt":"2026-08-07T12:07:19","guid":{"rendered":"https:\/\/www.europesays.com\/ai\/132819\/"},"modified":"2026-08-07T12:07:19","modified_gmt":"2026-08-07T12:07:19","slug":"china-is-gaining-ground-in-ai-the-u-s-still-has-a-major-advantage","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ai\/132819\/","title":{"rendered":"China is gaining ground in AI. The U.S. still has a major advantage"},"content":{"rendered":"

This report is from this week’s The Tech Download newsletter. Like what you see? You can subscribe\u00a0here.<\/a><\/p>\n

Earlier this week, Cl\u00e9ment Delangue, the CEO of startup Hugging Face \u2014 which was recently on the receiving end of a rogue cyber attack<\/a> by OpenAI’s models \u2014 made the somewhat controversial claim that China was winning the AI race.<\/p>\n

“[China is] clearly dominating on open models right now, and I wouldn’t be surprised if they start dominating at the frontier either by the end of this year or next year at the rate of progress,” the Hugging Face CEO told CNBC<\/a> earlier this week.<\/p>\n

Despite being hamstrung by access to cutting edge AI compute \u2014 an area in which the U.S. dominates and has looked to block China from getting access to \u2014 Chinese AI models are increasingly closing the performance gap with U.S. frontier systems.\u00a0<\/p>\n

Beijing-based Moonshot’s Kimi K3, released in July, edged ever closer<\/a> to top models from Anthropic and OpenAI in benchmarking, even surpassing them in some areas. There’s been growing adoption<\/a> of Chinese AI models among Western companies as capability has shot up.\u00a0<\/p>\n

And there are other areas in AI which China is also considered to be leading in. The world’s most capable open models \u2013 which can be downloaded, modified and self-hosted \u2013 are all Chinese, and many experts consider the country to be ahead in robotics.<\/p>\n

So is the U.S. losing the AI arms race?<\/p>\n

U.S. and Chinese companies have come to dominate the global artificial intelligence race.<\/p>\n

Imen Ben Youssef | Afp | Getty Images<\/p>\n

China’s advantages<\/p>\n

While lagging behind the frontier, China’s models have emerged as cheaper and highly capable alternatives to U.S. options. With most AI use not requiring frontier model capabilities, adoption has risen on American shores and reportedly<\/a> in developing economies in Africa.\u00a0<\/p>\n

“Based on current trends it seems more likely than not that Chinese AI will become the default for developing countries,” Daniel Remler, senior fellow, technology and national security program at think tank the Center for a New American Security (CNAS), told CNBC.<\/p>\n

That could have far-reaching consequences.\u00a0<\/p>\n

“If Chinese AI technology becomes the default for developing countries, those countries may be more likely to align themselves politically with Beijing and Chinese AI companies get a beachhead in their markets,” Remler said.<\/p>\n

China has “significant advantages” across many areas where AI will be deployed, including robotics, autonomous vehicles and state operations, Keegan McBride, director of science and technology policy at the Tony Blair Institute for Global Change, told me.<\/p>\n

Long term, if “manufacturing, robotics, automated scientific infrastructure and AI-enabled state operations become the defining metric for extracting value from AI, China is well positioned,” he added.<\/p>\n

The compute challenge<\/p>\n

But compute is an uphill struggle for China.\u00a0<\/p>\n

“The U.S. currently has the most capable models in the world, strong tech alliances and an overwhelming compute advantage,” McBride said.<\/p>\n

U.S. export controls have severely limited Chinese AI firms’ access to the most advanced chips.\u00a0<\/p>\n

“This not only undermines their ability to train larger and more capable AI models, but also to serve inference on those models,” said Remler. Moonshot had to pause new subscriptions due to limited capacity after demand for Kimi K3 boomed.<\/p>\n

Nevertheless, China is working to overcome compute constraints.\u00a0<\/p>\n

Companies have been accused of accessing advanced compute overseas<\/a>, distilling U.S. models and smuggling Nvidia<\/a> chips into the country. Its own domestic chip industry is also gaining ground<\/a> \u2014 though is still a significant distance behind America’s.<\/p>\n

The U.S. also has other factors in its favor.\u00a0<\/p>\n

While it (like China) has abundant energy potential, the country’s private capital ecosystem has allowed companies like Anthropic and OpenAI to raise record funding and scale. Talent still flocks to the country.\u00a0<\/p>\n

“If the United States can sustain these strengths, it will retain its AI advantage, serious geopolitical leverage, and ability to shape global AI rules,” said Remler.\u00a0<\/p>\n

But the race is anything but settled. Chinese AI systems are reaching new heights in terms of global adoption and capability.\u00a0<\/p>\n

The defining question is no longer whether China can compete at the frontier, Dewardric McNeal, managing director and senior policyanalyst at Longview Global wrote in an article<\/a> for CNBC earlier this month.\u00a0<\/p>\n

“It is whether the U.S. can adapt quickly enough to compete against an increasingly sophisticated Chinese innovation ecosystem that is advancing not only on model performance but also on cost, deployment, customization, financing, standards, developer adoption and global reach.”<\/p>\n

News edit<\/p>\n

SoftBank<\/a> reported profit for its fiscal first quarter that beat market expectations, driven by a huge gain<\/a> on its stake in Intel<\/a>, while a rise in ByteDance’s value helped its Vision Fund division.<\/p>\n

Anthropic’s Mythos model created fake online identities as it looked to pressure humans <\/a>into approving malicious code updates to an open source project, marking yet another cyber incident carried out by a frontier AI system.<\/p>\n

The European Union gained new powers to inspect AI models, restrict EU market access and fine model providers, raising the stakes<\/a> for U.S. companies like Anthropic and OpenAI and Google<\/p>\n

Meta<\/a> was ordered to pay $567 million into an abatement fund in New Mexico as part of a public nuisance case<\/a> that’s just one of many suits the company faces related to alleged harms caused by its apps.<\/p>\n

Hadrian has been valued at nearly $8 billion after fresh funding as money pours into defense tech.<\/a><\/p>\n

One more thingStock Chart IconStock chart icon\"hide<\/p>\n

Palantir stock.<\/p>\n

Palantir<\/a> stock skyrocketed 29.5% on Tuesday after the company reported “otherworldly” <\/a>second-quarter earnings driven by customer demand for AI sovereign tools.<\/p>\n

Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"This report is from this week’s The Tech Download newsletter. Like what you see? You can subscribe\u00a0here. Earlier…\n","protected":false},"author":2,"featured_media":132820,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[24,131,25,1900,133,148,387,835,1111,144,4643,464,9492,134,214],"class_list":["post-132819","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ai","tag-ai","tag-alphabet-class-a","tag-artificial-intelligence","tag-breaking-news-politics","tag-breaking-news-technology","tag-business-news","tag-china","tag-intel-corp","tag-meta-platforms-inc","tag-nvidia-corp","tag-palantir-technologies-inc","tag-politics","tag-softbank-corp","tag-technology","tag-united-states"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/132819","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=132819"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/132819\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/132820"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=132819"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=132819"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=132819"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}