The Global AI Race: U.S. vs. China

In the United States, much of the artificial intelligence discussion has been centered on competing with China for technological dominance. The U.S. focuses on reaching the cutting edge of AI technology, but China has gained a significant foothold in the global market, especially in developing regions. Many countries are looking for affordable and functional technology rather than the most advanced models.

While the U.S. invests in top-tier technologies, China pushes its economical models across developing nations. This strategy can have long-term negative effects on U.S. interests. In these nations, competition will influence whether American or Chinese technology powers infrastructure, healthcare, education, and government services.

China’s involvement extends throughout Africa, Asia, and Latin America, creating enduring relationships that may be challenging for the U.S. to disrupt. However, adopting Chinese technology accompanies risks, especially concerning security. Chinese technology often poses greater security threats than American models and may enable extensive government surveillance.

China’s focus on open-weight models facilitates easier adoption. Unlike American models that remain tied to their companies, Chinese offerings like DeepSeek and Alibaba’s models are available for download and adaptation. Huawei, expanding its influence throughout the Global South, announced AI services in April 2025 for nine additional countries, including Brazil, Indonesia, and South Africa. Huawei offers DeepSeek access via its cloud network, supported by substantial cloud credits for startups and training in local languages.

Microsoft found that DeepSeek usage surged two to four times higher in Africa than other regions in 2025, aided by free access and technology partnerships. Chinese cloud providers target emerging markets, with notable market shares in Latin America and Southeast Asia. By becoming primary AI suppliers, China deepens its influence, creating challenges for countries to shift to another provider due to potential cost and disruption.

Political implications arise from these commercial choices. Heavily relying on Chinese systems for services can deter opposition to Beijing in other areas. Additionally, disinformation risks involve Chinese-tech repeating misleading narratives promoted by the Chinese Communist Party more frequently than American counterparts.

The absence of robust American presence could lead to U.S. business losing software, equipment, and service sales, jeopardizing long-term sustainability and reducing job opportunities for American workers. China’s advancements are part of its Digital Silk Road strategy, supported by extensive financing to boost its companies.

The U.S. Agency for International Development’s limited role and the lack of a unified U.S. strategy for engaging the Global South further complicate matters. The U.S. must prioritize affordable technology access for collaboration with developing countries.

The response from the U.S., such as promoting American AI and enhancing export financing, requires further strengthening to effectively compete with China in budget-constrained regions. Significant investment in technological funding, local training, language support, and problem-solving with partner governments is crucial. China currently holds an advantage, and the U.S. must act swiftly to avoid losing global AI leadership, crucial for maintaining influence and security.

Orit Frenkel, CEO of the American Leadership Initiative, emphasizes the urgent need for U.S. action in this strategic domain.