Input Stories

China is gaining on the U.S. when it comes to creating top-performing artificial intelligence (The New York Times, subscription).

What’s going on: In the year since generative AI company OpenAI blocked China’s access to its systems, China has been “closing the gap with the United States in the contest to make technologies that rival the human brain,” with companies such as Alibaba and DeepSeek having come out with their own open-surce AI.

• In fact, for the past decade, “Beijing has pushed Chinese firms to come up with high-tech manufacturing capabilities for which the country previously depended on imports,” a move that’s made the country a leader in batteries, solar panels and electric vehicles.

Why it’s a problem: “Beijing’s approach to AI is intended to help Chinese tech companies make advancements despite Washington’s restrictions.”

How they’re doing it: While in the U.S. it’s the private sector that’s shelled out to build data centers, in China, creating AI infrastructure and hardware is within the government’s purview.

• The government has also financed an AI-research laboratory network, often in collaboration with big-tech companies.
• And it’s ordered local governments and banks to lend generously, helping hundreds of start-ups get off the ground.
• Municipalities have erected entire neighborhoods, like Dream Town in Hangzhou, to function as “start-up incubators.”

And yet … The approach has its weaknesses.

• “It can be difficult to figure out where to invest and allocate resources,” one source told the Times. “AI is not like traditional industries like steel or shipbuilding, where the technology is fairly stable.”
• What’s more, significant government funding has gone to the country’s leading chipmaker—and those chips can’t do everything that a leading American company’s chips can do.

Fast gains: Still, China’s speed in nearing the level of its U.S. AI competitors is concerning, especially given its “approach of making models publicly available.”

• As another source told the Times, “Open-source is a source of technological soft power.”