John Thornhill and Caiwei Chen
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Welcome to The State of AI, a new collaboration between the Financial Times and MIT Technology Review. Every Monday for the next six weeks, writers from both publications will debate one aspect of the generative AI revolution reshaping global power.
This week, John Thornhill, FT tech columnist and Innovation Editor and Caiwei Chen, MIT Technology Review’s China reporter, ask whether China can beat the US in the battle for technological supremacy.
Do you agree Beijing is on course to overtake Silicon Valley? Join John in a live Q&A on November 13 at 1pm GMT. You can submit a question ahead of time here.
John Thornhill writes
Viewed from abroad, it seems only a matter of time before China emerges as the AI superpower of the 21st century.
In the west, our initial instinct is to focus on the US’s significant lead in semiconductor expertise, its cutting-edge AI research and its vast investments in data centres. The legendary investor Warren Buffett once warned: “Never bet against America.” He is right that, for more than two centuries, no other “incubator for unleashing human potential” has matched the US.
Today, however, China has the means, motive and opportunity to commit the equivalent of technological murder. When it comes to the mobilisation of the whole-of-society resources needed to develop and deploy AI to maximum effect, it may be just as rash to bet against China.
The data highlights the trends. In AI publications and patents, China leads. By 2023, China accounted for 22.6 per cent of all citations, compared with 20.9 per cent from Europe and 13 per cent from the US, according to Stanford University’s Artificial Intelligence Index Report 2025. As of 2023, China also accounted for 69.7 per cent of all AI patents. True, the US maintains a strong lead in the top 100 most cited publications (50 vs 34 in 2023) but its share has been steadily declining.
The US also outdoes China in top AI research talent — but the gap is narrowing. According to a report from the US Council of Economic Advisers, 59 per cent of the world’s top AI researchers worked in the US in 2019, compared with 11 per cent in China. But by 2022 that ratio was 42 per cent to 28 per cent.
The Trump administration’s tightening of restrictions for foreign H-1B visa holders may well lead to more Chinese AI researchers in the US returning home. The talent ratio could move further in China’s favour.
Regarding the technology itself, US-based institutions produced 40 of the world’s most notable AI models in 2024, compared with 15 from China. But Chinese researchers have learned to do more with less, and their strongest large language models — including the open-source DeepSeek-V3 and Alibaba’s Qwen 2.5-Max — surpass the best US models in terms of algorithmic efficiency.
Where China is really likely to excel in future is in applying these open-source models. The latest report from Air Street Capital shows that China has now overtaken the US in terms of monthly downloads of AI models. In AI-enabled fintech, ecommerce and logistics, China already outstrips America.
Perhaps the most intriguing — and potentially the most productive — applications of AI may yet come in hardware, particularly in drones and industrial robotics. With the research field evolving towards embodied AI, China’s advantage in advanced manufacturing will shine through.
Dan Wang, tech analyst and author of Breakneck: China’s Quest to Engineer the Future, has rightly highlighted the strengths of China’s engineering state in manufacturing — even if he has also shown the damaging effects of applying that engineering mentality in the social sphere. “China has been growing technologically stronger and economically more dynamic in all sorts of ways,” he told me. “But repression is very real. And it is getting worse in all sorts of ways as well.”
I’d be fascinated to hear from you, Caiwei, about your take on the strengths and weaknesses of China’s AI dream. To what extent will China’s engineered social control hamper its technological ambitions?
Caiwei Chen responds
Hi John!
You’re right that the US still holds a clear lead in frontier research and infrastructure. But “winning” AI can mean many different things. Jeffrey Ding, in his book Technology and the Rise of Great Powers, makes a counterintuitive point: for a general-purpose technology such as AI, long-term advantage often comes down to how widely and deeply technologies spread across society. And China is in a good position to win that race (although murder might be pushing it a bit!).
Chips will remain China’s biggest bottleneck. Export restrictions have throttled access to top GPUs, pushing buyers into grey markets and forcing labs to recycle or repair banned Nvidia stock. Even as domestic chip programmes expand, the performance gap at the very top still stands.
Yet those same constraints have pushed Chinese companies towards a different playbook: pooling compute, optimising efficiency and releasing open-weight models. DeepSeek-V3’s training run, for example, used just 2.6mn GPU-hours — far below the scale of US counterparts. But Alibaba’s Qwen models now rank among the most downloaded open weights globally, and companies such as Zhipu and MiniMax are building competitive multimodal and video models.
China’s industrial policy means new models can move from lab to implementation fast. Local governments and big enterprises are already rolling out reasoning models in administration, logistics and finance.
Education is another tell. Major Chinese universities are implementing AI literacy programmes in their curricula, embedding skills proactively before the labour market demands them. The Ministry of Education has also announced plans to integrate AI training for children of all school ages. I’m not sure “engineering state” fully captures China’s relationship with new technologies, but decades of infrastructure building and top-down co-ordination have made the system unusually effective at pushing large-scale adoption, often with far less social resistance than you would see elsewhere. The use at scale, naturally, allows for faster iterative improvements.
The public in China feels the same. Stanford HAI’s 2025 AI index found Chinese respondents to be the most optimistic in the world about AI — far more than in the US or the UK. This is striking, given that China’s economy has slowed since the Covid pandemic for the first time in more than two decades. Many in government and industry now see AI as a much-needed spark. Optimism can be a powerful fuel, but whether it can sustain through slower growth is still an open question.
Social control remains part of the picture, but a different kind of ambition is taking shape. The new generation of Chinese AI founders are the most globally minded I’ve seen, moving fluidly between Silicon Valley hackathons and pitch meetings in Dubai, many fluent in English and in the rhythms of global venture capital. Having watched the last generation wrestle with the burden of a Chinese label, they now build companies that are quietly transnational from the start.
The US may still lead in speed and experimentation, but China could shape how AI becomes part of daily life, both at home and abroad. Speed matters, but speed isn’t the same thing as supremacy.
John Thornhill replies
It’s true, Caiwei, that speed is not the same as supremacy (and murder may be too strong a word). And you’re also right to amplify the point about China’s strength in open-weight models and the US preference for proprietary models. This is not just a struggle between two different countries’ economic models but also between two different ways of deploying technology.
Even OpenAI’s chief executive Sam Altman admitted earlier this year: “We have been on the wrong side of history here and need to figure out a different open-source strategy.” That’s going to be a very interesting subplot to follow. Who’s called that one right?
Further reading
There’s been a lot of talk about how people may be using generative AI in their daily lives. The FT’s visual explainer team explores the reality
When it comes to real-world uses, toys and companion devices, the MIT Technology Review reveals how a novel but emergent application of AI is gaining traction in China
The once-frantic data centre build-out in China has hit walls, and as the sanctions and AI demands shift, this on-the-ground reporting from MIT Technology Review looks at how stakeholders are figuring it out
There’s still time to save your spot at the FT’s Future of AI Summit on November 5-6, featuring Nvidia’s Jensen Huang and 600 business leaders involved in AI application. Register for an in-person pass at this year’s summit here
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