AI showdown: US vs. China – who will lead future?

Proceeding from a new article, The Economist unveils that as artificial intelligence continues to reshape industries, two global giants are locked in a high-stakes race for dominance: the US and China. 

The global race for AI dominance is heating up, with the US and China leading the charge. OpenAI, based in the US, is the world’s most well-known AI company, but China’s DeepSeek is rapidly gaining ground, offering competitive models at a lower cost.

Despite America’s reputation for technological innovation, experts argue that the true winner in the AI race may not be the country with the most advanced models, but the one that adopts AI at scale across its society. Technological diffusion—how widely and quickly technology spreads—will be more crucial than the original breakthroughs. On this front, the competition is closer than many Americans realize.

While the West often views China as a strong innovator but poor implementer of new technology, recent trends suggest otherwise. In the 2010s, China filed about half of the world’s new patents but lagged behind in adoption. However, recent data shows that China has jumped 15 places globally in technology diffusion. Chinese consumers are increasingly exposed to advanced tech, such as electric vehicles and robots, more than their American counterparts.

Investors are beginning to question whether China will surpass America in AI adoption. According to a study by IBM, 50 per cent of Chinese companies are using AI, compared to just 33 per cent of American companies. McKinsey research shows that 19 per cent of Chinese workers use AI in their jobs, compared to 12 per cent in North America.

China’s AI adoption is thriving in key sectors like the public sector, consumer technology, and manufacturing. Local governments are using AI for tasks like streamlining hospital records and locating missing persons. Consumers, benefiting from lower-priced AI services, are more willing to embrace new technologies.

While America still invests significantly more in AI infrastructure, including $300 billion from tech giants like Amazon and Microsoft, China’s ability to achieve cutting-edge AI at lower costs signals that financial muscle alone may not determine the outcome of this race. The true winner will likely be the nation that maximizes AI’s potential across all sectors of society.

By Naila Huseynova