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Who's winning the AI race?

Artificial intelligence (AI) has the potential to rewire economic growth and reshape geopolitics. For these reasons, it has been compared to the nuclear, space and arms races, which defined the 20th century. And, while the US may be in the lead at the moment, this is a marathon not a sprint.

Duration: 1 Min

Key Takeaways

  • AI models developed by US companies are at the frontier and are likely to remain so, helped by export controls on the most advanced chips. That said, China's open models are close behind and may see wider adoption worldwide, even if the US uses geopolitical levers to embed its technology stack (and displace China’s) across key allies.  
  • US firms continue to spend heavily on AI infrastructure, but the Chinese state also has deep pockets and is better placed to provide cheap electricity. China is on track to become the world's first "electro-state" while US domestic politics could stymie energy production needed for data centres.  
  • A key difference is that while US tech firms are shooting for the moon in the hopes of achieving artificial general intelligence (AGI), China’s ‘AI+’ strategy is focused on using current AI tools to augment its vast manufacturing ecosystem.   
  • China’s regulatory efforts to harness data could also give it an edge in developing new models, specifically ‘world models’, which use large reams of data to allow AI to understand the physical world, such as for autonomous driving and robotics.  
  • It will be difficult to judge who is leading the AI race real time; ultimately whoever develops the largest ecosystem may take the top spot.  

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Risk warning

The value of investments, and the income from them, can go down as well as up and an investor may get back less than the amount invested. Past performance is not a guide to future results.