The momentum case for China overtaking the US in AI

There is now a path for China to surpass the U.S. in AI. Even though the U.S. is still ahead, China has tremendous momentum with its vibrant open-weights model ecosystem and aggressive moves in semiconductor design and manufacturing. In the startup world, we know momentum matters: Even if a company is small today, a high rate of growth compounded for a few years quickly becomes an unstoppable force. This is why a small, scrappy team with high growth can threaten even behemoths. While both the U.S. and China are behemoths, China’s hypercompetitive business landscape and rapid diffusion of knowledge give it tremendous momentum. The White House’s AI Action Plan released last week, which explicitly champions open source (among other things), is a very positive step for the U.S., but by itself it won’t be sufficient to sustain the U.S. lead. Now, AI isn’t a single, monolithic technology, and different countries are ahead in different areas. For example, even before Generative AI, the U.S. had long been ahead in scaled cloud AI implementations, while China has long been ahead in surveillance technology. These translate to different advantages in economic growth as well as both soft and…