U.S. and China balance mass adoption and R&D to find edge in global AI race

Lorikeet News Desk

published

February 10, 2025

Credit: Wikimedia Common – TechCrunch, Nvidia (edited)

Key Points

AI sparks a technological arms race between the U.S. and China, with both nations vying for global leadership.
The U.S. excels in foundational AI research and semiconductor design, while China leverages scale and government-backed R&D.
Emerging economies increasingly favor Chinese AI solutions, potentially reshaping global alliances and economic dependencies.

Let’s be real—this is a two-horse race. The U.S. and China are locked in an AI cold war, and no one else is even close.

Sanjay Basu

Sr. Director of GPU & Gen AI Solutions & Services | Fortune 100 cloud provider

AI has quietly ignited an technological arms race, one that resembles a modern-day cold war among the world's superpowers. Whether explicitly acknowledged or not, AI is now the defining factor in determining global leadership.

To understand the direction in which power is moving, we spoke with Sanjay Basu, the Senior Director of GPU and Gen AI Solutions and Services for Cloud Engineering at a Fortune 100 cloud infrastructure provider.

AI cold war: "Let’s be real—this is a two-horse race. The U.S. and China are locked in an AI cold war, and no one else is even close," Basu states.

The U.S. maintains an edge through its dominance in foundational AI research, advanced semiconductor design led by companies like NVIDIA, and a robust software ecosystem. However, China counters with unparalleled scale, government-backed R&D initiatives, and an immense reservoir of data. "While the U.S. has been tightening the screws on chip exports, hoping to slow China’s ability to train massive models, it’s a safe bet that China will respond by pouring even more resources into domestic AI chip manufacturing," Basu adds.

Mass adoption: "Now, zooming out, what happens in 3-5 years? The U.S. still leads in cutting-edge research and enterprise AI, but China is going to dominate in mass adoption—especially in global markets that don’t want to be locked into the U.S. tech stack," Basu predicts.

Emerging economies in Africa, Southeast Asia, and parts of the Middle East are increasingly gravitating towards Chinese AI solutions due to their cost-effectiveness and fewer restrictions. This growing preference for Chinese technology could reshape global alliances and economic dependencies in the near future.

The U.S. and China will continue to dominate AI, but China’s dominance in emerging markets could shift the balance in unexpected ways.

Sanjay Basu

Sr. Director of GPU & Gen AI Solutions & Services | Fortune 100 cloud provider

Russia's role: While Russia remains a formidable force, Basu doesn’t see a shake up of power in Russia’s favor. "Russia is out of the race—crippled by sanctions, it’s more likely to focus on AI-powered cyber warfare than competing in the global AI market," Basu remarks.

India's potential: "India is interesting. It’s got the talent, the data, and a rapidly growing AI ecosystem, but it lacks the deep-pocketed AI giants needed to play at OpenAI or DeepSeek’s level," Basu suggests. "What India might end up doing is becoming the world’s AI service hub, where models trained elsewhere are deployed and customized at scale for enterprise applications."

Europe's stance: Despite its leadership in global politics, Europe’s stringent regulations could stifle innovation, "Europe, meanwhile, is shooting itself in the foot with regulatory red tape. While it might lead in ethical AI governance, don’t expect Europe to produce a frontier model that competes with the U.S. or China anytime soon," Basu notes.

Shift the balance: "The U.S. and China will continue to dominate AI, but China’s dominance in emerging markets could shift the balance in unexpected ways. Meanwhile, India might carve out a niche, and Europe will be the AI ethics police—whether anyone listens or not," Basu concludes.

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