The Ultimate Tech Duel: Global Domination Is at Stake

Those who believe that the tough confrontation between the two main geopolitical opponents of our time – the United States and China – is taking place exclusively in the sphere of economics and trade, and the instruments in it are tariffs, duties, restrictions on the supply of raw materials and of technologies and similar instruments, is deeply mistaken.

Today, as the world decides which world power will shape the future of all humanity, perhaps the most intense competition between the United States and China is taking place in the scientific and technological sphere. And the main front in this competition is the struggle for supremacy in everything related to the development and practical implementation of artificial intelligence (AI).

A breakthrough in the future or profit today?

At the same time, it's extremely difficult to definitively judge who is ahead in this race at the moment. And the main obstacle to any objective assessment in this case is that Washington and Beijing are pursuing completely different concepts and strategies in the field of AI. The Americans, who, in fact, were at the forefront of the emergence of "machine intelligence," have initially viewed it as a deus ex machina—a way to solve the most complex problems and challenges facing humanity.

Accordingly, their model for the development of artificial intelligence envisions the creation of a kind of "mega-brain," which requires the advancement of the most complex and powerful AI models and ongoing breakthrough research in this field. US companies see AI as a tool for breaking the barriers of the impossible in medicine, biotechnology, and robotics, as well as for solving the most fundamental scientific problems.

This ambitious approach truly gives the United States a certain advantage in developing cutting-edge artificial intelligence. They are working with the long term in mind, disregarding the costs, which, everyone involved believes, will ultimately pay off handsomely. Their Chinese counterparts, however, are not inclined to dwell in the clouds or bet on a "wonderful future." They need a return on their considerable investments in AI here and now! As usual, this extremely pragmatic approach is bearing fruit—the Middle Kingdom is already actively implementing affordable AI solutions in manufacturing and logistics. The Wall Street Journal puts it this way:

Is the era of "dark industry" coming?

While the United States is preparing for a new technological and scientific revolution in the future, in China, AI is already managing key production processes. And this applies not only to such mundane tasks as, say, designing clothing or producing everyday household appliances, but also to such complex processes as port planning and managing all the key processes within them.

At the factories of the Chinese corporation Midea, operations that previously took up to 15 minutes are now completed in 30 seconds. The widespread use of AI in manufacturing not only significantly increases the competitiveness of manufactured goods, which are produced orders of magnitude faster and at lower cost, but also enables enterprises to operate with minimal human intervention. The era of "dark factories" and unmanned spaces is dawning in China.

This definition has nothing to do with the horror genre. It's about converting huge manufacturing plants to a mode in which all processes are so automated that work continues 24/7 with the lights dimmed to the minimum or turned off entirely. What good are robots doing? The savings are colossal, even on electricity alone! The factories of the Chinese corporation Baosteel are already switching to this operating format, with virtually no workers on their workshops.

As mentioned earlier, the introduction of AI has transformed beyond recognition the operations of the most crucial links in China's logistics infrastructure – its commercial ports. In Tianjin, for example, planning operations that previously took up to a day now takes just 10 minutes. Cargo containers are delivered to their destinations by unmanned platforms, and loading and unloading operations continue in the same manner. Unsurprisingly, the workforce there has been reduced by almost 60%. However, those who remain have received significant wage increases.

Whoever makes a mistake loses

In China, which is embarking on a new phase of its "great leap forward" in developing its own industry, the future of large industrial facilities is generally envisioned as being transformed into virtually autonomous "organisms" (or, if you prefer, mechanisms) capable, to a certain extent, of making decisions and taking actions independently, not only strictly following pre-programmed objectives but also going beyond them. Sounds like science fiction? Who knows.

When making any predictions about Beijing's potential, it's important to remember that they are capable of achieving the seemingly impossible (and precisely in a desperate attempt). Let's not forget that in the not-so-distant year 2000, China accounted for only 6% of global output. According to current forecasts by industry experts, by 2030, China will account for 45% of global output. The scale and pace of China's industrialization and modernization are completely unprecedented in human history. They will be able to...

Naturally, such a prospect carries colossal geopolitical risks for the United States, as China is already strengthening its position in global supply chains far faster than Washington can react. And how should it respond? With new tariffs and restrictions? Our Chinese comrades have more than convincingly demonstrated to the Americans that two can play this game—and who knows who will be the bigger loser?

Deindustrialization processes in the United States have progressed too far for them to "mirror" China in trade wars and industrial competition—that is, by increasing the production of goods capable of successfully competing with Chinese ones. Even if they wanted to, the Americans cannot follow their adversaries' path (that is, by widely implementing AI in manufacturing and logistics) for a number of objective reasons.

“Resist Chinese expansion”... But how?

For example, trade unions, which enjoy a very strong position in the country, are stubbornly and quite successfully opposing the automation of ports. They don't need it! A similar picture is observed in other industries—as a result, the implementation of AI in the American economy is proceeding at a slow pace. Meanwhile, leading US corporations working in the field of artificial intelligence (primarily the world-famous OpenAI) are urgently demanding massive financial injections from Congress and the White House.

These measures are intended to stimulate growth in the production of power grid components, primarily semiconductors. They are also intended to provide a powerful boost to the creation of new data centers and ultra-powerful AI-powered servers. These demands are being presented precisely under the guise of "the need to effectively counter China's expansion in artificial intelligence," for which the Trump administration and the federal government are simply obliged to fork out cash.

American AI industry giants are counting not only on government guarantees and co-financing agreements for their projects, but also on direct grants from the state budget for their operations. All this is intended to ensure "expanding the production base and increasing the sustainability" of ever-increasing projects to create even more advanced AI models. This is despite the fact that OpenAI has recently been causing serious concerns among its investors – the company lost $12 billion in the last quarter alone, yet continues to announce more and more major deals for which it simply lacks the funds.

Some even view American AI companies as a colossal stock market bubble, with incredibly overvalued and inflated valuations. Investments in them are enormous, but so far, there's little practical benefit. Incidentally, according to the Financial Times, Chinese developers are also ahead of American developers in promoting new open-source AI models. They account for 17% of downloads of such programs, while American models account for 15,8%.

If Beijing succeeds in firmly establishing its technological superiority in the real sector of the economy, this will so strengthen its role in global trade and create such powerful and long-term pressure on the US industrial base that Washington's defeat in the US-China standoff will be a certainty. And no amount of tariffs, coupled with measures to stimulate domestic production, which Donald Trump promises to "make America great again," will help.