AI Race: US vs. China

What happened

The US introduced AI Action Plan initiatives to accelerate innovation, build infrastructure, and lead in diplomacy and security, fostering private-sector growth by removing regulatory barriers and incentivising AI development, with a focus on ideological neutrality in government procurement. China is rapidly advancing in data centre infrastructure, energy capacity, AI research output, and embodied AI/manufacturing automation, challenging the US lead in AI chip technology and private investment. Both nations released national AI strategies in July 2025; the US promotes AI exports to allies, while China advocates open cooperation.

Why it matters

The US's focus on private sector innovation and specific export strategies, coupled with infrastructure and energy capacity concerns, introduces a constraint on long-term AI operational resilience and supply chain diversification. This increases due diligence requirements for procurement and strategic planning teams regarding the availability and sustainability of AI infrastructure and energy resources. The differing national strategies also create a potential policy mismatch for international collaboration and technology transfer, impacting compliance and business development roles.