Great Power Race Over AI, Semiconductors, and Dual-Use Technologies: Escalating Strategies, Responses, and Global Implications

The intensifying global competition for technological dominance in artificial intelligence (AI), semiconductors, and dual-use military and civilian technologies continues to reshape the geopolitical landscape. As the United States and China forge ahead with strategic initiatives and policies, other nations are also increasingly involved, seeking to carve out autonomous technological spheres amid this high-stakes rivalry. Recent developments reveal a complex tapestry of export controls, military modernization, diplomatic maneuvers, and concerted efforts at norm-setting—all underscoring the profound implications for global security and economic stability.

US–China Technological Decoupling: Strategies and Responses

In recent months, the United States has sharpened its export control policies to restrict China's access to cutting-edge AI and semiconductor technologies. Notably, the US Commerce Department revised export licenses for advanced chips, such as Nvidia’s H200 AI processor, limiting their export to China. These measures seek to delay China’s development of state-of-the-art AI capabilities and maintain a strategic technological edge for the US. According to officials, the restrictions are part of a broader effort to prevent China from closing the innovation gap that remains in critical sectors like advanced chips and high-performance computing.

China’s response has been swift and multifaceted. The country is aggressively pushing for self-reliant semiconductor R&D and expanding domestic manufacturing capacity. This effort aims to develop a “good enough” AI stack—an independent ecosystem capable of supporting critical applications without reliance on Western supply chains. Chinese policymakers articulate a vision of technological sovereignty, emphasizing reducing dependency on foreign technology even as they continue to borrow technical expertise and innovation from Western sources in the short term.

Despite these efforts, a significant technology gap persists—particularly in the most advanced chips, where China still relies heavily on Western innovations. This dependency underscores the ongoing challenge of technological decoupling and the risk of fragmenting the global tech ecosystem into separate spheres of innovation.

Military and Dual-Use Technologies: Rising Risks and Strategic Investments

The race extends beyond civilian AI and semiconductors into dual-use technologies—those with both civilian and military applications. China has made notable strides in hypersonic weapons, deploying hypersonic glide vehicles that challenge existing missile defense systems and raise alarming questions about strategic stability. The US has responded by accelerating multi-layered missile defenses, supported by AI-driven sensors and autonomous tracking systems designed to detect and intercept hypersonic threats.

In space, China’s activities have grown increasingly assertive, deploying anti-satellite systems and exploring lunar and space-based surveillance assets. Such capabilities threaten to undermine US dominance in space and complicate international governance of outer space resources.

Additionally, China’s operations in the Arctic—including deploying icebreakers and establishing scientific stations—aim to influence governance frameworks and access to strategic resources in the region. These moves serve to expand China's strategic footprint into critical frontier domains, further fueling the competition.

The escalation in dual-use technologies heightens the risk of miscalculation and conflict, prompting Western nations to bolster AI-enabled early warning systems, counter-hypersonic defenses, and intelligence-sharing alliances. These measures are vital to maintaining strategic stability amid rapid technological advances.

Global Initiatives and Sovereign Efforts to Shape AI and Strategic Autonomy

As the US and China deepen their technological pursuits, countries like Europe and India are charting their own paths toward strategic autonomy. Europe’s push for sovereign AI frameworks emphasizes independent standards, governance, and technological capacity to maintain economic resilience and influence in global AI norms. Similarly, India’s ambitious “AI for All” initiative aims to foster indigenous AI development and reduce reliance on foreign technology, aligning with its broader goal of strategic autonomy.

International forums such as the AI Summit and the New Delhi AI Declaration exemplify efforts by multiple nations—including the US, China, Russia, and others—to establish norms, standards, and governance frameworks for AI. These initiatives seek to manage dual-use concerns, prevent escalation, and create common ground for responsible innovation.

Furthermore, recent diplomatic and economic signals—such as discussions around stabilizing US–China relations, trade measures, and narratives like “Chinamaxxing” or “Chinataxxing”—highlight ongoing efforts to balance competitive pressures with diplomatic engagement. These signals suggest an awareness of the costs of escalation and a recognition of the importance of maintaining open channels for dialogue.

Policy Implications and Strategic Outlook

In response to escalating technological competition, Western policymakers are pursuing a multi-pronged approach:

• Tightening export controls and refining licensing mechanisms to limit China’s access to advanced technologies.
• Investing heavily in domestic industrial capacity, including semiconductor manufacturing and AI research.
• Strengthening alliances through shared intelligence, joint research initiatives, and coordinated policy measures.
• Enhancing missile defense and space capabilities driven by AI and autonomous systems.

These strategies aim to manage the competition, prevent escalation, and preserve strategic stability. However, the absence of comprehensive international norms for dual-use technologies and the fragmentation of supply chains increase risks of miscalculation and conflict.

The persistent push by China toward technological self-sufficiency—particularly in semiconductors and AI—suggests that the race for technological dominance will continue intensively in the coming years. Meanwhile, diplomatic efforts to establish norms and frameworks for responsible development and use of dual-use technologies remain crucial but challenging.

Current Status and Future Outlook

The great power competition over AI, semiconductors, and dual-use technologies is entering a critical phase. With both the US and China investing heavily in military modernization and technological sovereignty, the global landscape risks bifurcating into separate technological spheres—each with its own standards, supply chains, and governance systems.

Diplomatic engagement, norm-setting, and alliance cohesion will be pivotal in mitigating risks, preventing escalation, and fostering innovative cooperation where possible. The unfolding dynamics underscore the importance of strategic patience and multilateral dialogue in managing this complex and high-stakes competition.

As the race continues, the world faces a delicate balance: advancing technological frontiers while ensuring stability, security, and peace in an era defined by frontier domains and dual-use innovations. The decisions made today will profoundly influence the future global order—a landscape where technological supremacy and strategic stability are inextricably linked.