The US–China Technology Competition: A Dynamic Race for Global Technological Leadership

The contest for technological supremacy between the United States and China has entered a new phase characterized by rapid advancements, strategic realignments, and an increasingly complex geopolitical landscape. Both nations are leveraging innovation, supply chain resilience, and regulatory strategies to secure their positions at the forefront of AI, semiconductor manufacturing, and global tech standards. This evolving rivalry not only reshapes their domestic industries but also influences global supply chains, international norms, and geopolitical influence.

China's Accelerated Push in Artificial Intelligence and Semiconductors

Over the past year, China has intensified efforts to build self-reliant technological ecosystems in AI and semiconductors, seeking to mitigate reliance on Western technology and circumvent US-led sanctions.

Breakthroughs in AI: From Language Models to Embodied Intelligence

A landmark achievement was the launch of GLM-5, a domestically developed large-scale language model that now rivals Western counterparts such as OpenAI's GPT series and Google's Bard. This milestone underscores China's strategic focus on technological self-sufficiency and elevates its position in the global AI race.

• Implications of GLM-5 and AI Self-Reliance:
  • Strategic Capabilities: GLM-5 enhances sectors like defense, cybersecurity, and economic planning by providing indigenous, high-performance AI tools.
  • Challenging Western Dominance: The model's capabilities threaten to diminish the monopoly Western firms hold over advanced AI, prompting a recalibration in global AI leadership.
  • Supply Chain Resilience: Developing AI domestically reduces exposure to US export controls and sanctions, insulating China's AI ecosystem from external disruptions.

Beyond language models, Qianjue Tech, established in 2023, is pioneering brain-inspired and embodied AI systems—designed to emulate biological cognition for perception, reasoning, and autonomous decision-making. The company’s recent funding rounds and surging valuations indicate strong investor confidence and a clear strategic focus on next-generation AI paradigms.

• Qianjue’s Strategic Advances:
  • Innovative Architectures: Emulating neural processes to improve AI adaptability, efficiency, and robustness.
  • Application Spectrum: From defense and industrial automation to consumer robotics and human-computer interfaces.
  • Market Momentum: Increased funding and rising valuations underscore China’s commitment to becoming a leader in embodied and brain-inspired AI.

Booming Startup Ecosystem and Market Activity

Chinese AI startups are experiencing a market resurgence, especially after recent holidays. Notably:

• Zhipu and MiniMax Group saw their shares more than quadruple in Hong Kong, reflecting investor confidence in China’s AI trajectory.
• Funding rounds for startups like Moonshot, which is focusing on multimodal and embodied AI systems, have propelled valuations to around US$10 billion.

"Chinese generative AI startups Zhipu and MiniMax Group shares soared in Hong Kong, rising over four-fold, as investors bet on China's fast-growing AI ecosystem," indicating a renewed market enthusiasm and a belief that China is poised to challenge Western dominance in AI.

This momentum signifies a paradigm shift—China’s AI startup ecosystem is gaining global prominence, reinforcing the country’s ambitions to capture global AI leadership.

Semiconductor Manufacturing: Building a Self-Reliant Industry

China continues its ambitious push to expand domestic semiconductor capacity and develop an independent supply chain resilient to external sanctions.

Capacity Expansion and Supply Chain Restructuring

• New fabrication plants (fabs): China is constructing and upgrading fabs across key regions, focusing on advanced process nodes to reduce dependence on foreign technology.
• International collaborations: While facing US restrictions, China is fostering partnerships with friendly countries to bypass US export controls, seeking alternative sources for critical equipment and components.

Strategic Realignment of Global Supply Chains

China is actively diversifying its trade routes, establishing new corridors through Central Asia and Southeast Asia, to reduce reliance on Western-controlled supply channels. These efforts aim to maintain access to key semiconductor inputs and equipment despite ongoing US sanctions.

US Strategies: Sanctions, Diversification, and Domestic Innovation

The United States remains committed to limiting China’s technological progress through a comprehensive toolkit:

• Export Controls and Sanctions: Targeting Chinese firms like Huawei, ZTE, and others, particularly in semiconductor components, to restrict China’s access to cutting-edge technology.
• Supply Chain Diversification: US policymakers are encouraging companies to shift supply routes away from China, exploring overland routes via Central and Southeast Asia, and forging new logistics partnerships to mitigate risks.
• Domestic Semiconductor Investment: Massive funding initiatives aim to expand US-based fabs and boost domestic manufacturing, reducing reliance on foreign supply chains.
• Regulatory Scrutiny: High-profile AI acquisitions, such as Meta’s $2 billion purchase of Manus, are subjected to increased review, emphasizing strategic control over advanced AI technologies.

Talent Flows and Corporate Maneuvering

Despite geopolitical tensions, talent mobility remains active, with Chinese firms like ByteDance expanding their AI research teams in the US by opening nearly 100 new AI-related positions—a move aimed at leveraging international expertise.

Furthermore, founder stories of entrepreneurs who began in China and scaled globally exemplify the evolving landscape:

• This middle school dropout, Luyu Zhang, who built his AI startup in China, is now scaling it in Silicon Valley, illustrating the fluidity of talent and ideas across borders.

In terms of corporate activity:

• The Meta/Manus deal demonstrates how US firms are consolidating AI capabilities, though such moves are increasingly scrutinized for national security concerns.

Recent Market Surge and Investor Confidence

Post-holiday, Chinese AI startups have experienced a notable surge:

• Companies like Zhipu and MiniMax Group saw their stock prices more than quadruple in Hong Kong, driven by optimism about China’s AI growth.
• Funding rounds for startups like Moonshot—focused on multimodal and embodied AI—have pushed valuations to around US$10 billion, reaffirming China’s strategic push to dominate next-generation AI.

Near-Term Outlook and Strategic Implications

Looking ahead, several key trends are shaping the future of US–China technological competition:

• Next-generation AI models are expected to be unveiled, potentially surpassing Western benchmarks in multimodal perception, natural language understanding, and embodied cognition.
• Semiconductor capacity expansion will likely accelerate, moving China closer to breaking dependency on foreign technology.
• Supply chain realignments will deepen, with China seeking greater strategic autonomy through new trade routes and domestic innovation.
• Both nations are actively shaping international norms and standards for AI, cybersecurity, and digital governance to assert influence over the global order.

Implications for Global Leadership and Standards

This competition signifies more than technological progress; it reflects a broader contest over geopolitical influence, economic sovereignty, and global governance. China’s rapid advances in AI and semiconductors are narrowing the gap, challenging US dominance, and positioning China as a co-equal or even leading force in setting international standards.

Meanwhile, US strategies emphasizing regulation, innovation, and supply chain resilience aim to reassert leadership, but face the challenge of keeping pace with China’s aggressive growth.

Current Status and Final Perspective

As of now, China’s AI startup ecosystem is gaining remarkable momentum, with market surges and funding inflows reinforcing its potential to challenge Western dominance. Concurrently, US efforts to limit and reshape China’s technological rise continue, but their effectiveness will depend on adaptability and speed.

This high-stakes race is shaping the future of global technology, with profound implications for economic power, security, and international influence. The next several years will be critical in determining whether China can close the innovation gap or if the US will reassert its leadership, ultimately transforming the global technological order into a contest that will define the 21st century.