China’s AI diplomacy in the Global South consists of three primary strategies: the promotion of Chinese open-weight models, the expansion of AI cooperation networks, and the institutionalisation of a China-led AI governance architecture. China’s push to diffuse Chinese-origin AI models in the Global South aims to project China as the normative leader of future global AI governance.

China held the annual World Artificial Intelligence Conference in Shanghai from 17 July to 20 July, with the theme ‘Intelligent Partners, Co-create the Future’. President Xi Jinping delivered an in-person keynote address on the inclusive development of Artificial Intelligence (AI) and the building of an equitable and just AI governance system.[i] China also launched the World Artificial Intelligence Cooperation Organization (WAICO), aimed at fostering inter-governmental cooperation on artificial intelligence, with 29 countries as signatories.[ii]

While ‘AI diplomacy’ is not officially incorporated in policy documents, China has been increasingly using its technical prowess in AI as a diplomatic asset in its engagement with countries, especially from the Global South.[iii] Chinese foreign ministry announcements reveal that AI has become an important part of China’s offerings in bilateral cooperation, as it frequently features in discussions between foreign delegates and the Chinese leadership. Similarly, Beijing in the past few years has also been a proactive participant in dialogues and platforms on AI global governance and cooperation, advancing its own version of normative structures and regulatory mechanisms.[iv]

As Beijing sees AI as the next frontier of great power competition and a tool of global influence, Chinese AI diplomacy rests on three pillars—the promotion of Chinese-developed open-weight AI models; the forging of a network for technology and talent development; and the institutionalisation of the Chinese approach to the governance of AI.

AI as the Next Frontier of Great Power Competition

Sino-US competition to achieve AI supremacy is multifaceted. The broad pillars of this contest are chips and computing power, models, AI applications, talent, research skills, data availability and capital investments. Observers note that, given their different strategies and approaches to AI development, a definitive assessment of who is winning the AI race is premature. While the US is leading with cutting-edge models and computing power and holds an advantageous position in semiconductors, capital-intensive infrastructure, and proprietary innovation, constrained by US export restrictions and access to high-end chips, China is engaged in improving AI efficiency, open-source models, and large-scale deployment across its domestic sector.[v]

However, there are signs that China is catching up with the US in certain key areas. For instance, Chinese LLMs have significantly reduced their performance gap with US models at a much lower cost.[vi] The Kimi K2.6 model, released by Chinese start-up Moonshot in April 2026, performed on par with top Western models and was built at a lower cost. Further, China, although trailing the US, has a strong talent pool and currently holds the most AI patents.[vii]

From a realpolitik perspective, the hustle between the US and China for AI supremacy reflects a broader geopolitical contest to dominate the future international order, which, in the coming years, will be heavily shaped by AI.[viii] The power that leads AI will hold considerable leverage over the shape of the international order. An American lead could mean the continuance of the US’ overwhelming dominance and the survival of the order largely rooted in US values and norms. On the other hand, an alternative outcome that favours China would create uncertainty about how Beijing would use technological primacy to reshape the global order.

The implications of AI on military, economic and political aspects are increasingly expanding. AI is seen as the key element in future combat, set to completely revolutionise force structures, operational concepts, and the nature of warfare as we know it. Similarly, in the face of ageing populations and declining fertility rates, AI is expected to increase productivity across economies through automation, multi-domain operations, and the smart allocation of scarce resources. Further, it will have a transformative impact on nations’ domestic politics, re-orienting state-citizen relations and governance structures.[ix]

Therefore, AI is not simply a technological asset but has assumed critical significance as a core determinant of national security and the global balance of power. A McKinsey Global Institute report highlights that leading AI countries with a higher degree of adoption of artificial intelligence technologies will be able to capture around 20–25 per cent net economic benefits. In comparison, developing economies will be able to achieve only 5–15 per cent.[x]

As both China and the US are aggressively maximising the use of AI within their national spaces, they are positioned to accrue massive gains in state power and influence on the global stage, which will, in turn, sustain their military dominance. The competitive variable in this context is whether Chinese firms can develop more lucrative and commercially viable AI applications than their American counterparts, and whether the resulting multiplier........

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