While no one has waved an official chequered flag in the Sino-American race for artificial intelligence (AI) supremacy, the markets are betting that the United States will prevail. The chipmaker Nvidia recently became the world’s first $4-trillion company (and its CEO, Jensen Huang, has acquired global rockstar status). Microsoft, the biggest investor in OpenAI’s for-profit entity, is not far behind, with a valuation of $3.7 trillion.But early leadership does not guarantee victory, especially when it comes to innovation.

Hardly a day goes by without a new report about China’s extraordinary AI gains. The US may have broken new ground with OpenAI’s ChatGPT, but China’s DeepSeek shocked the world earlier this year with the cost and processing efficiency of its R1 large language model. And just this month, the Chinese start-up Moonshot AI released its impressive Kimi K2 model, which outperforms Western competitors on several key benchmarks.Many factors influence the AI race—not only Nvidia’s powerful chips, but also talent, software, and strategic focus.

For now, semiconductors are an obvious strategic chokepoint working to America’s advantage. Under its “small yard, high fence” policy, the Biden administration imposed stringent restrictions on advanced semiconductor exports. Yet this has backfired, encouraging China’s aggressive pursuit to develop its own AI chips.

In the end, I suspect that the AI race will be determined less by........

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