Artificial intelligence is emerging as a new front in the widening US-China rift. As US President Donald Trump and Chinese President Xi Jinping meet this week, the two leaders are expected to discuss an AI dialogue mechanism to address safety and national security risks.
In fact, Tuesday’s front page of the People’s Daily, the official newspaper of the Chinese communist party (CCP), ran an article saying that the US and China should “make AI a new frontier for China-US cooperation” and “make good use of the intergovernmental dialogue mechanism on AI”.
But behind the talk of cooperation, there’s a deeper contest over who controls the technologies, chips and computing infrastructure that could shape the next phase of the global economy.
For Washington, maintaining its lead in advanced AI has become an economic and strategic priority. In fact, Trump recently said, “We’re leading China in AI, and frankly, I want to keep it that way, because whoever wins AI, wins.”
Moreover, the US has already restricted China’s access to some advanced semiconductors and AI-related technologies, though Washington continues to debate how far those restrictions should go.
China, meanwhile, is treating AI as an important part of its economic transformation. The New York Times has reported that Beijing is directing significant resources towards AI even as Chinese economists question whether the technology can generate enough jobs or provide an immediate boost to the economy.
The report estimated that state-led funds invested more than $184 billion in AI firms between 2000 and 2023, and last year, the government and state-owned banks pledged hundreds of billions more. Private AI investment in China is far lower than in the United States, where private sources poured $285 billion into the technology in 2025 alone.
That makes AI competition different from the traditional US-China trade dispute.
Tariffs can affect the movement of goods, while restrictions on chips, computing power and advanced AI models can impact the technological capacity of different industries.
The rivalry is also creating a difficult balance between cooperation and competition. As US officials and technology executives have raised concerns about the risks posed by increasingly powerful AI systems, China’s foreign ministry responded, saying “fearmongering, confrontation and vicious competition will only disrupt the process of global AI governance”.
At the summit, the US and China could seek common ground on AI safety, even as their rivalry over tech control continues. The Guardian reported that officials have already discussed about establishing a channel to discuss AI risks, while Chinese state media has also called for AI to become a new area of US-China cooperation.
The broader message from the summit is that AI is no longer simply a technology-sector issue. It is also linked to trade, industrial policy, national security and economic power. As Washington and Beijing try to manage their relationship, control over advanced AI could become one of the most consequential bargaining points between the world’s two largest economies.
