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Why the real AI race is within China and not across the Pacific
Which vision of AI leadership within China wins out will be more impactful in shaping the future than a simple two-horse superpower race
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Jeffrey Wu is a director at MindWorks Capital, a leading Hong Kong-headquartered venture capital firm specialising in technology investment across Greater China and Southeast Asia.
For much of the global debate, the race for artificial intelligence (AI) supremacy has been framed as a binary contest between the United States and China. As Washington envisions it, victory hinges on frontier models and compute scale, a battle dominated by a handful of American labs. China is cast as the challenger, constrained by export controls and dependent on catching up.
That narrative is increasingly outdated. China is not pursuing a single AI strategy. It is running three large-scale experiments in parallel, each led by different clusters of firms which are shaped by distinct constraints and pointing towards a different vision of what AI leadership might mean.
The first camp is the compute maximalists, with Alibaba and ByteDance at the forefront. Their wager is that scale and performance still matter most. Alibaba has spent heavily on cloud and AI infrastructure in the past year, pushing free cash flow to negative 21.8 billion yuan (US$3.1 billion), even as cloud revenue grew 34 per cent. Management now claims more than 35 per cent of China’s AI cloud market, and its Qwen model family has spawned more than 180,000 derivative open-source models.
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