As major artificial intelligence breakthroughs arrive on what seems to be a near-weekly basis, the race between the US and China continues to intensify. In this post and the next, we will examine the good and bad news for the prospects of American triumph in the battle for AI superiority, a skirmish that could well determine the future of global innovation.

Let’s start with the bad news.

Last week, I attended a hearing of the House Select Committee on the Chinese Communist Party entitled “China’s Campaign to Steal America’s AI Edge.” Chairman John Moolenaar (R-MI) opened the proceedings by asserting that “China’s smuggling of advanced AI chips is a pervasive threat facing law enforcement” and observing that “just last month, the Department of Justice announced a $2.5 billion chip smuggling case, which would be the largest export control violation in US history.”

Moolenaar then asked, “Why is China so desperate to acquire US-designed chips? The reason is obvious. AI is a truly transformative technology. It’s already changing how we fight wars, run our government, and operate companies.” Critically, the chairman contended, “it is essential for the United States to maintain a decisive lead in the AI race. We cannot afford a future where Beijing dominates this technology.”

At the hearing, Dmitri Alperovitch, the founder and chairman of the Silverado Policy Accelerator, echoed Moolenaar, arguing that “we are in a race, and the stakes could not be higher. Artificial intelligence will transform every industry, every battlefield, and every government.” Critically, Alperovitch asserted, “whoever fields the best models running on the best infrastructure will likely win not just the AI race itself but the 21st century. The single most important input to winning is compute—the processing power used to train and run AI models.”

Yusuf Mahmood, the director of AI and emerging technology policy at the America First Policy Institute, reckoned that “China’s frontier AI capabilities are generally considered to be about seven months behind America’s.” He also detailed exactly how Chinese actors have pilfered American AI breakthroughs, including through distilling pioneer models like GPT or Claude by creating accounts, querying the models en masse, and vacuuming up the data; stealing trade secrets; and poisoning pioneer models through hacking. These attacks, Mahmood argued, already have malign effects. “The American trade secrets, capabilities, and hardware that China steals directly feed its economy and Beijing’s military apparatus—including technology shipped around the globe to US adversaries and rogue states,” he testified. “Just recently, the Iranian regime used weapons systems powered by Chinese AI technology to attack American warfighters.”

In parallel, Stanford University’s Institute for Human-Centered Artificial Intelligence released a study earlier this month concluding that China is rapidly closing the AI gap with the United States. “For years,” the researchers concluded, “the US outpaced all other global regions on AI – in model size, performance, artificial intelligence research, citations, and more. But China emerged as an AI counterweight to the US, gradually gaining ground, and this year it appears to have nearly erased any US lead.”

Specifically, the institute found that, in February 2025, China’s DeepSeek-R1 model matched the level of the most advanced US AI and that, currently, Anthropic’s top model leads its Chinese counterpart by a scant 2.7 percent. Ominously, the researchers discovered that “China leads in publication volume, citations, patent output, and industrial robot installations” And that “the number of AI scholars moving to the United States has dropped 89% since 2017.”

Chinese capabilities extend to other realms as well. As Elena McGovern and Daniel Silverberg observed in the Washington Post earlier this week, a Chinese bulk carrier sailed directly over two major underwater fiber-optic cables in the Baltic Sea at the very moment those cables were cut, thus exposing how vulnerable Western data transmission lines are to disruption from hostile actors.

Is the news all bad? What can we do about it? Stay tuned for the next installment to find out.