The Global AI Race: Challenges and Strategies for the U.S.

The conversation about artificial intelligence in the U.S. often focuses on competing with China for technological supremacy. While the U.S. aims to pioneer state-of-the-art frontier AI technologies, China gains ground in the global market. Many countries seek affordable, reliable technology, not necessarily the most sophisticated models.

While the U.S. invests heavily in advanced technologies, China spreads its more economical models throughout the developing world. This competitive edge may lead to long-term negative impacts for the U.S. The outcome will influence which nations provide the technology for infrastructure, hospitals, classrooms, and government services.

China establishes lasting relationships by implementing their technology in infrastructure and services across Africa, Asia, and Latin America. The result is a challenging environment for the U.S. to penetrate.

Using Chinese technology comes with risks. It may offer less security than American equivalents, potentially posing national security threats. China also supplies technology that enables governments to monitor their populations.

China’s focus on open-weight models simplifies technology adoption. Unlike American models, often accessible only through company-controlled services, Chinese models such as DeepSeek and Alibaba’s offerings are downloadable and adaptable.

Huawei expands its presence in the Global South. In April, Huawei introduced AI services in nine additional countries, like Brazil, Indonesia, and South Africa. These countries access DeepSeek and other models via Huawei’s cloud network. In Egypt, Huawei provided startups with up to $150,000 in cloud credits for computing services, including training and an Arabic-language model.

These initiatives reduce startup costs and encourage local businesses to engage with Chinese technology. Microsoft’s analysis showed DeepSeek usage in Africa was significantly higher than other regions in late 2025. The report noted DeepSeek’s free access and partnerships as distribution methods.

Chinese cloud services are expanding, aiming at emerging markets. A 2025 study highlighted that Chinese data center providers represented significant market shares in countries like Brazil, Chile, and Argentina. Similar dominance was noted in Indonesia and various Southeast Asian nations.

As Chinese suppliers dominate AI offerings in developing economies, Beijing gains more influence. Governments reliant on Chinese systems face costly disruptions if switching providers. If essential services depend on these suppliers, challenging Beijing on geopolitical issues might become complicated.

Concerns exist over information manipulation. U.S. tests found DeepSeek models often repeated certain Chinese Communist Party narratives more frequently than American counterparts. As AI becomes more integral to understanding history and events, Chinese perspectives may gain larger audiences.

American enterprises risk losing future sales in software and services, hindering their viability and limiting job opportunities for American workers. China’s Digital Silk Road strategy positions it advantageously in scientific and technological cooperation with the Global South, supported by substantial financial backing.

The absence of a cohesive U.S. strategy for engaging the Global South, along with limited involvement by the U.S. Agency for International Development, weakens the U.S. stance.

Affordable AI and technology access should take center stage in U.S. engagement with developing nations. Although the U.S. has taken steps to make its AI technology more accessible, more is necessary to rival China’s influence in cost-sensitive regions.

The U.S. needs to enhance funding for countries seeking American AI and technology. It should also focus on training, supporting local language tools, and collaborating with governments to address pressing problems.

With China leading in the Global South technology race, the U.S. must act swiftly to prevent losing the broader AI competition. Failing in this competition would affect U.S. influence, national security, and the capacity to shape global AI development and use.

Orit Frenkel is CEO of the American Leadership Initiative.