As nations increasingly embrace the 97% cost advantage of Chinese AI, the USA has this brief opportunity to seize back the initiative.
America’s ‘biggest risk’ on AI is China getting ahead, Bessent says
Monday, 29 Jun 2026 | 5:38 PM MYT
US Treasury Secretary Scott Bessent on Tuesday said China surpassing the United States on artificial intelligence was the “biggest risk” of the technology – outweighing concerns over safety or job losses.
“The biggest risk to AI is China getting ahead of us,” Bessent said at the Economic Club of New York, adding that China’s willingness to discuss AI underscored America’s technological lead.
“I am one of the point people on our AI policy. I am the point person in terms of the economic relationship with China,” he said.
“I could tell you that the reason the Chinese are willing to have a discussion on AI is because we are ahead, so we have to stay ahead.”
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Read more: https://www.thestar.com.my/aseanplus/aseanplus-news/2026/06/29/americas-biggest-risk-on-ai-is-china-getting-ahead-bessent-says#goog_rewarded
Bessant isn’t the only significant figure concerned about Chinese AI competition. Many pundits suggest China is already ahead;
People around the world see a winner on AI — and it’s not the US
Respondents in key U.S.-allied countries increasingly see China as the world’s AI leader, while American optimism about the technology continues to erode.
06/15/2026 05:00 AM EDT
China is eclipsing the United States as the perceived artificial intelligence superpower in much of the world, according to a new global poll that underscores how Silicon Valley’s lead in the defining technology race is no longer taken for granted.
The survey also calls into question whether the United States will continue advancing the AI frontier fast enough to stay ahead of China, finding that Americans are increasingly worried about the technology’s consumption of resources, its ability to automate jobs and its potential to sow misinformation online.
The poll, conducted by U.K.-based research firm Public First surveying over 18,000 people across 15 countries, shows that just over half of American respondents — as well as majorities of people responding in Japan, India and Vietnam — still see the U.S. as the dominant AI superpower.
But those in the 11 other countries, including close U.S. allies such as France, Canada and the United Kingdom, see China as the leader. In Germany, only 23 percent of people saw the U.S. as dominant.
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Read more: https://www.politico.com/news/2026/06/15/people-around-the-world-see-a-winner-on-ai-and-its-not-the-us-00960930
Why, despite not having the latest chip technology, is China mounting such a challenge to a technology the Trump administration sees as a national priority?
Vice President JD Vance highlighted one critical advantage China has;
Vance: China is ahead of the US in AI development thanks to the construction of energy facilities
China is ahead of the United States in artificial intelligence thanks to the rapid development of the energy infrastructure needed to operate data centers, said US Vice President J.D. Vance in an interview with journalist Michael Knowles, APA reports.“I believe the Chinese are ahead of us in the field of artificial intelligence in only one way: they’re not afraid to build new energy capacity, while we are. This is where the environmental movement in the US will collide with reality. If AI companies don’t understand this, the first victims of this confrontation between the construction of new energy capacity and the environmental movement will be American AI data centers,” Vance said.
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Read more: https://en.apa.az/america/vance-china-is-ahead-of-the-us-in-ai-development-thanks-to-the-construction-of-energy-facilities-513900
The US effort to compete with China is being sabotaged by opponents of cheap and abundant fossil fuel energy. Make no mistake, if China needs a new coal plant, they build a new coal plant – no handwringing or giant polar bear puppets, just put in the power plant where it is needed.
In addition China, cut off from the very latest US technology, has learned how to do more with less. Just as the Indian nuclear programme defeated supercomputer export bans by developing novel ways to network hundreds of computers into a DIY supercomputer, so China has been forced to explore ways to achieve results comparable to US AI models by using their energy and bulk low end chip advantages.
China’s AI models compete on cost efficiency for training and inference
Chinese developers are slashing compute costs by up to 97% through architectural innovation, reshaping the global AI pricing landscape under the pressure of US export controls.
DeepSeek trained its V3 model for roughly $5.58 million. For context, US competitors routinely spend tens to hundreds of millions on frontier-level models.
In May 2026, DeepSeek permanently slashed prices on its V4-Pro model by 75%. Cached input costs dropped to as low as RMB 0.025 per million tokens.
DeepSeek isn’t alone in this race to the bottom. Chinese firm 01.ai reportedly offers inference at approximately 14 cents per million tokens, positioning Chinese API pricing as the lowest in the world.
Chinese AI models on OpenRouter have achieved 5x growth in volume, driven almost entirely by their cost advantages over US alternatives.
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Read more: https://cryptobriefing.com/china-ai-models-cost-efficiency/
This could have serious consequences for the USA if China wins a decisive advantage.
AI is real and it works.
A few weeks ago I demonstrated vibe coding a simple game – achieving an 800% increase in productivity over the time it would have taken me if I had coded the game without AI assistance.
It’s not just software – vibe products are very rapidly becoming a thing, where new product development is something you do in your coffee break, with orders shipping within hours of finalising your design. While this use of AI technology to develop real products is currently experimental, its not going to take long for Chinese manufacturers to realise how much money they could make by combining their low cost AI advantages with their large scale lost cost manufacturing advantages.
It’s not just 3D printing – similar modelling techniques can be used for laser cutting, automated welding, and other rapid development manufacturing technologies. It’s only a matter of time until some genius assembles all this into a system which combines the advantages of mass production and bespoke engineering.
The USA has this one brief opportunity to wake up and sweep away the energy cost and regulatory roadblocks to competition with China.
Regardless of how you feel about AI, AI cannot be suppressed, the genie cannot be put back in its bottle. Any impediment to AI development in the USA can only hurt the USA, as other players embrace the new AI industrial revolution and crush nations and industries which are left behind, just as completely as other less advanced economies were crushed by the original industrial revolution in the late 1700s, until others figured out how to catch up.
