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By Didi Kirsten Tatlow and John Feng
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America built the AI revolution. OpenAI, Anthropic, Google, Meta, NVIDIA —names that define the technology—were born in the United States, nurtured by its universities, bankrolled by its venture capital and celebrated by its politicians. The pace of this growth, however, has not been matched by its policymakers.
After years of fractured debate, the White House’s AI master plan arrived in March...at a meager four pages. The “National Policy Framework for Artificial Intelligence” commits the administration to “winning” the AI race and takes aim at the more than 1,000 state-level AI laws now on the books, pushing instead for a “national standard—not 50 discordant ones.” It is a proposal, not a law. Turning it into one could take years.
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Read More on AI
Across the Pacific, it’s a different story. China has its own AI giants—ByteDance, DeepSeek, Baidu, Alibaba, Tencent, Huawei—but it also has a national AI strategy that goes deeper than four sheets of A4 paper. It is a system, woven into industrial policy, energy planning, military doctrine and the machinery of the Chinese Communist Party itself. Beijing does not debate whether to coordinate. It coordinates.
When Jack Ma, the founder of Alibaba, spoke out against financial regulation in 2020, he disappeared from public life for three months and returned a chastened man. The message to China’s tech sector was unambiguous: innovation happens within boundaries, and the boundaries are set by the state.
While this model is clearly anathema to the U.S. and any democratic nation, and for obvious reasons, the stronger link between industry and the state gives China advantages that American policymakers are only now beginning to reckon with. These could have dire consequences for the U.S. as the two global superpowers battle for AI supremacy.
“The U.S. is winning on the dimensions that Washington tracks—the models and the chips. But we are losing where the future will be decided—data and implementation,” said Max Fenkell, head of global policy and government relations at Scale AI.
“We are seeing two different races play out. And I fear right now the United States may be winning the wrong one,” Fenkell recently told Congress.
The consequences of losing would be devastating to American global power. Because the endpoint is not just better chatbots or smarter factories. It is artificial general intelligence: human-like cognition that will reshape the world in ways no one can fully predict. And on that horizon, experts told Newsweek, China—which has been hyperfocused on AI for 15 years and can plan and act in ways that America’s system resists—may be ahead.
Nowhere is the gap more visible than in robotics. China has not just kept pace—it has streaked ahead, not only in factory automation but in the development and deployment of humanoid robots, driven by targeted regulation and a national strategy dating to 2015. About a decade on, the U.S. is still debating what kind of robotics policy it wants.
“They are just starting to discuss it slowly,” said Susanne Bieller, General Secretary of the Frankfurt‑based International Federation of Robotics, in an interview. The U.S. was now asking itself, “do we need a U.S. national robotic strategy,” Bieller said, “which is really, really late. And if you also look at other Western countries, we’re quite slow in that. And that, I think, is what you can learn from China...this well-structured strategy.”
The roots of that structure run deep. America’s free-market model made it fast, creative and dominant. The original breakthroughs in AI mostly happened in the U.S., and its large language models still lead the world. For decades, China sent thousands of students to American universities to absorb that science—and bring it home.
But implementing AI at scale—working out its uses and limits, planning for its energy demands, integrating it across sectors—is where the hands-off model shows its cracks. Because China has both. It has private enterprise and state industrial policy. It has ambition and a plan to execute it. AI is not, in Beijing’s view, simply a technology. It is a sprawling, über-powerful force—a complex new industrial and human revolution—and it demands coordination across energy, labor, research and politics. That is precisely the kind of planning America has traditionally resisted, and where China has always excelled.
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Race to the Top
In the key area of energy supply to power the systems, the U.S. is simply behind. To fix it would require building a lot more, and fast—which would require thinking differently and planning more, Maryam Khan Cope, a senior non-resident associate in Renewing American Innovation at the Center for Strategic & International Studies in Washington, D.C., told Newsweek.
“What needs to happen is you need, across the sector, all the big state utilities, all the private companies and the EPA, and they all need to provide expedited approvals for all these projects. They actually need to act very similarly to how China acts on major infrastructure projects, which is by going across the country,” Cope said.
The old playbook, she warned, will not be enough. “We’re getting to something big, and the old ways of doing things are probably not going to work,” she said. But it isn’t all bad news for the U.S., Cope said. “This type of industrial change can be a race to the top. We’ve done it before in the U.S.,” she added.
China’s ambition, however, is running into a crisis of its own making—and it is demographic. Youth—the engine of economy—is running dry, and China’s aging population is becoming a fiscal burden. In 2025, about a decade after the government ended its decades-old one-child policy, it registered the lowest number of births on record. By the end of the century the United Nations expects China to lose over half its population—an unprecedented fall under peacetime conditions.
The demographic decline is now irreversible. Chinese authorities can only slow the inevitable erosion of what Beijing calls a core index of “comprehensive national power.” What that means for its longstanding goal of overtaking the United States economically and militarily remains uncertain. But Chinese planners did not wait to find out. They anticipated the crunch years ago and are already deep into building a society designed to function without the workforce it will no longer have—one in which robots and AI make up for lost human capital.
In February, the world got a glimpse of that ambition. China sought to impress global audiences with rows of humanoid robots that took to the stage to perform a fast-moving, martial arts routine alongside youthful, human martial artists at its annual Spring Festival Gala to mark Chinese New Year.
It was more than spectacle. The robots were made by Unitree Robotics—but their appearance on that stage was Beijing’s message to its own people and to the world: that robotics was not a novelty but a necessity, as central to China’s future as the children it is no longer having.
“But these efforts can go only so far, because continuing innovation relies on young minds. Moreover, robot workers do not consume, and consumption is the major driver of any economy. Without a sufficient population of consumers, AI and robots are nothing more than industrial waste,” said Fuxian Yi, a senior scientist in obstetrics and gynecology at the University of Wisconsin-Madison, who has spent his career studying China’s demographic decline.
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China's AI Road Map
The demographic clock is ticking—and Beijing knows it. China’s AI roadmap, reasserted in March in its 15th Five-Year Plan, envisages a seamless integration with society by 2035. Beijing aims for at least 90 percent adoption nationwide. One goal is to boost stagnant public spending by the end of this decade.
Planners hope it will also solve the gathering elder care crisis of a fast-aging population. Other key areas are military and even child care.
But robots cannot fix what ails China right now. It is the present, not the future, that keeps its leaders up at night.
The world’s second-largest economy is expanding more slowly. Resistance to its dominance in global manufacturing and massive export surpluses is growing in the U.S. and in some developing countries. Unless China finds new sources of growth, its economy will continue to weaken.
So far, Beijing’s most visible response has been to accelerate automation at scale—and the numbers are staggering. Chinese industry now installs more industrial robots than any other country, accounting for just over half of global deployments in 2024, according to data from the International Federation of Robotics. Its operational stock of industrial robots now stands at over two million units—more than four times Japan’s total, and five times that of the United States or South Korea.
“It’s amazing what China has done,” said Carsten Heer, a spokesperson for the IFR. “They saw it coming”—the demographic drop off—“and they reacted. What would the world look like for them if they hadn’t done their national robotic strategy?”
China is also moving to capture market share in a second arena: AI itself. And here its weapon of choice has been free accessibility, rather than following the U.S. model—where leading AI products can carry a high cost to the consumer.
“China has opted to go all in on an open-source approach to AI,” the U.S.-China Economic and Security Commission said in a report in late March, citing DeepSeek as an example.
“This has resulted in the acceleration of global uptake of Chinese AI and created a feedback loop where widespread adoption drives iteration, then further adoption,” the commission said in its report, “Two Loops: How China’s Open AI Strategy Reinforces its Industrial Dominance.”
The scale of that uptake is striking. As an example, it cited Alibaba’s Qwen models, which it said accounted for the largest ecosystem on Hugging Face, with over 100,000 derivatives.
The implications reach beyond the West. China’s biggest buyers in wealthy nations will have a say in whether its economic model succeeds. But Beijing is also looking south—to the Global South, where its open-source AI products and services may prove far more attractive than the closed, costly alternatives coming out of Silicon Valley.
How Chinese Companies Raced Ahead
None of this happened by accident. The architects of China’s AI industrial policy drew on a proven playbook. Key to this was “Made in China 2025,” a 10-year plan that helped Chinese companies race ahead in green technology, including electric vehicles. In AI, Beijing is running the same play—directing state subsidies into critical sectors, pooling physical and intellectual resources and aiming, once again, to lead the world.
“China is pursuing a full-stack approach to supporting AI through industrial policy. The idea there is to use AI to turbocharge a whole range of sectors and industries: manufacturing, health care, biotech, education [and] government services. And in some ways, there’s a parallel here with how China has approached other technologies of this scale, like the rise of the internet or even more general-purpose technologies like computers or electricity,” said Kyle Chan, a fellow at the John L. Thornton China Center at Brookings, a Washington, D.C.-based institute.
Industrial policy works—and Beijing has learned that lesson well, Chan said.
Chinese policymakers are doing their part by establishing an ecosystem for success by scale—new data centers, integrated compute networks and unprecedented power grids, to name but a few—while at each step ensuring the product remains fully aligned with the Communist Party’s domestic ideological and foreign policy goals.
The tension at the heart of that model is real. China has always wanted control. America has always offered freedom. But with AI, Beijing is experimenting with letting go—within limits—and it appears to be working. The country insists that AI must cohere with Communist Party values, and it censors large language models heavily, as it does everything else. Yet within those boundaries, innovation is flourishing.
The release of DeepSeek in January 2025 was the moment Chinese policymakers understood the scale of what they had built. The open-source large language model announced China’s arrival not just as a manufacturer of AI infrastructure, but as a global force in AI itself. That adaptability, Chan said, “has been crucial to China’s ability to use industrial policy successfully.”
It could hardly contrast more sharply with the mood in the West—where suspicion of automation, and of any effort to replace human workers, remains a powerful political force.
Where Does China Win?
That cultural difference may prove decisive. China is moving fast, probing multiple pathways forward, said Valentin Weber, a senior associate fellow at the German Council on Foreign Relations in Berlin, who has published widely on Chinese technology and AI. And the breadth of that advance—across robotics, data, embodied AI and brain-computer interfaces—makes it increasingly likely, Weber argues, that China will achieve the ultimate prize before the U.S.
That prize is artificial general intelligence—machine cognition that matches, and then exceeds, the human mind.
China is pursuing multiple paths to AGI, and data is at the core of it. “If we look at the U.S., you would have a primary focus on things like ChatGPT. To scale those systems to get better, you scrape the internet, you try to get all the data that’s available on the internet. And that’s pretty limited amount of resource that you have. And at some point you hit a roadblock,” Weber said in an interview.
“China did that, too. But at the same time, it is really, really working on building data sets that are focused on the real world. That means on robots that see the sunshine, that work with tools, robots that work with people, robots that are deployed to households. And there you have a data ecosystem that’s basically limitless, because you have limitless situations that robots will get into,” Weber said.
The implications for the U.S. are stark—and Weber is direct about what needs to change.
“We have to get serious about competition. I think what we need to do is really to get a better sense of what China is up to. We need to evaluate Chinese AI advances, both in LLMs, but also in embodied AI. We need know who we compete with, how far advanced they are, if we need [to] speed up even more in terms of what things, also what works in China, what doesn’t work in China,” he said.
“We really need to know because China knows about exactly what is happening in universities here, in industry, at companies, and that’s a disadvantage that we have. We don't know what’s happening there, we don’t know how far ahead they are."
“We’re basically like in a race, let’s say a marathon, but we don’t know where the opponent is. We do not know if they’re ahead of us, if they’re behind us, where they are,” Weber said.
And bang on cue, in March, China’s 15th, Five-Year Plan highlighted AGI as a goal—a still-rare glimpse of what Beijing is really aiming for.
Overall, Chinese leader Xi Jinping’s government sees AI as a way out of the looming economic malaise, but its robot future—at least where filling gaps in the welfare state is concerned—remains mostly a dream, for now.
China does face real hurdles—the chips that enable the most sophisticated, humanoid interactions remain mostly in the hands of the U.S. and its close allies, though the Trump administration has flip-flopped on export restrictions.
But even that advantage, if it holds, is borrowed time. If China overtakes the U.S. in AI—and it may, sooner than Washington expects—it will not be because it outspent the U.S., or out-invented it. It will be because America could not bring itself to do what it has always valued least: plan ahead, and pull together.
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