China Narrows AI Gap, Challenges US Dominance

As the artificial intelligence (AI) technology gap between China and the United States narrows, Beijing is aggressively promoting a narrative centred on ‘open source’ and ‘inclusive AI’ as the foundation of its global governance vision. In a keynote speech at the World Artificial Intelligence Conference (WAIC) in Shanghai on Friday (17/07), Chinese President Xi Jinping affirmed his country’s ambition to take a leading role in setting global AI standards. He denounced what he called the ‘excessive expansion of the concept of national security.’ Xi Jinping did not explicitly name the US, but Beijing’s effort to position itself as the champion of a new AI order and to challenge Washington’s dominance was unmistakable. Speaking to DW, Rogier Creemers, an assistant professor at Leiden University in the Netherlands who focuses on Chinese digital technology policy, said the 2026 Shanghai summit sent several important signals. He assessed that WAIC signified AI has now become one of Beijing’s top political priorities. Furthermore, Creemers said, China intends to challenge the US through its support for open-source AI models and by promoting AI-based industrialisation. He also noted that China hopes to garner support from Global South countries for this effort. China is getting closer to the US in AI model development, and the application of AI in industrial processes is gradually maturing. Paul Triolo, senior vice president for China and technology policy lead at DGA-Albright Stonebridge Group, told DW that Chinese AI model developers continue to compete on the global stage, particularly by training open-weight models using limited but still advanced computer hardware. Triolo believes that AI adoption across various Chinese enterprises may be happening faster than in the US. Additionally, public fear of AI in China is lower than in the US, accelerating the adoption of AI applications at the consumer level. Early in 2026, Chinese state media declared that the performance gap between Chinese and US AI models had ‘largely disappeared.’ Several experts generally agree with this assessment, noting that benchmark tests on Chinese Large Language Models (LLMs), such as GLM-5.2 and Kimi K3, show the gap is narrowing or has even closed completely. For most applications, Triolo said, China’s leading open-weight AI models are cheaper to run and more than capable of handling the majority of tasks. At the same time, advanced proprietary models from leading US companies like Anthropic, OpenAI, and Google still maintain an edge in security and scalability. Regarding the effectiveness of US AI blockades, Triolo noted that evidence so far suggests the US strategy to slow China’s advanced AI development has failed on many levels. Laila Khawaja, Director of Research at Gavekal Research, told DW that while US export controls have impacted China’s ability to manufacture chips domestically, cheaply, and at scale, significant numbers of advanced AI chips still enter China through the black market. Meanwhile, Chinese firms can still access computing resources via overseas cloud services. Triolo added that the US strategy has also caused significant collateral damage to American companies, particularly impacting their research and development budgets and supply chains, such as those supplying rare earth metals. In his speech, Xi Jinping stressed the importance of ‘promoting open-source development,’ and state media promoted the message that China ‘does not impose technology blockades.’ Analysts see Beijing increasingly using ‘open source’ and ‘inclusive AI’ as a counter-narrative to the largely closed US AI ecosystem. Most Chinese AI models are open-weight, with flagship products like DeepSeek, Zhipu’s GLM 5.2, and Kimi K3 released under MIT licences that allow users to download, deploy, modify, distribute, and commercialise them. Creemers noted that while Chinese AI models are currently quite open regarding their weights, access to the source code remains limited. He suggested that China hopes to encourage other countries to adopt Chinese AI models, thereby creating overseas markets for its technology and ensuring Beijing remains part of the next wave of technological development. Xi Jinping also announced at WAIC in Shanghai that the World AI Cooperation Organization (WAICO), a Chinese-launched initiative, has attracted 29 member countries. He described the organisation as ‘an important milestone in the history of AI development’ and said it responds to calls from Global South countries for a greater role in AI governance. WAICO is seen as an initiative to rival the US-led international Pax Silica initiative, which aims to secure global AI supply chains and critical minerals. The real competition, according to Triolo, lies in which part of the US and Chinese AI technology stack will ultimately be adopted by the Global South. He believes China holds a significant advantage due to lower costs and the extensive digital infrastructure already built by Chinese companies.