U.S.-China tech battle entering its ‘primetime’ — and generative A.I. could be the next frontier
China’s President Xi Jinping (R) met with U.S. Secretary of State Antony Blinken. The U.S. has looked to cut China off from key technologies like advanced semiconductors over the past few years. The two sides likely discussed tech tensions but analysts said not much is likely to change even as the two sides look to improve relations.
Leah Millis | AFP | Getty Images
Generative artificial intelligence, the technology that viral chatbot ChatGPT is based on, could be the new battleground in the battle for tech supremacy between the U.S. and China, according to one analyst.
Despite the two nations seeking better relations after U.S. Secretary of State Antony Blinken met with Chinese President Xi Jinping this week, analysts said the tech tensions will continue.
Washington has sought to cut off China from key technology like semiconductors while China has looked to boost its self-sufficiency and wean itself off American technology, touting its domestic sectors.
“The status quo isn’t likely to change much on any front — from sanctions to business pressure,” Abishur Prakash, CEO of Toronto-based advisory firm, The Geopolitical Business, told CNBC via email.
AI, which is seen as a critical technology by both nations, will likely be dragged into the battle between the two sides.
AI in the ‘crosshairs’
Meanwhile, the U.S. has looked to boost its own domestic technology including semiconductors, with funding such as the $52 billion available via the Chips and Science Act.
Washington’s attention is now likely to turn to generative AI.
“There will likely be more attempts coming from Washington to target the development in China of some types of applications, and generative AI could be in the crosshairs in the coming year,” Paul Triolo, the technology policy lead at consulting firm Albright Stonebridge, told CNBC.
It comes “as the Biden administration determines which technologies could benefit both China’s military modernization, and which could also boost Chinese companies’ ability to make breakthroughs in generative AI,” he added.
Generative AI relates to applications such as ChatGPT which are able to generate content when prompted by users.
How U.S. restrictions target A.I.
AI needs to be trained on huge amounts of data in order to work. Generative AI is based on so-called large language models, meaning it is trained on huge amount of language in order to be able to understand and respond to prompts from users.
The processing of this data requires a large amount of computing power that is powered by specific semiconductors, such as those sold by U.S. firm Nvidia, which is seen as the market leader in such chips.
Part of the U.S.’s current restrictions aim to cut China off from some of Nvidia’s key chips, which in turn could hamper China’s AI development.
Washington is also carrying out an outbound investment review, which would put rules in place for American investment into foreign companies.
“The upcoming outbound investment review executive order will include restrictions on U.S. investment in some AI-related technologies, and this will be a major indication of the direction of U.S. technology controls in the final two years of the Biden administration,” Triolo said.
China’s generative A.I. push
ChatGPT, developed by American firm OpenAI, has taken the world by storm and has sparked somewhat of an AI arms race between U.S. technology companies including Microsoft, which is an investor, and Alphabet.
Chinese technology giants have taken note.
Over the past few months, Chinese technology giants from Baidu to Alibaba have announced plans and launched trials for their own ChatGPT rivals.
Blinken-Xi meeting unlikely to change much
Beijing has accused the U.S. of violating international trade rules through its sanctions and said curbs on China’s chip industry amount to “bullying.”
Washington maintains its moves are in the interest of national security and are targeting specific sensitive technologies.
China hasn’t retaliated much. However, last month Chinese regulators barred operators of “critical information infrastructure” from buying chips from U.S. firm Micron, claiming the company’s products failed its network security review.
Technology wasn’t spoken about in public too much when Blinken recently met with China’s Xi, but the two sides no doubt discussed it.
Triolo told CNBC that the U.S. likely raised issues about the treatment of Micron while China would have brought up the export controls.
“Beijing views that package [export controls], and the U.S. CHIPS and Science Act, as a one-two punch designed to decouple China’s semiconductor industry from the global semiconductor ecosystem,” Triolo said.
However, the two sides are in somewhat of a stalemate.
Blinken spoke about areas of co-operation between the U.S. and China such as the climate crisis and the economy. But advanced technology is one area the two nations remain in competition.
“But, at the same time, as I said, it’s not in our interest to provide technology to China that could be used against us,” Blinken said on Monday.
“What China wants, the U.S. isn’t going to give, like opening up the chip ecosystem to Beijing or not scrutinizing Chinese investment in U.S. technology,” Prakash said. “The U.S.-China battle for technology supremacy is about to enter its primetime.”
Unlike the previous flashpoints, like over 5G or TikTok, when both sides still believed differences could be patched over, now such ideas are politically dead. The chasm between the U.S. and China has expanded so much — and neither superpower wants to bridge the differences.”
Firefly Aerospace rings the opening bell at the Nasdaq on Aug. 7th, 2025.
The Nasdaq
Firefly Aerospace jumped more than 50% in its Nasdaq debut on Thursday after pricing shares above its expected range.
Shares started trading at $70 each under the ticker symbol FLY. The initial price values the company at close to $10 billion. The shares ticked lower after the open.
Space technology has gained momentum in recent years as companies such as Elon Musk‘s SpaceX amass more funding and government contracts. Firefly is the third space company to go public this year after Voyager Technology and Karman Holdings.
The rocket and lunar lander maker priced shares late Wednesday at $45, above its expected range of $41 to $43, raising $868 million. Earlier this week, Firefly had hiked its range up from the $35 to $39 it initially expected.
Firefly’s customers have included a growing list of key defense contractors such as Lockheed Martin and L3Harris, and the company recently received a $50 million from Northrop Grumman. Last month, Firefly also won a $177 million contract with NASA.
“It’s all about execution,” CEO Jason Kim told CNBC’s “Squawk Box” on Thursday. “We’re focused on rating up our alpha rockets because there’s so much demand for the response of dedicated one-ton launches from national security, commercial, as well as hypersonic missile testing.”
Earlier this year, Firefly’s Blue Ghost lunar lander successfully touched down on the moon in a mission funded by NASA. Firefly is also widely known for its Alpha rocket and has said in its IPO filing that its backlog totaled about $1.1 billion at the end of March.
In its IPO filing, Firefly said revenue in the latest quarter jumped sixfold to $55.9 million from $8.3 million. However, the company reported a net loss of about $60.1 million, up from $52.8 million in the year-ago period.
Beyond just space, the tech IPO market has started to heat up this year after an extended dry spell due to high inflation and rising interest rates. Figma, Circle and CoreWeave have all debuted in 2025 and seen their stocks pop.
Defense and aerospace private equity firm AE Industrial Partners owns a more than 41% stake in Firefly and controls the company, according to the prospectus. Of Firefly’s nine board members, five currently work at the firm. AE has $6.4 billion assets under management, according to its website.
Attendees walk through an exposition hall at AWS re:Invent, a conference hosted by Amazon Web Services, in Las Vegas on Dec. 3, 2024.
Noah Berger | Getty Images
Amazon Web Services has agreed to provide U.S. federal agencies with up to $1 billion in discounts for cloud adoption, modernization and training through 2028, an agency overseeing government procurement announced Thursday.
The agreement is expected to speed up migration to the cloud, as well as adoption of artificial intelligence tools, the General Services Administration said.
“AWS’s partnership with GSA demonstrates a shared public-private commitment to enhancing America’s AI leadership,” the agency said in a release.
Amazon‘s cloud boss Matt Garman hailed the agreement as a “significant milestone in the large-scale digital transformation of government services.”
The discounts aggregated across federal agencies include credits to use AWS’ cloud infrastructure, modernization programs and training services, as well as incentives for “direct partnership.”
The GSA announced a similar deal last month with cloud rival Oracle. The agency also reached an agreement with OpenAI on Wednesday that will give federal agencies access to ChatGPT for $1 through the next year.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike