China’s AI balancing act — beating the U.S. but keeping the tech from threatening Beijing’s rule
China is looking to challenge the U.S. in artificial intelligence. China’s tech giants have launched their own AI models.
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China’s race to develop smarter-than-human artificial intelligence may put it ahead of the U.S., but such ground-breaking technology could also risk lessening the stronghold that the ruling Communist Party has over the world’s second-largest economy.
That’s the view of prominent AI scientist Max Tegmark, who told CNBC artificial general intelligence (AGI) is closer than we think and the narrative of a geopolitical battle between the U.S. and China racing to build the smartest AI is a “suicide race.”
While there is no singular definition of AGI, it is broadly taken to refer to AI that can outsmart humans.
Applications like ChatGPT — that allow users to prompt a chatbot for answers — have exploded in popularity. But many AI companies are racing to develop the next level, with AI that has human-level intelligence.
Sam Altman, the CEO of OpenAI, has said that AGI could be achieved by 2025. While there are other major names in the tech sector who also think AGI is close, many others think true AGI is still very far away.
As well as competition between technology companies, there is also the geopolitical battle taking place between the U.S. and China for dominance in realms from AI to chips. While this is often portrayed as a race to be first to the latest technology, Tegmark said this is not the right framing.
“I think of this battle, this geopolitical battle to build AGI first as a ‘hopium war’,” Tegmark told CNBC in an interview last month. ” I call it the ‘hopium war’ because it’s fueled by … delusional hope that we can control AGI.”
Tegmark is the president of the Future of Life Institute, a thinktank which penned a letter last year calling for AI labs to pause the development of advanced AI systems. The letter was signed by major tech names including Tesla CEO Elon Musk. Tegmark’s concern is that AI is advancing rapidly with very few guardrails in place, and no way to control it should it begin to outsmart humans.
“We are much closer to building AGI than figuring out how to control it. And that means that the AGI race is not an arms race, it’s a suicide race,” Tegmark said.
Is China worried about AGI?
China has little incentive to build AGI, according to Tegmark. The AI scientist recalled a story in which Elon Musk told him about a “high level meeting” the Tesla boss had with Chinese government officials in early 2023. Musk said to the Chinese government that if AGI is built, China “will not be controlled by the Communist Party, but by the super intelligence,” Tegmark said.
“[Musk] got a very strong reaction. Some of them, really hadn’t thought about that, and with less than a month from that, China came out with their first AI regulations,” Tegmark said, referencing new regulation governing generative AI.
China’s ministry of foreign affairs was not immediately available for comment on the anecdote. CNBC also contacted Tesla for a response from Musk.
“The U.S. doesn’t need to convince China to not build AGI. Even if the U.S. didn’t exist, the Chinese government would have an incentive to not build it because they want to be in control,” Tegmark said.
“[The] last thing they want is to lose that control.”
China’s approach to AI
AI is a strategic priority for the Chinese government. The country’s biggest firms such as Alibaba, Huawei and Tencent have been developing their own AI models. The capabilities of those models are also advancing.
China was also among the first countries in the world to bring in regulation around various aspects of AI. The country’s internet is heavily censored and any information that appears to go against Beijing’s ideology is blocked. OpenAI’s ChatGPT is banned and it is well-noted that chatbots in China won’t answer questions related to politics and topics deemed sensitive by the Communist Party.
The country’s approach to AI is therefore an attempt to push innovation while also balancing its own interests. When it comes to AGI, China is likely to pursue a similar approach, according to analysts.
“I would not count on China to limit its own AI capabilities due to fears that such technologies would threaten Party rule. Similar predictions were made about the internet, they all proved to be false,” Kendra Schaefer, a partner at consultancy Trivium China,” told CNBC.
“China will attempt to dominate AGI while creating a techno-regulatory apparatus that limits what AGI is permitted to do domestically.”
U.S.-China AI battle
Despite Tegmark’s view that the the race to build AGI is a “hopium war,” geopoltiics remains front and center between the U.S. and China when it comes to development of the technology.
“Right now, China is viewing AI through a dual-lens: geopolitical power and domestic growth,” said Abishur Prakash, founder and geopolitical strategist at Toronto-based strategy advisory firm, The Geopolitical Business.
“With AI, China hopes to shift the balance of power around the globe, like creating a new export model. And, in parallel, China wants to power its economy in new ways, from government efficiency to business applications,” Prakash told CNBC.
The U.S. has pursued a policy of attempting to restrict China’s access to key technologies, mainly semiconductors like those designed by Nvidia, that are required to train more advanced AI models. China has responded by attempting to build its homegrown chip industry.
Will the U.S. and China partner on AI rules?
Technologists have warned of some of the risks and dangers when AGI does finally arrive. One theory is that without guardrails, AI will be able to improve itself and design new systems independently.
Tegmark believes that any such risks will be realized by both the U.S. and China, which will force both countries’ governments to individually come up with rules around AI safety.
“So my optimistic path forward is the U.S. and China unilaterally impose national safety standards to prevent their own companies from doing harm and building uncontrollable AGI, not to appease the rivals superpowers, but just to protect themselves,” Tegmark said.
“After that happens though, there’s this really interesting stage where the U.S. and China will be like, wait, how can we guarantee that North Korea doesn’t build AGI or someone else? And then the U.S. and China have an incentive now to push the rest of the world to join them into an AGI moratorium.”
Indeed, governments are already trying to work together to figure out how to create regulations and frameworks around AI. Last year, the U.K. hosted an AI safety summit, which the U.S. and China were both in attendance, to discuss potential guardrails around the technology.
But regulation and rules around AI are currently fragmented. This year, the European Union enacted the AI Act, the first major law globally governing the technology. China has its own set of rules, while many other countries have not yet moved to create any regulation.
Tegmark’s hope of co-ordination around AI safety is echoed by others.
“When the dangers of competition are greater than the rewards, nations will ideally be motivated to come together and mutually self-regulate,” Trivium China’s Schaefer said.
“Indeed, some Chinese policymakers have advocated for getting out ahead of that potential issue and establishing an international governance body under the UN – similar to the International Atomic Energy Agency – so there is desire on Beijing’s side to establish a global governance body,” she said.
ChatGPT for Teachers
Courtesy of OpenAI
OpenAI on Wednesday announced ChatGPT for Teachers, a version of its artificial intelligence chatbot that is designed for K-12 educators and school districts.
Educators can use ChatGPT for Teachers to securely work with student information, get personalized teaching support and collaborate with colleagues within their district, OpenAI said. There are also administrative controls that district leaders can use to determine how ChatGPT for Teachers will work within their communities.
OpenAI said it is initially launching ChatGPT for Teachers with a cohort of districts that represent roughly 150,000 educators. ChatGPT for Teachers will be free to K-12 educators in the U.S. through June 2027, the company said.
“Our objective here is to make sure that teachers have access to AI tools as well as a teacher-focused experience so they can truly guide AI use,” Leah Belsky, vice president of education at OpenAI, told reporters during a briefing.
The company said student data will be protected and that anything shared within ChatGPT for Teachers will not be used to train its models.
OpenAI rocketed into the mainstream following the launch of its generic ChatGPT chatbot in 2022. It’s faced criticism from teachers and parents who argue that students can use the tool to cheat and avoid engaging in critical thinking.
ChatGPT for Teachers is not intended for students, but OpenAI said giving teachers hands-on experience with AI tools will help them understand and establish best practices in their classrooms.
“Every student today is growing up with AI, and teachers play a central role in helping them learn how to use these tools responsibly and effectively,” the company said in a blog post. “To support that work, educators need space to explore AI for themselves.”
In July, OpenAI released a product within ChatGPT called “study mode.” Study mode was built with college-age students in mind, and it aims to help them work through problems step-by-step before they arrive at an answer.
OpenAI said it built study mode as “a first step in a longer journey to improve learning in ChatGPT.”
WATCH: Investors believe OpenAI will become the largest hyperscaler: The Futurum Group CEO Daniel Newman
Block said Wednesday that it expects gross profit to increase in the mid-teens annually for the next three years, reaching about $15.8 billion in 2028.
At the payment company’s first investor day event since 2022, Block unveiled a three-year financial outlook. The announcements land as Wall Street has turned skeptical on Block’s prospects, pushing the stock down by more than 30% in 2025, while major indexes have notched solid gains.
Block shares were initially halted around the time of the announcement and then jumped 9% when trading resumed.
The fresh guidance also comes two weeks after Block reported quarterly results, missing revenue estimates for a sixth straight time. Block has been diversifying away from its point-of-sale business, which has become increasingly crowded, launching more services tied to Cash App and offering artificial intelligence tools to sellers.
Block said in its new outlook that adjusted operating income is projected to increase about 30% annually, topping $4.6 billion by 2028. Adjusted earnings per share will grow in the low 30% range, reaching $5.50 in three years.
Chief Financial Officer Amrita Ahuja told CNBC ahead of the release that the company is entering a new phase of execution.
Block vs. Nasdaq this year
“Since 2022, our last investor day, we’re nearly double the size from a gross profit perspective,” Ahuja said, adding that earnings before interest, taxes, depreciation and amortization “more than tripled.”
Block also introduced a new non-GAAP cash flow metric, designed to reflect the capital required to grow its lending products, which it expects to reach more than $4 billion, or 25% of gross profit, by 2028.
For 2026, Block expects gross profit to rise 17% to $11.98 billion, with adjusted operating income and EPS both increasing more than 30%, to $2.7 billion and $3.20, respectively.
Ahuja said Block has adopted a “rule of 40” investment framework. That typically refers to revenue growth rate plus profit margin exceeding 40. She said the company expects to reach that metric this year and has reorganized around a single roadmap with a shared technical infrastructure.
“That transformation has resulted in us moving faster, with more connected decisions across our ecosystem,” Ahuja said.
On Wednesday, Block also expanded its share repurchase program by $5 billion, adding to the $1.1 billion in remaining authorization as of Sept. 30. The prior buyback plan was for up to $4 billion in purchases.
Block CEO Jack Dorsey, who co-founded the company as Square in 2009, was in attendance at the investor event. Dorsey has largely been out of public view in recent years.
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