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.
Tim Cook, chief executive officer of Apple Inc., during the Apple Worldwide Developers Conference (WWDC) at Apple Park campus in Cupertino, California, US, on Monday, June 9, 2025.
David Paul Morris | Bloomberg | Getty Images
Apple on Thursday announced a redesigned blood oxygen feature for some Apple Watch users, following a years-long intellectual property dispute over the capability.
Apple said the redesigned feature is coming to some Apple Watch Series 9, Series 10, and Apple Watch Ultra 2 users on Thursday. The update was possible because of a recent U.S. Customs ruling, the company said.
In 2023, the International Trade Commission found that Apple’s blood oxygen sensors infringed on intellectual property from Masimo, a medical technology company. Apple paused the sale of some of its watches and began selling modified versions of the wearables without the blood oxygen feature.
“Apple’s teams work tirelessly to create products and services that empower users with industry-leading health, wellness, and safety features that are grounded in science and have privacy at the core,” the company said in a release announcing the feature rollout.
Ether and bitcoin.
Yuriko Nakao | Getty Images
Bitcoin hit a new record late Wednesday as ether climbed even closer to its all-time high.
The flagship cryptocurrency rose as high as $124,496, surpassing its July record of 123,193.63, according to Coin Metrics. Ether rose to $4,791.19 overnight, edging closer to its 2021 record of $4,866.01.
Both coins took a hit Thursday, however, after July’s wholesale inflation data came in much hotter than expected. Bitcoin was lower by 3% at $118,481.00 while ether fell 2% to $4,629.20.
Bitcoin hit a new record overnight, surpassing its July all-time high
The initial gains were sparked by Tuesday’s cooler-than-expected July inflation report, which had lifted investor optimism for rate cuts from the Federal Reserve at the end of its September policy meeting. The coins rallied with the stock market for two days. On Wednesday, the S&P 500 and Nasdaq also scaled new records.
For the week, bitcoin is on pace for a nearly 2% gain, while ether has rallied more than 14%. Ether flipped bitcoin as the crypto market leader in June, gaining 85% since then thanks to heavy institutional buying, tightening supply and adoption from corporate accumulators – all under the backdrop of a friendlier regulatory environment for the crypto industry. Jake Kennis, analyst at Nansen, said the rally likely has more room to run given the flows remain strong.
“Bitcoin hitting a fresh all time high and ETH being on the verge of doing so means we’ve moved from speculative mania to a phase where institutional adoption, real-world integration, and global liquidity are driving price discovery,” said Ben Kurland, CEO at crypto research and trading platform DYOR.
“The fact that both assets are on the verge of breaking records in tandem signals broad market conviction, not just a single-asset rally,” he added. “Momentum this strong rarely burns out instantly, but it also tends to draw in latecomers who can fuel volatility. Right now the story is less about euphoria and more about validation. Crypto is graduating from ‘alternative’ to ‘essential’ in the global portfolio mix.”
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