When over a thousand companies, as well as scientists, entrepreneurs, diplomats and investors, gather in Shanghai from 17-20 July for the eighth edition of China’s World Artificial Intelligence Conference (WAIC), they will be attending something more than an annual global technology fair.

Discerning visitors to the WAIC, an annual conference hosted in Shanghai since 2018, will witness an ongoing, deeper contest between two giant models of technological leadership: Silicon Valley’s private-sector innovation ecosystem versus Shanghai’s state-backed, ambition-driven model of national rejuvenation.

Indeed, this has been a long-time in-the-making contest between innovation, transparency, frontier-technologies versus cost-effectiveness, accessibility, efficiency and outreach. Artificial Intelligence (AI), therefore, is no longer just about algorithms. It is about whether Beijing or Washington sets the terms of the world’s digital future, unfolding at an unprecedented pace.

The entrance to the venues of the WAIC in 2024 (left), and 2025 (right)

Algorithms and ambitions

The nineteenth century was shaped by coal and steel; the twentieth by oil, nuclear weapons and industrial speed and scale. The twenty-first is increasingly being shaped by algorithms. The question is no longer who could and would build AI, but who defines its standards, controls its infrastructure and influences its usage and the making of its governance structures.

For much of the past decade, Silicon Valley in America’s San Jose area seemed to have had all the answers. OpenAI, Google, Microsoft, Nvidia and Anthropic, among others, collectively made the United States the centre of frontier AI design and development initiatives.

Stanford’s AI Index has repeatedly confirmed the United States leadership in model performance, venture capital and advanced research on an annual basis.

But China increasingly presents itself as an alternative to this persistent assumption of the United States being the best. This is what has made China’s WAIC evolve over the years from being a technology exhibition into a geopolitical platform of strategic consequences.

The WAIC trajectory since its first edition in 2018 (left), and the pantheon of eminent speakers it hosted (right)

Since its launch in 2018, it has become China’s answer to Davos, Munich and Silicon Valley combined: a place where engineers, strategists, diplomats and investors meet to negotiate these increasingly algorithm-driven geopolitical trends.

Algorithms today are determining geopolitics because AI is no longer limited to a contest for leadership in technology but is increasingly moulding geopolitical ambitions. Algorithms are determining tools of seeking political influence and legitimacy amongst nations.

Countries that set standards shape markets; countries that define norms influence institutions. Beijing fully understands that Shanghai can be its ideal platform not just to display its technological prowess, but also to argue how the future of AI can remain an American monopoly no more.

China’s pursuit of leadership in frontier technologies has been integral to its long-term vision outlined in its centennial goals for 2049. The State Council’s 2017 New Generation Artificial Intelligence Development Plan, for instance, has set the goal of making China the world’s leading AI innovation centre by 2030 itself.

Accordingly, China has not framed its AI targets as mere economic opportunity, but sees it as a pillar of its overall national rejuvenation. Competition with the United States across sectors is seen only as its byproduct and not its primary objective.

China’s AI moment

China’s rise in AI is notable less for its national scale and speed alone than for germinating sinews of global resilience that make it a major development partner across 150 countries.

American export control initiatives that sought to deny China’s access to advanced semiconductors and restrictions placed on technology transfers, especially by the Joe Biden administration, have not been able to slow down this Chinese juggernaut.

Instead, they have pushed Beijing harder toward seeking self-reliance. The emergence of Chinese large language models such as DeepSeek, Ali Baba’s Qwen and Zhipu Ai’s GLM-5.2 model shows that China can still innovate under pressure.

Former president of Google China and AI-expert, Kai-Fu Lee’s statement that China benefits a great deal from abundant data, entrepreneurial energy and skilled engineers remains instructive.

China produces millions of STEM (Science, Technology, Engineering and Mathematics) graduates, generates vast digital data through its platforms and has built a large-scale commercial ecosystem that can rapidly absorb new technological innovations.

The Apple Park, the Apple Inc. headquarters in Cupertino, California (left), is a landmark representing Silicon Valley; photo credit - Daniel L Lu, and the Xuhui district of Shanghai, the hub of Chinese AI (right)

China’s rise in integrating AI has been phenomenal by all means.

Chinese firms have also chosen a different strategy from their major American rivals. Silicon Valley tends to chase frontier performance; Chinese companies often prioritise affordability, accessibility and deployment.

That distinction matters because the rise of the Global South shows that much of Asia, Africa and the developing world looks not for the most powerful AI, but for the most accessible and cost-effective one.

China may not need to build the world’s best AI. It may only need to build the world’s most widely adopted AI. However, it would also be premature to extend the logic of America’s relative decline to the AI sectors as well. The US still continues to reflect a clear lead over Beijing in most of the AI-related technological frontiers.

America still leads

According to the American Federal Reserve System, the United States dominates cumulative AI supercomputer capacity, controlling an estimated 74 per cent of global high-end AI compute, while China holds 14 per cent and the European Union collectively holds 4.8 per cent.

American universities continue to lead in frontier AI research and development. Its venture capital remains unmatched. For instance, Nvidia alone dominates the AI accelerator market, with its share at around 80-90 per cent of data-centre AI GPUs used for training and inference workloads.

Likewise, OpenAI, Google DeepMind and Anthropic also continue to play a leading role in setting the pace of AI model development.

The United States also retains a powerful advantage in terms of global attraction. The world’s best researchers continue to gravitate toward American institutions, even as American companies continue to define most global standards.

In Joseph Nye’s terms, the United States still exercises considerable soft power in technology.

A Chinese data centre (left), photo source - China Daily, and the Amazon data centre (right), photo source - South Bend Tribune

The biggest constraint on China remains the semiconductors. Advanced AI depends on cutting-edge chips, with the United States, Taiwan, Japan and the Netherlands continuing to dominate critical parts of that supply chain network.

American restrictions have exposed China’s vulnerability, even though these have also accelerated Chinese efforts to close that gap.

Trust is another institutional and political obstacle. Questions about data governance, transparency and state influence continue to shape international perceptions of Chinese AI technologies. Many countries may welcome Chinese AI tools, but they remain cautious about their dependence on China.

Hence, while China has surely narrowed the gap, the United States remains a clear leader.

The Sino-American rivalry

But what is important to note is that this Sino-American rivalry in AI partnerships around the world has been moving beyond its limited bandwidth of hardware and model performance. The next phase of their AI competition is being shaped by building AI norms, standards, and governance.

Henry Kissinger, while comparing AI to the Enlightenment, had once warned that AI potentially can even introduce changes in human consciousness itself. On the other hand, Geoffrey Hinton, the ‘Godfather of AI,’ has repeatedly warned of humanity losing control over AI, regretting, like Alfred Nobel, the technology he helped build.

All such concerns have pushed the regulation and governance issue to the centre stage of all the AI debates.

To China’s advantage, it presents itself as a champion of inclusive AI development. It emphasises sovereign control, equitable access and the needs of the Global South. The United States and its allies, on the other hand, stress issues of transparency, accountability and democratic safeguards.

This is where the rivalry becomes ideological. China argues that AI should serve development and national sovereignty. The United States argues that AI must be open, secure and constrained by democratic rules.

Both positions have strengths, and both carry risks. The real contest, then, is not only over who builds the best systems, but over whose principles govern them.

The battle for rules

This is why, more than showcasing China’s technological innovations, its annual WAIC at Shanghai aims to promote and exchange novel ideas, technologies, applications, talent and capital to press ahead with collaborations in global scientific and technological innovations.

This makes the WAIC not simply a platform for Chinese AI technology but its engine for setting the terms of the next global digital order.

As of now, however, irrespective of whether China eventually overtakes the United States or not, America continues to maintain a clear edge in research, chips, venture capital and universities. China, on the other hand, carries a major advantage of scale, industrial depth, state support and a vast domestic market for its AI models.

Professional services firm Pricewaterhousecoopers (PwC) estimates that AI could add nearly USD15 trillion to the global economy by 2030. That can transform the fortunes of major AI powers, including China and the United States and, therefore, the stakes are far larger than just profit or prestige.

The top AI leaders (from left): Sam Altman (OpenAI), Dario Amodei (Anthropic), Zhipu Zhang Fen (Qwen), and Jensen Huang (Nvidia)

AI will shape the future of advanced productivity, military modernisation, industrial competitiveness and geopolitical influence.

So, when delegates gather at Shanghai’s WAIC next month, the technical discussions about chips, models and standards will all point to a larger question: who is writing the rules of the age of Artificial Intelligence?

Silicon Valley may still lead in innovation; Shanghai increasingly wants to lead in imagination.

But WAIC may also reveal other contenders on this precipice. Asia’s AI future need not necessarily be decided by either China or the United States alone. It can also be shaped by whether Asia can collectively build systems that are powerful, trusted and broadly usable — and that is where nations like India have begun to matter.

With its digital public infrastructure, democratic legitimacy and strategic autonomy, India is the only other major Asian power positioned to turn AI from a contest of empires into a platform for inclusion.

UK Prime Minister Rishi Sunak with Demis Hassabis (DeepMind), Amodei, and Altman in May 2023 (left), and PM Modi with the AI tech leaders at the India AI Summit in January 2026

For Asia, therefore, the choice is no longer between Silicon Valley and Shanghai. For India, likewise, the task is to ensure that Asia’s AI future is not imported, but authored by Asian nations.
In the age of AI, Asia must not remain a market for other people’s intelligence. It must become a maker of its own future.

India as the third choice

That tectonic shift in Asia’s AI discourses gives India an unusual strategic space to envision potential for making a contribution. India has a large digital population, strong software talent, a vibrant startup ecosystem and a degree of geopolitical autonomy that neither Washington nor Beijing can easily ignore.

As seen in Prime Minister Narendra Modi’s speeches at New Delhi’s AI Impact Summit this February and at VivaTech Summit in Paris this month, his MANAV doctrine has stressed moral and ethical, Accountable and transparent, National sovereignty over data, Accessible and inclusive, and Valid and legitimate AI development.

This vision has the backing of India’s digital public infrastructure, especially Aadhaar and Unified Payment Interface (UPI), showcasing how scale and inclusion can coexist within a democratic framework.

But India also faces clear limits of being a far behind third actor. It does not yet have frontier AI models comparable to those of the United States or China. Its computing infrastructure remains limited, and domestic semiconductor capacity is still modest.

The danger especially lies in India’s long-term dependence on foreign ecosystems.

India’s opportunities, on the other hand, lie in offering something different from China or the United States. India’s experience with multilingual societies, democratic governance and digital inclusion gives it a basis for a distinct AI model.

Rather than choosing between Silicon Valley and Shanghai, India can perhaps position itself as a third choice or as a bridge between these two giants. Becoming a third choice also suits India’s tradition of strategic autonomy and can greatly strengthen its role as a voice for the Global South.

In a world where many countries want access to both American innovation and Chinese affordability, India’s policy may find credence in becoming the strongest advocate of a possible third path for responsible, ethical, human-centric and inclusive AI.

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