CHINA :: AI Sparks Another Power Struggle

The markets are sending a signal that's hard to ignore. Shares of Asia-Pacific were on track Wednesday for a sixth consecutive day of gains, while South Korea rose 1.2% and tech giants such as Samsung y SK Hynix were up more than 2%. Taiwan was also gaining ground and remained near all-time highs. The common thread is once again the same: artificial intelligence, semiconductors, and growing demand for computing power. Reuters

But behind the numbers lies an even more significant phenomenon. AI is beginning to move beyond the stage where millions of people were simply experimenting with chatbots. It is entering the era of agents capable of performing tasks, and the markets are betting huge sums of money that this transition will give rise to a new global business.

Muse, Meta's new artificial intelligence agent, topped the U.S. download charts over the past two weeks, according to Reuters. Launched on September 8, it reached 2.8 million downloads in its first twelve days and can perform tasks such as sending emails, organizing trips, or carrying out certain transactions. Meta’s stock has risen more than 20% since its launch, adding more than $200,000 million to its market capitalization.

The excitement spread quickly. AMD’s market capitalization surpassed $1 trillion for the first time, and the Nasdaq returned to all-time highs. What the market is buying isn’t just another piece of software—it’s the possibility that AI will move beyond answering questions to become an everyday infrastructure capable of working directly for millions of people.

And while the United States continues to dominate much of this industry, China has no intention of standing on the sidelines.

Beijing has been trying for years to build its own technology supply chain, ranging from artificial intelligence models to processors, memory, data centers, and industrial capacity. U.S. restrictions on Chinese access to certain advanced semiconductors have added urgency to that effort. Companies such as Huawei, CXMT, YMTC, and DeepSeek represent different pieces of a strategy aimed at reducing dependence on foreign technology and closing the gap with global leaders.

Huawei recently acknowledged that domestic demand for its AI computing systems currently exceeds its production capacity. The company is developing new generations of its Ascend chips while holding discussions with Chinese developers to train future models using its own infrastructure. This does not mean that China has caught up with Nvidia in terms of cutting-edge technology, but it does demonstrate the scale of the demand that is building within the country.

At the same time, the Chinese manufacturer CXMT is preparing to enter the NAND memory market, a strategic sector for AI servers, data centers, and supercomputing. The company raised about $8.6 billion in its initial public offering in July and, along with YMTC, is part of China’s effort to develop a memory industry capable of competing with Samsung, SK Hynix, and Micron.

Even DeepSeek is developing its own artificial intelligence chip, according to sources cited by Reuters. The goal would be to use it for inference—the process by which a trained model generates responses—and reduce reliance on processors from Nvidia y Huawei.

There is also one factor that is of particular concern to Western industry: the price. A recent Reuters column highlights the growing debate among investors regarding Chinese models that offer competitive capabilities at costs considerably lower than certain U.S. alternatives. Opinions on the extent to which this threatens U.S. companies remain divided, but the economic pressure is real: if sufficiently capable models can operate at a much lower cost, Western companies will have to justify massive investments in infrastructure with equally massive revenues.

That's where the real one appears Chinese power. It’s not just about building a better chatbot. China has a massive industrial base, tightly integrated supply chains, manufacturing capacity, technical talent, and a gigantic domestic market. A particularly telling example occurred just this week: the U.S.-based company EnerVenue decided to set up its first battery factory in Changzhou, China, after abandoning a planned project in Kentucky. Its CEO explained to Reuters that the depth of the supply chain and the availability of specialists and engineers were decisive factors. The new facility is approximately 95% automated.

This example helps illustrate the scale of the competition. The United States retains extraordinary advantages in software, chip design, research, capital, and some of the most powerful technology companies on the planet. China possesses a different kind of strength: the ability to integrate research, industrial production, suppliers, and manufacturing on a massive scale. Neither of these advantages should be underestimated.

And now the two powers are once again facing off against each other.

The Chinese president Xi Jinping He arrives in Washington as markets await word on whether the United States and China will extend their trade truce and whether any form of cooperation on artificial intelligence might emerge. Reuters notes that AI will be among the topics discussed at the meeting. Reuters

That's why this week's stock market movements may seem like just another financial story, but there's something much bigger behind them. Artificial intelligence is simultaneously becoming an industry, infrastructure, competitive advantage, and source of economic power.

The United States is trying to maintain the lead it has built up around Silicon Valley, its major research labs, and its chip manufacturers. China wants to prove that it can develop its own technologies, manufacture on a large scale, and compete on price as well.

The race has barely begun. And this time, it's not just about who will have the most advanced artificial intelligence.

It's being played Who will control the economy that will grow around it?.