US Aims To Thwart Xi Jinping's AI Ambitions As China Lures Billionaires Into Race

Amidst the intensifying global race for artificial intelligence supremacy, the United States and China are engaged in a high-stakes battle, with strategic moves and enticing billionaires shaping the competition. 

What Happened: To counter China’s AI ambitions under President Xi Jinping, the Biden administration is reportedly considering updating export controls on AI chips, aiming to limit China’s access to advanced technologies with military applications, according to the Financial Times.

This strategic measure, which could impact companies like Nvidia Corp (NASDAQ:NVDA), highlights the escalating rivalry between the two superpowers and the geopolitical implications at stake. 

This development comes at a time when China has been actively attracting billionaires to participate in the AI race, as reported by Bloomberg. 

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Tech giants like Tencent Holdings Ltd (OTC:TCEHY), Alibaba Group Holding (NASDAQ:BABA), and Baidu Inc. (NASDAQ:BIDU) have successfully lured renowned entrepreneurs, industry leaders, and experienced engineers from both domestic and foreign companies.

Promising the potential to outperform their American counterparts, China’s AI sector is attracting significant talent. For instance, Wang Xiaochuan, the founder of the Sogou search engine, swiftly launched his own AI startup, Baichuan, securing $50 million in seed capital and recruiting former colleagues from Sogou. 

Why It's Important: China’s AI sector is experiencing substantial investments, with an estimated $15 billion expected to be spent on AI technology this year alone. This influx of funding, coupled with the recruitment of top-tier Chinese talent, poses a formidable challenge to the current U.S. dominance in the AI landscape. 

Although the U.S. currently surpasses China in AI investments, with $26.6 billion compared to China’s $4 billion in the year to mid-June, the gap is gradually narrowing, indicating the growing competitiveness in the field.

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