China Warns of US ‘AI Monopoly’
At China’s flagship World AI Conference in Shanghai this week, Premier Li Qiang delivered a stark warning about American “AI monopoly” while unveiling China’s strategy to unite developing nations in creating alternative AI governance frameworks, signaling an escalation in the technology cold war between the world’s two largest economies.
THE SHANGHAI DECLARATION
Speaking before an audience that notably included more officials from developing nations than Western countries, Premier Li Qiang outlined China’s vision for a multipolar AI world. “We must prevent the monopolization of AI technology by a few,” Li declared, in a thinly veiled reference to American tech giants’ dominance.
The Premier announced China’s intention to establish a new international organization dedicated to “fostering safe and inclusive use” of AI technology. Unlike existing Western-led initiatives, this body would prioritize the needs of developing nations and emphasize “AI sovereignty”—the right of nations to develop and deploy AI systems free from foreign interference.
This move represents China’s most ambitious attempt yet to challenge Western dominance in setting global AI standards and governance frameworks. By positioning itself as the champion of the Global South, China seeks to build a coalition that could rival US influence in shaping AI’s future.
HUMANOID ROBOTS AND HARD POWER
While diplomats debated governance, the conference floor told a different story. Chinese companies demonstrated advanced humanoid robots engaged in boxing matches, showcasing the country’s rapid progress in robotics and AI-powered manufacturing.
Notable demonstrations included:
Unitree’s G1 humanoid: Priced at just $16,000, undercutting Western competitors by 90%Kepler’s forerunner: Capable of complex manipulation tasks for factory automationFourier Intelligence’s GR-2: Designed for healthcare and elder care applicationsThese displays served a dual purpose: demonstrating China’s technical capabilities while highlighting its manufacturing advantages. With production costs a fraction of Western competitors, Chinese firms are positioned to dominate the physical manifestation of AI through robotics.
THE $4.8 TRILLION PRIZE
According to conference presentations, the global AI market is projected to reach $4.8 trillion by 2030, with the US and China competing for the largest share. However, the two nations are pursuing fundamentally different strategies:
US Strategy: Focus on foundational models, cloud services, and software platforms
China Strategy: Emphasis on applications, manufacturing integration, and cost-effective deployment
China’s approach leverages its advantages in:
Manufacturing scale and efficiencyMassive domestic market for AI deploymentState-directed investment in strategic sectorsFewer regulatory constraints on data usageTHE DEVELOPING WORLD COURTSHIP
China’s most strategic move involves courting developing nations excluded from the Western AI ecosystem. The conference featured delegations from:
African Union representatives discussing AI for agricultureLatin American officials exploring smart city applicationsSoutheast Asian leaders seeking alternatives to Western platformsMiddle Eastern nations interested in AI sovereigntyChina offers these nations:
Affordable Technology: AI solutions priced for developing markets
Technology Transfer: Unlike Western firms, Chinese companies offer to build local capacity
No Political Conditions: AI cooperation without democracy or human rights requirements
Infrastructure Support: Integration with Belt and Road Initiative projects
STANDARDS WARS
The battle extends beyond rhetoric to technical standards—the boring but crucial protocols that determine how AI systems interact globally. China is pushing its standards through:
International Telecommunication Union (ITU): Where developing nations have equal votesISO/IEC committees: Flooding committees with Chinese proposalsBilateral agreements: Creating facts on the ground through deploymentIf successful, Chinese standards could create a parallel AI ecosystem incompatible with Western systems, forcing countries to choose sides in a digital iron curtain.
WESTERN RESPONSE AND CONCERNS
The Shanghai conference has alarmed Western policymakers who see China’s moves as threatening the US-led international order. Concerns include:
Authoritarian AI: Chinese AI systems often include surveillance and control features
Data Security: Questions about data handling and privacy protection
Military Applications: Dual-use technology with military potential
Economic Dependence: Countries adopting Chinese AI may become economically dependent
US officials have privately warned allies about the risks of adopting Chinese AI systems, but many developing nations see few alternatives given the high costs of Western technology.
TECHNOLOGY DECOUPLING ACCELERATES
The conference crystallized the ongoing technology decoupling between the US and China:
Chip Access: US export controls limit China’s access to advanced semiconductorsData Flows: Increasing restrictions on cross-border data movementResearch Collaboration: Academic partnerships under scrutinyInvestment Restrictions: Barriers to cross-border AI investmentsThis decoupling may force the creation of two separate AI ecosystems, reducing global efficiency but increasing strategic competition.
IMPLICATIONS FOR GLOBAL BUSINESS
For multinational corporations, the US-China AI split creates difficult choices:
Market Access: Companies may need different AI strategies for different regions
Compliance Complexity: Navigating incompatible regulatory frameworks
Technology Stacks: Potentially maintaining separate technology infrastructures
Partnership Risks: Joint ventures may face political scrutiny
Innovation Barriers: Reduced knowledge transfer between ecosystems
Companies are increasingly forced to choose between the US and Chinese markets rather than serving both seamlessly.
THE INNOVATION RACE
Despite restrictions, China continues advancing in key AI areas:
Computer Vision: Leading in surveillance and industrial applicationsAI Chips: Developing domestic alternatives to NVIDIARobotics: Achieving cost breakthroughs in humanoid robotsApplications: Rapid deployment in manufacturing, logistics, and servicesHowever, China still lags in:
Foundational Models: Behind in large language model developmentCutting-edge Chips: Limited access to most advanced semiconductorsCloud Infrastructure: Lacking global reach of US providersResearch Ecosystem: Brain drain to Western institutions continuesTHE PATH FORWARD
The Shanghai conference marks a turning point in global AI development. Rather than a single, unified AI future, we’re heading toward a fragmented landscape with competing standards, governance models, and technology stacks.
For the US, the challenge is maintaining technological leadership while preventing China from building an alternative ecosystem that could attract much of the world. For China, the goal is leveraging its manufacturing prowess and market size to create viable alternatives to Western AI dominance.
For the rest of the world, the choice between American and Chinese AI systems will shape their technological and economic futures for decades to come. The AI cold war is no longer theoretical—it’s playing out in conferences, standards bodies, and deployment decisions worldwide.
As one Asian diplomat noted privately: “We’re being asked to choose sides in a technology war we didn’t start but can’t avoid. The question isn’t whether to pick a side, but when and at what cost.”
SOURCES[1] Bloomberg. (July 30, 2025). “China Vies to Unseat US in Fight for $4.8 Trillion AI Market.”
[2] World AI Conference 2025 Official Proceedings.
[3] Premier Li Qiang’s Keynote Address, Shanghai, July 29, 2025.
[4] Industry analyst reports from the conference floor.
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