US-China race takes center stage as Trump defines AI policy 

The Trump administration is increasingly framing the race to dominate artificial intelligence (AI) as an existential competition with China to determine the future of the powerful technology.

It’s a mindset that has permeated the administration’s push to define its AI policy, including as it unveiled its action plan on the subject this month.

“The United States is in a race to achieve global dominance in artificial intelligence,” an introduction to the plan from several key Trump officials reads. “Whoever has the largest AI ecosystem will set global AI standards and reap broad economic and military benefits.”  

“Just like we won the space race, it is imperative that the United States and its allies win this race,” it continues. 

Outside observers generally say the administration is not overstating either the fact of the intense race or the importance of winning it. They compare the battle to the arms race or the space race in decades past.

“It’s an AI arms race,” Wedbush Securities analyst Dan Ives told The Hill. “The U.S., I believe, is ahead of China, but China is not sitting on a treadmill.” 

The new AI model from the Chinese startup DeepSeek was dubbed “AI’s Sputnik moment” by venture capitalist Marc Andreessen.

Sputnik, the first artificial satellite launched into space by the Soviet Union, took the U.S. by surprise and marked the start of the space race between Washington and Moscow. 

DeepSeek’s highly capable model similarly shook the American AI landscape, raising questions for U.S. tech firms about the need for vast investments in computing power and the prospect that Chinese tech firms could eventually surpass them.

“You risk becoming reliant on other countries, and then in a moment of crisis, you may not have access to the technology or software that you need,” Owen Tedford, a senior research analyst at Beacon Policy Advisors, said of the stakes of the AI race. 

The Trump administration has approached the growing prospect of Chinese AI by pushing for a focus on innovation over regulation, drawing a sharp contrast with the Biden administration.  

In its 28-page framework, the Trump administration detailed its plan to win the AI competition, with a focus on removing regulations, expediting the construction of data center and energy infrastructure and exporting U.S. technology abroad.

After taking office, President Trump rescinded former President Biden’s executive order on AI guardrails, while Vice President Vance criticized “excessive regulation” of AI while in Europe earlier this year. 

Trump’s AI plan looks to boost innovation by taking aim at both federal and state AI rules, directing his administration to slash federal funding for states with regulations deemed too “onerous” — not unlike the AI moratorium some Republicans unsuccessfully sought to squeeze into the president’s “big, beautiful bill." 

The framework also aims to encourage the adoption of American technology abroad, another key aspect on which the administration is differentiating itself from its predecessor on the AI race. 

The Biden administration took a more restrictive approach toward the export of American AI, primarily through limits on chip sales that sought to prevent the key hardware from winding up in the hands of foreign adversaries such as China. 

Biden released the AI diffusion rule in his final days in office, placing caps on chip sales to most countries around the world other than a select few U.S. allies and partners.  

Trump rescinded the rule in May shortly before it was set to take effect. While some Republicans have urged him to release a new version of the diffusion rule, the president has opted to focus on exporting U.S. technology as a means of boosting AI leadership abroad as opposed to limiting China’s resources. 

He signed an executive order Wednesday directing his administration to create an American AI Exports Program that will develop full-stack AI export packages, featuring U.S. chips, AI models and applications. 

“There’s a belief that maybe by dominating the AI race, if we are able to be technology leaders, China will end up becoming reliant on us instead of cutting it out and forcing it to create its own domestic alternatives,” Tedford said. 

“It’s an argument that didn’t really seem to have much weight in the Biden administration but seems to be carrying the day much more with the Trump administration,” he added. 

Ben Buchanan, a White House special adviser on AI during the Biden administration, argued in a New York Times op-ed Thursday that Trump is making a “profound mistake” when it comes to China. 

His criticism centers on a key decision made last week by the Trump administration to once again allow Nvidia to sell its H20 chips to China. 

Earlier this year, the U.S. implemented new licensing requirements that limited Nvidia’s ability to sell the chips in China. However, the company recently revealed it was filing applications to sell the H20s after receiving assurances from the Trump administration that its licenses would be granted. 

Buchanan argued the decision “threatens American dominance” over AI because “Nvidia’s chips will give China’s A.I. ecosystem, and its government, just what it needs to surpass the United States in the most critical arenas.” 

Trump’s approach also risks alienating the China hawks within his own party, who have voiced concerns that it could boost Beijing’s AI capabilities. 

Rep. John Moolenaar (R-Mich.), chair of the House Select Committee on the Chinese Communist Party, questioned the administration’s decision to allow for H20 sales to China in a letter Friday. 

“As the Trump administration has repeatedly stated, the U.S. must ensure that American rather than Chinese tech companies build the global AI infrastructure,” he wrote. “At the same time, however, we must also ensure that the world does not adopt Chinese AI models trained on U.S. technology.”    

Another outspoken Republican, Rep. Marjorie Taylor Greene (Ga.), is pushing back on the third prong of Trump’s AI plan, which seeks to boost the construction of AI data center and energy infrastructure.

The administration has repeatedly underscored the infrastructure needs for building out American AI capabilities, with Energy Secretary Chris Wright comparing the AI race to the Manhattan Project.

The tech industry has also ramped up pressure, specifically on the energy front. Anthropic argued in a recent report that the U.S. is “lagging in bringing energy generation online,” while China is “rapidly building energy infrastructure for AI.” 

However, Greene warned Thursday that there are “massive future implications and problems” with Trump’s data center buildout given its potential impact on water supply, while also taking aim at the president's plan to target state AI rules. 

“Competing with China does not mean become like China by threatening state rights, replacing human jobs on mass scale creating mass poverty, and creating potentially devastating effects on our environment and critical water supply,” she said.