How China Is Changing AI

0:24 ARTIFICIAL INTELLIGENCE HAVE TAKEN A DRAMATIC TURN WITH SAFETY FEARS FRONT AND CENTER IN THE GLOBAL AI RACE. WE HAVE HAD WARNINGS OF THREATS TO HUMANITY AND CALLS FROM U.S. INDUSTRY LEADERS TO SLOW THE BREAKNECK SPEED OF DEVELOPMENT. YET, THE CALLS HAVE BEEN SWIFTLY REJECTED BY BOTH WASHINGTON AND BEIJING. GREAT RIVALS ARE DOWNPLAYING THE THREATS, URGING TECH INNOVATORS TO STAY IN THE RACE AND KEEP ACCELERATING AI. >> WE ARE LEAVING CHINA IN AI, THE MOST SOPHISTICATED COUNTRY IN THE WORLD. I WANT TO KEEP IT THAT WAY.

0:57 WHOEVER WINS AI WINS. I THINK THAT YOU HAVE A LOT OF NEGATIVE FORCES. >> THE DEVELOPMENT OF ARTIFICIAL INTELLIGENCE IS CRUCIAL TO THE WELL-BEING OF ALL HUMANITY. ALL PARTIES SHOULD WORK TOGETHER TO PROMOTE OPEN, INCLUSIVE DEVELOPMENT OF ARI FOR GOOD AND FOR ALL. FEAR MONGERING, COMPETITION WILL ONLY DISRUPT THE PROMISE OF GLOBAL AI GOVERNANCE, WHICH SERVES NOBODY'S INTERESTS.

1:34 >> OVER THE PAST YEAR, CHINESE COMPETITORS HAVE BEEN GRABBING THE WORLD'S ATTENTION CLIMBING COMPARABLE CAPABILITIES WITH U.S. COUNTERPARTS AT LOWER COST. THAT THRIVING CHINESE AI SCENE SET TO CHANGE THE GLOBAL GAME. >> CHINA HAS A LANDSCAPE THAT IS EXTREMELY VIBRANT. ANY BIG CHINESE TECH COMPANY YOU CAN NAME HAS AN AI MODEL OR A MODEL IN TRAINING. >> IN THE U.S. YOU HAVE GOOGLE AND META. IN CHINA YOU HAVE BYTEDANCE, ALIBABA, TENCENT. IN THE U.S.

2:08 YOU HAVE STARTUPS LIKE OPENAI AND ANTHROPIC. IN CHINA YOU HAVE MOONSHOT, DEEPSEEK,. >> THE COMPANIES ARE COMING UP WITH BREAKTHROUGH INNOVATIONS. >> CHINA HAS OFFERINGS THAT ARE A LOT MORE ATTRACTIVE NOW. >> ONE OF OUR BLOOMBERG ARTICLES SAYS THAT IT IS A BALANCE BETWEEN COST AND CAPABILITY. SHERY: CHINESE MODELS ARE RAPIDLY CATCHING UP IN PERFORMANCE.

2:42 CHAT GPT WAS RELEASED IN LATE 2022 AND SINCE THEN THE PERFORMANCE OF FRONTIER U.S. AI MODELS HAS BEEN INCREASING. CHINESE MODELS LAGGED BEHIND FOR YEARS. AS OF 2026, THE GAP HAS BEEN RAPIDLY NARROWING. HOW HAS CHINA BEEN ABLE TO MAKE A ARE SO CHEAP? >> CHINA'S ELECTRICITY IS CHEAPER. IT HAS ABUNDANT ACCESS TO TALENT AT A FRACTION OF THE COST U.S. COMPANIES MUST PAY TOP ENGINEERS. SHERY: SURE, CHEAP ENERGY AND TALENT ARE HELPFUL. THERE'S SOMETHING ELSE.

3:13 >> OPEN-WEIGHT MODELS. THIS ALLOWS A LOT OF EYES TO LOOK AT THE TECHNOLOGY AT THE SAME TIME AND GIVE A BETTER SHOT AT CLOSING THE GAP. >> THE MODEL COMES WITH A KEY DISADVANTAGE. >> NOBODY HAS FIGURED OUT HOW TO MAKE MONEY. IT HAS BEEN A RACE TO THE BOTTOM FOR MORE THAN A YEAR NOW. COMPANIES ARE UNDERCUTTING EACH OTHER ON PRICE. >> CONSUMERS IN CHINA ARE NOT WILLING TO PAY FOR A OUR SERVICE IS MUCH. MONETIZATION PROSPECTS HAVE BEEN DIFFICULT.

3:44 >> ANTHROPIC AND OPENAI BUILT THE IPHONE. CHINESE COMPANIES ARE MORE LIKE ANDROID. >> IF THIS FITS THE VIEW OF WHAT BEIJING WANTS IN THEIR ECONOMY. THEY WANTED TO BE AFFORDABLE SO IT CAN BE ADOPTED QUICKLY WITHIN THE ECONOMY. >> THE DEVELOPMENT OF AR SHOULD NOT BE A SOLO PERFORMANCE BY ANY ONE COUNTRY BUT RATHER A SYMPHONY OF GLOBAL COOPERATION. >> FIRMS ARE BEGINNING TO OFFER LOWER COST AR MODELS.

4:19 IN JULY OPENAI LAUNCHED GPT 5.6 LUNAR, ITS MOST COMP -- COST EFFICIENT MODEL SO FAR. >> THE AI RACE SO FAR IS TREMENDOUSLY COMPETITIVE AND THAT IS UNLIKELY TO STOP JUST BECAUSE CEOS SAID WE MUST SLOW DOWN THE PACE. POLITICAL LEADERSHIP IN THE U.S. AND CHINA DON'T REALLY WANT THAT TO HAPPEN. >> BEHIND CHINA'S AI SUCCESS IS A GROWING SELF SUFFICIENT SUPPLY CHAIN ECOSYSTEM. ON THE LOGIC SIDE, A HOMEGROWN CHIPMAKERS HAVE BEEN INNOVATING WITH NOVEL DESIGNS AND ARE NOW TOUTING STRONG DEMAND FOR AI CHIPS. ON THE MEMORY FRONT, CHINA ANOINTED ITS OWN CHAMPION, TSMC, THE COUNTRY'S MOST VALUABLE FIRM AFTER ITS BLOCKBUSTER IPO IN JULY.

5:06 NOW IT IS REPORTEDLY TESTING TECH ROUGHLY ONE GENERATION BEHIND KOREAN AND U.S. LEADERS. ANOTHER PLAYER MAY NOT BE TOO FAR BEHIND. IN MANUFACTURING, LITHOGRAPHY HAS BEEN A BATTLEGROUND WITH THE U.S. BACKING CHINESE ACCESS TO CUTTING EDGE TECH. RECENT REPORTS SAY THE CHINESE MAY HAVE ACHIEVED A BREAKTHROUGH IN A ROOM WORKAROUND TOOL. LET'S BRING IN OUR BLOOMBERG GEOECONOMICS TECH ANALYST MICHAEL DANE. IT'S GREAT TO HAVE YOU WITH US.

5:40 ROB, HOW SERIOUS IS A COMPETITION FROM CHINA WHEN IT COMES TO LEADERSHIP IN ARTIFICIAL INTELLIGENCE AGAINST THE U.S. AT THIS POINT? >> IT IS CLEAR FROM THE EXTERNAL DATA THAT IT IS A TWO HORSE RACE BETWEEN AMERICA AND CHINA AT THE MOMENT. OVER THE LAST 18 MONTHS OR SO, THE PERFORMANCE GAP BETWEEN U.S. AND CHINESE MODELS AVERAGED 10-15%. OVER THE LAST THREE MONTHS, THAT NARROWED TO AROUND 5%.

6:12 LOOKING AT THE LATEST DATA, RECENTLY RELEASED IN THE LAST WEEK OR SO, THAT HAS ACTUALLY NARROWED TO 2.8%. OBVIOUSLY THESE NUMBERS SPEAK FOR THEMSELVES. IT IS A NECK AND NECK RACE. AMERICA MAINTAINS A NARROW LEAD. MAYBE THAT REFLECTS ITS SUPERIOR ACCESS TO ADVANCED AI ACCELERATORS FROM THE LIKES OF NVIDIA, ETC.. BUT CHINA IS DEFINITELY IN THE RACE. CHINESE MODELS ARE GOOD. WE ARE SEEING A GLOBAL UPTAKE GIVEN THE BOOK -- OVERWEIGHT APPROACH AT THE MOMENT. AS MENTIONED ON THE VIDEO YOU JUST PLAYED. MONETIZATION REMAINS A HUGE CHALLENGE FROM A CHINESE PERSPECTIVE.

6:52 THE LEVERS OF MONETIZATION COMING THROUGH RELATIVE TO ANTHROPIC AND OPENAI ARE A FRACTION. PERHAPS IT REFLECTS A GOVERNMENT POLICY TO PLURIPOTENT -- PROLIFERATE ACROSS THE TECHNOLOGY. MONETIZATION IS A SECONDARY CONSIDERATION FOR ANOTHER DAY. SHERY: WE ARE SEEING CHINESE PLAYERS BEING GOOD AT WHAT THEY DO, WHETHER IT MODELS LIKE MOONSHOT OR TSMC. BUT THEY DON'T NECESSARILY DOMINATE.

7:27 CAN THEY ACTUALLY GET AHEAD AND CLOSE THE GAP WITHOUT FULLY DOMINATING THE FULL STACK OF AI? MICHAEL: I THINK IT IS POSSIBLE, ESPECIALLY IN THE SEMICONDUCTOR SUPPLY CHAIN. CHINA ESSENTIALLY HAS A RED EVENT -- MAYBE NOT DOMINANT PLAYER, BUT A RELEVANT PLAYER AT PROBABLY EVERY STAGE OF THE SEMICONDUCTOR EQUIPMENT TOOLS. AND IT DOES HAVE A HUGE ADVANTAGE OF ESSENTIALLY HAVING A DOMESTIC CHINESE MARKET TO SCALE UP WITH. IT IS ENTIRELY CAPABLE OF BUILDING A RESILIENT DOMESTIC ECOSYSTEM.

8:07 WHICH, IN THE FUTURE, IT COULD BECOME COMPETITIVE WITH GLOBAL ALTERNATIVES AND MAKE COMPETITORS IN GLOBAL MARKETS AS WELL. THAT THIS STATE I DON'T THINK DOMINANCE IS NECESSARY. I THINK RESILIENCE IS MORE WHAT THESE CHINESE COMPANIES ARE GOING FOR. SHERY: GIVEN WE ARE SEEING CHEAPER HARDWARE, CAN WE EXPECT THEM TO SHAPE THE ECONOMICS OF ARTIFICIAL INTELLIGENCE GOING FORWARD? MICHAEL: ABSOLUTELY. THEY WILL ALWAYS BE QUITE CRITICAL AND SERIOUSLY DEGRADE THE PRICING POWER AND ADVANTAGE. U.S. MODELS HAVE A DECLINE IN QUALITY.

8:41 I THINK THAT THE MONETIZATION CHALLENGE FOR THESE MODELS WILL CONTINUE. JUST THE PRESENCE OF THEM WELL, ESSENTIALLY, ALWAYS KEEP U.S. MODEL PROVIDERS HONEST FOR THEM TO CONSIDER OPTIMIZATION AND PROVIDE LOWER-PRICED MODELS. HAVING THE OPTIONALITY IS QUITE CRUCIAL. SHERY: TO YOUR POINT ON PROFITABILITY, CHINA'S LEADING AR LABS ARE BURNING MORE CASH THAN THEY GENERATE ANY REVENUE.

9:15 FOR EVERY DOLLAR OF REVENUE, IN 2026, I WANT OUR VIEWERS TO LOOK AT THIS CHART. A NET LOSS OF $.84. DEEPSEEK LOSING 150 AND 140 RESPECTIVELY. HOW CAN THEY ACHIEVE SUSTAINABLE PROFITS AT THIS POINT? >> THAT'S ABSOLUTELY RIGHT. IT IS A KEY CHALLENGE OF ANY INDUSTRY. TO GIVE BALANCE, I WOULD SAY OPENAI IS LOSING MORE THAN A DOLLAR FOR EVERY DOLLAR OF REVENUE IT GENERATES AT THE MOMENT.

9:49 SO THIS IS A GLOBAL PROBLEM THAT IS PARTICULARLY ACUTE IN A CHINA CONTEXT AND THE REASONS FOR THAT ARE OBVIOUS. THERE ARE CLOSE TO 1000 LARGE LANGUAGE MODELS COMPETING WITH EACH OTHER. THE MARKET IS FLOODED WITH SUPPLY AND COMMODITIZED. THERE IS SOMETHING CALLED THE FREEMIUM BUSINESS MODEL WHERE YOU CAN ACCESS BASIC FUNCTIONALITY FOR FREE. COMPANIES ARE TRYING TO ENCOURAGE PEOPLE TO PAY FOR PREMIUM ACCESS VIA SUBSCRIPTIONS. THAT HAS LED TO A SINGULAR FOCUS ON THE -- IN DENTISTRY ARE VERY LOW MARGIN UTILITY SERVICES, TOKEN ENGINES OR API SERVICES, A VERY COMPETITIVE -- COMPETITIVE MARKET. THEY AR YOU SHOWED ON THE SCREEN A MINUTE AGO IS THE MAIN A REVENUE GENERATOR.

10:38 WHILE TOPLINE REVENUE IS COMING IN IN A HYPERCOMPETITIVE MARKET WHERE PRICING IS REALLY NAILED IT TO THE FLOOR, IT IS VERY DIFFICULT FOR THESE COMPANIES TO MAKE ANY MONEY. AT THE SAME TIME, DO NOT FORGET THAT ASSOCIATED R&D AND CAPEX COSTS FOR THESE COMPANIES ARE ENORMOUS. THEY ARE BEING SQUEEZED ON THE COST FRONT. AT ALSO, WHILE TOKEN VOLUME IS COMING THROUGH, CHINESE TOKENS ARE TYPICALLY PRICED AROUND AN 80% DISCOUNT TO THEIR U.S. COUNTERPARTS. IT IS A VERY, VERY DIFFICULT ENVIRONMENT TO MAKE MONEY IN. THE ANSWERS TO THIS HAVE TO BE PRICE RISES. CONSOLIDATION WITHIN THE INDUSTRY. AND I THINK ULTIMATELY, THAT IS THE WAY IT HAS TO GO. FOR THE TIME BEING, I THINK THIS WILL CONTINUE. SHERY: MODELS KEEP ACCELERATING AND GETTING BETTER. MICHAEL, WHEN IT COMES TO THE U.S., WE HAVE SEEN AI EXECUTIVES CALLING OUT FOR THE SLOWDOWN OF THIS DEVELOPMENT, CITING AI SAFETY.

11:38 WILL WE SEE THAT HAPPEN IN THE U.S. SIDE OF THINGS? COULD THAT HAPPEN CHINA -- HELP TRYING TO LEAPFROG ADVANCES IN AR? ROBERT: I DO NOT THINK IT IS VERY LIKELY FOR THAT SLOW DOWN TO ACTUALLY HAPPEN IN THE U.S. BECAUSE OF THE COMMERCIAL PRESSURES AND POLITICAL PRESSURE NOW WITH PRESIDENT TRUMP HIMSELF ENCOURAGING THIS TO CONTINUE. AT THE END OF THE DAY, THE GOVERNMENT CANNOT REQUIRE COMPANIES ACCELERATE OR SLOW DOWN ACTUAL PROGRESS. BUT JUST THE NATURAL PRESSURE OF COMPETITION WILL ESSENTIALLY FORCE THEM TO KEEP PROGRESSING. WHAT IS INTERESTING TO CONSIDER IT EVEN UNDER A HYPOTHETICAL SCENARIO IN WHICH THE U.S.

12:18 IT DOES SLOW DOWN, GIVEN THE CONCENTRATION OF OPENAI, ANTHROPIC, AND FRONTIER, THAT DOES NOT MEAN THEY ARE TRYING TO LEAD BECAUSE THERE IS AN UNSETTLED QUESTION ABOUT HOW MUCH DISTILLATION MIGHT MATTER WERE NOT FOR CHINESE MODELS. THE U.S. IS INCREDIBLY IMPORTANT CHINESE PROGRESS. TRY HAS DENIED THAT. IT'S IMPORTANT TO CONSIDER. IT IS NOT A COMPLETELY SEPARATE INDEPENDENT TRAJECTORY.

12:54 SHERY: BLOOMBERG ECONOMICS TECH ANALYST ROBERT LEE, THANK YOU BOTH. COMING UP, WE DIG INTO THE PROBLEM OF PROFITABILITY WE WERE JUST TALKING ABOUT FOR CHINA AND HOW THEY ARE DEALING WITH HIGHER POWER DEMAND. MORE WITH A FANCY GROUP. THIS IS BLOOMBERG. THIS IS BLOOMBERG.

13:29 >> SINCE DEEPSEEK BROKE ONTO THE GLOBAL SCENE AND MOVED MARKETS IN 2025, MANY MORE CHINESE MODELS HAVE BECOME FAMILIAR IN THE INDUSTRY AS PERFORMANCE IMPROVES. THIS RANKING SHOWS CHINESE NAMES INCLUDING ALIBABA AND DEEPSEEK RANKING HIGHER THAN SOME MODELS FROM BIG U.S. FIRMS ON INTELLIGENCE, SPEED, COST, AND VERBOSITY. AMERICAN PRODUCTS STILL TAPE -- TAKE THE TOP SPOTS. THE CHINESE STRATEGY HAS BEEN TO COMPETE ON COST AND WORRY ABOUT PROFITS LATER. WE SPOKE RECENTLY WITH THE MINIMAX COFOUNDER AND PRESIDENT TO DISCUSS HOW THE CHINESE AI PLANS TO BATTLE INTENSE GLOBAL COMPETITION.

14:17 >> THE KEY STRATEGY. MINIMAX, WE THINK THE INTELLIGENCE AND COST IS NOT A TRADE-OFF. THE SECOND IS OPENNESS. WE THINK OPENNESS IS OUR ASSET. COMING FROM OPENING COMMUNITIES FOR OUR FUTURE R&D. >> IS IT FAIR TO SAY THEN THAT ADOPTION IS THE NUMBER ONE PRIORITY? >> I THINK INTELLIGENCE IS THE NUMBER ONE PRIORITY. TOKEN CONSUMPTION, TOKEN VOLUME. ADOPTION IS IMPORTANT.

14:52 ALSO GROSS PARVIN -- PROFIT MARGIN WILL BECOME MORE IMPORTANT. >> WHAT ABOUT SHIP COMPLAINTS -- CONSTRAINTS? THE KEY QUESTION. >> FRONTIER LABS ARE FACING THE CONSTRAINT, ESPECIALLY CHIP CONSTRAINT. THAT'S WHY WE PAY MORE ATTENTION ON OUR TACTICAL LEADERSHIP IN MODEL ARCHITECTURE, INFRASTRUCTURE, AND ORGANIZATION. WE INVENTED MINIMAX, WHICH IS 10 TIMES THE SPEED COMPARED TO REGULAR ARCHITECTURE WHICH WILL DEFINITELY ACCELERATE OUR LEARNING PROCESS.

15:32 ALSO IT WILL REQUIRE LESS COMPUTE. WE REFINED OUR MORTAL ARCHITECTURES. THIS IS A DESIGN PRINCIPLE FROM THE BEGINNING. >> IC. >> PROVIDING FRONTIER MODELS WITH COMPETITIVE PRICE DRIVES COMPANY SUCCESS. SHERY: THE MINIMAX COFOUNDER WITH DAVID ON GLASS. FANCY IS A CHINESE AI INFRASTRUCTURE PLATFORM WORKING ON EVERYTHING FROM COMPUTING POWER, MODELS, AND APPLICATIONS TO AI ENABLED HARDWARE. I SPOKE WITH THEIR CHIEF STRATEGY OFFICER MARIANNE SAYING ABOUT HOW THEY ARE KEEPING COSTS DOWN AND HOW THAT PLAYS INTO THE PUSH FOR PROFITABILITY.

16:19 >> WE FOCUSED ON COST EFFICIENCY. BRINGING DOWN THE COST OF INFERENCING AND PRODUCING HIGHER QUALITY OF TOKEN OUTPUT. SHERY: GIVEN THE BUSINESS THAT PHANCY HAS WHICH IS PRETTY WIDE, WHAT VISIBILITY DO YOU HAVE ON CHINESE DATA CENTERS, WHERE THEY ARE BEING BUILT AND PERHAPS EVEN THE AVAILABILITY OF ENOUGH POWER IN ORDER TO POWER THE NEXT GENERATION OF ARTIFICIAL INTELLIGENCE? MARYANN: THE POWER DEMAND, THE DEVELOPMENT OF RENEWABLE ENERGY HAS BEEN AHEAD OF GLOBAL AVERAGE.

16:58 PARTICULARLY IN CHINA, POWER DEMAND OR POWER SUPPLY HAS NOT BEEN A CRITICAL CONSTRAINT FOR OPERATORS HERE. THE GOVERNMENT REGULATORS HAD THE FORESIGHT TO DEVELOP INTO OUR FIVE-YEAR PLAN TO MAKE SURE RENEWABLE ENERGY HAS BEEN WELL PUT IN PLACE FOR THE LAST DECADE IF NOT MORE. IF YOU LOOK AT THE BRAKE TOWN OF OUR COST BREAKDOWN, POWER IS A SMALLER BREAKDOWN OF OUR GOODS FOR A IDC. SHERY: SOME OF AMERICA'S LEADING AI EXECUTIVES ARE MAKING A CALL TO SLOW DOWN THE DEVELOPMENT OF ARTIFICIAL INTELLIGENCE.

17:39 HOW IS THIS DEBATE PLAYING OUT IN CHINESE LABS? MARYANN: I REMEMBER SOME OF OUR WELL-KNOWN, HIGHLY RESPECTED SCIENTISTS USED TO TELL ME THAT IN A LAB, WE NEED TO LEARN HOW TO DEAL WITH HUNDREDS AND THOUSANDS OF FAILURES AND ERRORS IN ORDER TO GET ONE GOOD OUTCOME. THE DISCOVERY OF ELECTRICITY. WE WILL NEED TO LEARN HOW TO ADAPT TO A VARIETY OF CHALLENGES OR UNEXPECTED OUTCOME.

18:14 WE NEED TO HAVE TRUST THAT HUMANS WILL OVERCOME. WE COLLECTIVELY WILL HAVE THE REGULATORY FRAMEWORK AND HUMAN GUARDRAILS TO ENSURE THAT WE ARE CONSISTENTLY MAKING THE RIGHT PROGRESS. SHERY: THIS ANXIETY OVER AI TECHNOLOGY COMING ON THE FOCUS OF TRYING TO WIN THE RACE WHEN IT COMES TO DEVELOPMENT OF ARTIFICIAL GENERAL INTELLIGENCE. WHEN IT COMES TO CHINA, IS THAT THE FOCUS RIGHT NOW? ARE WE TALKING ABOUT VERTICAL INTEGRATION, WIDESPREAD USE IN ORDER TO TRY TO MAKE IT PROFITABLE AT THIS POINT? WHERE IS THE GENERAL DIRECTION OF AI DEVELOPMENT HEADED? MARYANN: YES.

18:55 YOU JUST BROUGHT UP A GOOD POINT. PROFITABILITY. WE DO HAVE A FORECAST THAT IN A FEW YEARS TIME, MANY OF THE AI SERVICE PROVIDERS SHOULD BE PROFITABLE. WE DELIVERED A CONSISTENT PROFITABILITY SINCE THE END OF 2025 AND WE WILL CONTINUE TO DO SO. WE BELIEVE MANY OF OUR PARTNERS IN THE ECOSYSTEM WILL ALSO BE ABLE TO DO SO. OUR ENTERPRISE CUSTOMERS ARE VERY FARKAS DON R.O.I.

19:33 RETURNS AND ALSO IDENTIFIABLE, MEASURABLE, QUANTIFIABLE PERFORMANCES THAT COULD LEAD TO POSITIVE OUTCOMES IN TERMS OF WHAT AGENTIC AI HAS BROUGHT IN TERMS OF WORKFLOW IMPROVEMENT. REPLACEMENT. THOSE ARE THE QUANTIFIABLE MEASURES THAT WE ARE HELPING OUR ENTERPRISE CUSTOMERS WITH ADOPTING THE USE OF A VARIETY OF AGENTIC WORKFLOWS. R.O.I., PASSIVE RETURNS, PROFIT ABILITIES HAVE BEEN SOMETHING THAT WE HAVE BEEN VERY FOCUSED ON. SHERY: PHANCY CHIEF STRATEGY OFFICER MARYANN TSENG. AS THE U.S.

20:13 AND CHINA TAKE DIFFERENT APPROACHES TO ADVANCING AI, WE LOOK AT WHO STANDS TO BENEFIT INTO RISKS BEING LEFT BEHIND. YOU ARE WATCHING BLOOMBERG TECH ASIA. ♪ SHERY: AI SUPERIORITY IS CENTRAL TO GAINING GLOBAL GEOPOLITICAL INFLUENCE. THE LEADERS OF THE U.S. AND CHINA MIRROR HOW THE RESPECTIVE AI FIRMS OPERATE. PRESIDENT TRUMP IS TAKING A CUT APPROACH. SAYING, WHOEVER WINS AI WINS.

20:55 CHINA IS LEANING ON ITS AI CHAMPIONS MORE OPEN STRATEGY. PRESIDENT XI TELLING THE SUMMIT IN INDIA THAT OPEN-SOURCE COOPERATION IN LLM'S WILL BUILD AN OPENAI ECOSYSTEM. EXPERTS EXPECT THE LIKELY OUTCOME TO BE A MIX OF THE TWO APPROACHES AND THE WILLINGNESS OF POLICYMAKERS TO INTERVENE COULD DETERMINE THE FATE OF INDUSTRIES, ECONOMIES, AND WORKERS AROUND THE WORLD. KAI FU LEE SPOKE TO US ABOUT WHY HE THINKS CHINA CAN WIN THE AI RACE WITH THE U.S..

21:33 >> CHINA IS JUST BETTER IN MANUFACTURING, SUPPLY CHAIN, AND COST MANAGEMENT. FASTER ITERATIONS FOR HARDWARE. >> DO WE NEED TO BE LOOKING AT IT AS COMPETITION? YOU ARE FAMILIAR. WE SEEM TO BE OBSESSING OVER, THIS IS NOT JUST ON OUR LEVEL. THIS IS AT THE CORPORATE LEVEL, THE GOVERNMENT LEVEL. I WONDER IF WE ARE BARKING UP THE WRONG TREE. >> U.S. WILL BE AHEAD IN MANY THINGS SUCH AS ENTERPRISE AI, MAKING MONEY, BUILDING BREAKTHROUGH TECHNOLOGY MODELS. CHINA WILL BE HEADING OTHER THINGS. MAYBE CONSUMER APPLICATIONS, AI DEVICES. SO I THINK THERE WILL BE PLENTY OF ROOM FOR BOTH COUNTRIES TO WIN.

22:16 WHAT I WORRY ABOUT IS THE POOR WERE COUNTRIES -- POORER COUNTRIES THAT DON'T HAVE THIS GDP GROWTH. THE WORKFLOW -- WORKFORCE WILL BECOME REPLACED. SHERY: THAT'S IT FOR THIS EPISODE OF BLOOMBERG TECH ASIA. STAY NEXT MONTH FOR MORE. CHECK OUT THE BLOOMBERG VIDEO HUB. ♪