The Banking Executive Magzine - July 2025 Issue

Who’s Winning in AI—China or America? 1) CAPITAL, COMPANIES, AND THE FRONTIER On the money and model frontier, the United States holds a command- ing lead. According to Stanford’s 2025 AI Index, U.S. private AI invest- ment reached $109.1 billion in 2024, almost 12× China’s $9.3 bil- lion. That capital is underwriting an ecosystem of hyperscalers (Mi- crosoft, Amazon, Google), chipmak- ers (NVIDIA, AMD), and frontier-model labs (OpenAI, An- thropic, Google DeepMind, Meta) that continue to set the technical pace. Model output tracks the money. The same report notes that in 2024 U.S.- based institutions produced 40 no- table AI models versus 15 for China—while also acknowledging that the performance gap is narrow- ing as Chinese teams climb rapidly on common benchmarks. What it means: For frontier capabil- ity—multimodal models, agentic sys- tems, and foundation-model platforms that others build atop—the U.S. remains the reference point. Ac- cess to American cloud scale and leading GPUs compounds this ad- vantage. 2) COMPUTE AND CHIPS: UNEVEN ACCESS, SHIFTING RULES Compute is the oxygen of modern AI—and here policy shapes the mar- ket. U.S. export controls introduced in 2022–2023 and tightened in 2025 restrict China’s access to the highest- end AI accelerators and, more re- cently, place worldwide controls on the diffusion of the most advanced closed-weight AI models and their model weights. The screws continue to turn. On Sep- tember 2, 2025, the U.S. revoked fast-track export status for shipments of certain U.S.-origin tools to TSMC’s Nanjing fab, signaling less flexibility for advanced equipment flows into China even via non-Chinese compa- nies. What it means: U.S. firms enjoy more ready access to top-tier com- pute; Chinese labs and clouds can still scale—but often with domestic accelerators and more emphasis on efficiency. Constraints nudge Chi- nese players toward smaller, highly optimized models and application- first strategies. 3) PATENTS, PUBLICATIONS, AND IP GRAVITY On intellectual property, China leads by volume—dramatically so in gen- erative AI. WIPO’s 2024 landscape report finds 38,000+ GenAI inven- tions from China between 2014– 2023, about six times the U.S. count, with Chinese firms (Tencent, Ping An, Baidu, Alibaba, ByteDance) promi- nent among the top assignees. Stanford’s 2025 AI Index similarly highlights China’s lead in AI publica- tions and patents, even as the U.S. leads in notable model outputs. What it means: IP quantity is not the same as platform dominance, but it ISSUE 199 JULY 2025 the BANKING EXECUTIVE 9