The Banking Executive Magzine - July 2025 Issue

Who’s Winning in AI—China or America? A FAIR SCORECARD FOR 2025 Frontier models & platforms: U.S. leads. Greater capital intensity, cloud scale, and access to top GPUs keep American firms ahead at the bleed- ing edge. Compute access: U.S. leads, and pol- icy keeps widening the gap at the very top end—though China is pro- gressing with domestic accelerators and efficiency gains. Patents & publications: China leads on volume, signaling broad experi- mentation and sector breadth, even as the very top general-purpose sys- tems remain mostly U.S.-built. Industrial deployment: Advantage China in “AI-at-scale” within domes- tic services and manufacturing; ad- vantage U.S. in platform-style deployment via global SaaS and cloud ecosystems. Governance capability: Different strengths. The U.S. is shaping global norms for frontier safety and model handling; China is calibrating fast im- plementation rules for consumer and enterprise use at home. Net-net: In 2025, the United States is ahead in frontier AI, which sets stan- dards and captures outsize value when breakthroughs land. China is ahead in breadth of applied adoption across key domestic sectors, and its IP engine is prolific. Neither position is static—and policy will continue to reshape the field. HOW LEADERS SHOULD RESPOND (PRACTICAL MOVES) 1. Pick the right race. If your advantage depends on fron- tier capability, align with U.S. clouds, model providers, and chip roadmaps; design for rapid model re- fresh and agentic workflows. If your advantage is in industrial deploy- ment, study Chinese “AI+” pat- terns—lean models, edge inference, data-ops discipline—and adopt where it fits. 2. Plan for compute volatility. Export rules can reprice supply overnight. Build multi-path compute strategies (on-prem + multi-cloud + emerging domestic accelerators), and design models with parameter- efficiency and distillation in mind. 3. Localize governance. Operationalize NIST AI RMF for in- ternal controls and procurement; in China, harden content, provenance, and security reviews to meet local service rules. Treat compliance as a product feature, not a paperwork burden. Own your problem spaces. China’s patent surge shows how quickly applied niches get captured. If you rely on proprietary workflows (e.g., underwriting, logistics, clinical pathways), convert know-how into defensible data and micro-models, not just generic LLM prompts. 4. Talent and partners. Whether your build center is Dubai, Riyadh, Singapore, or Frankfurt, align with ecosystems that give you access to models, data partnerships, and compliance support. In a fast-moving field, speed to safe deployment is the real moat. Bottom line: Asking “who is winning?” only makes sense if you specify the race. Today, the U.S. is winning the fron- tier, and that matters enormously for platform economics and global stan- dards. China is winning on breadth of applied use and IP volume, which matters for sustained diffusion across the real economy. For executives, the play is not to pick a flag—it’s to de- sign an AI strategy that borrows strength from both models: frontier where it differentiates, “AI+” where it compounds. ISSUE 199 JULY 2025 the BANKING EXECUTIVE 11