According to Bank of America’s co-head of Chinese equities, Mattie Zhao, neither the United States nor China can achieve technological superiority in artificial intelligence (AI) without international collaboration. In an interview with SCMP, she emphasized the necessity of global partnerships due to their intertwined supply chains.
While both nations possess unique strengths, Zhao pointed out that they are reliant on deeply interconnected global supply chains.
China has chips, the US has electricity
Zhao noted that China holds advantages in energy infrastructure and manufacturing equipment. However, it still depends on foreign suppliers for advanced chips, memory, and certain high-tech materials.
Conversely, the US faces challenges with its energy infrastructure, where the average age of power grids is between 30 to 40 years, compared to around 15 to 20 years in China. The rapid construction of data centers in the US has already met with resistance from local communities due to concerns over rising electricity costs.
“Different countries have different limitations,” Zhao remarked.
She believes that the United States may encounter restrictions in available capacity for further expansion of its AI infrastructure, while China requires breakthroughs in advanced chip manufacturing.
AI relies on global supply chains
Zhao stressed that the advancement of AI cannot be contained within a single nation. China remains dependent on foreign equipment and materials, while the US relies on international energy and manufacturing infrastructure.
As examples, she cited South Korea, which excels in memory production, and Japan, known for supplying high-tech materials and equipment. At the same time, China is becoming a major supplier of AI infrastructure.
Specifically, Chinese exports of transformers necessary for energy grids are projected to reach 64.6 billion yuan ($9.6 billion) by 2025, marking an approximate 30% increase year-on-year. Zhao indicated that similar growth rates are expected in 2026.
Thus, even attempts by the US and China to reduce mutual dependence do not eliminate the broader international connectivity of the sector. “Competition and cooperation will exist simultaneously,” Zhao stated.
US and China Prepare for AI Dialogue
Zhao's comments came ahead of a meeting between Donald Trump and Xi Jinping, where AI is expected to be a topic of discussion, according to SCMP.
Prior to the talks, delegations from the US and China agreed to establish a separate dialogue on AI. Additionally, both parties plan to launch a bilateral trade body. American representatives asserted that these initiatives should foster greater collaboration between the two nations.
Despite this, the technological rivalry persists. Washington has accused Chinese developers of using distillation methods to replicate the capabilities of American AI models, while Beijing criticizes US initiatives aimed at limiting the advancement of cutting-edge AI systems.
Amidst this backdrop, both countries are simultaneously attempting to reduce dependence on critically important foreign technologies. However, Zhao highlighted that the structure of the AI industry remains global, encompassing chips, memory, materials, equipment, electricity, and cooling systems.
It is worth noting that the combined annual revenue of the seven largest Chinese AI models is approximately 10% of that of American firms OpenAI and Anthropic, according to estimates from the Rhodium Group.