Bank of America highlights the need for US-China cooperation in AI development, emphasizing global supply chain dependencies.
Bank of America’s co-head of Chinese equities, Mattie Zhao, stated that both the United States and China need global collaboration to achieve technological leadership in artificial intelligence (AI). In a recent interview, she highlighted the importance of international partnerships due to the interconnected nature of supply chains.
While Zhao acknowledged the distinct advantages each country possesses, she emphasized their reliance on global supply chains. China excels in energy infrastructure and manufacturing, yet it depends on imports for advanced chips and high-tech materials.
Comparative Advantages
According to Zhao, China has a strong energy infrastructure, but the US is facing challenges with outdated power grids, averaging between 30 to 40 years in age, compared to China’s 15 to 20 years. The rapid expansion of data centers in the US has also faced pushback from communities concerned about rising electricity costs.
“Different countries have different limitations,” Zhao remarked.
She warned that the US might encounter limitations in expanding its AI infrastructure, while China needs advancements in chip manufacturing to progress further.
The Global AI Ecosystem
Zhao underscored that AI development is inherently global, with both nations relying on foreign resources. For instance, South Korea is a leader in memory production, and Japan provides essential high-tech materials and equipment. Meanwhile, China is increasingly becoming a key supplier of AI infrastructure.
Notably, Chinese exports of transformers for energy grids are expected to reach 64.6 billion yuan (approximately $9.6 billion) by 2025, reflecting a significant year-on-year growth. Zhao expects similar trends to continue into 2026.
Even as the US and China seek to lessen their mutual dependencies, the global nature of the AI sector remains intact. Zhao stated, “Competition and cooperation will exist simultaneously.”
Upcoming AI Dialogue
Zhao's remarks coincided with plans for a meeting between Donald Trump and Xi Jinping, where AI is anticipated to be a key topic. Prior to these discussions, delegations from both countries agreed to initiate a separate dialogue on AI and to establish a bilateral trade body aimed at enhancing collaboration.
Despite these efforts, a technological rivalry continues, with accusations from Washington regarding Chinese firms replicating American AI models. Conversely, Beijing criticizes US efforts to limit the progress of advanced AI technologies.
Amidst these tensions, both nations are attempting to reduce reliance on foreign technologies. However, Zhao pointed out that the AI industry remains globally structured, encompassing various components such as chips, memory, materials, equipment, electricity, and cooling systems.
Furthermore, estimates from the Rhodium Group indicate that the annual revenue of the seven largest Chinese AI models is around 10% of that of US firms like OpenAI and Anthropic.
