Episode 46 — Global Competition in AI — U.S., China, and Beyond

Artificial intelligence has become more than a technological advance—it is now a centerpiece of global competition, shaping how nations view their future security, prosperity, and influence. Governments increasingly treat AI as a strategic priority, investing in research, infrastructure, and regulation to secure leadership. Unlike past technologies confined to specific industries, AI has broad applications in defense, health, finance, and communication, making its mastery a marker of both economic strength and geopolitical power. The contest is most visible between the United States and China, whose rivalry defines much of the global narrative. Yet other regions, including Europe, Japan, and the Global South, also play critical roles, whether by shaping ethical standards, pioneering niche innovations, or leveraging unique datasets. Global competition in AI is not just about who develops the best algorithms but about who sets the rules, builds the infrastructure, and frames the values that will guide this transformative technology for decades to come.

AI is increasingly recognized as a strategic resource, comparable to oil in the twentieth century or nuclear energy during the Cold War. Nations see AI leadership as essential to their economic growth, national security, and global influence. The ability to develop and deploy advanced AI systems determines competitiveness in industries ranging from logistics to biotechnology. Military planners also view AI as a decisive advantage, enabling more precise targeting, faster decision-making, and more resilient defense systems. Economically, AI promises to boost productivity and drive GDP growth, making leadership a direct path to prosperity. Strategically, nations worry that dependence on foreign AI technologies could erode sovereignty, creating vulnerabilities in both civilian and defense systems. As a result, AI has shifted from being a research field to being a matter of national strategy, with governments crafting policies, funding research, and protecting intellectual property to secure their place in the global AI hierarchy.

The United States remains a global leader in AI, driven by a powerful ecosystem of research universities, technology companies, and venture capital. Institutions like MIT, Stanford, and Carnegie Mellon provide cutting-edge research, while corporations such as Google, Microsoft, Amazon, and Meta push commercial applications. The U.S. benefits from a dynamic innovation culture, deep talent pools, and strong links between academia and industry. Military agencies like DARPA also fund foundational AI research, ensuring national security applications are integrated with broader innovation. However, challenges remain: immigration restrictions affect the flow of global talent, while public debate grows over regulation and ethical oversight. Despite these hurdles, the U.S. retains a competitive edge through its entrepreneurial environment, robust investment networks, and global influence in setting technical standards. American leadership in AI is as much about shaping global discourse as it is about producing superior algorithms, reinforcing its central role in the competition for technological dominance.

China has positioned AI as a core element of its national strategy, aiming to achieve global leadership by the early 2030s. Backed by massive government investment, China has built thriving AI hubs in cities like Beijing, Shenzhen, and Hangzhou. Companies such as Baidu, Alibaba, Tencent, and Huawei play key roles, supported by state-driven policies that prioritize scale, infrastructure, and integration into daily life. China’s advantage lies in its vast datasets, derived from a large, digitally connected population and extensive surveillance systems. These provide fuel for training powerful AI models. The government’s centralized approach enables rapid implementation of AI in sectors like healthcare, transportation, and defense. However, China faces challenges in semiconductor independence and international pushback against its use of AI for surveillance and censorship. Still, its strategy demonstrates how AI is not merely technological but deeply political, aligning innovation with state objectives of economic growth, social control, and military modernization.

The European Union approaches AI leadership differently, emphasizing ethics, regulation, and human-centered design. Rather than competing directly on scale with the U.S. or China, the EU seeks to shape global norms by establishing frameworks that prioritize transparency, accountability, and fairness. The proposed AI Act, for example, categorizes applications by risk and imposes strict requirements for high-risk systems in areas like healthcare, employment, and policing. Europe also funds research through initiatives like Horizon Europe, supporting academic and industry collaboration across member states. While critics argue that heavy regulation may slow innovation, supporters see it as a strategic advantage, positioning the EU as the global authority on ethical AI governance. European companies and universities also contribute significant research, particularly in robotics and symbolic AI. The EU’s role highlights that competition is not only about technology but also about values, with Europe striving to ensure AI development respects human rights and democratic principles.

Beyond the U.S., China, and the EU, other regional leaders contribute significantly to global AI competition. Japan and South Korea invest heavily in robotics and automation, building on their long traditions of technological innovation. Israel has emerged as a powerhouse in AI startups, cybersecurity, and defense applications, leveraging strong ties between academia, industry, and military. Canada is recognized for its pioneering work in deep learning, with researchers like Geoffrey Hinton shaping the foundations of modern AI. These nations may not rival the U.S. or China in scale but play outsized roles in research breakthroughs, specialized applications, and thought leadership. Their contributions diversify the global AI landscape, ensuring innovation does not flow solely from two poles. Regional leaders also engage in partnerships, both with larger powers and among themselves, reinforcing the reality that AI competition is multipolar, with many actors shaping progress across different domains and approaches.

Talent competition is one of the fiercest aspects of global AI rivalry. Skilled researchers, engineers, and data scientists are in high demand, with universities, companies, and governments offering lucrative incentives to attract them. The U.S. has historically benefited from drawing international talent, though visa restrictions pose challenges. China invests heavily in cultivating domestic expertise while also luring back scientists trained abroad. Europe emphasizes retention and mobility within its member states, while Canada, Israel, and others attract talent through strong research environments and quality of life. Brain drain remains a concern, as researchers from developing nations often move to hubs in North America or Asia, reinforcing inequalities. Beyond technical skills, there is growing recognition of the need for interdisciplinary expertise in ethics, policy, and governance. Talent is not just about numbers but about ecosystems that support collaboration, diversity, and sustained innovation. In this race, people—not just machines—are the decisive factor.

Data is another critical resource in AI competition, serving as the raw material for training advanced systems. Countries with large, digitally active populations—such as China—enjoy natural advantages in generating vast datasets. The U.S., while smaller in population, benefits from a globally dominant internet ecosystem and widespread commercial data collection. Europe prioritizes privacy protections, creating tension between ethical standards and competitiveness. Nations recognize that data sovereignty is strategic: controlling and securing national datasets ensures independence and protects against foreign influence. Yet data alone is insufficient; its value depends on quality, diversity, and the infrastructure to process it effectively. International disputes over data access highlight its strategic importance, as countries restrict flows across borders for security and economic reasons. Data as a resource underscores that AI competition is not only about algorithms but about who controls the pipelines of information that make intelligent systems possible in the first place.

Infrastructure investments—particularly in supercomputing, cloud platforms, and semiconductor manufacturing—form the backbone of national AI strategies. Advanced processors are essential for training large-scale models, and supply chain disruptions expose vulnerabilities in nations reliant on imports. The U.S. and allies dominate semiconductor design, but China is investing heavily to achieve independence. Cloud computing platforms, led by firms like Amazon, Microsoft, Alibaba, and Google, provide the capacity for AI research at scale, while national supercomputing centers drive government and academic projects. Infrastructure also includes undersea cables, data centers, and energy resources, linking AI development to global networks of physical and digital systems. Without robust infrastructure, even strong research environments cannot achieve leadership. Thus, nations compete not only in algorithms but also in the material foundations of AI. Control over semiconductors, cloud markets, and supercomputing capacity is increasingly viewed as strategic leverage in the global AI race.

Military competition in AI reflects the broader intersection of technology and security. Nations see AI as essential for defense, from autonomous drones and predictive maintenance to cyber warfare and decision support. The U.S. invests through agencies like DARPA and partnerships with defense contractors, while China integrates AI directly into its military modernization strategy. Russia emphasizes AI for information warfare and autonomous weapons, while Israel advances AI in missile defense and surveillance. Military applications raise ethical and strategic concerns, as autonomous weapons compress decision-making timelines and increase risks of escalation. The potential for an AI arms race looms, with nations accelerating development to avoid falling behind. This militarization of AI underscores the dual-use dilemma: technologies beneficial in civilian life can destabilize global security when weaponized. It also highlights the urgency of international norms to prevent destabilizing or reckless deployment in conflict scenarios.

The economic impacts of AI leadership are profound, influencing GDP growth, trade competitiveness, and industrial development. Nations that lead in AI capture advantages in automation, healthcare, finance, and creative industries, generating wealth and attracting investment. Studies suggest AI could add trillions of dollars to the global economy by mid-century, but benefits will not be evenly distributed. Countries that fail to compete risk stagnation, dependency, or economic marginalization. AI also reshapes labor markets, creating new roles even as it displaces others, forcing nations to invest in reskilling and education. Leadership in AI becomes a multiplier: it not only drives economic growth but also attracts talent, builds global influence, and reinforces military power. The economic stakes of AI competition explain why governments treat it as a top priority. Prosperity in the twenty-first century may hinge as much on algorithmic strength as on traditional resources like energy or trade routes.

International collaborations provide a counterbalance to rivalry, enabling shared research and standards. Joint projects between universities, multinational corporations, and research labs foster knowledge exchange and innovation. Initiatives like the Global Partnership on AI seek to create cooperative frameworks for responsible development. Collaborations also occur in niche areas, such as European and Asian partnerships in robotics or U.S.–Canadian research in deep learning. However, these efforts often exist alongside competition, as nations remain cautious about sharing sensitive technologies. Collaboration demonstrates that AI is not a purely zero-sum field; knowledge can be shared to address global challenges such as climate change or pandemics. Yet cooperation depends on trust, and geopolitical tensions often limit its scope. International collaboration highlights the tension between AI as a competitive advantage and AI as a shared tool for solving humanity’s common problems. Navigating this balance will shape the future trajectory of global AI development.

Standards development has become a central arena of AI competition, as nations recognize that whoever sets technical and ethical norms gains influence over global adoption. Standards cover areas such as data privacy, bias testing, safety protocols, and interoperability of systems. The U.S. often emphasizes industry-led frameworks, while the EU pushes binding regulations grounded in human rights. China advances its own standards, seeking to export them alongside its technologies to developing nations. International organizations like ISO and IEEE work to harmonize efforts, but geopolitical rivalries complicate consensus. Standards are not just technical; they embody values and priorities. For example, a standard that prioritizes surveillance raises different implications than one emphasizing privacy. The battle over standards demonstrates that AI competition is not only about who builds the best systems but also about who defines the rules by which systems operate, influencing global governance and trust.

Geopolitical tensions in AI are increasingly visible in export controls, sanctions, and trade disputes. The U.S. has restricted exports of advanced semiconductors and AI-related technologies to China, citing national security concerns. China, in turn, invests heavily in domestic innovation to reduce reliance on foreign suppliers. These measures extend beyond economics, shaping alliances and rivalries. Smaller nations are often caught between competing powers, pressured to align with one bloc or another. Trade disputes over AI tools and infrastructure highlight the entanglement of technology and geopolitics, where algorithms and chips are as strategic as oil or steel once were. These tensions risk creating fragmented ecosystems, where incompatible technologies and governance systems divide the world. Export controls illustrate that AI competition is not confined to labs but plays out in boardrooms, legislatures, and diplomatic arenas, reflecting the inseparability of technology and statecraft in the twenty-first century.

Fragmentation is one of the greatest risks of global AI competition. If nations develop separate ecosystems with incompatible standards, interoperability across borders may break down. This could hinder collaboration, slow innovation, and deepen divides between regions. Fragmentation also risks exacerbating inequalities, as developing nations may be forced to choose between technological blocs, limiting access and flexibility. While competition drives innovation, unchecked fragmentation could undermine AI’s global potential, preventing cooperative efforts on shared challenges like climate change, pandemics, or financial stability. Avoiding this outcome requires balancing national interests with global collaboration, ensuring that rivalry does not create walls that stifle progress. Fragmentation underscores the paradox of AI competition: while nations seek independence and leadership, the challenges AI is best suited to address are global in scope, requiring shared solutions rather than isolated development.

Ethical and human rights dimensions must remain central in discussions of AI competition. Nations that prioritize surveillance and control risk undermining privacy, freedom, and fairness. For example, AI deployed for mass monitoring may enhance state security but at the cost of individual liberties. Conversely, nations that emphasize transparency and accountability may foster trust but face slower adoption. Competition can incentivize cutting corners, prioritizing speed over ethics. This raises the danger that global rivalry could erode hard-won protections for human rights. At the same time, embedding ethics into AI development offers a path to leadership, as citizens and consumers increasingly demand responsible systems. The ethical dimension highlights that AI competition is not morally neutral; it reflects values and choices. How nations balance innovation with rights will not only determine their reputations but also shape the kind of world AI ultimately helps create.

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Case studies of the United States AI ecosystem reveal how academic excellence, corporate innovation, and military investment intersect to sustain leadership. Universities such as MIT, Stanford, and Carnegie Mellon have long nurtured groundbreaking research, often in close collaboration with industry. Tech giants like Google, Microsoft, Amazon, and Meta not only fund academic labs but also commercialize AI at scale, from cloud platforms to consumer applications. Defense agencies including DARPA provide sustained funding for high-risk, high-reward projects, ensuring national security considerations remain aligned with broader innovation. Venture capital strengthens this ecosystem by channeling resources to startups, enabling rapid experimentation and growth. The U.S. also benefits from a cultural emphasis on entrepreneurship and risk-taking, attracting global talent despite immigration challenges. This multifaceted system demonstrates how strength in AI does not stem from a single sector but from the synergy of academia, industry, government, and finance working together to create a fertile environment for innovation.

China’s AI ecosystem reflects the power of state-driven coordination combined with entrepreneurial dynamism. The government has declared AI a national priority, embedding it in five-year plans and committing massive funding to research, infrastructure, and industry. Major firms such as Baidu, Alibaba, Tencent, and Huawei anchor the ecosystem, supported by thriving startups and strong university programs. Data advantages fuel growth, as China’s vast, digitally active population provides training material for algorithms at unparalleled scale. AI is rapidly integrated into healthcare, education, transport, and urban management, while defense applications ensure alignment with national security. Surveillance technologies, though controversial abroad, illustrate how China deploys AI in governance as well as commerce. Challenges remain, particularly in reliance on imported semiconductors and skepticism from international partners. Yet China’s ecosystem demonstrates how centralized planning and rapid deployment can accelerate progress, making it a formidable competitor to the U.S. in shaping the future of global AI leadership.

The European Union’s AI ecosystem highlights a distinctive approach that prioritizes governance and ethics alongside technological progress. The EU recognizes it cannot outspend or outscale the U.S. or China but seeks leadership in setting global standards. The proposed AI Act exemplifies this strategy, establishing strict risk-based regulations to ensure fairness, transparency, and accountability. Europe invests in academic research through frameworks like Horizon Europe, fostering collaboration across member states. Countries like France, Germany, and Finland have vibrant AI research hubs, while companies in robotics and automation contribute specialized expertise. Critics argue the EU risks slowing innovation with regulation-heavy policies, yet others see this as strategic: by becoming the global authority on ethical AI, Europe shapes how technology is perceived and deployed worldwide. The EU ecosystem underscores that leadership in AI is not only about algorithms or infrastructure but also about defining the rules and values by which systems operate.

Multinational corporations play an outsized role in global AI development, often wielding influence rivaling that of nation-states. Companies like Google, Microsoft, and Amazon dominate cloud platforms and foundational models, providing tools that underpin research and industry worldwide. Chinese firms like Tencent, Alibaba, and Huawei extend influence across Asia and Africa, exporting both infrastructure and governance models. These corporations shape not only technology but also global policy, lobbying governments and setting de facto standards through widespread adoption of their systems. Their scale allows them to invest in massive compute resources and attract top talent, reinforcing dominance. Yet reliance on a handful of firms creates risks of monopolization and concentration of power. Multinationals highlight the dual nature of global AI competition: while nations contest leadership, corporations increasingly define the practical contours of development, deployment, and ethics. They demonstrate that global competition is not simply state versus state but a complex interplay between public and private power.

Open source initiatives provide a counterbalance to concentrated corporate power, fostering global collaboration in AI research and application. Frameworks such as TensorFlow and PyTorch are shared across borders, enabling researchers from any country to contribute to and benefit from cutting-edge tools. Open source projects democratize access, lowering barriers for smaller firms and academic institutions. They also encourage transparency, as code can be inspected, tested, and improved collectively. However, open source also creates risks, as powerful models can be repurposed for malicious ends, from disinformation to cyberattacks. Still, the global community often embraces open sharing as a way to accelerate innovation and counteract monopolization. Open source collaboration illustrates that AI is not purely competitive; it is also cooperative, built on the collective efforts of thousands of researchers and practitioners. It reminds us that even amid global rivalry, scientific progress often advances through openness, trust, and shared knowledge.

The Global South faces both opportunities and challenges in the AI race. On one hand, AI applications in agriculture, healthcare, and financial inclusion hold immense potential to address pressing local needs. Mobile-based AI tools can support small farmers with crop advice, bring diagnostic tools to underserved communities, and expand access to banking through digital platforms. On the other hand, many developing nations struggle with infrastructure, talent shortages, and reliance on foreign technologies. This dependence risks widening inequalities, as benefits accrue disproportionately to wealthier nations that control platforms and data. Yet the Global South also has advantages: growing digital populations, unique datasets, and regional innovation hubs in countries like Kenya, Nigeria, and Brazil. Whether these regions become active shapers of AI or remain dependent on external powers depends on investments in education, governance, and infrastructure. The Global South illustrates the uneven geography of AI competition and the importance of inclusivity in shaping global outcomes.

Brain drain and talent flows illustrate another critical dynamic of AI competition. Researchers and engineers often migrate toward hubs of opportunity, drawn by high salaries, cutting-edge resources, and professional recognition. The U.S. and China attract large numbers of international scientists, while Europe, Canada, and Israel also serve as magnets. For developing nations, this migration can drain local ecosystems of expertise, perpetuating dependence on foreign technologies. Some countries attempt to reverse brain drain by creating incentives for expatriates to return, offering grants, infrastructure, and career pathways. Talent flows also highlight the collaborative side of AI: researchers frequently participate in global conferences, joint projects, and open-source communities, ensuring ideas travel even as individuals relocate. Managing brain drain requires balancing mobility with domestic investment, ensuring that global competition does not hollow out smaller ecosystems. Talent remains the most precious resource in AI, shaping which regions lead and which follow in this transformative field.

AI also risks exacerbating economic inequality between nations, creating divides that mirror and intensify existing global disparities. Countries with access to advanced infrastructure, abundant talent, and capital will accelerate growth, while those lacking these resources may fall further behind. This digital divide could entrench dependency, with poorer nations forced to rely on imported technologies that reflect the values and interests of external powers. Inequality also appears within nations, as urban areas develop robust AI ecosystems while rural regions are left behind. Addressing this challenge requires deliberate policies for knowledge transfer, inclusive innovation, and international cooperation. Without such efforts, AI may reinforce global hierarchies, concentrating power and prosperity in a handful of regions. The inequality dimension underscores that competition is not purely about innovation—it is also about distribution. Ensuring AI benefits humanity equitably requires attention to how opportunities and resources are shared across borders and societies.

Proposals for international AI governance aim to mitigate risks while fostering cooperation. Ideas range from global treaties restricting military use of AI to international standards bodies that set norms for transparency and accountability. Some advocate for a specialized UN agency dedicated to AI oversight, while others suggest coalitions of like-minded states that coordinate policies. These proposals recognize that AI’s risks—such as bias, surveillance, and weaponization—transcend borders, requiring shared solutions. Yet geopolitical rivalry complicates progress, as nations hesitate to cede control or share sensitive technology. Still, governance frameworks remain vital to avoid fragmentation and prevent AI from becoming a destabilizing force. International governance highlights that competition must be balanced with collaboration: without cooperative oversight, rivalry could spiral into arms races or unchecked exploitation. Proposals reflect the urgency of embedding AI in global institutions that can manage both its promise and its peril for humanity.

Diplomacy increasingly shapes AI competition, as treaties, alliances, and bilateral dialogues define how nations interact in this domain. The U.S. and EU coordinate closely on regulatory approaches, while China forges partnerships across Asia and Africa to expand its influence. Forums such as the G7 and OECD discuss AI ethics, while multilateral agreements address security risks of autonomous weapons. Diplomatic engagement reflects recognition that AI is not only technical but geopolitical, shaping alliances and rivalries much like nuclear power once did. Effective diplomacy balances competition with cooperation, ensuring trust and avoiding escalation. It also gives smaller nations a voice, enabling broader participation in shaping global norms. Diplomacy highlights that AI is not just about machines and data but about relationships, values, and trust between nations. How governments manage these dynamics will determine whether AI becomes a driver of shared progress or a source of instability and division.

Balancing competition with cooperation is one of the central dilemmas of global AI development. Nations want to lead, but global challenges like climate change, pandemics, and financial crises require collaboration. Competition drives innovation, but it can also undermine safety if nations cut corners to gain advantage. Cooperation builds trust and shared solutions but risks slowing progress if it dilutes competitive incentives. Striking the balance requires careful governance, ensuring rivalry does not escalate into destabilization. For example, nations may compete in commercial applications but agree to limit autonomous weapons or adopt shared standards for data privacy. The balance between competition and cooperation reflects broader geopolitical realities, where trust is scarce but interdependence unavoidable. Managing this tension is perhaps the greatest test of global AI governance, determining whether AI amplifies rivalry or fosters collaboration in solving humanity’s most pressing challenges.

AI leadership has also become entwined with national identity and cultural pride. Countries frame their progress in AI not only as economic or strategic achievement but as evidence of their innovation, modernity, and global influence. For the U.S., AI leadership symbolizes entrepreneurial spirit and technological dynamism. For China, it reflects the success of state-led modernization and global ambition. The EU emphasizes values-based leadership, projecting human rights and ethics as its contributions to the global stage. Smaller nations also leverage AI as cultural branding, highlighting niche expertise in robotics, deep learning, or ethics. National identity influences how citizens perceive AI, shaping public support and political momentum. It also affects how nations present themselves internationally, using AI as a marker of prestige. AI as cultural pride underscores that global competition is not purely technical but deeply symbolic, reflecting how societies see themselves and how they want to be seen by the world.

The implications of AI competition for security and stability are profound. An unchecked arms race in autonomous weapons or surveillance technologies could destabilize international order, while economic competition could trigger trade wars or technological fragmentation. Mistrust between major powers risks escalating into conflict, with AI as both tool and battleground. At the same time, cooperative agreements could strengthen stability, embedding safeguards and reducing risks of escalation. Security implications extend beyond states: corporations, communities, and individuals all face consequences when AI systems are weaponized or monopolized. The stakes highlight that AI is not a neutral force but a strategic factor shaping global power balances. How nations manage competition will influence whether AI becomes a stabilizing infrastructure for global cooperation or a destabilizing accelerant for conflict. Security in the AI age is inseparable from how technology is governed, shared, and controlled across borders.

Public perceptions of global AI competition reveal both fascination and concern. Media narratives often frame the U.S.–China rivalry as a “race,” emphasizing speed and dominance, while other coverage highlights Europe’s ethical stance or the potential for collaboration. Citizens worry about risks of surveillance, job loss, or militarization, yet they also see opportunity in AI-driven growth. Perceptions vary by region: in the U.S., AI is often celebrated as innovation; in Europe, debates stress regulation; in China, AI is framed as national progress. These narratives shape political decisions, influencing funding, governance, and public trust. They also reveal that AI competition is not only about governments or corporations but about how societies imagine their futures. Public perceptions matter because they determine legitimacy: leaders cannot sustain policies without societal support. The discourse around AI reflects broader anxieties about technology, globalization, and identity in an interconnected but divided world.

The future of global AI competition is likely to be multipolar, shaped by both rivalry and cooperation. The U.S. and China will remain central, but Europe, Japan, South Korea, Israel, Canada, and emerging economies will all play influential roles. Hybrid models of governance may emerge, where nations compete fiercely in some areas while collaborating in others, such as climate or public health. Open source initiatives, corporate leadership, and international institutions will further complicate the landscape, ensuring that AI development cannot be reduced to a simple two-player race. The trend is toward complexity: overlapping alliances, competing standards, and intertwined economies. The future of competition will depend on whether nations can balance ambition with responsibility, ensuring AI serves as a driver of prosperity and cooperation rather than conflict. This multipolar vision suggests that while rivalry will remain, shared challenges may push nations toward collaboration, shaping AI as both a competitive and cooperative force in global affairs.

Global competition in AI is a defining geopolitical issue, shaping security, prosperity, and identity in the twenty-first century. The United States and China dominate the narrative, but Europe and other nations also contribute by emphasizing ethics, innovation, and specialized expertise. Competition extends beyond algorithms to include data, infrastructure, talent, and governance, making AI a strategic resource as critical as energy or military power. Yet rivalry risks fragmentation, inequality, and instability if unchecked. Balancing competition with cooperation is essential, ensuring that AI advances serve shared global needs while respecting national interests. The story of global AI competition is still unfolding, but its outcome will determine not only who leads technologically but also what values shape the future of intelligent systems. For learners, the key insight is clear: AI competition is not merely technical but political, cultural, and ethical, demanding foresight to harness its power for global good.

Episode 46 — Global Competition in AI — U.S., China, and Beyond
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