China’s AI playbook

China’s AI Playbook: State-Led Vision vs. Silicon Valley’s Venture Drive at Web Summit Lisbon 2025

At Web Summit Lisbon 2025, experts discussed the contrasting AI development strategies of China and the US. Mr. Einar Tangen, Senior Fellow, emphasized AI’s reliance on data, while Dr. Jostein Hauge, Political Economist, highlighted semiconductors as crucial. The panel explored how these nations approach AI development, revealing distinct philosophies in a global technological race.

China’s approach focuses on practical application, integrating AI into manufacturing and logistics, guided by state-led, long-term economic plans like its five-year initiatives. China has also curbed data center expansion due to overcapacity, prioritizing purposeful deployment over speculative investment, reflecting a pragmatic and planned approach. A core tenet is achieving a complete domestic AI supply chain, stemming from a deep distrust of US-made chips and concerns about potential vulnerabilities.

China’s push for self-sufficiency in critical components like semiconductors is a direct response to perceived foreign technological threats and a drive for sovereignty. Its near-monopoly on rare earth magnets, producing 98% globally, provides significant strategic leverage against US restrictions, underscoring global interdependence. This planned approach contrasts sharply with the US model.

In contrast, the US approach, primarily from Silicon Valley, is venture capitalist-driven. Dr. Hauge explained this model fosters rapid innovation but often leads to uncertain practical applications and long-term economic outcomes, with a strong emphasis on short-term profits. US initiatives like the CHIPs and Science Act are secondary to the private sector’s profit motives, creating a less predictable environment due to political instability and frequent policy reversals.

Mr. Tangen contrasted Silicon Valley’s “travels fastest” individualistic innovation with China’s “travels furthest” collective, planned approach, emphasizing China’s consistent progress through structured five-year plans and accountability. The panel refuted the idea that China lacks innovation, citing its vast engineering talent and rapid advancements. Dr. Hauge noted China’s unprecedented transition from technological imitation to innovation, becoming a global powerhouse in green technologies, EVs, robotics, and soon in semiconductors and AI.

Concerns about an AI bubble were raised, with Mr. Tangen highlighting a disconnect between high corporate profits and broader global uncertainties. He stressed that the lack of policy certainty in the US makes long-term investment risky. Regarding sustainability, Mr. Tangen acknowledged US strengths but pointed out struggles with the CHIPS Act, where new factories are behind schedule and over budget due to a shortage of skilled domestic engineers. China, with its manpower, is pursuing indigenous semiconductor mastery, offering a more stable environment. Dr. Hauge concluded that both nations face different challenges, with China focused on rapid development and the US on adapting to a shifting global economic order.