The United States is currently engaged in an outdated competition in the artificial intelligence race, one that prioritizes individual chatbot capabilities over the development of a comprehensive technological ecosystem, according to analysis. While the U.S. debates which models perform best on benchmarks, China is actively constructing a foundational AI infrastructure, a strategy that experts warn could lead to long-term dominance.
The AI Power Stack
National competitiveness in artificial intelligence hinges on an interdependent series of layers, termed the "AI Power Stack." This stack begins with abundant and reliable electricity, essential for the power-hungry data centers that form the backbone of AI development. China's generation of more than double the electric power of the United States, directed towards computing clusters, provides a significant advantage. Above energy lie semiconductors, the critical components for digital technology. While the U.S. is working to bolster domestic chip manufacturing, China's Huawei is reportedly doubling production of its Ascend processors, with Chinese developers creating models specifically designed to run on this silicon.
Beyond chips and energy, the next layers include computing infrastructure like data centers and networking. Only after these foundational elements are in place do AI models themselves become decisive. The U.S. public discourse and congressional hearings tend to focus heavily on these models, often overlooking the broader infrastructure.
Applications, the final layer of technology deployment, are where AI is used in real-world scenarios such as factories, hospitals, and command posts. However, the broadest and arguably most critical layer, often discussed the least, is the ecosystem of developers, companies, universities, investors, and allied nations that ultimately determines which technology becomes the global standard.
China's Ecosystem Strategy
China's approach is described not as a technology race, but as a "civilization-building project." By focusing on the entire AI Power Stack, Beijing aims to become the platform upon which future technologies operate. This is evident in Chinese firms aggressively pricing their models to encourage widespread adoption. As of February 2026, open-source Chinese models reportedly accounted for more weekly token traffic on the world's largest model marketplace than American models. Furthermore, some U.S. startups are reportedly building on Chinese base models due to their lower operating costs.
This strategy of fostering adoption mirrors historical technological shifts. The internet and cloud computing did not necessarily prevail because they were the most technically superior networks but because millions of individuals and businesses built upon them. The current debate between open and closed AI models is seen as more than a technical disagreement; it is about establishing trust and encouraging adoption within a global ecosystem.
US Efforts and Remaining Advantages
While acknowledging China's strategic advantages, the United States is not standing still. The Trump administration's AI Action Plan, released in July 2025, aims to assemble comprehensive export packages for allies and partners, including hardware, models, and software. This initiative recognizes the need to export an entire technology ecosystem, not just individual components like chips.
To succeed, however, this strategy requires urgent support, comparable to defense budgets and semiconductor legislation. This includes faster permitting for energy generation and transmission, sustained investment in domestic chip manufacturing, and a willingness to compete on price in developing markets, areas where China is actively engaged. The nation that ultimately wins the AI Cold War will be the one that builds the ecosystem embraced and expanded upon by the rest of the world, shaping alliances, commerce, military power, and political influence for generations.
Despite China's current momentum in ecosystem development, the U.S. still holds a strategic advantage. Realizing this potential, however, depends on recognizing the true nature of the AI battlefield and acting with the necessary urgency before decisive advantages are irrevocably established.