US-China AI rivalry widens to third countries as Beijing rejects picking sides

China has rejected a reported US effort to make other governments choose a side in the ongoing US-China AI race.

The long ongoing competition between the US and China over the lead in the artificial intelligence industry is entering a new chapter where other nations can no longer sit and watch from the sidelines.  

Will countries be forced to pick between US and Chinese AI technology? 

Following a reported attempt by the US to pressure countries that had backed an AI cooperation pact, foreign ministry spokesperson Lin Jian said at a Beijing briefing that China opposes forcing countries into rival groups over AI, arguing that governments should be free to pick partners on their own terms.

Reportedly, Washington wrote to about 35 signatories of a joint statement on AI partnership, telling them they could not stay in the US-led AI initiative while also joining Chinese-backed efforts. 

Reuters, which reviewed an internal US draft and spoke to a US official, reported that the government is preparing to tell dozens of countries they must line up behind a US-led AI coalition or be shut out of it if they sign onto Beijing’s rival framework. 

Lin called for respect for each country’s digital sovereignty and urged both sides to drop what he described as zero-sum thinking in favor of a fairer global system for governing AI.

Lin’s stance on digital sovereignty is one that has been previously endorsed by Beijing in a published paper on global cyber governance built around national control over data and infrastructure. 

By framing the actions of the US government as an attack on other countries’ right to choose, China’s position as the side that doesn’t demand exclusivity will allow it to win over the same governments Washington is lobbying. 

How the US-China AI dispute has escalated 

In late July, China’s Ministry of Commerce urged Washington to stop threatening Chinese AI firms with sanctions, calling the pressure a form of “AI hegemony” that it said lacked factual or legal grounds. 

Those threats were due to claims from US companies that Chinese labs “distill” American AI models and use the outputs to train cheaper ones. 

Cryptopolitan has reported that a White House memo from science adviser Michael Kratsios accused entities based in China of running industrial-scale distillation campaigns, and that Chinese regulators are moving to bar domestic firms from taking US investment without approval. 

Beijing has noted that nearly 200 US startups asked their own government not to cut off access to Chinese open-source models, warning it would hurt American competitiveness.

Cryptopolitan reported in late July that US officials added foreign-built advanced robots to a restricted list, blocking new Chinese-made robot models from being sold in the US market. 

The restrictions affected robotics maker Unitree (SSE: 688836), but the company still had one of the biggest stock market launches of the year with its shares jumping 629% on its first day of trading in Shanghai. At one point, the company was valued at about $66 billion.

Meanwhile, US officials are still checking whether China has managed to obtain restricted Nvidia (NASDAQ: NVDA) chips. 

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