European AI chief says China’s AI capabilities are closer to the US than many admit

A top European artificial intelligence executive is pushing back hard against the idea that China lags behind America in AI development, calling it nothing more than a “fairy tale.”

Arthur Mensch runs Mistral, and he didn’t mince words Thursday at the World Economic Forum in Davos, Switzerland. He said China’s open-source technology capabilities are “probably stressing the CEOs in the US.”

That’s not what other tech leaders at Davos were saying. Most of them tried to reassure lawmakers and business people that Chinese AI development sits months or years behind the cutting edge.

Google DeepMind’s Demis Hassabis put the gap at about six months for frontier model development. He said Chinese companies haven’t shown they can break new ground.

Hassabis did say the gap between China and Western companies might be smaller than people think. He suggested Chinese firms could be just six months behind rather than one or two years. But he stuck to his point that Chinese companies haven’t proven they can push past where things are now.

Anthropic’s Dario Amodei went even harder, defending US restrictions on selling advanced tech to China. He compared selling high-end AI chips to the country to “selling nuclear weapons to North Korea.”

European challenger eyes enterprise growth

Mistral is trying to carve out space in a market where the US and China dominate. Last year, the Paris-based startup pulled in €1.3 billion ($1.5 billion) in investment. ASML Holding, the Dutch chip-machine maker, led the round. It was a rare team-up between two of Europe’s most important tech companies.

Mensch said Mistral is going after enterprise clients. Financial companies like HSBC Holdings and BNP Paribas are driving growth. The company wants to top $1 billion in revenue and plans to invest $1 billion in capital spending this year. They’re also looking at acquisition targets.

AI becomes a major geopolitical force

As Cryptopolitan highlighted earlier, AI has become a big deal in geopolitics. It could reshape economies and how people work in the coming years. Companies and countries are throwing billions at building AI infrastructure and capabilities. Nvidia’s Jensen Huang said Wednesday it would cost trillions.

When DeepSeek released its model nearly a year ago, it caused quite a stir. The announcement triggered a stock market drop that temporarily wiped nearly $1 trillion from US and European tech companies. Nvidia lost hundreds of billions in market value.

While Mensch has called DeepSeek’s success a win for open-source, the debate over China’s true capabilities continues to divide tech leaders and policymakers on both sides of the Atlantic.’

There’s also a policy shift happening. Trump administration officials are easing restrictions on advanced AI chip exports to China. They’re moving away from policies meant to keep Beijing from accessing American technology for AI development. Sales of the most advanced processors are still blocked for national security reasons, but it’s a big policy change.

Advanced AI chips have turned into the new battleground in global tech competition, which is why Amodei’s warning against sales to rival nations got attention.

The back-and-forth shows how much disagreement exists among industry leaders about where China really stands and what should be done about its growing technological strength. China has been making moves to continue AI innovation while universities introduce DeepSeek-based courses, signaling the country’s commitment to advancing in the field.

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