The intensifying competition between the United States and China in the field of Artificial General Intelligence (AGI) is prompting significant shifts in policy and strategic initiatives. The United States-China Economic and Security Review Commission (USCC) recently released a comprehensive report recommending ambitious government-backed programs and stringent export controls to maintain the US technological edge.
Introduction to the US-China AGI Competition
In November 2024, the USCC submitted its annual report to Congress, featuring 32 recommendations aimed at reshaping the technology and trade relationship between the two nations. Central to these proposals is the call for a Manhattan Project-style initiative dedicated to the development of AGI — AI systems that could potentially surpass human cognitive abilities.
This move highlights the growing importance of AGI within the broader technology rivalry, where leadership in AI development is perceived as pivotal to future economic and national security dominance.
Key Proposals in the USCC Report
1. Launching a Government-Backed AGI Initiative
- Multi-year contracts for leading AI companies, cloud providers, and data center operators.
- Designation as a “DX Rating” project, giving it the highest priority within the Department of Defense.
- Modeling urgency after historical large-scale scientific efforts such as the original Manhattan Project during WWII.
This initiative would deepen government involvement in AI innovation, challenging the conventionally private-sector-driven nature of AI development. The prioritization reflects concerns that without state-led coordination, US leadership in developing AGI could be compromised.
2. Strengthening Export Controls and Investment Screening
- Restrictions on the import of advanced Chinese-made autonomous humanoid robots with capabilities in dexterity, locomotion, and intelligence.
- Enhanced oversight of technology transfers in sensitive fields, particularly semiconductors and critical energy infrastructure with remote monitoring.
- Creation of an Outbound Investment Office to block US capital and expertise from flowing into sensitive Chinese technologies.
China’s persistent efforts to build a sophisticated, self-sufficient semiconductor industry despite global restrictions underscore the need for rigorous technological controls. These measures aim to curb China’s advancement in next-gen technologies.
3. Revising Trade Relations and Transparency Measures
- Recommendations to eliminate China’s Permanent Normal Trade Relations (PNTR) status to reduce dependencies in global tech supply chains.
- Improving transparency for investments and technology transfers, including better tracking of capital flows through offshore entities.
This acknowledges the risks inherent in the deeply intertwined US-China tech ecosystems and marks a push toward greater decoupling in strategic sectors.
Context: The Growing US-China Tech Rivalry
China’s commitment to becoming a global technology leader is exemplified by its “new quality productive forces” initiative, emphasizing domestic innovation in AI, quantum computing, and semiconductor manufacturing. For instance, Chinese telecom giant China Telecom recently trained an AI model with one trillion parameters on domestically produced chips, a milestone illustrating China’s hardware and AI advances (South China Morning Post, 2024).
Meanwhile, the US is seeking to maintain and extend its lead through policy frameworks that align national security priorities and foster rapid technological progress.
Challenges and Implications
The USCC’s recommendations come with several challenges:
- Technical Complexity: Developing AGI remains a frontier scientific challenge with uncertain timelines, meaning government funding alone may not guarantee breakthroughs.
- Global Innovation Networks: Stricter export and investment controls could fragment global research collaborations that have historically driven innovation.
- International Coordination: The report emphasizes working with allied nations on multilateral approaches to export controls, investment screening, and technology oversight, which requires diplomatic and strategic alignment.
Despite these hurdles, the shift signals a new era where government policy will play a direct and influential role in artificial intelligence development and technology competition.
Updated Insights and Case Studies
Recent studies demonstrate the strategic importance of AGI:
- Global AI Investment: In 2023, global AI funding surpassed $150 billion, with strategic governmental investments forming a significant part of this capital (McKinsey, 2023).
- International Policy Movements: The US’s approach mirrors efforts in the EU and UK, where AI regulatory frameworks and public-private partnerships aim to balance innovation with security (European Commission, 2024).
- Case Study – AI Chips: The semiconductor industry dominates the AI hardware race. Collaborations like the Nvidia-OpenAI $100 billion chip deal highlight the scale of investment required to sustain AI advancements (AI News, 2025).
Conclusion
The US-China tech rivalry is entering a critical and complex phase, marked by strategic government initiatives toward AGI development and enhanced control over critical technologies and trade. While these policies aim to secure national interests and technological supremacy, they also challenge longstanding global innovation practices and demand new forms of international cooperation.
Understanding and adapting to this evolving landscape will be essential for policymakers, researchers, and industry leaders navigating the future of artificial intelligence and global technology competition.
Photo credit: Nathan Bingle (Unsplash)