Nations Hedge Between US and China as Global AI Rivalry Intensifies
As the United States and China establish their respective AI blocs, other nations are strategically positioning themselves to leverage the advantages of both factions while mitigating the risk of being left behind. As the rivalry intensifies, analysts suggest that the opportunity for nations to freely select between the two AI superpowers is diminishing, compelling them to eventually choose between the US-led Pax Silica and the China-inspired World AI Cooperation Organization. That could place numerous nations in a quandary: Should they opt for the United States’ cutting-edge chips and AI technologies, or align with China’s more cost-effective, open-source AI systems?Kazakhstan, a Central Asian nation with a population of approximately 21 million, exemplifies a unique case of a country striving to bridge that gap. Just three weeks after its AI minister Zhaslan Madiyev visited Washington in June to join the US group working to strengthen AI supply chains, he travelled to Shanghai for a signing ceremony that established the Central Asian country as a founding member of China’s initiative to influence the global AI agenda.
Being in Pax Silica signifies an increase in technological partnerships, the creation of high-tech manufacturing jobs, and a strategic position within global AI supply chains. Simultaneously, Kazakhstan, as a member of China’s World AI Cooperation Organization along with 28 other founding nations such as Pakistan and Russia, aspires to influence the establishment of regional and global AI standards. “Everyone is hedging,” said Dana Masalimova. “We don’t want this binary choice,” Masalimova said. Kazakhstan is benefiting from both US and Chinese investments, but is in a “very precarious spot,” she said. It possesses abundant critical mineral resources vital for AI development and offers inexpensive electricity to support data centers, which have become a source of political contention in the United States. Earlier this year, Kazakhstan’s government signed an investment deal worth up to 10 billion USD involving Nvidia to build a “data center valley” in the country. Meanwhile, an increasing number of Chinese enterprises are directing their investments toward Kazakhstan. Local officials report that Chinese foreign direct investment in Kazakhstan attained a historic high of USD 2.8 billion in 2025.
Chinese leader Xi Jinping convened with Kazakh President Kassym-Jomart Tokayev in July to enhance collaboration within the framework of China’s global infrastructure development initiative, the Belt and Road. Both China and the US are utilising access to AI as a means to enhance their global influence. President Donald Trump asserted last month that “whoever wins AI, wins”. US officials and AI companies have alleged that China is engaged in extensive “distillation,” or the extraction of capabilities, from advanced American models. Beijing has dismissed these assertions, contending that the United States is striving for an AI monopoly while limiting China’s access to some of the most advanced AI chips and chip manufacturing equipment globally. “Countries can’t be trusted partners in Pax Silica while substantively engaging in initiatives that advance a competing vision for super intelligence,” the US State Department said, using the Trump administration’s new preferred term for AI. Beijing emphasises the openness and inclusiveness of its World AI Cooperation Organization. “As both major countries in AI, China and the United States should leverage respective strengths in AI rather than guarding against each other,” the Chinese embassy in Washington said in a statement. “AI should not be owned by major countries.” The two AI powers have different messaging largely because Beijing needs to court third countries in its bid to build an alternative coalition, whereas Washington already has a powerful network of allies, said Kyle Chan, a fellow at The Brookings Institution’s John L Thornton China Centre.
That lends power to what he referred to as “swing countries”. Similar to Kazakhstan, Indonesia possesses resources essential for AI and various technologies, including nickel and copper. It is also aiming to maximise the potential of both AI capabilities, having become a member of China’s World AI Cooperation Organization. Indonesia aims to capitalise on both opportunities, as stated by Mari Pangestu, vice chair of the Indonesian National Economic Council, during a recent event at the University of Hong Kong Business School. “We should be able to be part of both, put it that way. And choose the best system.” And choose the best system. US AI firms are directing investments to other nations such as Singapore, where Anthropic is establishing its newest office in Asia. The city-state indicates that it is also contemplating membership in China’s AI organization. In Saudi Arabia, the AI startup Humain introduced a platform in September that is constructed on an open model developed by a Chinese AI firm. The kingdom has established a partnership with Nvidia to enhance AI computing through the utilisation of its advanced chips. France, recognised as a significant player in the AI development landscape alongside the US and China, is charting its own course with its startup Mistral. The new model released this month demonstrates superior performance compared to certain advanced Chinese models.
Japan maintains a strong alignment with the United States regarding strategic and security matters, particularly in the realms of advanced semiconductors, reliable artificial intelligence, and regulatory standards. However, it will not dismiss the more cost-effective Chinese AI models for “lower-risk applications,” stated Takahiro Tsuchiya. For countries such as the UK and Germany, which possess significant economic and military capabilities yet lack independently developed advanced frontier AI models, aligning with the US could be crucial for securing access to data centers and chip agreements with American firms, according to Anton Leicht and Sam Winter-Levy at the Carnegie Endowment for International Peace. Essentially, their access to advanced AI systems “depends on the whims of policymakers in Washington and Beijing,” they said, while those countries may have limited influence over AI’s future. China, meanwhile, has been narrowing the technology gap with the US in the realms of chipmaking and advanced AI capabilities; however, it continues to lag behind the leading technological capabilities of the US, at least for the time being. Additionally, Beijing’s open-source strategy enables nations to reduce their dependence on the United States, with China actively financing developing countries to establish their own AI ecosystems, according to Alberto Lemma, a research fellow at the think tank ODI Global.
As of now, China has extended official sector grants and loans for projects and activities that utilise or facilitate AI technologies in a minimum of 77 low- and middle-income countries, as reported by the AidData research lab at William & Mary, a public university located in Virginia. Some prominent beneficiaries include Nigeria, Zambia, Ghana, Bangladesh, Senegal, Cameroon, and Kenya. Public perceptions are undergoing transformation. Recent study results from Pew Research Center indicate that individuals in middle-income countries are increasingly exhibiting a positive outlook and trust toward China regarding artificial intelligence and the regulation of this technology. All things considered, many countries “don’t want to pick a side … because there are advantages and disadvantages to each technology stack,” said Aalok Mehta. Most countries may eventually lack a good option since they cannot compete on building AI frontier models, but “every country in the world in some way or another is thinking about AI sovereignty,” he said. After all, “maybe no other country than the US and China can really build these very large, powerful models”.
