The digital race: US-China rivalry in the AI sphere

Author and professor Winston Ma discusses the current state of play in the US-China AI rivalry and where opportunities and risks lie

Q: You published your book Digital War in 2018. How has the AI environment changed since then?

A: When I wrote The Digital War, the competition was at the application layer—TikTok, WeChat and other mobile internet platforms visible to consumers. Today the digital war has shifted down to the foundation: a “compute arms race”, that is the competition to be number one in raw computing power, for chips and the gigawatts of energy to run them at national scale—exactly the bottom layers of Jensen Huang’s five-layer AI stack. That infrastructure shift is why sovereign wealth funds (SWF), not just venture capital, have become the defining capital allocators of the AI era.

Q: A really high-profile development is OpenClaw, which allows control of various apps by AI. To what extent do you think this represents a leap in AI capabilities?

A: OpenClaw is not a fundamental model breakthrough—it combined existing components to cross a new threshold, creating what I call “trusted action engines” that function as digital fiduciaries (the real “agent” under civil and commercial laws): delegated goal, autonomous execution and real-world legal consequences binding on the principal. The deeper leap is fiduciary, not technical: OpenClaw’s architecture maps onto trustee territory (a specialized agent with extensive authorization), and the accountability gap that creates is the “iPhone 1.0 moment” for AI regulation.

Q: What impact do you see AI having on employment and the economy, both in global terms and in China terms?

A: Globally, AI’s most disruptive employment impact is at the white-collar “knowledge professional” layer—agentic workflows are augmenting and, in some cases, replacing the professional roles that China’s middle class has spent thirty years training toward. China faces a specific structural opportunity, however: AI-driven “Light-out Factories” are already offsetting its demographic headwinds by supercharging manufacturing productivity, and agentic AI may prove a significant equalizer for SMEs (small & medium enterprises) globally, which also include the dramatic rise of OPCs (One Person Company) in China.

Q: There is talk of the world moving into a more divided digital ecosystem. What are your thoughts on the overall structure and direction it is heading in?

A: We are witnessing the end of the “Global Internet” and the emergence of “Sovereign AI”—where data, models and cloud infrastructure are increasingly contained within specific geopolitical boundaries to ensure national security. But it is more than the US-China bifurcation: Gulf states, India and Southeast Asia are each building partially sovereign digital stacks (by their SWF funds), suggesting the global AI ecosystem is fracturing into more than two camps.

Q: What position do technology and digital infrastructure hold within the current US-China rivalry?

A: Technology is no longer a sector of the US-China rivalry—it is the battlefield itself. That’s evident in the America’s AI Action Plan released by the White House in July 2025, which is a comprehensive blueprint designed to ensure “unquestioned and unchallenged” global technological dominance. And it’s title? “Winning the Race”.

Q: Since the publication of Digital War, what developments have most validated or challenged your original thesis?

A: The weaponization of the semiconductor supply chain and the rise of data sovereignty laws have validated my Digital War thesis more completely than I anticipated—the bifurcation of the US-China tech ecosystem has been real and accelerating. What genuinely surprised me is the “Energy Wall”: the power demands of AI computing became the primary strategic bottleneck faster than anyone foresaw, turning energy geopolitics into the newest front of the digital war.

Q: What advantages do the US and China each have in the digital race?

A: The US holds the chip, model, and capital advantage for fundamental research—the world’s leading foundation models and deepest venture capital ecosystem remain concentrated in America. China’s advantage is an ecosystem good at application scaling: the renewable energy infrastructure required to power massive AI clusters, the biggest domestic deployment base for application-layer training data, the world’s largest manufacturing base for embodied AI hardware and a national will (15th Five-Year Plan) that mandates AI integration into all industries.

Q: What do you see as the implications of the different systems of governance in the digital race?

A: On one hand, they are very different because China is actively drafting and releasing national laws and regulations in response to the latest generative AI revolution, while the US has no Federal data law or AI regulation. On the other hand, both sides are putting more emphasis on promoting AI innovation for now.

Q: What do you see as the next phase in this “rivalry”?

A: The next phase will be defined by “Integrated Sovereign AI Stack”—nations competing to build the most efficient end-to-end AI factories, i.e. the five layer of power, chip, cloud, model and application. The investment capital required is massive, hence the need to be financed by sovereign capital rather than private markets alone. As I track on my SWF Sovereign AI Substack, sovereign wealth funds are likely to be the defining architects of the AI rivalry.

Professor Winston Ma is an investor, attorney, author and adjunct professor in the global AI-digital economy. He is a partner of Dragon Global, an AI-focused family office, and he is also the Executive Director of Global Public Investment Funds Forum and an Adjunct Professor on Sovereign Investors at New York University (NYU) School of Law. He has authored several books, including The Digital War: How China’s Tech Power Shapes the Future of AI, Blockchain and Cyberspace and Blockchain and Web3: Building the Cryptocurrency, Privacy and Security Foundations of the Metaverse.