In recent weeks, President Trump went to Pittsburg to announce major AI investments at the Pennsylvania Energy and Innovation Summit at Carnegie Mellon University. Companies are spending over $90 billion in projects such as data centers, energy innovation center. The private sector companies investing include: Amazon, BlackRock, Alphabet, Gecko Robotics, EQT, and PNC Financial. The collaboration between universities, the government and private companies will make Pittsburg a hub.

In an article by Meaghan Tobin of the New York Times News Service, when China is contrasted to the US, it is the government allocating the resources to AI.

China is closing the gap which the US leads, to make technologies that rival the human brain. The Chinese government has spent a decade funneling resources in AI as well as electric vehicles and solar power industries.

Kyle Chan, an adjunct researcher at the RAND Corp, said China is applying state support across the entire AI tech stack, from chips to data centers.

For the past 10 years, Beijing has pushed Chinese companies to build manufacturing capabilities in high-tech industries for which the country previously depended on imports. That approach helped China become maker to a 1/3 of the world’s manufactured goods and a leader in electric vehicles, batteries and solar panels. It also applied to the essential building blocks of advanced AI systems: computing power, skilled engineers and data resources. A Wall Street Journal video on Black Factory – an automobile factory lights were on low because 99% of the work being done was by robots, people were needed to maintain the robots. The auto company was lowering prices because the robots work 24/7.

In the US, the emphasis is on private companies, in China it is the central government. To concentrate talent, the Chinese government financed a series of labs where much of the advanced AI research takes place, often in collaboration with big Chinese tech companies such as Alibaba and ByteDance.

The Chinese government has directed banks and local government to go on a lending spree that fuelled hundreds of startups. Since 2014, the semiconductor fund has spent nearly $100 billion with $8.5 billion to startups. For local government, they have sent up entire neighborhoods that function as startup incubators such as Dream Town in Hangzhou, which is home to Alibaba and DeepSeek and is known as a hot spot for AI talent.

The government covers 10-15% of the costs for startups. When Deep Principle moved to Hangzhou, it received $2.5 million subsidy as well as local officials helped with office space and housing for employees.

There are advantages and disadvantages with the Central government setting directives such as the many are caught off guard with advances in generative AI behind ChatGPT model.

Chinese companies use open-source models as the fastest way to catch up to Silicon Valley which makes it easier for engineers around the world to build on their systems. What will be the world’s standard?

Linking to dividend paying stocks, some of these companies are profitable because what they do is the standard in the world. Everyone else has to do the same thing and as long as the company can continue to offer leadership, they will be the first choice of customers. In technology, things change quickly, but the returns tend to be built over the long-term. It is hard not to start with the largest companies as your partner. Companies often see their competition from around the world, while western governments want to focus on inside their borders because consumers see what is in front of them. There are many competing interests, which makes even if there are flaws in the model, the government is looking in the correct direction.

There are more questions than answers, till the next time – to raising questions.