The AI Race: America’s AGI Dream vs. China’s Pragmatic Path

When we imagine the future shaped by artificial intelligence, one vision is of AI being as ubiquitous as electricity and as accessible as running water. But the critical question is: which nation will define this future? The U.S. and China are locked in a fierce competition, not only over chips and algorithms, but over the very direction of AI’s evolution—toward superintelligence fantasies or practical applications that reshape daily life.

At the 2025 GPT-5 launch event, OpenAI’s Sam Altman stood under the spotlight and likened AI to a new “Manhattan Project”, comparing it to the “Death Star” from Star Wars—a technology so powerful it could reshape human destiny. His words electrified Silicon Valley and resonated across America, fueling dreams of Artificial General Intelligence (AGI).

Yet, behind the spectacle, harsh realities remain. A Goldman Sachs report revealed that U.S. businesses adopting AI rose only from 9.2% to 9.7%, while 88% of AI pilot projects never reached full deployment. For all the excitement about AGI, most AI technologies are still stuck in labs, not integrated into daily business or governance.

This gap reflects a deeper strategic flaw. Washington’s “Winning the AI Race” report names China as the primary rival, but doubles down on an ambiguous vision of AGI. The U.S. rallies allies in a “Chip Quad Alliance”, while neglecting the fact that AI hallucinations and reliability issues remain unsolved, even in GPT-5. Beneath the glossy presentation, the core limitations persist.

Meanwhile, China is pursuing a radically different path: pragmatism.

At Qingdao Port, AI-powered robotic arms sort cargo twice as fast as humans. In Shenzhen factories, robots assemble parts with unmatched precision. Even farmers in rural China use AI apps to monitor crops, predict pests, and optimize yield. These examples reveal China’s focus: embedding AI into every layer of the economy and society.

Beijing’s “AI+ Plan” sets clear timelines—AI integrated across industries by 2027, and by 2030, AI functioning as a basic utility like water and electricity. Companies like Huawei open-source their chip designs, while Baidu and Alibaba provide free access to large models, enabling startups and SMEs to adapt AI for their needs. This open ecosystem accelerates adoption, ensuring that AI generates value today, not just in some distant future.

In short, China is repeating the electricity playbook: first bring power to every home, then refine the generators. AI doesn’t need to be perfect to be transformative; it needs to be usable, scalable, and practical.

So how can the U.S. break out of its AGI obsession and reclaim leadership?

  1. Cure the “AGI Illusion.” U.S. policymakers must stop betting everything on distant superintelligence and lead by adopting AI in government operations. Federal systems remain outdated, lacking unified platforms. By using AI for logistics, cybersecurity, and data management, public servants can experience real gains—learning to walk before running.
  2. Invest in infrastructure. AI requires powerful compute centers and vast data networks. Current U.S. capacity barely covers military needs, let alone the wider economy. Reviving initiatives like the AI Infrastructure Alliance could democratize access, preventing big tech monopolies and empowering universities and small enterprises.
  3. Embrace global collaboration. While China advances by sharing open-source models, the U.S. risks isolation through technology embargoes. As former Google CEO Eric Schmidt warned, obsession with AGI as a “Holy Grail” may leave America lagging behind China’s pragmatic route.

The AI race is not only about who builds the smartest machine, but about who can make AI indispensable in real life first. America must shift from dreaming about tomorrow’s superintelligence to delivering today’s usable AI solutions—before it is permanently outpaced.


References

  • Goldman Sachs AI Adoption Report (2025)
  • White House: Winning the AI Race Strategy Paper

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