Under such a reflex (and common, in my case) act of taking out the cell phone and opening Gemini or have a browser tab open with ChatGPT There is a huge infrastructure behind it. I am a free user of both models, but AI is a long-distance race that is worth a lot of money. Hence, companies with a solid ecosystem such as Google or Meta can better endure this initial phase of expansion and that OpenAI already has it on its roadmap. put advertising. I have mentioned two products that I use daily and that are competitors, but on a global stage they are on the same team: the United States.
On the other side of the ring, China. Because the other power that has entered the race is China (Europe is still finding its feet). In fact, his government has outlined a detailed plan to dominate it by 2027. While in China the push for artificial intelligence is led by the government, in the United States it is the private sector. Two different ways of understanding the business that constitute the tip of the iceberg of two routes that, despite having a common goal, increasingly diverge.
Different investment approaches. If we talk about investment, the difference is abysmal: in the United States, a venture capital investment of 175 billion dollars was made, according to data from China International Capital Corp. If we look for a figure from a reference entity within the US, signatures like PitchBook up the ante up to 222 billion (brutal: of every 3 dollars invested in startups in the US, 2 go directly to AI) and Crunchbase estimates it at 168 billion dollars. In any case, light years ahead of China, which is around 6 billion dollars, according to the Stanford AI Index Report. Focusing on business, the range narrows: American big tech companies invested six times more than their Chinese counterparts, according to with data from Pitchbook and FactSet.
And if we combine public and private, too: in China the sum amounts to 165,000 million dollars in recent years, well behind the 563,000 million coming from companies and the US government. An obvious thing: state and private capital have different expectations in terms of profitability, investment horizons and target sectors. A concrete example: China has just launched its first LLM aimed at agriculturea strategic sector for the state that is surely not among the first interests of the US private sector. And this is key to understanding their divergent growth trajectories.
Where does each one invest?. In China, money is flowing into underlying technologies, with advanced semiconductors leading the way. as explained by CICC. In the United States, on the contrary, the absolute priority is the construction of data centers, a slow and full of so many obstacles that until they consider the spaceand energy infrastructure able to meet the demand.
And it makes sense, as each one’s case is particular: China is facing a technology blockade that has made it have to dig in its heels and step on the accelerator to achieve self-sufficiency and thus address the scarcity of resources derived from its restricted access to latest generation chips. In the case of the United States, the combination of aging energy infrastructure and strong growth in electricity demand has reactivated its search for new energy sources, with significant geopolitical effects, and has returned prominence to industries such as nuclear.
What if it’s a bubble? In the midst of the growth phase of the sector and with countries putting all their efforts into action, it is inevitable to think that sooner or later the bubble could burst. For the Nobel Prize winner in Economics Michael Spence, we are facing a “rational bubblethus justifying the investments: “The cost of coming in third place in the competition is much greater than the losses derived from overinvestment or inefficiency” he explained in the Taihu World Cultural forum.
At last month’s FII Priority Asia forum in Tokyo, SoftBank Group founder and CEO Masayoshi Son attempted to allay fears explaining that “if AI were to generate 10% of global gross domestic product in the long term, it would more than offset trillions of dollars in AI spending.” In any case, there are surveys that give food for thought.
In Xataka | Europe is discovering right now that the US is not the partner it thought. And that is a problem in AI.
Cover | Gemini
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