Inside the AI Cold War Between the U.S. and China

Summary

WSJ Tech News Briefing – Inside the AI Cold War Between the U.S. and China

Release Date: November 11, 2025
Host: Peter Ciampelli, The Wall Street Journal
Guest: Josh Chin, WSJ Senior Global Correspondent

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Episode Overview

This episode dives into the escalating technological rivalry between the United States and China, focusing particularly on the geopolitical race for artificial intelligence (AI) dominance. Host Peter Ciampelli and WSJ’s Josh Chin unpack why the U.S. has maintained an edge, how China is rapidly closing the gap through a nationwide computing network, and the complex implications of this new “AI Cold War,” including chip export controls, regulatory philosophies, and the broader impact on global power dynamics.

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Key Discussion Points & Insights

The U.S. Lead and China’s Catch-up in AI

• Why the U.S. Pulled Ahead:

  • Early U.S. investment in advanced chips and AI R&D, with support from deep-pocketed private investors.
  • China initially focused on AI applications aligned with government priorities, like computer vision and surveillance, not generative AI.

    “China was focused at the time on other forms of AI. They were really zeroed in on computer vision, other types of technology that aligned with their interest in surveillance.” —Josh Chin [07:04]

• The Changing Landscape:

  • China is now rapidly increasing government investment, aiming to leverage distributed computing via a nationwide web of smaller data centers.
  • The release of models like Deepseek signified China’s intent to compete directly in generative AI.

Parallels to the Cold War

• The ‘Sputnik Moment’ Analogy:
  • Many liken ChatGPT’s launch to the U.S.-Soviet space race, but Chin points out the AI competition more closely resembles the extended “computer race” without a clear finish line:

    “It’s more of a general use technology... And so the analogy is more like the computer race between the Soviet Union and the U.S., which is one that didn’t really have a finish line per se.” —Josh Chin [07:47]

  • Unlike with space, victory in AI may play out over decades through ever-advancing iterations.

The Chip Supply Battle

• U.S. Export Controls:
  • The U.S. heavily restricts sales of advanced chips to China, which has hampered Chinese model development.
  • Control of “cutting edge technology that goes into chips” is a central pillar of American advantage:

    “Chips of course, underpin most of the technological developments in AI. So it really gives the U.S. a huge lead when it comes to pushing the boundaries of this technology.” —Josh Chin [08:43]

  • China’s response includes developing domestic chips and focusing on highly efficient AI algorithms.

Risks and Philosophies Around AI Regulation

• China’s Early Restrictions:

  • The Communist Party viewed generative AI as a threat to information control, prompting strict rules for model releases (e.g., answering 70,000 regulatory questions per model).

    “Their initial view of generative AI was just something that threatened that control. And so they imposed a bunch of restrictions.” —Josh Chin [10:11]

  • As China’s AI ecosystem matured, authorities balanced control with competitiveness, relaxing some rules to let firms innovate.

• Contrasts with the U.S.:

  • The U.S., with its focus on open innovation, has so far trailed China in introducing broad AI regulations.
  • Both powers perceive AI as double-edged — a potential driver of economic and military advantage, but also a threat to national stability and control.

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Notable Quotes and Memorable Moments

• On the Nature of the AI Race:

  “It’s tough to say what it’s going to look like in the end because it’s not really clear right now if there is a finish line.” —Josh Chin [08:15]

• On China’s View of AI as a Threat:

  “They still feel a little bit threatened... but they’ve become a little bit more confident in their ability to control the output of these models.” —Josh Chin [10:30]

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Important Timestamps

• 06:25: Introduction to the global AI competition and what’s at stake.
• 07:03: Why China lagged behind the U.S. in generative AI.
• 07:46: Framing the AI race as a “computer race” without a clear end point.
• 08:36: The impact and significance of U.S. chip export restrictions.
• 10:06: Why China led in AI regulations and the regime’s ambivalence about AI’s potential.
• 11:18: Episode wrap-up.

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Tone & Style Notes

• The conversation maintains a direct, analytical tone, occasionally referencing metaphors (“Sputnik moment”, Cold War”).
• Emphasis is placed on economic, technological, and political complexities rather than alarmism or hype.

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Final Thoughts

This episode delivers a concise but nuanced exploration of the high-stakes AI face-off between the U.S. and China. It highlights how chips, regulatory philosophies, and evolving governmental priorities shape the contest’s trajectory—leaving listeners with a sense that the “AI Cold War” is a drawn-out, high-uncertainty struggle that will reshape the geopolitics of technology for years to come.

Transcript

[A]

No longer a far off abstraction, quantum computing is becoming top of mind for businesses and the exploration of how it can be used within industries is expected to increase significantly over the next five years. At the break, join Katie Pizzolato, Vice President, IBM Quantum Platform, to learn how companies are beginning to discover how quantum computing could one day solve their biggest challenges.

[B]

Welcome to Tech News briefing. It's Tuesday, November 11th. I'm Peter Ciampelli. For the Wall Street Energy is getting more and more expensive. This August, prices in New Jersey were 19% higher than a year before. And across the country, people are feeling the pain as rising energy prices overlap with more expensive food and persistent inflation. We're getting into what's causing these price hikes. And then the US Is the leader in AI. But China is catching up with increased investment from the government and a plan to use computing power from across the nation to level the playing field. But first, energy customers from across the country are feeling the heat as costs are rising, partially due to more and.

[C]

More data centers popping up in some areas.

[B]

Just yesterday, a group of Democratic senators called on the Trump administration to share how it plans to mitigate price impacts from these AI data centers to protect citizens and put more burden on the companies as prices continue to rise. One organization projected electricity shutoffs due to unpaid bills could rise to 4 million nationwide this year, up from about 3.5 million last year. The Wall Street Journal's Jared Mitovich joins.

[C]

Us to explain the trend.

[B]

Jared, power prices are going up everywhere.

[C]

Across the United States.

[B]

What's causing people's energy bills to go up?

[D]

So as you touched on, it's a combination of factors, right? So it's kind of a simple economics equation of supply and demand. So demand right now you're seeing across the board, it's surging. Data centers are popping up across the country fueled by the interest in AI and growing AI infrastructure to power that technology. At the same time, though, and especially in parts of the country like the eastern US Supply is stagnant or even decreasing as power plants are shut off due to increased regulations and efficiency rules, as well as the fact that there's just more regulations and laws in place that are kind of restricting the ability for new power to come on. So there's a backlog and new supply at the same time that there's rising demand and through kind of like a complex process that eventually trickles down into the rising bills you're seeing for consumers and small businesses.

[C]

The role that data centers are playing in this issue is that something that's Specific to specific areas or is it a big trend that is happening nationwide?

[D]

So I think you're just starting to see the beginning of it where data centers have gone from basically Nothing to like 4% of energy demand in certain areas and projected to rise even more substantially in the next few years. And while you're seeing that across the country, there are certain hotspots, there's been attention paid to places like Northern Virginia, which kind of earned the nickname Data Center Alley for kind of the proliferation of data center infrastructure popping up there. But in places like Maine, for example, in the far northeast corner of the country, there are no big AI data center projects popping up. And the price increases there are actually due to a different set of factors. So it's hard to generalize across the board. But what we can say with some degree of certainty is that the data centers are going to continue to present a challenge for demand going forward.

[C]

In your piece, you mentioned that these higher prices are affecting people in lower income households disproportionately. Why is that?

[D]

As these prices have increased, there is also the fact that prices across the board for goods and rent and everything are presenting a real challenge for low income consumers. So think of electricity prices as just adding another wrinkle in an already difficult environment. Environment for affordability. That's all on top of the fact that many consumers, as these bills have in some cases risen as much as 19% in the year ending August, customers can't simply even afford to pay those bills.

[C]

Those energy price jumps were also a big focus in the recent New Jersey gubernatorial election. Do you expect that this will continue to be a major issue in future elections?

[D]

We spoke to some New Jersey election experts who say that electricity prices are the new property taxes. If you're from New Jersey, New Jersey, you kind of know that property taxes or taxes in general are a typical issue in political campaigns and so forth. And now there's this new cost that is frustrating people and that you did see in some exit polling that the Journal was provided drove them to vote a certain way. Like it was a top of mind issue, but it's bundled into that overall broad concern about affordability that you're seeing politicians really, really hone in on as they try to win over voters. So that's all to say, I think you're seeing it become an issue now. But I think what will be interesting is to see how these politicians try to handle the issue. At the end of the day, the governor of New Jersey doesn't have all that much power over electricity prices. And while you see those candidates making pledges about how they'll handle it, it'll be interesting to see how those pledges translate into customers bills going forward, given the complex circumstances that we've been talking about.

[B]

That was Wall Street Journal news associate Jared Minovich. Coming up, the new Cold War is the race for AI superiority. We're going inside China's plan to compete with US Computing power by creating a countrywide network of smaller data centers. That's after the break.

[A]

Quantum computers are poised to help businesses drive innovation through more expansive and multidimensional computations, says Katie Pizzolato, vice president, IBM Quantum Platform, which sees a roadmap to these use cases.

[B]

By 20, they unlock a new set.

[E]

Of mathematics and algorithms to tackle applications outside the reach of classical computers. Working alone. It really is a fundamentally different way to process information.

[A]

Different but not impenetrable.

[E]

It does feel more complex. For sure it is, but it is much more accessible and the barrier to entry is much lower than people anticipate.

[B]

The race to build an AI superintelligence, one that surpasses human intelligence and has the ability to improve itself, has a lot of incentives for the country. Who wins? The US has had the advantage for.

[C]

Years now with advanced chips and financial firepower from private American investors.

[B]

But China is catching up, and both powers recognize that there's a threat a superintelligence could pose. Wall Street Journal senior global correspondent Josh Chin joins us to share more about this new Cold War. Josh, I want to start by going back to the beginning before the release of Deepseek. Why was China so far behind the.

[C]

US in the AI race?

[F]

There were a couple different factors. One was that China was focused at the time on other forms of AI. They were really zeroed in on computer vision, other types of technology that aligned with their interest in surveillance. The other factor is that they were just so far behind on chip technology that they didn't really have the resources to compete with American models when it came to generative AI.

[C]

And your piece mentions many similarities to the Cold War, with heavily watched parallel competition in scientific progress.

[B]

What is the tangible goal of this.

[C]

AI race if we were to compare it to the Cold War, and what would it mean if and when one of those powers reaches that goal?

[F]

The interesting thing about the parallels with the Cold War is a lot of people have been saying that ChatGPT was a sort of Sputnik moment for China. But actually, if you look at the way that the technology is rolling out, it's more of a general use technology it's more like computing power. And so the analogy is more like the computer race between the Soviet Union and the us, which is one that didn't really have a finish line per se. It was one that kind of played out over years with a bunch of different iterations. And eventually the US did win that or pulled so far ahead the Soviet Union couldn't compete anymore. But it's tough to say what it's going to look like in the end because it's not really clear right now if there is a finish line.

[C]

And you mentioned the US's advantage in chips earlier. Can you tell me more about what was the significance of the US restricting the export of chips and what have chips done to help the us?

[F]

The US decision to restrict exports of chips to China was probably one of the more significant trade moves the US has made in terms of the competition between the US and China. The US just, it owns all the most cutting edge technology that goes into chips. Chips of course, underpin most of the technological developments in AI. So it really gives the US a huge lead when it comes to pushing the boundaries of this technology. And China is trying to develop its own chips. It's trying to catch up. It's still quite a ways behind. The other thing it's trying to do is to develop more efficient AI models that sort of make better use of the limited computing power that they do have. But it's probably the most important advantage that the US has in staying ahead of China in this race.

[C]

One thing that I think is interesting is there seems to be a sort of double edged sword when it comes to AI progress, where the power that unlocks the potential of AI then unlocks the potential to revolutionize all these different types of fields. But at the same time it seems like whatever power is behind is at risk of being threatened by AI. And I was wondering if you could tell me why China, even though it was behind the US in the race, it led the US in efforts to introduce AI restrictions. And what kind of threats does AI pose to each superpower in contrast to their advantages?

[F]

It's really interesting because in the early days of AI, the Communist Party really took a sort of extremely cautious view of this technology. And that's because the Communist Party in China spent a ton of effort before AI was invented or before the current generation of generative AI came along. They invested a ton of effort in controlling information through Internet censorship. And their initial view of generative AI was just something that threatened that control. And so they imposed a bunch of restrictions. They made it so that any AI company that wanted to release a model had to answer something like 70,000 different questions about that model before they could get approval. And I think they still feel that way. They still feel a little bit threatened, but they've become a little bit more confident in their ability to control the output of these models with the systems they have in place already. Also, they realize that they do need to compete with the US So it is worth it to them to risk a little bit less control to give their companies more space to develop products. But they still do feel that it is a threat if these systems were to really get out of control, to sort of undermine their ability to impose censorship and to control the political conversation. So they are definitely keeping a very close eye on it.

[B]

That was our senior global correspondent Josh Chin. And that's it for Tech News Briefing. Today's show was produced by Julie Chang with supervising producer Katie Ferguson. I'm Peter Ciampelli for the Wall Street Journal. We'll be back later this morning with TNB Tech Minute.

[C]

Thanks for listening.

[A]

The time to develop strategies around quantum computing is now, says Katie Pizzolato, vice president, IBM Quantum platform Just like AI.

[E]

Was experimental in its early days and is now foundational, Quantum is moving through a very similar arc. So building quantum literacy is important. Educate leaders and technical teams on the basics and implications of the technology and run experiments and identify where you define value.

[A]

Quantum, she says, should be seen as a new part of your ecosystem, not a substitute for it.

[E]

Think about how this technology is going to integrate with AI and classical systems. Quantum is not going to replace those things. It will augment them. We got to find the parts of the workflow where quantum is Most valuable.

[A]

Visit IBM.com to learn how quantum computing will accelerate business innovation and growth.

[G]

Custom content from WSJ is a unit of the Wall Street Journal Advertising Department. The Wall Street Journal news organization was not involved in the creation of.