Sino Strategies: China's Influence & its Implications for the U.S.

Summary

• China’s AI Tigers, six top start-ups backed by major Chinese tech firms and the state, are rapidly developing advanced AI models, positioning China as a serious global competitor in AI.
• U.S. policymakers may need to boost domestic innovation and talent attraction, while businesses and consumers may need to reassess AI partnerships and prepare for increased global competition in AI applications. 

Top 6 Chinese AI Start-ups

In early 2025, DeepSeek sent shockwaves throughout the tech world when the company launched an AI chatbot rivaling the highest performing U.S.-based generative AI models at the time for, presumably, only a fraction of the training and computing resources. However, DeepSeek is not considered one of the dominant Chinese players in the AI race. Those companies, collectively referred to as the “AI Tigers,” are AI tech unicorns that have received backing from large incumbents, such as Tencent and Alibaba, and state-owned funding sources.

The six AI tigers — Zhipu AI, Moonshot AI, MiniMax, Baichuan Intelligence, StepFun, and 01.AI — employ engineering scientists from incumbent U.S. and Chinese tech companies and have all deployed their own high-performing large language models. They are vying to rival western counterparts in the global race for AI supremacy. 

China’s Supportive AI Ecosystem

The six AI Tigers have benefitted from a very supportive R&D environment in China. Technology innovation, especially in the areas of AI, data science, and machine learning, are key pillars of Beijing’s development strategy. The CCP has supported the development of a robust technology ecosystem, one capable of fostering leading AI innovations, through capital injections and other forms of resource support over the past several decades. 

What’s more, Chinese governmental leadership has long supported the development and success of individual companies, deemed National Champions, including Baidu, Alibaba, and Tencent. As global competition for AI dominance continues to escalate, one would expect to see increased state-led investment in and resource-sharing with these National Champions, AI Tigers, and other AI-utilizing companies. 

Implications for the U.S.

1. U.S. Policy Implications

China’s AI Tigers, while successful domestically, still face obstacles in expanding internationally, especially in the United States. Zhipu AI is on the Biden Administration’s restricted trade list due to the company’s alleged support of the PLA, and MiniMax’s popular personalized AI app, Talkie, is not available on Apple’s US app store. That said, as noted above the AI tigers are receiving plenty of private and public support domestically. If the U.S. seeks to remain competitive in the global race for AI supremacy, U.S. policymakers may seek to support and collaborate more closely with its domestic technology ecosystem. Increased incentives to attract international AI tech talent could also benefit the U.S. and the nation’s ability to compete with China and other players. 

2. U.S. Business Implications

As Chinese firms rapidly scale their capabilities in AI, the global supply of available AI-based solutions will expand as well. U.S. companies that rely on third-party AI services may thus have increased buyer negotiating power, particularly as vendors compete more aggressively on price and customization of their AI-based applications. U.S. companies could leverage this dynamic by proactively reevaluating existing vendor relationships and benchmarking costs and capabilities across global providers. U.S. businesses could also consider geographically diversifying their AI partnerships to reduce supply chain and geopolitical risk while capitalizing on emerging innovations abroad.

3. U.S. Consumer Implications

The rise of China’s AI tigers signals a growing influence that may soon shape the everyday experiences of U.S. consumers, from the algorithms behind social media feeds to the AI assistants embedded in smart devices. U.S. consumers may be required to better understand the AI tools they use, and there may be opportunities to advocate for enhanced data protection and more incentivized domestic innovation.