US Dominance

China’s rapid AI advancements are challenging US technological dominance, creating a “China tech shock.” Fueled by cost efficiencies, a strong supply chain, and government investment, China is moving up the value chain in AI and other sectors. Domestically produced chips and abundant energy empower its AI development, potentially leading to a “China tech sphere” favored by developing economies due to lower costs. This shift raises questions about US hyperscalers’ substantial AI investments and their return.