BEIJING — Chinese artificial intelligence models are closing in on their American counterparts, with recent releases challenging the assumption that Chinese AI consistently lags behind.
Labs in China have introduced Qwen3-Max and Kimi K1.5, which perform nearly as well as leading U.S. systems such as Anthropic's Claude 3.5. The convergence raises a broader question: which political system is better at building AI tools and integrating them into the economy.
American models still offer better overall value. Artificial Analysis, a U.S. research firm, found that American models outperform Chinese ones across most cost-to-performance trade-offs — meaning Chinese models, while chea deliver less efficiency per dollar.
The gap in raw computing power remains wide. China is building roughly a tenth of the data-center capacity under construction in the United States. But that deficit may narrow: China's semi-planned economy has a strong record in infrastructure development, and large Chinese-backed facilities are being established in Southeast Asia.
China's open-weight models partly offset the compute disadvantage, as they can run on a range of servers. The country also generates nearly three times the installed electricity capacity of the United States, an advantage that continues to grow.
Sanctions restricting China's access to advanced chips have not stopped its progress. China has resorted to smuggling high-end Nvidia chips and renting computing power in foreign data centers. Huawei is expanding domestic chip production, though its output remains below the performance of global leaders.
Chinese-made lithography tools now use deep ultraviolet light for chip printing. Extreme ultraviolet technology — the most advanced method — remains beyond China's current reach, limiting its path to full chip self-sufficiency.
Model performance is only one part of China's AI strategy. Beijing's primary focus is deploying and spreading the technology across the economy. Chinese leaders argue that, as with electricity, widespread adoption yields greater rewards than the initial invention.
That emphasis on diffusion is also driven by demographics. China's working-age population is projected to shrink by 25 percent by 2050. Integrating AI across sectors offers a way to sustain economic output despite a declining workforce.
The Chinese Communist Party has worked to encourage innovation while maintaining political control — an approach scholars sometimes call "smart authoritarianism," in which the state directs resources and sets technological priorities within a centralized system. Jennifer Lind, a scholar who studies China, has said the country has shown a capacity for innovation that many outside observers did not anticipate. Chinese laboratories have also achieved world-leading results in quantum communication and encryption.
That model carries real constraints. The performance gap in AI models and China's continued dependence on foreign chip technology remain unresolved problems for a system that has staked significant prestige on technological self-reliance.
