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August 6, 2026 \u2014 3:30pm<\/p>\n
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Remove items from your saved list<\/a> to add more.<\/p>\n AAA<\/p>\n This isn\u2019t your little brother\u2019s AI, the kind he uses to cheat on exam papers<\/a>.<\/p>\n No, the cutting-edge AI models that China<\/a> and the United States are racing to master<\/a> \u2013 the kind that can shut down another country\u2019s critical infrastructure \u2013 will help determine which superpower stays sovereign. And which country can become vulnerable to another\u2019s agenda.<\/p>\n So who will gain AI supremacy<\/a>? And which country will be most vulnerable when the impending AI bust hits? The Americans may have started the AI race<\/a>, but the Chinese are currently producing AI models far more cheaply, and in greater numbers.<\/p>\n \u201cIt could happen at any time,\u201d Peter Hartcher, this masthead\u2019s international and political editor, tells The Morning Edition<\/a>, noting that the United States, in particular, is amid a \u201cclassic investment frenzy, a boom\u201d, involving trillions of dollars in investment.<\/p>\n All it would take, for a bust, would be a \u201cdisplacement event\u201d, Hartcher says. \u201c[That] can be any shock that changes the outlook. It can be a change in official interest rates, monetary policy. Or, it can be a shock from a competitor, let\u2019s say China.\u201d<\/p>\n Click the player below to listen to the full episode, or read on for an edited extract of the conversation.<\/p>\n<\/p>\n Samantha Selinger-Morris: Are we at that point where it\u2019s inevitable that the AI market in America and elsewhere is just going to be crushed by the Chinese AI market?<\/p>\n Peter Hartcher: It\u2019s not inevitable, and lord knows this is frontier stuff on the technological frontier, so anything can happen.<\/p>\n But if you were a betting person, you would look at, for example, the technological tracker maintained by ASPI, the Australian Strategic Policy Institute, which is an internationally recognised benchmark where they say of the \u2013 I think it\u2019s 64 technologies they rate as critical advanced technologies in the world today \u2013 China is leading the US in 59 of those, nearly all of them. And the Chinese technological momentum is surging and carrying the Chinese systems to the fore in almost every sector.<\/p>\n Related Article So the pattern and the momentum is distinctly with China to catch up to or surpass the US in various, multiple, almost all technological fields. This is why it\u2019s on the cusp, with AI is now on the cusp of seeing which way this goes.<\/p>\n We\u2019ve talked about the massive investments, in the trillions of dollars, that the US companies are making. Last year, according to Stanford University \u2013 they have a lab that monitors all things AI \u2013 according to them, Chinese private sector investment in AI last year was just $US12 billion, $12 billion. At the same time, each of the major US companies is spending many multiples of that, each one of them, spending collectively trillions against $12 billion. No wonder the Chinese can charge lower prices \u2013 because they have lower capital outlays. So, this contrast is striking, and it\u2019s increasing, and we\u2019ll see where it goes.<\/p>\n OK, so if everyone, though, is partaking in this AI boom and therefore a bust is headed, presumably at some point \u2013 possibly even a recession \u2013 does that mean that China would be slightly insulated from that? Like if it\u2019s spending way less than, say, everybody else is, or in particular the US is, might it be less vulnerable to a bust or recession than, say, America, or even us?<\/p>\n Exactly right. It\u2019s a really important point because if you\u2019re only spending that much … while the Wall Street companies have got AI companies and related-to AI companies have got capitalisation of $27 trillion outstanding in the marketplace, the Chinese equivalent is about $4 trillion. So, you know [what] they\u2019ve got; the US crash has got that much to fall, the Chinese crash has only got that much to fall. [So] yes, we head into this phase with the US having bet the house on AI, whereas China\u2019s just bet maybe a couple of the bedrooms.<\/p>\n Listen to the full podcast episode in the player above or click here<\/a>.<\/p>\n Hear the story behind the headlines on The Morning Edition podcast, every weekday from 5am on Apple<\/a>, Spotify<\/a> or your favourite podcast platform.<\/p>\n Save<\/p>\n You have reached your maximum number of saved items.<\/p>\n![\"The](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/4223b893ce4203f4b3e47a9edde91a3f1a51e13e.jpeg\")
The race to be the world\u2019s AI leader has resulted in a rise in so-called AI factories. Bloomberg<\/p>\n![\"Data](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/08\/1786004533_66_8e1f97fd5f434c0893d0fca4070b035e9fcf867e.jpeg\")
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