The Asian AI Boom: U.S. Leadership Under Challenge

Imagine you wake up in the morning and see a robot preparing your breakfast. Outside, robot employees work in automated shops and restaurants. Out your window are self-driving cars, trains, and buses. This fantasy has been increasingly getting closer to reality with the development of artificial intelligence (AI). Just 10 years ago, everyone would have thought that a robot writing like an author or coding like a programmer would have been impossible. However, the impossible became possible with one technology: graphics processing units (GPUs). GPUs are a critical technology that enables the functioning of platforms like ChatGPT and Microsoft Copilot. Recent growth in GPU technology, made possible by Nvidia, sparked the rapid development of AI across the globe.

Nvidia, the company that revolutionized AI advancement, is not just a GPU manufacturer but has also become a key player in geopolitics. Starting as a small Silicon Valley startup building better GPUs for gaming, Nvidia’s GPUs expanded into the AI industry and revolutionized the field. Nvidia leads the GPU industry. And recently, as world powers like China and the U.S. begin to view AI as the pathway to global dominance, demand for Nvidia’s chips has surged, making Nvidia vital to global politics. 

Currently, the United States leads the AI industry, possessing most of Nvidia’s advanced chips. However, U.S. dominance of AI may change in the near future. Just a week ago, Nvidia co-founder and CEO Jensen Huang visited the Asia-Pacific Economic Cooperation Summit in South Korea. At the summit, Huang met with South Korean President Lee Jae Myoung—and leaders of South Korean tech giants like Samsung and Hyundai—to discuss potential partnerships to advance the Korean AI industry. This new deal with the South Korean government opens the possibility for South Korea to rise as an influential force in the AI world.

One of the major deals that Huang made with South Korea is the supply of over 260,000 of Nvidia’s latest AI accelerator chips to the South Korean government and major corporations, including Samsung Electronics, Hyundai Motor Group, SK Group, Naver, and LG. This marks one of the largest supply deals of chips. In August, the South Korean government launched an ambitious AI initiative, pledging to spend over $390 million to build a large-scale domestic AI model that can combat competitive AI models, such as ChatGPT, and decrease the country’s dependency on foreign AI technologies. This supply deal with Nvidia makes South Korea the third global holder of GPUs, just behind China and the U.S. In addition to the supply deal, Samsung announced plans to build the world’s first AI megafactory in partnership with Nvidia. This new factory will integrate AI throughout the manufacturing flow. utilizing AI to analyze and predict data across designing and manufacturing processes. 

Nvidia is also working with research institutions and tech corporations in South Korea to bring Artificial Intelligence Radio Access Network (AI-RAN) and 6G to life. AI-RAN is a technology that enables optimized mobile networks and AI-based services. The AI-RAN technology can reduce computing cost and extend the device’s battery life, allowing a more efficient network that can ease the traffic faced by standard RANs. 

With AI-RAN, 6G can come to reality in the near future. 6G would revolutionize various fields like healthcare and transportation by enabling new innovations, from real-time diagnostics and remote telesurgery to autonomous cars. This new deal demonstrates a bright future for South Korea as a major contributor to the 6G and AI-RAN industry that can revolutionize and grow the South Korean economy.

However, it is not only South Korea that is on the precipice of an AI boom—China is as well. China has been a growing threat to American dominance in the AI industry for the past few years due to large government and private initiatives and investments. To combat and limit Chinese AI expansion, the White House halted AI chip exports to China and even a few neighboring countries in order to stop the smuggling of AI chips to China for the last few years. Despite the blockade, China has continued to expand its AI industry using domestic chips like Huawei’s. Currently, Chinese chips cannot compete with Nvidia’s, but their chips were built to be used in clusters of many chips to perform as efficiently as those of Nvidia. To encourage the growth of domestic AI technology, China has banned imports of American chips, encouraging many Chinese companies to use Chinese chips. 

Building up to the recent meeting of President Donald Trump and Chinese President Xi Jinping, Huang hoped that the presidents would resolve and relieve the AI chip import ban. The presidents agreed to relieve tension with a truce in the trade wars between the two countries, but did not make any significant change in core U.S. policies restricting Nvidia’s advanced AI chip exports.

This continued ban on AI chip exports to China encourages the advancement of Chinese AI technology. U.S. policies that hinder Nvidia’s access to the world’s biggest market will weaken American companies’ competitiveness and encourage other nations to import Chinese chips, ultimately making Chinese AI globally dominant.

The U.S. still leads the world with an AI market valued at $84 billion, while China’s is at $60 billion. However, the Chinese AI industry has greater government investment and support, with more AI talents emerging from China. If this trend continues, China will overcome American AI technologies and become the world’s leader in AI innovation.

AI is rapidly changing the world and has become a technology that is inseparable from daily life. The nation with a more advanced and efficient AI industry will lead the global politics and economy. For the past few years, the United States has been leading the world with AI innovations, but with Nvidia’s new deal with South Korea and the increasing growth of China’s AI industry, American AI dominance is threatened. These developments make the actions of the U.S. government in the next few years critical to maintaining AI leadership. With new players emerging, the United States must continue to develop, innovate, and empower the growing AI industry.