The Race for Global AI Dominance: USA vs. China How Do We Measure Who’s Ahead?

Abstract

This case study investigates the intensifying race between the United States and China for global dominance in artificial intelligence (AI), emphasizing that leadership in AI is not just about innovation but also about the ability to diffuse and adopt technologies across society. While both nations are leading in AI development, the case highlights political scientist Jeffrey Ding’s argument that China suffers from a “diffusion deficit,” struggling to implement AI widely beyond elite urban centers. Using examples such as OpenAI’s ChatGPT and China’s DeepSeek, the study contrasts U.S. first-mover advantages with China’s ambition to define global AI standards, often underpinned by authoritarian governance models. The case examines the relationship between innovation and diffusion processes with worldwide power transformations as well as economic development stages and ethical AI governance standards. The study investigates China's expanding digital authoritarianism exports which create worries about surveillance tools employed for human rights suppression. Through the lens of innovation capacity vs. diffusion capacity, the case encourages students to critically examine not only who is winning the AI race, but also what kind of global future each model of AI development might promote.