Who Is Leading the Global AI Race?

Recently, China's internet companies placed a US $5 billion order for high-performance Nvidia chips. Nvidia's revenues could be considered a proxy for AI investment intensity as the company has a near-monopoly in the high-performance GPU market, with a share of more than 80 percent across desktop and cloud GPUs. A bigger spend on GPUs is likely to correlate with significantly larger investments in AI projects and skills.

Over the 2022 fiscal year, Nvidia's revenues from China and the USA were US $7.1 billion and $4.4 billion respectively (although the US GDP was 41 percent higher than China's). However, in 2023 we saw a significant increase in Nvidia's revenues from the USA, at US $8.3 billion, in spite of the economic downturn. Together with the Biden-⁠Harris administration's initiatives to promote domestic AI innovation, this signals that the USA is serious about AI.

Over the coming years, it will be interesting to monitor the specific applications of AI that China and America specialise in and their impact on employment, foreign policy and productivity.