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27 July 2024

The Most Misunderstood – and Important – Factor in the AI Arms Race

Hadley Spadaccini

On July 10, 2024, NATO and its Indo-Pacific partners announced four new joint projects, one of which is dedicated to artificial intelligence (AI). This collaboration marks a stronger effort to counter China’s AI advancements and underscores growing concerns about perceived threats posed by Chinese AI. In Washington, developing advanced AI algorithms to confront those threats has emerged as a strategic priority.

AI competition with China hinges on state-of-the-art, massive data centers that can house immense computational resources – i.e., advanced semiconductors and processors – to support advanced AI model development. The increasing scarcity of these resources is now defining China-U.S. AI competition more than algorithmic superiority.

Unfortunately, U.S. attempts to exclude China from the most advanced chips are proving costly and ineffective. The United States must either prepare for an endless and costly battle for AI resources with China or shift toward cooperation rather than pure competition.

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