Why China's $100 billion AI investment is raising urgent questions for US schools and innovation policies
Tired of too many ads? go ad free now
The move has raised questions about how the US education system might need to respond to maintain its competitive edge in the global tech landscape.
Over the past decade, China has adopted an industrial policy approach to bolster its AI industry, using government funding to build manufacturing capabilities, develop high-tech infrastructure, and cultivate engineering talent. This approach has previously helped China dominate in industries such as electric vehicles and solar power, and now it is being applied aggressively to AI.
China's comprehensive industrial policy for AI
The Chinese government's support spans the entire AI tech stack, from semiconductors and data centers to software and energy resources, as noted by Kyle Chan, an adjunct researcher at the RAND Corporation, as quoted by the New York Times. This has included a $100 billion fund established since 2014 to grow the semiconductor industry and an $8.5 billion allocation to support young AI start-ups announced in April.
Local governments have also played a role by creating start-up incubators and offering subsidies to attract companies. For example, the Dream Town incubator in Hangzhou, home to major firms like Alibaba and DeepSeek, offers substantial financial incentives and support to emerging AI companies. Deep Principle, a start-up focused on AI applications in chemical research, received a $2.5 million subsidy from a Hangzhou district, along with assistance in securing office and housing space, as reported by the New York Times.
Tired of too many ads? go ad free now
China's focus on open-source AI systems has accelerated its progress. Companies like Alibaba, ByteDance, Huawei, and Baidu have released open-source AI models to foster broader development and innovation. ByteDance alone invested $11 billion last year in AI infrastructure, including data centers.
US companies invest heavily, but government support differs
While US technology giants such as Google, Meta, and OpenAI have spent billions on AI research and data centers, the US government has not matched China's level of direct industrial policy support.
US restrictions on chip sales to China, including products from Nvidia, aim to limit Beijing's ability to access advanced technology. However, Nvidia recently announced government approval to sell a China-specific chip, the H20, under license.
Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC) produces chips for Huawei and others, striving to provide alternatives to Nvidia's technology.
According to the New York Times, these chips do not yet match Nvidia's full capabilities but serve as a viable backup in the event of US export restrictions.
Data control and censorship shape Chinese AI development
Chinese AI companies must operate under government guidelines that restrict access to certain global internet sources. Instead, Beijing provides data resources like the 'mainstream values corpus,' a dataset based on state media content approved for AI training.
Companies like ByteDance benefit from vast amounts of user data collected within China to train their systems.
Implications for US education and technology leadership
The rapid development of China's AI ecosystem has led to concerns about the readiness of the US education system to produce skilled engineers and researchers capable of maintaining American leadership in technology. Sam Altman, CEO of OpenAI, framed the competition as ideological, stressing the importance of democratic AI over authoritarian approaches, as quoted by the New York Times.
Kevin Xu, founder of Interconnected Capital, described open-source technology as a form of 'technological soft power,' akin to 'the Hollywood movie or the Big Mac of technology,' highlighting the influence China's approach might have on global engineering communities, according to the New York Times.
As China's state-backed investments reshape the global AI landscape, questions remain about how US educational institutions will adapt to prepare the next generation of technology innovators.
TOI Education is on WhatsApp now. Follow us
.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
an hour ago
- Economic Times
Tigers are not out of the woods yet
Synopsis India faced a severe decline in its tiger population post-independence. Project Tiger helped increase the numbers significantly. Now, the tiger population is over 3,700. Balancing tourism and conservation is a key challenge. Protecting villagers' interests is also important. The threat of poaching and the Chinese market remains. India needs innovative solutions for tiger conservation. Agencies The figures speak for themselves. In 1947, India's human population was 340 million and there were an estimated 40,000 tigers; when Project Tiger was launched in 1973, there were just 268 of them left although humans in India had nearly doubled to 584 million by then. So, since Independence 1,600 tigers had been killed per year, more than during the British Raj actually, although it was the white sahibs who had made large-scale hunting of the big feline a fashionable "sport".Till it was banned in 1972, people may recall that shikar was a tourism draw in India, with "game hunters" coming to shoot these magnificent animals, much as they kill lions in Africa now. That was probably justified then (as it is in some countries in Africa even now) as a legitimate economic activity, as there's such a "surplus" of them. What is a surplus? Surely if any species is "surplus" right now, it's humans but sport is not considered a way to remedy for "sport" or pleasure not food was always a pastime for Indian monarchs. But in the 19th century it became so democratised that every burra sahib, feudal and local notable worth his khidmatgars shot tigers, leopards and even the cheetah (the latter to extinction) by the mid-20th century. And to this day, hundreds of stuffed animals or their skins and heads adorn old forts, palaces and mansions. But people cringe at the very idea of displaying human skulls. Why?The human population of India has quadrupled from the 1947 figure to a whopping 1.4 billion now, but the tiger population has also increased over 10 times from 1972's abysmal three-figure to over 3,700 now. That we have managed to do this is nothing short of amazing even though there are alarming photos all the time of hordes of noisy, camera-wielding desi tourists in our tiger reserves and national parks. And that highlights a piquant to retired Forest Service stalwarts speaking on World Tiger Day at the Tollygunge Club in Kolkata last week, it was clear that unless people feel invested in tigers, they will not be motivated to protect them. The official focus, of course, is on villagers who live next to tiger reserves and often feel sidelined in favour of the endangered species. Their concerns-especially regarding compensation for families of those killed by tigers-are being addressed so that they do not regard the animals as enemies or harbingers of death and financial ruin. But what about the millions of tourists? Roads cutting through core areas, more vehicles accessing sanctuaries and staying longer hours inside, hotels hemming in the jungle and the sheer pressure of human interest in tigers and other large wildlife like lions, rhinos, elephants, gaud (bison) are scary developments. But the monetary lure of the insatiable Chinese market for wild tiger parts is also a perennial threat. So, could curtailing public access in order to protect tiger habitats then actually aid poaching?India's human population growth has slowed hugely; we now have to continue to demonstrate to the world the efficacy of our different approach to "managing" wildlife too. When India banned the fashionable "sport" of hunting and decided to save the tiger, the world sniggered. Seeing 268 become 3,700, they cannot deny the success of Project Tiger. With the Chinese spectre always looming, India also needs to think imaginatively now to resolve the current tiger-tourism conflict too.
Economic Times
an hour ago
- Economic Times
Dalai Lama: Politics of reincarnation
Synopsis The Dalai Lama's plan to name his reincarnation has sparked controversy with China, as reincarnation holds political power in Tibetan Buddhism. Historically, Buddhism and Islam influenced China, with Tibetan Buddhism gaining prominence through Mongol patronage. The concept of reincarnation was later used to solidify ties between Tibet, Mongolia, and China, leading to Chinese control over Tibetan reincarnations. Reuters Tibetan spiritual leader, the 14th Dalai Lama, is served food on his 90th birthday celebration at the Tsuglagkhang, also known as the Dalai Lama Temple complex, in the northern town of Dharamshala, India, July 6, 2025. The Dalai Lama plans to declare where he will be reincarnated in his next life. In other words, where his successor will be born. To the rational mind, this may sound like a bizarre proposition, but it has annoyed the Communist authorities in China. This is because reincarnation in the Tibetan world is not about the occult or mysticism-it is about real political power. Wealth and weapons can control the bodies of people. Stories are needed to control the Chinese, whose core civilisational area has primarily been the river valleys of Yangtze and Hwang-ho, have long sought control of the dry western regions through whose mountain passes, Chinese got access to horses, in exchange for bolts of silk. From there came Buddhism, after 300 AD and Islam after 700 AD. These forces forced the isolationist China to become a major global player in medieval times, even before the arrival of Europeans arrived in ships after 1600 AD via the eastern of rebirth spread via Buddhism. Rebirth is not very prominent in the Vedas, but it emerges as a major theme in South Asia following the rise of the Buddhist and Jain monastic orders 2,500 years ago. The Buddhist Jataka tales speak of the previous lives of the Buddha. Jain chronicles also speak of the rebirths of Ravana and Krishna who will become Tirthankara of the future. In Hindu tales, boons and curses of previous lives shape fortune and misfortune in present tales of rebirth became popular in China during the Tang dynasty around 800 AD when Chinese kings sponsored the building of Buddhist caves, Buddhist monasteries, Buddhist art and relic shrines. In Tibet, Buddhism made its early inroads around 800 AD. It became a major and powerful force by 1200 AD, roughly when Buddhist monks were migrating out of India, in search of new patrons, facing Brahmin hostility as well as Islamic persecution. The story of Padmasambhava who came from Oddiyana (Odisha) and tamed local Tibetan demons became the dominant story of how Tantric Buddhism reached the Himalayan plateau. After Buddhism had declined in India, it found refuge in China (seen as the home of the Bodhisattva Manjushri) and in Tibet (seen as the home of the primal Buddha Vairocana). Southeast Asia retained the older models of Buddhism based on the teachings of Gautama Buddha. The Mahayana school flourished in China; the Tantric school flourished in Tibet. These had grander and highly innovative mythologies. The popularity of Tibetan Buddhism has much to do with the rise of the Mongols. The Mongols, a fierce horse-breeding nomadic tribe, became conquerors under Genghis Khan in 1200 AD. The great Khan and his sons saw the Tibetan Vajrayana priests as magicians who could serve their war missions. Buddhist Tantric magic involving fierce "Heruka" beings could change weather conditions and strike fear in the hearts of enemies. In fact, the worship of Mahakala, a Tantrik Buddhist deity, played a significant role in the Mongol conquest of China as well as the sacking of Baghdad -a fact that is rarely discussed by 'rational' Khan invited the Tibetan Phags-pa Lama to be his spiritual guide. This happened around 1300 AD. It was a major moment in world history, when relations between China and Tibet was established via a Mongolian hundred years later, the descendants of the Mongols and the descendants of the Tibetan lamas were seeking a way to reconnect and gain legitimacy. This is when the idea of reincarnation was invoked: a Mongol chief, Altan Khan, claimed that he was the reincarnation of Kublai Khan, and a minor lama of the Gelug monastery claimed that he was the reincarnation of Phags-pa Lama. In doing so, they were reasserting the links between Tibet, Mongolia and their shared claim over China. Altan Khan designated Sonam Gyatso as "Dalai" (a translation into Mongolian of the name Gyatso, meaning "ocean") in subsequent decades, Tibetan lamas broke free of the shackles of the Mongol Khans and came to see themselves as both spiritual and military leaders of Tibet, perhaps inspired by the concept of the Caliph in the Islamic world. Fearing the rising autonomy and power of the Tibetan lamas, during the Qing (Manchu) era, the Chinese emperor declared that all reincarnations in Tibet must be ratified by the Chinese court. They implemented the "Golden Urn" system in 1793 which involved drawing lots from an urn to select candidates, ostensibly to ensure fairness and remember the war sorcery that Tibetan monks were once famous for. The Dalai Lama prefers to talk of the wise and compassionate Buddha rather than the fierce skull-bedecked "Heruka" beings that impressed the Mongols and terrified the Chinese. These images plaster the walls of Tibetan monasteries. Today, professors prefer calling them creative visualisations and metaphors of loving kindness. By ignoring the role of these myths in human history, historians and journalists fail to understand the complexity of the Dalai Lama's story in modern times.
&w=3840&q=100)
First Post
an hour ago
- First Post
US export license backlog hits record levels amid internal commerce department turmoil
Thousands of US export license applications, including high-value tech shipments to China, are stuck in limbo due to bureaucratic dysfunction within the Commerce Department's Bureau of Industry and Security. read more An American flag flutters over a ship and shipping containers at the Port of Los Angeles, in San Pedro California, US. File image/ Reuters Thousands of license applications by US companies to export goods and technology around the globe, including to China, are in limbo because turmoil at the agency in charge of approving them has left it nearly paralyzed, two sources said. While US Commerce Secretary Howard Lutnick has become a familiar face touting President Donald Trump's tariff and trade deals, sources said the export bureau under Lutnick's command has failed to issue expected new rules, stifled communications with industry representatives, pushed out experts, and lost staff through buyouts and resignations. STORY CONTINUES BELOW THIS AD Shipments of artificial intelligence chips from Nvidia to China are the most high-profile example of licenses not being swiftly approved. The company said July 14 the government assured it licenses would be granted for its H20 chip, and it hoped to start deliveries soon. Lutnick and other officials confirmed sales would be allowed. But sources said this week no licenses have yet been issued, and billions of dollars of AI chip orders are at stake. One US official said the backlog of license applications is the lengthiest in more than three decades. A spokesperson for Nvidia declined to comment. The Department of Commerce did not respond to a request for comment. The turmoil and resulting inaction at an agency tasked with promoting overseas trade and safeguarding American technology are alarming both those seeking tougher restrictions on exports to China and companies trying to sell their wares abroad. 'Licensing is how the US does business and competes globally,' said Meghan Harris, who served on the National Security Council in the first Trump administration and has worked at Commerce. 'Delays and unpredictability put us at an unnecessary disadvantage.' The Commerce Department's Bureau of Industry and Security averaged 38 days per export license application in fiscal year 2023, the most recent data available, denying 2% of 37,943 applications. STORY CONTINUES BELOW THIS AD The license process enforces US export restrictions in an effort to make sure sensitive goods and technology do not reach countries or entities whose use of the items could harm US national security. Some staff have criticized Jeffrey Kessler, who became BIS undersecretary in March, saying he has micromanaged the bureau and failed to communicate adequately. Kessler did not respond to a request for comment. At a staff meeting soon after he took office, Kessler urged BIS staff to limit communications with company representatives and industry officials, according to two additional sources, who said he later asked for all meetings to be entered on a spreadsheet. Getting approval from Kessler's office to attend meetings with other government agencies has also been tricky, those sources said. Sources spoke anonymously because they were not authorized to speak publicly. Frustration among exporters Frustration is growing within US industry. 'We're seeing whole sectors where there is no movement or indication if or when licenses will be issued," including license applications for semiconductor manufacturing equipment worth billions of dollars, said Sean Stein, president of the US-China Business Council. STORY CONTINUES BELOW THIS AD While the clock is ticking on license applications, 'Chinese companies are exploring and doing deals with suppliers in China and other countries,' he said. 'The longer we have the delay, the more market share we're going to lose." Jim Anzalone, president of Compliance Assurance, a Florida-based trade consultancy, said he has seen delays in license approvals for sensors, radars, and sonar to Latin America and other parts of the world. 'There's nothing official about what the policy is and when the backlog would be cleared,' he said. He has received denials sporadically after submitting some two dozen applications months ago to export semiconductor manufacturing equipment to China, including four denials on Wednesday, he added. Sources stressed that some licenses are getting approved, especially exports to allied countries, and they noted that some communication with companies continues, especially around license applications. Commerce is also delaying regulatory changes. The agency said in May it would rescind and replace a Biden administration rule before it went into effect that month restricting where AI chips can be exported, but the agency has not done so yet. STORY CONTINUES BELOW THIS AD Other rules, which sources said have been drafted for months, have not been published, including one to expand export restrictions to subsidiaries of companies already banned from receiving controlled US exports. Meanwhile, important staff vacancies such as China-based export control officers have not been filled, and high-level career employees have resigned. A retirement party was held this week for Dan Clutch, acting director of the BIS Office of Export Enforcement, the latest experienced staff member to leave.
