China threatens U.S. AI monopoly

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China’s rapid advancement in AI is threatening to shake up U.S. dominance in the market, with one analyst warning of a tech shock that is just getting started.

Rory Green, TS Lombard’s chief China economist and head of Asia research, told CNBC’s “Squawk Box Europe” on Monday that America’s “perceived monopoly” on tech and AI has been broken by China.

“I think the China tech shock is just getting started. It’s not just AI, DeepSeek, and electric vehicles. China is moving up the value chain very rapidly... It’s the first time in history that an emerging market economy is at the forefront of science and technology,” Green said in a conversation with CNBC’s Steve Sedgewick and Ben Boulos.

China is pairing dominant-market level tech with emerging-market production costs, backed by its massive supply chain, Green said. He added that with Xi Jinping being like a “tech bro” that is chucking money into these sectors, it makes for a powerful mix that is really rapidly accelerating the China tech story.

Indeed, Beijing quietly launched a 60.06 billion yuan ($8.69 billion) national AI fund last year, and has an initiative called “AI+” which will see the tech integrated across its economy, industries, and society.

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Developing economies that don’t have a national security issue with China have a choice between “low-cost China tech, Huawei, 5G batteries, solar panels, AI, probably some cheap RMB financing,” or “high-cost American and European alternative,” he said.

“For these economies, I think the choice is fairly simple, and you could see easily a world where maybe most of the world’s population is running on a Chinese tech stack in five to 10 years time,” he added.

Additionally, Demis Hassabis, the CEO of Google DeepMind, one of the world’s leading AI labs, told CNBC in January that China’s AI models might be just “a matter of months” behind U.S. and Western rivals and are closer to those capabilities than “maybe we thought one or two years ago.”

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