China and the United States have become locked in a competitive struggle over who will control two technologies widely expected to transform the global economy: artificial intelligence and the next generation of wireless service, or 5G. That years-long slow-boil began to heat up in recent weeks. And naturally, it involved a tweet.
Most recently, Chinese telecom equipment and consumer electronics giant Huawei filed suit against the U.S. government on Thursday, alleging that a law passed last August banning the company’s hardware is unconstitutional because it unfairly targets Huawei.
The arms race between the two superpowers over the tech talent, physical infrastructure and industrial muscle—not to mention the IP that comes with the technologies—that will unlock these advancements has been increasingly evident in diplomatic machinations, public investments of varying size and outward rhetoric from state leaders, as each country’s government has moved the technologies to the top of their respective economic agendas.
These struggles are about more than economic opportunity alone. The shift to 5G networks, which promise to eventually reach speeds up to 100 times faster than what’s currently available, could expand the role of wireless communications systems into everything from power grids to traffic, while AI is already facilitating the mass collection and processing of data that will power critical tools like autonomous driving and facial recognition.
In that future state, control over telecom equipment and AI-powered data centers could be like holding the keys to a society. Cooperation between the U.S. National Security Agency and major cell carriers in monitoring citizen communications and the Chinese government’s widespread use of identification scanning in law enforcement have already shown the surveillance power inherent to both technologies.
President Donald Trump’s administration’s increasing focus on beating China to 5G was on display in a plan floated by his reelection campaign last week to nationalize the construction of the new cellular networks. The half-baked proposal would involve the U.S. government taking over parts of the wireless wave spectrum and sharing them with carriers on a wholesale basis.
While administration officials pushed back against the report, it’s not the first time the issue has been raised; Axios previously reported that some members of the administration had considered a federal takeover of the process for national security reasons early last year.
Meanwhile, the government has picked a high-profile fight with Chinese telecom equipment and consumer electronics giant Huawei, urging ally countries to ban the company from building 5G infrastructure for fear that the Chinese government might use it as a backdoor for surveillance purposes. That mostly behind-the-scenes maneuvering dramatically escalated when Canadian authorities arrested Huawei chief financial officer and daughter of the company’s founder Meng Wanzhou at the request of the U.S. government allegedly for breaking U.S. sanctions with Iran.
Virginia Democratic Senator Mark Warner also recently proposed leveling sanctions against Huawei over its alleged theft of trade secrets and business in countries sanctioned by the U.S. Warner previously introduced the ZTE Enforcement Review and Oversight (ZERO) Act, which sought to impose similar restrictions on Chinese telecom equipment maker ZTE.
“There is ample evidence to suggest that no major Chinese company is independent of the Chinese government and Communist Party—and Huawei, which China’s government and military tout as a ‘national champion,’ is no exception,” Warner said in a statement. “It has been clear for some time that Huawei poses a threat to our national security, and I applaud the Trump Administration for taking steps to finally hold the company accountable.”
Huawei has countered that it will not cooperate with the Chinese government on surveillance operations and accused the U.S. of hypocrisy in this regard for a recent law that compels cloud providers like Microsoft and Amazon to turn over data to the U.S. government. It struck back further this week with a lawsuit claiming the U.S. government’s ban on its products is unconstitutional. The suit seeks to overturn the part of the National Defense Authorization Act that imposed the blockade, signed by Trump in August, on the grounds that it singles out an individual or party for punishment without a fair trial.
That fight may ostensibly be about national security concerns, but it’s also true that China has moved far ahead of the U.S. on the implementation of 5G, according to various studies, and Huawei is playing a central role in that buildout, which includes things like government allocation of spectrum bands, wireless equipment installations in cities and devices with network-compatible chips. Huawei has racked up far more contracts to build 5G networks than any of its rivals which include the Swedish firm Ericsson and the Finnish company Nokia.
On the AI front, the United States still holds the lead in many categories, but China is quickly catching up, according to Chinese venture capitalist and author of AI Superpowers Kai-Fu Lee. The United States has a wide lead in research on more sophisticated applications of AI like humanoid robotics and advanced learning and its use in the business sector. But China’s widespread deployment of facial recognition in massive surveillance operations and wealth of engineering talent are growing its computer vision and algorithmic AI capabilities quickly, so much so that Lee sees the country overtaking the U.S. within the next half decade. Furthermore, because research is published publicly, Lee doesn’t see the U.S.’s strong points as significant advantages in the competition going forward.
“Going forward, China has a significant advantage because the data keeps growing,” Lee said in a previous interview. “So if more people allow it, more companies will collect more data, and there are more people to begin with. The more data collected, the better the system gets.”
China’s AI prowess is boosted by its heavy public investment in the education needed to feed the field’s extremely constrained talent pool, specialized office parks and funds for AI-focused businesses. The Chinese government’s 2030 tech plan includes a promise to invest around $1 trillion in the technology over the next decade.
Meanwhile Trump recently answered with his own executive order focused on driving AI investment. However, the proposal was mostly short on policy details and didn’t allocate any specific funds for the projects mentioned. The so-called American AI Initiative pushes for more AI-centric education programs at universities and trade schools, more access to the data and cloud computing services necessary to build AI systems and more government collaboration with private-sector and academic entities.