Where is the US-China AI 'race' heading in 2026?

One year ago this week, Silicon Valley and Wall Street were shocked by the release of China's DeepSeek mobile app, which rivaled US-based large language models like ChatGPT by showing comparable performance on key benchmarks at a fraction of the cost while using less-advanced chips.

DeepSeek opened a new chapter in the US-China rivalry, with the world recognizing the competitiveness of Chinese AI models, and Beijing pouring more resources into developing its own AI ecosystem.

In its AI action plan released several months after DeepSeek's emergence, President Donald Trump's administration laid out the stakes in stark terms: "The United States is in a race to achieve global dominance in artificial intelligence (AI)." The plan, titled "Winning the Race: America's AI Action Plan," called for rolling back regulatory barriers that allegedly hinder innovation and leveraging the dominance of US tech around the world.

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