BofA: Neither US nor China Can Win AI Race Without Allies

Global supply chains prevent AI self-sufficiency

Neither the United States nor China can achieve artificial intelligence dominance independently, according to Bank of America equity analyst Matty Zhao, who cited deeply interconnected global technology supply chains that make unilateral leadership impossible.

Zhao, co-head of China equity at Bank of America Global Research, told the South China Morning Post that each nation faces distinct infrastructure constraints. The US confronts an aging power grid averaging 30 to 40 years old—double China's 15 to 20 years—while data centers trigger community resistance over electricity costs. China, meanwhile, remains dependent on foreign suppliers for advanced semiconductors, memory chips, and specialized high-end materials despite advantages in power equipment and manufacturing.

"This race cannot be done by one country," Zhao said during the bank's Asia-Pacific Conference in Hong Kong. Both nations must cooperate with regional technology leaders including South Korea for memory chips and Japan for critical materials like copper foil and manufacturing equipment.

Why it matters

The analysis underscores a fundamental tension in US-China technology competition: while both governments pursue strategic autonomy, the technical requirements for frontier AI development remain stubbornly global. Infrastructure bottlenecks—whether electrical capacity or semiconductor fabrication—cannot be resolved through domestic policy alone, potentially forcing pragmatic cooperation even as geopolitical rivalry intensifies.

Summit sets stage for AI dialogue

Zhao's comments preceded Thursday's meeting between Chinese President Xi Jinping and US President Donald Trump in Washington, where artificial intelligence was expected alongside trade discussions. US Treasury Secretary Scott Bessent and Chinese Vice-Premier He Lifeng agreed Sunday to establish an AI dialogue and launch a bilateral trade body following eight hours of talks in New York.

"We had a very successful engagement with the Chinese on trade and AI," Bessent said, with US Trade Representative Jamieson Greer noting the initiatives would support the presidential relationship.

China exports power infrastructure as chip gaps persist

China has emerged as a major supplier of AI-supporting infrastructure, particularly electrical equipment. The country's transformer exports—critical for regulating power grid voltage—rose approximately 30 percent last year and maintained similar growth this year, reaching a record 64.6 billion yuan ($9.6 billion) in 2025.

Yet China requires "breakthroughs" in high-end chips, Zhao said, alongside continued access to specialized Japanese machinery, advanced semiconductors from the US and other nations, and certain optical technologies.

The diplomatic push occurs against deepening technological distrust. Washington has accused Chinese developers of extracting capabilities from leading US models, while Beijing has criticized American calls to slow frontier AI development as attempts to preserve dominance. Anthropic CEO Dario Amodei has urged stronger chip export controls on China, while Beijing pushes domestic firms toward homegrown semiconductors.

The details were first reported by the South China Morning Post.