727: The USA's AI Race Against China: Impact on Global Investments
07-06-2025
PropertyInvesting.net team
1 Introduction
The world finds itself at the intersection of an intense technological arms race, pitting two global superpowers against one another: the United States and China. The stakes are higher than ever, as both nations vie for dominance in fields that will define the future of the global economy—Generative Artificial Intelligence (AI), Autonomous Vehicles, and Robotics. As China’s rapid advancements in these areas threaten to eclipse American leadership, there is mounting concern within the United States that it may fall behind. The shifting tides of global investment strategies in the face of these technological battles are becoming increasingly evident, with long-term consequences for industries, currencies, and investment portfolios.
This Special Report will explore the current dynamics of the USA's race against China in the technological domain, the impact of outsourcing on the West's ability to compete, the role of artificial intelligence and robotics, and the potential for strategic investment in this new world order.
2 Outsourcing and the Decline of Western Competitiveness
In the past few decades, the economic strategies of the United States and Europe have been profoundly shaped by financialization and globalization. These trends, most notably during the presidencies of Barack Obama and Joe Biden, led to the outsourcing of key sectors of industry, manufacturing, and technological innovation to low-cost centers like China. The financialization of the economy allowed companies in the West to focus on short-term profits, often at the expense of long-term innovation and competitiveness. This externalization of production processes has led to a dramatic erosion of the West's engineering and manufacturing capabilities.
For instance, industries such as robotics and AI were initially developed in the United States, but over time, the offshoring of production to China, coupled with cheaper labor costs, allowed Chinese companies to leverage these technologies at a much faster pace. Meanwhile, the West’s reliance on Chinese manufacturing for essential components, such as semiconductors, has left its industries vulnerable to supply chain disruptions.
Think tanks in the United States have noted that this outsourcing trend is a critical factor in the US losing its technological edge. As China has rapidly advanced in fields like AI, machine learning, and robotics, it has moved from a manufacturer of goods to a global leader in innovation. The US, by comparison, has seen its technological base weaken. The Biden administration’s push for reshoring and creating resilient supply chains, though promising, comes after decades of outsourcing that cannot be reversed overnight.
3 The Rise of China: A Technological Superpower
China’s rapid development in AI, robotics, and autonomous vehicles is no longer a topic of speculation—it is a reality. Post-2022, with the emergence of ChatGPT and other generative AI tools, the technological world shifted fundamentally. OpenAI’s introduction of models capable of generating human-like text, writing code, and solving complex problems has sparked a global revolution in AI applications. China, with its aggressive investment in tech companies and its state-sponsored initiatives, has aggressively pushed the development of similar AI and robotic technologies. The Chinese government has poured billions into companies like Baidu, Tencent, and Alibaba, all of which are competing in the fields of AI and autonomous systems.
Meanwhile, the USA, historically the leader in technological innovation, now faces mounting pressure as its lead in critical technologies erodes. China’s dominance in energy consumption, manufacturing output, and now AI and robotics, places it in an advantageous position. The Chinese government’s holistic approach—where policy, funding, and infrastructure development are integrated—is significantly outpacing the more fragmented approach in the US, where private corporations lead technological advancements, often without cohesive government direction.
By 2023, China’s AI sector had already surpassed the US in several metrics, including AI patents, scientific publications, and investment into AI startups. If these trends continue, China is poised to overtake the US in the next decade as the global leader in cutting-edge technologies.
4 The Impact of Fiat Currencies: A Changing Global Financial Landscape
Another major component of the US-China power struggle lies in the global financial system. The US dollar, long the dominant currency in global trade and reserve assets, is now facing significant challenges. The increasing balance of payments deficits, the burden of national debt, and the continuous debasement of fiat currencies are contributing to the weakening of the dollar.
One of the primary factors leading to this decline is the reliance on a financialized economy. The outsized role of financial markets and the growing debt load in the US has led to a situation where the real economy, particularly in manufacturing and technology, has been neglected. As the dollar weakens, countries are increasingly looking for alternatives to the US currency, including Bitcoin—the decentralized cryptocurrency seen by many as a store of value independent of government control.
China, on the other hand, has been making strides toward de-dollarization, both through its development of digital currencies and by promoting the yuan in international trade. While the US has been preoccupied with its internal challenges, China has seized the opportunity to align its technological and economic policies with a more diversified global financial system. In the event that the US dollar loses its reserve currency status, the ripple effect will be felt globally—affecting everything from international trade to foreign investment strategies.
5 The Urgency of the US Response: A Call for Action
The USA’s growing concern over its technological lag in AI and robotics is not merely a matter of national pride; it is a matter of economic survival. The balance of payments deficits that have plagued the US economy for years are becoming unsustainable. If these deficits continue, and if China maintains its lead in technological and manufacturing capabilities, the US faces the prospect of a diminished role in future global trade and technological development.
The situation is urgent. The Biden administration initially signaled a desire to reinvigorate American manufacturing through initiatives like the CHIPS Act and reshoring efforts. However, the fact remains that Western bureaucracies have been slow to respond, and the lack of investment in core engineering capabilities has already had long-term effects. The new Trump administration is trying to reverse the steep decline - the underlying reason for tariffs and incentives for overseas manufacturers to "set up shop" in the USA.
Moreover, as AI and robotics continue to advance rapidly, the risk of the US losing its competitive edge grows. Autonomous vehicles, energy storage, and robotics are no longer just future concepts—they are transforming industries like automotive, logistics, and energy. The USA must act quickly to maintain its leadership in these critical areas.
6 Investment Opportunities in the New Technological Arena
Given the rapidly changing global landscape, some companies stand poised to benefit from the technological race between the US and China. Tesla (TSLA), for example, is a clear winner in the AI, robotics, and autonomous vehicle sectors. Tesla’s leadership in electric vehicles, autonomous driving technology, and energy storage positions it to thrive as the global transition to sustainable energy and automation accelerates. As Tesla continues to push the boundaries of innovation, its stock is likely to benefit from increased demand for both its products and its cutting-edge technologies.
In addition, MicroStrategy (MSTR), a company known for its large Bitcoin treasury holdings, represents an opportunity to invest in the growing interest in decentralized finance and digital currencies. With the dollar facing pressure, Bitcoin could become an increasingly important asset, serving as a hedge against inflation and currency devaluation. MicroStrategy’s heavy investment in Bitcoin offers exposure to the potential upside of this technological and financial shift.
Both of these companies are emblematic of the changing investment landscape, where traditional metrics of success—such as earnings and revenue—are being overshadowed by their roles in the emerging technological and financial systems.
7 Conclusion: The Future of Global Investments
As the United States and China continue to compete in the race for technological supremacy, the implications for global investments are profound. The technological advancements in AI, robotics, and autonomous vehicles, combined with the shifting financial landscape, will reshape industries and global power structures in the coming decades. The USA faces significant challenges in maintaining its leadership, especially in light of its outsourcing practices and declining manufacturing capabilities.
The future of global investments will likely be defined by companies like Tesla and MicroStrategy (Strategy - MSTR), which stand at the intersection of technological innovation and global financial change. These companies offer a glimpse into the future, where AI, automation, and digital currencies are central to economic growth. For investors, the key will be recognizing the winners in this new technological race and positioning themselves for long-term success in a rapidly changing world. Other companies that are at the forefront are Nvidia, Google and Meta, with Solana being the key aLt-coin cryptocurrency that will help transform Traditional Finance (fiat) to Decentralised Finance (immutable digital currencies supporting Bitcoin as "digital gold" and "store of value").
In the end, the USA’s ability to reassert its technological prowess and address its economic imbalances will determine whether it can retain its leadership in the global economy or whether China will emerge as the dominant technological power of the 21st century.
We hope this Special Report has given you some interesting insights.