US Dominance of Global AI Ecosystem Remains Strong Despite China's Efforts

The global AI debate often fixates on models: which ones are faster, cheaper, and more capable. However, this focus diverts attention away from a fundamental truth: as long as the US controls the underlying infrastructure that enables AI ecosystems, it will remain dominant.

Nvidia's AI ecosystem is a key driver of American tech hegemony. The company owes its strength to its graphics processing units (GPUs), which account for 85% of the global market. Its software layer, CUDA, binds everything together and creates high switching costs for competitors.

The US also maintains control over the AI hyperscalers, cloud computing infrastructure, and undersea fiber-optic cables that connect them. These layers of enabling hardware are highly susceptible to American export controls and extraterritorial data extraction laws.

China's frontier labs may be training on domestically-hosted infrastructure, but they remain dependent on American undersea cables wherever their models touch the global internet. The US also exerts incredible leverage over the AI ecosystem through its CLOUD Act, which requires US-headquartered cloud providers to produce data within their possession, custody or control.