As the US regulatory environment becomes increasingly chaotic, discouraging investment and innovation, China has streamlined regulations and fostered public-private partnerships. The implications for the future of American influence could be profound.
NEW HAVEN – In the aftermath of pandemic-era restrictions and a government crackdown on the tech sector, China’s AI companies spent much of 2023 in a state of malaise. While American firms surged ahead with increasingly powerful models and applications, Chinese regulators appeared intent on constraining domestic innovation through stringent and often ambiguou rules.
But Chinese AI companies managed to pull themselves out of this rut by adopting new strategies and reshaping institutional relationships between the authorities and private developers with a view toward streamlining domestic regulations.
Since then, the landscape has shifted dramatically: the US AI industry now grapples with a chaotic regulatory environment under President Donald Trump’s administration, while China’s approach to AI governance has grown more flexible and supportive of innovation.
Several developments have contributed to this shift. For starters, the emergence of novel institutional mechanisms helped shape a more collaborative, multi-stakeholder approach to regulation,
fueling the creation of new AI companies. One notable example is DeepSeek, China’s breakthrough AI firm, which grew out of a hedge fund. Others, like Zhipu AI and Moonshot AI – creator of the Kimi model – originated from a partnership between Tsinghua University and the Beijing Academy of AI, a nonprofit industry association established with support from municipal authorities.
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