Managing the risks of frontier artificial intelligence (AI) models and protecting intellectual property are set to top the agenda when United States President Donald Trump hosts Chinese President Xi Jinping in Washington on September 24.
Chinese state media and commentators say the Trump administration called for the AI summit because it fears Beijing is gaining the upper hand in the global AI race, particularly after China forged AI partnerships with 28 nations, mainly from the Global South, at the 2026 World Artificial Intelligence Conference (WAIC) in Shanghai on July 17.
They say Washington will further tighten its controls on AI development in China, but the Chinese consensus is that more curbs will only push Chinese firms to advance their self-sufficiency and build an AI ecosystem.
Reuters first reported the planned AI dialogue on July 21, saying that the discussions would be the first official US-China AI dialogue under Trump, led on the American side by Treasury Secretary Scott Bessent.
Both nations will discuss how to regulate powerful AI models that could reshape military power, enable cyberattacks on critical infrastructure and upend labor markets.
On July 23, Trump confirmed the report, saying the two leaders had already discussed AI during his trip to Beijing in May.
“President Xi is coming over on September 24,” Trump said. “We talked about it when I was over in Beijing, and we’ll be talking about it again.”
Trump called AI “probably the biggest thing anybody’s ever seen” and warned that the nation dominating the technology would hold the ultimate advantage.
“Whoever wins that race is probably going to win,” he said.
Washington’s push to engage China on AI comes against the backdrop of a surge in competitive Chinese models. Firms including DeepSeek, Zhipu AI and Moonshot AI have this year released a string of low-cost, high-performance models capable of matching OpenAI’s ChatGPT and Anthropic’s Claude on key benchmarks.
These Chinese firms are alleged to have trained their models partly by distilling knowledge from Western AI systems, a process akin to a student learning by studying a brilliant teacher’s answers and reasoning patterns, rather than building knowledge from scratch. This allows them to avoid using expensive AI chips and achieve comparable results at a fraction of the cost,
They have also applied two efficiency techniques: mixture of experts (MoE) and sparse attention. MoE automatically routes each query to only the most relevant cluster of specialists within a model, rather than activating the entire system. Sparse attention, meanwhile, allows the model to focus only on the most relevant portions of a text, reducing computing demands without sacrificing accuracy.
Global Times, a newspaper under the People’s Daily, said in a commentary on July 26 that China’s open-source AI models have grown powerful enough over the past two years to alarm America’s leading AI laboratories.
“Two years ago, names like Zhipu AI and Moonshot AI barely registered in the American tech press. Now their models are going toe-to-toe with those from Anthropic and OpenAI,” the commentary said. “The United States’ panic makes sense.”
The commentary said that, in the broader US-China relationship, Washington no longer expects to knock China out in one blow but tries to stretch the timeline, holding on to its window of advantage for as long as possible.
“The failure to eliminate China doesn’t mean the contest is over. On the contrary, as knocking China out becomes less feasible, the AI race between the US and China simply shifts to more specific and hard-fought fronts,” it said. “As long as China stays true to a development path suited to its own realities, it will earn the standing it deserves in shaping AI’s norms, rules and standards of access.”
China’s realities
For many years, Chinese state media avoided directly acknowledging what the Global Times commentary calls China’s “realities” in AI development, a phrase that has come to refer to the US sanctions and export controls that have constrained Chinese chipmakers and AI firms.
The US barred Dutch chipmaking equipment maker ASML from selling extreme ultraviolet (EUV) lithography machines to China in 2019, and extended the restrictions to cover high-end deep ultraviolet (DUV) lithography in October 2023. From October 2022, it also banned exports of high-end Nvidia graphics processing units (GPUs) to China.
These moves had pushed Chinese chipmakers to source second-hand mid-end DUV machines to produce AI chips, import Nvidia chips through smugglers and shell companies and train AI models in data centers in Southeast Asian countries.
However, as Washington kept tightening its controls, Chinese AI firms such as DeepSeek have pivoted to training models through distillation, drawing knowledge from Western AI systems at a fraction of the cost of building from scratch.
US Treasury Secretary Scott Bessent said on July 21 that the Trump administration is finding evidence that Chinese AI models were built on American ones. He emphasized that Washington does not condone intellectual property theft.
Zhu Min, a former deputy governor of the People’s Bank of China who spoke at a World Economic Forum panel in June, said China’s AI strategy rests on one priority above all: putting AI to work across its vast industrial economy, particularly in factories.
“China’s greatest advantage was never about building the largest model. It lies in having more use cases, more factories, more diverse industries and cost-conscious business owners,” Zhu said. “The real winners will not be the AI model makers but those doing deployment, integration and process restructuring. The vendors installing factory systems, connecting data pipelines, retraining workers and collecting annual fees will pocket more than anyone.”
Zhu singled out manufacturing as the sector where AI will penetrate deepest in China because the returns are most tangible. He said every percentage-point gain in factory yield translates directly into profit; every avoided production stoppage cuts losses; and every shortened delivery cycle increases turnover.
He said American capital tends to chase top-tier model companies, betting that a handful of firms will capture a vast market; Chinese investment, by contrast, is flowing toward the application and industrial layers, wagering on a vast universe of factories, orders and niche scenarios.
Chen Xia, a Shandong-based columnist, says it is unlikely that Washington and Beijing will reach any major agreement at the September AI talks.
“The most likely outcome is a handful of toothless risk management clauses. On the issues China truly cares about, including access to technology and the easing of export controls, the US will not compromise on any of them,” Chen says. “The US only wants to walk away with maximum political gain at minimum cost.”
He says Trump’s current overture toward China is a tactical maneuver ahead of the midterm elections in early November, when Republicans are fighting to hold on to their slim majorities in both the Senate and House of Representatives. Once the vote is over, he says, Washington’s underlying strategy of containing and suppressing China will become more obvious.
He adds that the US is using the talks to push through a set of global AI regulatory rules that serve its own interests, seeking to lock other nations into a position of permanent disadvantage; China, by contrast, only wants to use the dialogue to secure a fairer and more equitable voice in shaping global AI governance.
Read: US may sanction China’s Moonshot for distilling Anthropic’s Fable
Follow Jeff Pao on X at @jeffpao3
