Abstract

This report analyses the AI competition between U.S. and China, in terms of the components of AI ecosystem including semiconductor, infrastructure, AI foundation model and its application layer. The government’s strategy and related policies are also investigated. This report predicts that the long run outcomes of AI competition is contingent to the following factors. ① the degree AI model’s commoditization and the shift of major battlefield to AI applications, ② the long run effectiveness of technology protection policy such as export control on semiconductor ③ the efficiency of the innovation systems of both countries. This report also presents policy implications to us.