AI is a general-purpose technology with tremendous promise. But U.S. AI leadership and adoption is by no means assured, because there is intense international competition.
AI Is a General-Purpose Technology
It is important both because of its many uses and because of its development as an American industry. It promises to help address America’s decade-long productivity crisis. Boosting productivity 1 percentage point per year faster than the baseline estimations would lead to a 22 percent larger U.S. GDP by 2045. That in turn would reduce annual deficits by $640 billion.
U.S. AI Leadership and Adoption Is Not Assured
One case in point is the current backlash against building more data centers, which has been building even though all leading AI model developers have committed to ensuring their demand for electricity does not boost prices for consumers. Another example is resistance to AI stemming from fear of job losses. Two-thirds of Americans tell pollsters they think AI will lead to fewer jobs. So, no wonder 42 percent of Americans think AI will have more drawbacks than benefits. Meanwhile, 88 percent of people in China think it will be the other way: AI will have more benefits than drawbacks. I firmly believe China is right about that.
There Is Intense International Competition in AI
America is a race with China and others to lead in AI. On the research front, China leads in publication volume, citations, and patent grants, while the United States retains higher-impact patents. On the commercialization front, America produced 50 notable models in 2025 versus China’s 30. But China is ahead on the “AI of Things.” As measures of AI intensity, South Korea leads in AI patents per capita, and China’s share of the top 100 most-cited AI papers grew from 33 percent in 2021 to 41 percent in 2024. If China wins the AI race, its dominance could have two implications: 1. China would gain techno-economic leverage over us. 2. China’s military would likely have superior weapons. It is important for policymakers to understand the stakes and avoid that outcome.
