Elon Musk recently said that Grok 5, the next version of his chatbot, will be the closest thing yet to artificial general intelligence (AGI). His words highlight the way many in the U.S. still see the future of AI. They believe the next step is not just better tools, but machines that can think at a human level. The race to build this kind of AI is fierce, with firms like OpenAI, Alphabet (GOOG), Meta Platforms (META), and others spending at a record pace. Analysts estimate that the big tech companies will spend between $344 billion and $400 billion in 2025 on data centers, talent, and research.
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Yet China is running a different race.
America bets on AGI
In the U.S., AGI has become the main prize. Supporters say it could bring military advantages, open new ways to treat disease, and even help tackle climate change. Some researchers think superintelligent systems may arrive as soon as 2027. The sums of money being spent show how high the stakes have become. A congressional panel has even raised the idea of a “Manhattan Project” for AI to ensure the U.S. stays ahead.
Still, risks are mounting. The release of GPT-5 by OpenAI last month was meant to be a big step toward AGI. Instead, it left many users underwhelmed. Chief executive Sam Altman admitted the rollout was rough and has tried to cool down expectations. Other tech leaders have also started to pull back from bold forecasts. As more money pours into the sector, some investors are asking if the chase for AGI is becoming a bubble.
China favors applications
China, by contrast, is pushing AI that works in the here and now. President Xi Jinping has urged the industry to build tools that can improve efficiency and be put to use right away. To accelerate progress, the Chinese central government set up an $8.4 billion fund in January, while local authorities and banks rolled out their own programs. Cities have also published development plans under the “AI+” banner, meant to weave AI into daily life and industry.
This pragmatic drive is already visible. State media say Chinese AI models are grading school exams, advising farmers on crops, and helping police respond to cases. Tsinghua University is building an AI-assisted hospital where doctors will work with virtual colleagues. Factories are using intelligent robots to inspect textiles and assemble cars. The city of Xiong’an has even introduced a local AI model to help farmers with pest control and to improve weather reports.
For China, part of this path is shaped by limits. U.S. export rules make it hard to get the top semiconductors needed to train extensive models. As a result, China has placed a greater emphasis on smaller data centers and open-source tools. The strategy is to spread AI broadly and make it cheaper to adopt, even beyond its borders. One important note is that despite China’s focus on practical uses of AI, Alibaba (BABA), the giant e-commerce company, has stated it will eventually pursue AGI.
Which path wins?
The United States and China are placing very different bets. The U.S. is focused on a long-term vision of machines that could one day match human thought. China is concentrating on near-term tools that raise efficiency and support entire industries. The U.S. risks pouring vast sums into a goal that may take far longer than expected. China risks being left behind if a breakthrough in general intelligence does arrive. At this stage, both strategies carry weight, and only time will show which path delivers the greater payoff.
By using TipRanks’ Comparison Tool, we’ve stacked some of the larger AI companies, both American and Chinese, side by side to gain a broader view of each stock.
