Business News Tech AI US-China AI race could face financial setbacks, mass layoffs over next three years: Report
US-China AI race could face financial setbacks, mass layoffs over next three years: Report
The report highlighted, the global artificial intelligence (AI) race is increasingly becoming a contest between China's state-led approach and the US market-driven model.
The intensifying artificial intelligence (AI) race between the US and China could face growing financial risks, including a potential " AI bubble burst " and mass layoffs over the next three years, according to S&P Global Ratings. The report highlighted, the global artificial intelligence (AI) race is increasingly becoming a contest between China's state-led approach and the US market-driven model. However, the outcome remains "uncertain," as "China shows advantages in government support and national coordination while the US hyperscalers plan to invest vastly larger sums and have unimpeded access to cutting-edge technology."
The competition between the two countries can be assessed across five key layers of the AI technology ecosystem, including power, chips, infrastructure, models and applications. S. in two and behind in two," with one layer where both face major challenges. " However, in semiconductor manufacturing , US technology restrictions remain China's biggest challenge, although these measures are also accelerating domestic innovation. It further noted, US technology bans are pushing China to develop "complete end-to-end domestic chip supply chains," reducing its dependence on foreign technologies. At the same time, both countries face different challenges in expanding data centre capacity. While the US data centre expansion is constrained by market expectations for returns on investment, China faces the risk of excessive infrastructure development driven by aggressive investment by local governments.
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