The competition for artificial intelligence supremacy has entered a new phase, with China’s president Xi Jinping proposing a multilateral governance body and US senators warning that domestic infrastructure bottlenecks risk handing Beijing the lead. Speaking at an international AI conference in Shanghai on July 17, Xi called for the creation of a World AI Cooperation Organization (WACA), initially comprising 29 countries from the Global South including Russia, Brazil and Indonesia. “The development of AI cannot result from the work of a single country, but must come from a symphony of international cooperation,” Xi said.

The proposal comes as Washington focuses on the physical infrastructure needed to sustain AI growth. At a Senate Commerce Committee hearing, chairman Ted Cruz stated: “We are in a strategic competition with China to lead the world on AI, and winning that race requires massive capital investment to build the networks that will power tomorrow’s AI applications.” Witness Asad Ramzanali of the Vanderbilt Policy Accelerator told the committee that the current US data centre buildout “has no coherent governance strategy at all and it’s provoking real backlash around the country,” citing community opposition to water and electricity consumption.

Meanwhile, Meta CEO Mark Zuckerberg has pushed back against calls to ban Chinese AI models, telling the Financial Times that a prohibition would not be “an effective solution”. Instead, he suggested US companies should “systematically” identify bottlenecks to compete better. His comments follow US Treasury Secretary Scott Bessent’s warning that sanctions could be considered if Chinese labs “cross the line into theft of intellectual property”, after allegations that Moonshot AI used US rivals to train its Kimi K3 model – a charge the company denies.

Analysts note that the rivalry is shifting from model performance to global adoption. China is pursuing an open-source strategy to encourage uptake of its systems, while the US relies on private-sector giants. The decisive phase of Xi’s diplomatic push is expected during his visit to the United States on September 24, a meeting that will test whether cooperation or confrontation defines the next stage of the AI race.