Countries caught between the United States and China are trying to benefit from both sides of the intensifying US-China AI rivalry, as Washington and Beijing build competing international blocs around advanced technology.
The balancing act may become harder as the two powers seek to draw clearer lines between their alliances. Governments could eventually face a choice between access to America’s most advanced chips and AI systems, and China’s cheaper, open-source alternatives.
Kazakhstan has emerged as one of the clearest examples of a country attempting to bridge the divide. Its AI minister, Zhaslan Madiyev, joined a US effort to strengthen AI supply chains during a visit to Washington in June, then travelled to Shanghai three weeks later for a ceremony marking Kazakhstan as a founding member of China’s World AI Cooperation Organization.
The Central Asian country hopes its involvement with the US-led Pax Silica will bring technology partnerships, high-tech manufacturing jobs and a role in international AI supply chains. Membership of the Chinese initiative, alongside 28 other founding countries including Pakistan and Russia, could give it a voice in shaping regional and global standards.
“Everyone is hedging,” said Dana Masalimova, a former Kazakh diplomat and an independent scholar and centre associate at Harvard University’s Kathryn W. and Shelby Cullom Davis Center for Russian and Eurasian Studies.
“We don’t want this binary choice,” she said.
Countries seek influence as AI blocs take shape
Kazakhstan is benefiting from investment linked to both powers, although Ms Masalimova said it occupied a “very precarious spot”. The country has critical mineral resources used in AI development and relatively cheap electricity to power data centres.
Its government signed an investment deal worth up to 10 billion dollars involving Nvidia earlier this year to develop what it called a “data centre valley”. Chinese investment has also been growing, with local officials saying foreign direct investment from China reached a record 2.8 billion dollars in 2025.
Chinese President Xi Jinping met Kazakhstan’s President Kassym-Jomart Tokayev in July to discuss expanding co-operation under Beijing’s Belt and Road infrastructure initiative.
Washington has presented Pax Silica as a group for trusted partners, with China its implicit target. The US State Department said: “Countries can’t be trusted partners in Pax Silica while substantively engaging in initiatives that advance a competing vision for super intelligence.”
President Donald Trump said last month that “whoever wins AI, wins”. US officials and AI companies have accused China of large-scale “distillation”, meaning the extraction of capabilities from leading American models. Beijing has rejected the allegations, accusing the US of pursuing an AI monopoly while restricting China’s access to advanced chips and chipmaking equipment.
China has promoted its World AI Cooperation Organization as a more open and inclusive alternative. The Chinese embassy in Washington said: “As both major countries in AI, China and the United States should leverage respective strengths in AI rather than guarding against each other. AI should not be owned by major countries.”
Kyle Chan, a fellow at the Brookings Institution’s John L Thornton China Center, said the contrasting approaches reflected the two countries’ different positions. China needs to attract third countries as it builds an alternative coalition, while the US already has an extensive network of allies.
That gives added importance to what Mr Chan described as “swing countries” — governments able to work with both sides while the rivalry remains unsettled.
Indonesia and Singapore weigh their options
Indonesia, another country with resources important to advanced technology, has also joined China’s AI organisation. The country is a major source of nickel and copper and is seeking investment and technological benefits from both powers.
“We should be able to be part of both, put it that way. And choose the best system,” Mari Pangestu, vice-chair of Indonesia’s National Economic Council, told reporters at a University of Hong Kong Business School event.
US AI companies are expanding their presence elsewhere in the region. Anthropic is establishing its latest Asian office in Singapore, whose government is also considering whether to join China’s organisation.
Saudi Arabia is pursuing a similarly mixed approach. Its AI start-up Humain unveiled a platform in September built on an open model from a Chinese AI company, while the kingdom has a separate Nvidia deal to expand computing capacity using the company’s advanced chips.
France is attempting to develop an independent position. Its start-up Mistral, described as one of the most ambitious AI developers outside the US and China, released a model this month that outperformed some advanced Chinese systems.
Japan remains closely aligned with Washington on security and strategic matters, including advanced semiconductors, trusted AI and standards. But Takahiro Tsuchiya, a professor at Kyoto University of Foreign Studies, said Tokyo would not rule out cheaper Chinese models for “lower-risk applications”.
US-China AI rivalry leaves other powers dependent
The choices are particularly difficult for countries such as the UK and Germany, which have substantial economic and military capabilities but no domestically developed frontier AI models of their own, according to Anton Leicht and Sam Winter-Levy of the Carnegie Endowment for International Peace.
They said access to advanced AI systems could depend on decisions made in Washington and Beijing, leaving countries that lack their own leading models with limited influence over how the technology develops.
China has been narrowing the gap with the US in chipmaking and advanced AI, although it still trails the leading American capabilities. Its open-source approach, however, allows other countries to reduce their reliance on the US.
Beijing has also funded efforts by developing countries to establish their own AI ecosystems. AidData, a research lab at William & Mary university in Virginia, said China had provided official grants and loans for projects using or enabling AI technology in at least 77 low- and middle-income countries.
Nigeria, Zambia, Ghana, Bangladesh, Senegal, Cameroon and Kenya are among the main recipients. Research from the Pew Research Center has also found that public opinion in middle-income countries is becoming more positive towards China on AI and its regulation.
Aalok Mehta, director of the Wadhwani AI Center at the Center for Strategic and International Studies, said many governments were reluctant to choose between the rival technology systems because each offered advantages and disadvantages.
“Most countries don’t want to pick a side … because there are advantages and disadvantages to each technology stack,” he said.
Countries may ultimately have few options to compete with the US and China in developing frontier models. But Mr Mehta said governments around the world were nevertheless considering how to secure control over their use of AI and protect what he called their AI sovereignty.
