Punching above their weight: how China’s AI giants stretch each dollar in compute race

Advertisement Punching above their weight: how China’s AI giants stretch each dollar in compute race Lower costs and faster growth rates let China’s AI firms narrow the divide, raising the question: does the spending gap still matter? 3-MIN READ3-MIN Listen Howard Liuin Beijing The massive gap in artificial intelligence spending between US and Chinese tech titans may not buy the advantage expected for American giants, as lower domestic costs and heavy state support allow Chinese firms to secure far more computing power per dollar, according to a new report by Moody’s Ratings. While US hyperscalers outspent their Chinese counterparts by a staggering margin, the physical gap in computing capacity was nowhere near as wide as those mega-budgets suggested, the report said. Lower buildout costs, targeted policy incentives and access to cheaper green energy meant Chinese tech firms were punching above their financial weight, narrowing the compute divide with American peers at a fraction of the price, Moody’s noted. The US retained a clear overall lead in cutting-edge semiconductor chips, but the findings suggested headline capex numbers tell only part of the story. Here is what you need to know. How wide is the spending gap between US and Chinese tech giants? Capital expenditure by China’s major tech companies was set to more than double to around US$140 billion this year – up from US$65 billion in 2025 – and reach US$165 billion by 2027, according to Moody’s. Advertisement Select Voice Select Speed 1.00x [Image text:] RA100 R382 R392 MEDT 42 472 TEDS EOLF 800 O e R06L 10 06 R215 EOT L03 C 103 . 00 1003 RA750 R651