The next phase of the US-China AI race may come down to chips, compute access, and how quickly Washington can close the gaps in its own rules.
A new policy paper from Anthropic has thrust the US–China AI rivalry back into the spotlight as President Donald Trump visits China alongside several Silicon Valley heavyweights, including Elon Musk, Tim Cook, Jensen Huang, and Larry Fink, warning that decisions made today could determine who controls the next generation of artificial intelligence by 2028.
In its report titled “2028: Two scenarios for global AI leadership,” Anthropic lays out two different outcomes for the global AI race.
In the first, the US and allied democracies successfully maintain their lead by tightening export controls, limiting what Anthropic described as “distillation attacks” by Chinese AI firms, and accelerating the global adoption of American AI technology.
“In this world, democracies set the rules and norms around AI,” the company wrote.
In the second scenario, Anthropic warned that if Washington fails to close loopholes around chip exports and remote access to computing infrastructure, Chinese AI firms could catch up or surpass US companies.
“In this world, AI norms and rules are shaped by authoritarian regimes, and the best models enable automated repression at scale,” Anthropic wrote.
Chips and compute are at the center of the fight
A major focus of the paper was access to advanced chips and semiconductor manufacturing tools.
Anthropic argued that China’s AI sector remains constrained primarily by limited access to cutting-edge compute resources rather than talent or research capabilities. The company claimed Chinese firms have stayed competitive by exploiting export-control loopholes, accessing overseas data centers, and using distillation techniques to mimic American AI models.
The report pointed to companies including Huawei, Alibaba, and ByteDance as examples of Chinese firms advancing AI efforts despite US restrictions. Anthropic also cited reports that Chinese AI models, including those from DeepSeek, were trained on advanced US chips that are technically restricted from being sold to China.
According to the paper, “distillation attacks” have become another major concern for US AI firms. Anthropic described the practice as Chinese labs creating fraudulent accounts to extract outputs from American models and replicate their capabilities at lower cost. The company said OpenAI, Google, Anthropic, and the Frontier Model Forum have all publicly criticized the practice.
AI seen as military and political tool
Anthropic repeatedly framed AI as both an economic engine and a national security technology.
The company warned that frontier AI systems could reshape cyber warfare, military planning, and surveillance. It claimed the Chinese government already uses AI for censorship, monitoring, and cyber operations, and argued that more advanced systems could dramatically expand those capabilities.
Anthropic also argued that a close US-China AI race could weaken safety standards because companies and governments may feel pressured to release increasingly capable systems faster. The report highlighted concerns about safety practices at Chinese AI labs, claiming only a small number publicly disclose safety testing results for high-risk areas such as chemical, biological, radiological, and nuclear threats.
A call for tougher US policy
The paper arrives as debate intensifies in Washington over semiconductor export restrictions and America’s long-term AI strategy, including how much access Chinese firms should have to advanced Nvidia hardware.
Anthropic urged US policymakers to tighten controls on advanced chips, crack down on chip smuggling and on overseas compute access, and expand efforts to promote the adoption of American AI systems worldwide.
The company said the US currently has a rare opportunity to lock in a significant lead.
“There is a high likelihood that we will look back on 2026 as the breakaway opportunity for American AI,” Anthropic wrote.
Still, the company said it supports AI safety dialogue with Chinese experts where possible and stressed that its concerns are directed at the Chinese Communist Party rather than the Chinese people or broader AI research community.
Anthropic’s paper ultimately frames 2026 as a narrowing window for US policymakers. Whether that view proves prescient or self-interested, the company argues that decisions made now could shape not only who builds the strongest AI systems but also whose rules govern how they are used.
For more on Anthropic’s growing enterprise momentum and how it’s reshaping the AI market, check out our coverage of how the company recently surpassed OpenAI in enterprise AI adoption, according to Neuron AI.