U.S. wants Asia to use its AI, but China dominates cheaper models

BEIJING — The artificial intelligence race between the U.S. and China is heating up in the world’s largest continent: Asia.

“The American strategy is to stop China from becoming the leading AI supplier for the rest of Asia … and frankly the whole world,” said Gary Dvorchak, managing director at The Blueshirt Group. While China’s alternatives are cheaper, he pointed out the U.S. currently offers a more complete solution from chips to AI models.

But the U.S. sales challenge was apparent at the Asia-Pacific Economic Cooperation “Digital Weeks” in the southwestern Chinese city of Chengdu this month.

The U.S. left few public traces of its involvement in the event, despite a U.S. official and a U.S. business representative to APEC both highlighting AI in promoting the Chengdu event earlier this year. The subdued U.S. presence comes after Anthropic flip-flopped on its Fable AI model release due to abrupt U.S. policy changes, and new Chinese AI models have recently launched similar capabilities for far less.

In contrast, last summer at the first APEC AI meeting in South Korea, Michael Kratsios, President Donald Trump’s chief science and technology policy advisor, highlighted the U.S. AI Action Plan and the establishment of the American AI Exports Program, according to a White House transcript of his remarks.

However, earlier this month Politico cited three former officials in reporting the Commerce Department has so far received a less-than-expected 78 applications for the American AI Exports Program.

And on July 24 at an APEC High-level Forum on AI organized by China’s cybersecurity regulator, Bill Guidera, deputy under secretary for innovation and engagement at the U.S. Department of Commerce, still focused on the AI exports program, according to materials reviewed by CNBC.

He called broadly for Asia-Pacific partnerships, noting buyers can acquire a full U.S. tech stack or just portions through the exports program. “It is the brilliant design that shows the strength, security and capability of U.S. AI,” Guidera said.

The Commerce Department’s International Trade Administration confirmed in a July 29 social media post that Guidera spoke in Chengdu. When asked about the Politico report, an ITA spokesperson said the volume of applications “exceeded our expectations.” The White House did not respond to a CNBC request for comment.

American business showcases were also limited. Google and Meta were the only U.S. companies that CNBC noted had booths at APEC as of July 23, among booths for Thailand and China, which were mostly Chengdu-based companies. The two U.S. companies respectively emphasized molecular AI system AlphaFold and AI applications for small businesses, rather than large language models.

Google’s government affairs vice president, Wilson L. White, only made passing references to Gemini in a speech on July 24, while Tencent Vice…