SOURCE: PIXABAY
BY KEVIN POLICARPO
China’s AI company, DeepSeek, back in January 2025 caught the world’s attention by putting China’s own foot forward in the global A.I. race.
According to a Bloomberg article (August 4th, 2026), China’s A.I. sector is closing the gap with Silicon Valley. Companies such as Alibaba group, Moonshot AI and ByteDance Ltd., have recently produced new A.I. models that are comparable in capability to U.S. models while being less expensive.
For example, according to a benchmark test carried out by independent evaluator Artificial Analysis, “…executing a complex real-world workload costs just $0.03 with DeepSeek V4 Flash, compared to $3.15 with Claude Fable 5.”[1]
Poe Zhao, a tech analyst from Beijing and founder of the Hello China Tech newsletter stated: “The most important change since January 2025 is that China’s progress no longer looks like a single-company breakthrough… The first DeepSeek moment looked exceptional. The recent releases suggest China now has a repeatable system for producing models close to the global frontier.”[2]
George Chen, Digital Practice chair at The Asia Group noted how President Trump and Premier Xi Jinping have made A.I. leadership a national priority: “A lot of countries are looking at the competition between US and China, and they don’t want to take a side right now because the competition’s just starting… When Xi visits the White House in September, because of Kimi, because of Alibaba and the model they just released last night, Xi will definitely feel like he has, in Trump’s language, more cards to play.”[3]
These recent successes for China are intensifying U.S.-China tech friction, which is prompting Washington to threaten sanctions over concerns of intellectual property. President Trump has also signaled that his administration is weighing the need for additional safety controls on models such as OpenAI’s GPT series and Anthropic’s Fable against the threat that China poses in the A.I. race, stating to reporters: “We have to be careful in both ways… We don’t want to restrict them where all of a sudden, we come in second to China.”[4]
Recently, OpenAI and Anthropic are planning initial public offerings with aspirations to reach market valuations of at least a trillion dollars. However, China’s A.I. offerings threaten both companies’ pricing power.
Dr. Kai-Fu Lee, founder of Chinese A.I. startup 01.AI stated: “If there weren’t these Chinese open-source models, OpenAI and Anthropic would be laughing all the way to the bank… Now there’s an alternative, and it’s cheaper.”[5]
U.S. Data Center Opposition
In order to keep ahead of competitors such as China, the U.S. is pushing the construction of new data centers hard. However, the rush to construct the data centers is running into growing opposition across the nation, opposition that is affecting politics in the lead up to the Midterm elections.
According to a Heatmap article (August 19th, 2026): “Three-quarters of Americans now say that they would oppose a new data center being built near where they live, according to a new Heatmap Pro poll conducted by Embold Research, and more than six in 10 Americans say they would strongly oppose such a proposal. That’s by far the most negative response since Heatmap Pro started polling Americans about their receptivity to data centers roughly a year ago.”[6]
This shift against data centers “…is represented across age, gender, income, partisan ID, and the rural-urban divide. Data centers are 43 points underwater with Republicans, 65 points underwater with independents, and 75 points underwater with Democrats. Notably, local data centers are 63 points underwater with rural voters, a group that has skewed more Republican over the past decade. Urban and suburban voters are only a few points more supportive of the facilities.”[7]
Both Democrats and Republicans are blaming the Trump administration’s lax response to the hacking incidents caused by OpenAI and Anthropic’s models as well as their relations to major tech companies. Former White House Chief Strategist Steve Bannon spoke to Reuters about the administration’s inadequate regulation of A.I. in regards to its potential dangers: “There is ‘too cozy a relationship between the companies and the staff, not just in the White House but I also think in the national security apparatus, …Why would you allow them to be in control? You don’t. And I’m the anti-deep state, anti-administrative state guy, but you definitely need at least a rudimentary framework of some sort of regulatory apparatus,’ to regulate AI…”[8]
The backlash against data centers is causing politicians to distance themselves from the facilities. Candidates in key swing states are scrambling to endorse much stricter data center regulations and accusing their opponents of being too cozy with tech giants.
One example of a politician switching sides on the data center issue is Pennsylvania Governor Josh Shapiro, who “…slammed what he called ‘predatory developers’ trying to bully local officials and ram through dozens of projects in Pennsylvania — his administration said it counted reports of more than 100 — that likely will never be built because they don’t have the financing, power supply or tech-sector clients to use the space.”[9]
Another example is the governor’s race in Texas. According to a Washington Post article (August 24th, 2026),[10] Republicans in Texas are switching their votes in the gubernatorial race from Greg Abbott to Democrat Gina Hinojosa: “A recent Fox News poll showed Hinojosa, a lawyer and state legislator based in Austin, within a point of Abbott, a sign of weakness in a state where the GOP usually boasts a nine- to 12-point advantage. Last week, the nonpartisan Cook Political Report shifted the governor’s race from “solid” to “likely” Republican. The picture in the U.S. Senate race to replace John Cornyn is even tighter, according to Cook, which lists the contest as a “toss up” between Paxton and Democratic state Rep. James Talarico.”[11]
This switch is due to Hinojosa’s push to impose a moratorium on data center projects whereas Abbott wants to continue construction.
FOOTNOTES
[1]https://www.bloomberg.com/news/articles/2026-08-04/china-s-ai-blitz-creates-death-zone-for-rival-us-model-makers
[2] Ibid.
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] https://heatmap.news/daily/data-center-opposition-poll-collapse
[7] Ibid.
[8]https://www.reuters.com/legal/litigation/trumps-tech-ties-blamed-ai-inaction-by-maga-republicans-democrats-2026-08-06/?utm_source=Sailthru&utm_medium=Newsletter&utm_campaign=Daily-Briefing&utm_term=080626&lctg=62fb99802babb15cdc0a4365&user_email=811ed8b292600ce981aafdcd541b60691ac1c024c7d281dc8621f11e98498b52
[9] https://www.publicsource.org/shapiro-data-centers-pennsylvania-energy/
[10]https://www.washingtonpost.com/nation/2026/08/24/some-texas-conservatives-are-planning-vote-democrat/
[11] ibid.