AI pioneer Kai-Fu Lee told Bloomberg that Chinese AI firms are rapidly narrowing the technological gap with the U.S. despite semiconductor sanctions.

U.S. restrictions forced Chinese companies to innovate by optimizing algorithms and data utilization on less advanced hardware.

China’s focus on open-weight models provides a cost-effective and customizable alternative to closed systems from OpenAI and Anthropic.

Lee expects China to win the global AI reach race by capturing demand in Global South markets.