The third AI race

Christopher Smart, managing partner of geopolitical strategy firm Arbroath Group, says the most important AI race is not over who builds the best models or distributes them most widely, but who uses them most effectively.

Writing in a note published Monday, Smart says the U.S. maintains an edge in developing advanced AI thanks to its strengths in semiconductors, data centers and capital. China, meanwhile, has focused on accelerating adoption through inexpensive or free open-weight AI models that users can customize, aiming to spread AI throughout its economy and beyond.

While Washington and Beijing pursue different strategies, Smart contends that investors should look beyond AI developers and focus on which governments, companies and individuals are successfully integrating the technology into their work. The challenge, he argues, is not just building powerful AI tools but getting people to use them. Adoption, he says, will matter more than technological leadership alone.

Citing themes from The Geopolitics of AI: Power, Conflict and the Future of Global Order, edited by Hal Brands, Smart notes that countries such as Singapore and the United Arab Emirates are seeking advantages through AI-friendly policies and rapid deployment rather than competing directly with U.S. or Chinese model developers.

For businesses, AI promises remain easier to discuss than to measure, making execution critical. Smart concludes that the biggest beneficiaries of AI will be those that successfully incorporate the technology into existing products, services and daily activities, not necessarily those with the most powerful models or the most downloads.