US-China Tech Rivalry Intensifies Over TikTok Sale Deal

Last Friday, a high-stakes phone call took place between President Donald Trump and Chinese President Xi Jinping, focusing on the future of TikTok. The discussions centered around a proposed sale of the platform to a US consortium that includes tech giants like Oracle. While this deal is presented as a win for American control over algorithms and user data, it highlights a broader concern: the relationship between the United States and China has evolved into a complex technology competition that challenges American interests.

The implications of this tech rivalry extend far beyond the TikTok negotiations. The ongoing conflict is rooted in a strategic framework that China has developed over decades. This framework is not merely about politics or trade; it represents a significant shift in global power dynamics where technology plays a crucial role. China’s strategy can be traced back to the 1990s when it began leveraging its large, state-controlled market to coerce foreign firms into joint ventures, facilitating the transfer of vital technology and expertise. By 2015, more than 6,000 joint ventures had generated approximately $27.8 billion in foreign investment, significantly bolstering China’s technological capabilities.

China’s next phase involved domestic replication of foreign technologies. By studying innovations and learning directly from Western experts, Chinese companies reverse-engineered and tailored these technologies for local applications. This approach allowed them to rapidly scale production and enhance domestic capabilities without depending on external expertise. The ultimate goal was to achieve technological parity or even superiority over Western counterparts while maintaining control over its vast domestic market.

Beijing’s focus on achieving self-sufficiency in technology has resulted in substantial investments in research and development (R&D). China is now the second-largest spender on R&D globally, with initiatives like Made in China 2025 and Xi Jinping‘s emphasis on “technological self-reliance” propelling advancements in vital sectors such as 5G, artificial intelligence, electric vehicles, robotics, and space exploration.

The competitiveness of Chinese firms has increasingly frustrated US companies. Jensen Huang, CEO of Nvidia, expressed concern about China’s rapid advancements in AI chips, which have begun to rival Nvidia’s offerings. He attributed the situation to the turbulent relationship between the US and China, indicating a broader impact of geopolitical policies on technology markets. As he remarked, “Nvidia would be supportive of the Chinese government and the US government as they all sort through these geopolitical policies.”

Today, China is producing AI chips that are comparable to Nvidia’s lower-tier models, suggesting a reduction in reliance on foreign hardware. The newly designed H800 chips are specifically tailored for the Chinese market, emerging after the US blocked the export of Nvidia’s advanced models. This shift indicates that Beijing is increasingly capable of powering its AI and industrial systems independently.

The success of companies like DeepSeek exemplifies China’s effective adaptation of foreign technology. By capitalizing on partnerships with US firms and academic institutions, DeepSeek has utilized a process known as “distillation.” This technique enables one AI model to learn from another by mimicking its behavior, allowing DeepSeek to absorb insights from advanced models like ChatGPT without replicating every detail. As a result, the company has made significant strides toward achieving near parity in AI capabilities.

US universities have played a pivotal role in facilitating China’s technological growth. In late August, President Trump announced that up to 600,000 Chinese students would be allowed to study in the United States. This decision underscores how US institutions often prioritize financial gains—approximately $50.2 billion annually—from international students over national security concerns. Through initiatives like the China Scholarship Council, China continues to gain access to technological know-how, funding thousands of STEM students who are required to return home to contribute to its scientific ambitions.

Additionally, programs such as the Thousand Talents Plan entice skilled Chinese nationals working in major US tech firms back to China, offering attractive salaries and research funding. These incentives have raised alarms among intelligence officials, who view them as potential avenues for espionage.

China’s strategy also encompasses partnerships with leading American universities. For instance, MIT and Tsinghua University have collaborated on advanced robotics and machine learning, effectively equipping China with the knowledge necessary to replicate and scale cutting-edge technologies. This academic cooperation accelerates China’s ascent as a global technology leader.

Dr. Fei-Ling Wang, author of “The China Race: Competition for Alternative World Orders,” emphasized that unless the US takes decisive action, China’s strategy of technology acquisition and advancement could position it as the global leader of the 21st century. The United States now faces a critical choice: to continue prioritizing short-term economic gains or to confront the long-term challenges posed by China’s rise to power.

To navigate this complex landscape, the US must adopt a comprehensive approach. This involves tightening export controls on advanced technologies, increasing scrutiny of academic collaborations, and significantly ramping up investment in domestic R&D and STEM education. The forced sale of TikTok represents only one aspect of this unfolding narrative, but the stakes for US innovation, security, and global influence have never been higher.