BBS:      TELESC.NET.BR
Assunto:  US firms should get ready for more competition from China
De:       Mike Powell
Data:     Mon, 23 Feb 2026 12:52:26 -0500
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'I do think we always have to think about, maybe even worry a little bit about,
Chinese subsidies': Microsoft President says US firms should get ready for more
competition from China

By Efosa Udinmwen published yesterday

US firms face rising challenges as China deploys affordable AI tools

    Government-backed funding gives Chinese firms significant operational
advantages
    Lower-cost AI models from China appeal to developing nations worldwide
    Microsoft is investing billions to strengthen AI tools and infrastructure
globally

Microsoft President Brad Smith has warned American technology companies may
face growing challenges from Chinese competitors that benefit from substantial
state subsidies.  Beijing has provided multi-billion-dollar support, including
a national AI fund and energy vouchers, to reduce operational costs for
domestic companies.

Smith compared the situation to China's earlier success in
telecommunications, noting how state-backed firms like Huawei and ZTE disrupted
the global market and pressured European and US companies.

Rising competition is fueled by government support

"I do think we always have to think about, maybe even worry a little bit
about, Chinese subsidies. Some American companies disappeared. European
companies like Ericsson and Nokia were thrown on the defensive," Smith told
CNBC.

"I think for the rest of us, we have to compete with that, and we have to be
good at competing with that, with the support of our governments."

He also emphasized similar strategies could make lower-cost AI offerings from
Chinese companies attractive in developing nations, where affordability is
often key.

Chinese AI companies have quickly expanded their international presence, often
relying on partnerships instead of building wholly owned data centers outside
China.  Alibaba, for instance, provides cloud-based AI services across multiple
regions but frequently collaborates with local infrastructure providers.

Smith pointed out that existing Chinese data centers worldwide could be
leveraged with government support, giving Chinese firms a potential cost
advantage in deploying AI models at scale.

China's approach includes both direct funding and operational incentives - a
national AI fund worth roughly $8.4 billion was established to support
early-stage projects, while local governments provide vouchers to reduce
computing costs.  Low energy prices in many Chinese regions further reduce
barriers to building and operating power-intensive AI infrastructure.

These measures create a competitive landscape where US firms may face pricing
pressures and constraints in emerging markets.

Microsoft is responding with its own investment strategy, aiming to spend $50
billion by 2030 on AI initiatives in developing countries, efforts which
combine infrastructure development, training programs, and support for AI tools
designed to enhance local productivity.

Smith argued American companies must compete effectively while leveraging their
advantages, including access to high-performance chips and leading-edge
technology, to maintain influence in global AI markets.

Analysts suggest that Chinese AI models could become dominant in regions with
limited resources, forming a "China tech sphere" over the next five to ten
years.  For governments and companies in developing nations, cost efficiency
may outweigh national origin when choosing AI tools.

Microsoft's response involves deploying AI and productivity tools that are
scalable, reliable, and capable of operating in the same environments targeted
by Chinese competitors.


https://www.techradar.com/pro/i-do-think-we-always-have-to-think-about-maybe-ev
en-worry-a-little-bit-about-chinese-subsidies-microsoft-president-says-us-firms
-should-get-ready-for-more-competition-from-china

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 * Origin: Capitol City Online (1:2320/105)

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