Many criteria could be used to judge which country is coming out ahead in the AI Race. Which country’s chatbots are better at distorting facts or refusing to report at all on matters censored by the Chinese Communist Party? Chinese AI. Which AI industry is better at making dramatic technological advances? American AI. Which is better at stealing the innovations? Chinese AI.
Which country would win an all-out cyber war on the other? China seems to be already engaged in one.
Noah Smith believes that “America is still beating China in the AI race” and advises that the U.S. retain this lead (September 5, 2026).
“Imagine if China were to gain a big lead in AI models that gave it the power to easily hack into American banks and brokerage accounts and erase people’s wealth. It would cause absolute chaos in American society, but how could the U.S. retaliate? Launch nukes? Nor could the U.S. hack China in return, since China’s more capable AI would also be used to defend. If either country opens up a large, sustained lead in AI capabilities, it might upend the balance of power between the two.”
The cyber war
One can have the best technology without having the best strategy. So far, the U.S. has responded to the CCP’s sweeping cyberattacks on American networks and infrastructure of recent years by targeting known state-backed hacking groups and their infrastructure, perhaps in order to deactivate malware. And the U.S. has targeted front companies for PRC state agencies.
Whether our cyber warriors have also infiltrated or attacked the Chinese government’s own networks or military infrastructure in any meaningful way is unclear. Operations wouldn’t necessarily be publicized, and CCP accusations must be taken with a grain of salt.
But if U.S. cyber operations against China are not yet as damaging as they might be, it may also be true that the U.S. government’s cyber warriors right now can hit China’s networks much harder than it ever has and is even preparing to do so. As of February 27, 2026, the Pentagon was at least “seeking to make AI-powered cyber tools to identify infrastructure targets in China as part of an effort to improve US capabilities in any future military conflict with Beijing.” Perhaps the plan will fall into place once the cyber tools are developed. So there is at least a plan to have a plan.
Posture
A 2023 “Posture Statement” published by U.S. Cyber Command states that a “China Outcomes Group aligns components in USCYBERCOM and NSA, enhances intelligence insights, improves cybersecurity and delivers operational outcomes for the nation. Resources are prioritized and focused on deterring and countering the PRC’s aggressive behavior.”
Priorities are good, as is focus.
Since 2023, investigators have discovered many major and devastating cyber attacks on us, including campaigns traced to China and state-backed hackers that have compromised U.S. telecommunications, critical infrastructure, and the U.S. Treasury and other government networks. So it seems that the deterrence part of the mission has not yet achieved peak success.
