America Must Win the AI Race Against China

July 2, 2025

America risks losing the global AI race to China due to restrictive copyright lawsuits and underutilized data, undermining national security and innovation while Beijing accelerates through state-backed access and legal leniency.

The 21st century will be defined by a great power competition between the United States and China, with artificial intelligence at the center of the rivalry. Beijing recognizes that AI will significantly impact geopolitics and global economic competitiveness for decades to come and has set a national goal to lead the world in the technology race by 2030. America’s strength lies in its dynamic private sector and its historic commitment to fostering transformative innovations, ranging from electricity to the Internet.

America Must Grow a Strong AI Industry

Washington must treat American AI leadership as a top strategic priority. That means fostering innovation at home and resisting calls to restrict our own tech industry, including a firm rejection of efforts to undermine our long-standing copyright policy. Such a misguided approach would undermine America’s economic competitiveness and national security at precisely the moment when the global AI competition is rapidly accelerating.

If China reaches advanced AI first, it will surge ahead in autonomous weaponry, cyber warfare, and intelligence analysis. Economically, Chinese firms with the world’s best AI would dominate critical industries from biotech to finance. Beijing could set global rules for AI, exporting authoritarian standards and undermining freedom worldwide. Chinese deepfakes and propaganda could compromise the very integrity of information itself. Losing this race would irreparably harm America’s security and prosperity.

Data is the new oil of the digital age, and China’s leaders know it. One of Beijing’s top goals for 2024 is to “promote the development, openness, distribution, and utilization of data,” treating data as a strategic resource for national power. The Chinese government has recently established a National Data Administration to channel data into AI development and ensure a stable and high-quality data supply across the economy. Chinese AI firms routinely access vast troves of government data, including surveillance camera footage and health records, giving them a considerable advantage.

When China’s AI companies get access to large government datasets, their innovation rates jump dramatically. In areas such as healthcare and geospatial intelligence, China’s national champion labs have a privileged pipeline of data, which supercharges their algorithms. By contrast, the United States has not yet recognized the importance of access to data. The US government has not made nearly as much government data available to AI developers, and our AI champions face a barrage of lawsuits that twist lawful development into illegal infringement.

America rose to technological prominence by championing an open approach to information. Our balanced copyright framework, especially the doctrine of fair use, has long enabled new technologies to flourish while still protecting American IP and fostering the global reach of American culture. Fair use allows for transformative use of copyrighted material without permission. That’s why search engines can index the web, researchers can mine data, and software developers can test and improve algorithms using benchmark datasets.

Courts have consistently upheld fair use for technologies that create new societal value from existing works. Training AI models fits squarely within this tradition. The Trump administration should defend it.

International Online Freedom Is at Risk

Unfortunately, that cornerstone is now under siege. Europe has adopted a much more restrictive stance on AI training data, now allowing copyright holders to opt out of having their content used for training, creating a thicket of uncertainty that hampers European startups. We must not let America drift toward such over-regulation. Our fair use framework is precisely why we became the global hub for AI development, and it remains our best competitive advantage.

The biggest threat to continued American leadership on AI comes from the growing efforts to restrict access to the datasets used to train advanced models. In the past year alone, at least three dozen lawsuits have been filed against US AI developers, alleging that learning from copyrighted content in training data is outright infringement. Some suits seek astronomical damages or demand that AI models be deleted entirely.

If these plaintiffs prevail, every American AI lab would face a constant threat of multi-billion-dollar liability, chilling investment, and driving our best researchers overseas. For Beijing, this would be a dream come true. While American firms are paralyzed by litigation, Chinese AI champions continue to train on whatever data they choose. If China has free access to data while American companies are denied it, the race is effectively over.

How Can the American AI Prevail Over China?

The United States should preserve the legal environment that enabled our innovation in the first place. Our fair use doctrine isn’t a loophole; it’s a deliberate policy that balances creators’ rights with the broader public interest in progress. Maintaining the current copyright framework will ensure the world follows America’s lead.

The government itself should review what data it can release to AI companies without compromising the privacy of its citizens. With these two steps, let’s keep America’s AI engines running at full speed, and secure our future in this defining technology of our time.