The massive gap in artificial intelligence spending between US and Chinese tech titans may not buy the advantage expected for American giants, as lower domestic costs and heavy state support allow Chinese firms to secure far more computing power per dollar, according to a new report by Moody’s Ratings.
While US hyperscalers outspent their Chinese counterparts by a staggering margin, the physical gap in computing capacity was nowhere near as wide as those mega-budgets suggested, the report said.
Lower buildout costs, targeted policy incentives and access to cheaper green energy meant Chinese tech firms were punching above their financial weight, narrowing the compute divide with American peers at a fraction of the price, Moody’s noted.
The US retained a clear overall lead in cutting-edge semiconductor chips, but the findings suggested headline capex numbers tell only part of the story. Here is what you need to know.
How wide is the spending gap between US and Chinese tech giants?
Capital expenditure by China’s major tech companies was set to more than double to around US$140 billion this year – up from US$65 billion in 2025 – and reach US$165 billion by 2027, according to Moody’s.