China Supremacy ASPI Report, Stanford State of AI Report 2025
And other reports I'm reading. 🧠💻 DeepCoder-14B, Qwen 3, what is Deep Cogito? State of Open-source LLM space. Are we witnessing China AI Supremacy? Not yet but China emerging tech supremacy is here.
Image source: see the work of the illustrator.
Hey Everyone,
In this article I want to cover some of the reports I’ve been reading, namely the Stanford State of AI Report 2025. Full disclosure you might want to print this one out, it’s infographics utopia. Whether you are an investor, China watcher, professor, analyst or someone in industry, we’re going to cover some major AI trends and emerging tech snapshots here.
I’m going to make your job more easy if I can. I will link to the original reports repeatedly throughout the article.
Meanwhile Trump’s tariffs, especially the China trade war now escalated could hurt AI and datacenter by making stuff more expensive, lowering BigTech margins and disrupting critical supply-chains for advanced technologies.
In the open-source AI space, Together AI, Alibaba and Deep Cogito are doing some interesting things.
State of Open-Source LLMs
While Meta’s Llama-4 appears to be a disappointment, and we usually think of Mistral, DeepSeek or Qwen in Open-source LLMs, I want to turn your attention to a couple of other contenders (though as we will see they are related) I think deserve a worthy mention.
Together AI who raised over $300 million Series B a month ago, have announced 🧠💻 DeepCoder-14B – A fully open-source, RL-trained code model! It’s interesting because it’s a code reasoning model finetuned from Deepseek-R1-Distilled-Qwen-14B via distributed RL.
Remember this is open-source, they have basically democratized the recipe for training a small model into a strong competitive coder—on-par with o3-mini—using reinforcement learning.
Qwen 3 Upgrades from Alibaba Cloud
The next version of the Qwen LLM series, Qwen3, brings a new level of advancement in both natural language processing and multimodal capabilities.
Qwen3-VL (Vision-Language) is a powerful addition to the Qwen3 series, designed to seamlessly integrate visual and textual data, enabling the model to understand and generate language in the context of images and videos. With advanced multimodal capabilities.
A significant highlight of Qwen3 is the introduction of Qwen3-math, a model designed specifically for tackling mathematical reasoning and problem-solving tasks.
In addition to these enhancements, Qwen3-Audio makes its debut, bringing robust audio processing capabilities into the mix.
We will know more about Qwen3 when they announce the flagship model which is expected soon.
What is Deep Cogito?
Coming out of stealth this week, Deep Cognito introduces revolutionary open-source hybrid models. They boast a family of openly available AI models that can be switched between “reasoning” and non-reasoning modes. As you know, Hybrid models can quickly answer simple questions while spending additional time considering more challenging queries.
They are releasing open models of 3B, 8B, 14B, 32B, and 70B sizes.
They plan to release larger models too including 109B, 400B, 671B, in the coming weeks / months, as well as improved checkpoints for each of these model sizes.
The LLMs are trained using IDA - a scalable alignment strategy for better performance, according to the CEO.
You can download them on Hugging Face or Ollama, or use them as an API on Fireworks AI or Together AI.
Deep Cogito says Iterated Distillation and Amplification (IDA) is a promising alignment technique for self-improvement. The Open-source LLM space is so much more collaborative you’ll notice and the team thanks Llama Team, Qwen Team, HuggingFace, RunPod, Fireworks AI, Together AI, Ollama, Nebius.
How the Media is Framing the HAI Report
The AI Index report tracks, collates, distills, and visualizes data related to artificial intelligence (AI).
Multiple Media outlets have taken the main talking point from the State of AI report that China is catching up in AI. The U.S. vs. China AI race for AI Supremacy is the main thesis of this Newsletter. So in this post we’ll be exploring this from multiple angles.
Many leaders in Silicon Valley and D.C., including in the Trump administration, say winning this AI competition is critical to the future of U.S. national security. But two reports this week highlight China’s gaining superiority. This one and this one. What should we make of this relative to the absurdly high trade tariffs Trump has put on China?
“The tariffs will make building AI datacenters much more expensive, both because AI servers are largely imported and will face tariffs, at least until supply chains can be rejigged, and because much of the other equipment in datacenters, like the cooling and power infrastructure, is imported as well,” says Chris Miller, author of Chip War.
The ASPI report is even more urgent. In a new report, the Australian Strategic Policy Institute (which I will refer as ASPI in the rest of this article) says China is outpacing the US in 37 out of 44 critical technology research areas. I’ve been reading this report for years and it’s moving in the direction of Chinese AI Supremacy. Yet hardly anyone in the West is talking openly about this! What it amounts to is China leading in the next era of emerging tech - from quantum to biotechnology, to space-technologies and robotics.
Robotics
Biotechnology
Space-Technology
Quantum computing
Artificial Intelligence
New energy systems
Renewable energy
Infrastructure construction
Advanced materials & manufacturing
While the U.S. is hype driven around BigTech profits related to Generative AI, China appears to be taking a more holistic approach to technological innovation focusing on shoring up its semiconductor industry, winning the humanoid robotics race and dominant innovation at the bleeding edge of many frontiers.
Australian Think Tank’s Dire Warning
The Australian Strategic Policy Institute (ASPI) is an independent, non-partisan think tank that provides analysis and advice on defense, strategic policy, and national security issues, aiming to inform public debate and influence government decision-making.
According to this Australian Strategic Policy Institute: China’s global lead extends to 37 out of 44 technologies that ASPI is now tracking, covering a range of crucial technology fields spanning defence, space, robotics, energy, the environment, biotechnology, artificial intelligence (AI), advanced materials and key quantum technology areas
While the Trump Administration is supposedly full of China hawks, he’s increasing tariffs and export controls, basically pushing China to innovate harder and more trade relationships with the rest of the world more aggressively. He’s boasting about investments in the U.S. which are exaggerated don’t address the key technologies of the future.
“China’s overall research lead, and its dominant concentration of expertise across a range of strategic sectors, has short and long term implications for democratic nations. In the long term, China’s leading research position means that it has set itself up to excel not just in current technological development in almost all sectors, but in future technologies that don’t yet exist.” - ASPI’s verdict is pretty stark.
A report of China using Quantum computers to fine-tune LLMs really caught my attention. It hasn’t been independently verified though or even peer reviewed.
The Stanford Institute for Human-Centered Artificial Intelligence (HAI) is perhaps one of the more neutral AI reports out there. Yet their data on China in AI says the same thing.
Packed with new data and in-depth analyses, our latest report highlights the most critical trends in AI – from shifting geopolitical landscape and rapid technological evolution, to AI’s expanding role in science and medicine, business, and public life.
This is the report that we’ll be going into the most detail today.
The ASPI report highlights a lot of important topics for our emerging tech coverage however.
Also worth checking out: ASPI’s new Critical Technology Tracker.
You can compare the U.S. with China directly on any of their categories directly:
The results are a bit humbling. Their report is 84 pages.
Is China the Future Emerging Tech Super-Power of the 2030s?
“Our research reveals that China has built the foundations to position itself as the world’s leading science and technology superpower, by establishing a sometimes stunning lead in high-impact research across the majority of critical and emerging technology domains.”
All signs point to China really gaining the lead in the 2030s. It must overcome some pretty significant barriers in the semiconductor industry, the Cloud, its Venture Capital system and the way it develops startups, and its lack of foreign investment since the U.S. has been working to undermine this, along with export controls on AI chips. However nothing the U.S. is doing is likely to prevent the outcome that China will dominate, in most technology sectors.
I mean, I could make the argument China already has the lead in humanoid robotics and Open-source LLMs already in 2025. The U.S. inspite of the hype around OpenAI and Anthropic’s Generative AI capabilities, appear to be losing momentum in most of these categories to China in the mid to late 2020s.
Indeed even the way the Trump Administration interprets trade with China seems to be all wrong. Cleary the U.S. is not planning for a future where it is competitive with China in innovation and emerging technologies with these weird trade war last ditch efforts slow them down type policies with cumulative tariffs of at least 104%. If anything, the U.S. is too defensive and thinking about deterrence, insteading of promoting science and technology at home. Instead of building AI Infrastructure in one concentrated area, it’s slipping behind in many of the others.
If Jensen Huang is the New King of Tech? What is China? Nvidia’s stock remains down 30% this year and likely going down further. While Western media keeps talking about Silicon Valley or Elon Musk, the world is moving on. The Billions the Americans are spending, aren’t even in critical or right areas to keep up. The U.S. is cash rich, but not spending in the right places.
According to Stanford, the U.S. saw $109.1 billion invested last year —nearly 12 times China's $9.3 billion and 24 times the U.K.'s $4.5 billion.
ASPI analyzed the top 10% most highly cited research publications from the past five years on each of the 44 technologies to draw some of its conclusions.
Meanwhile in AI, China continues to lead in AI publications and patents. The HAI’s report is 456 pages.
China will be the Space-Tech Leader
Where China’s lead is likely to be the most impactful in the next decade is the defense and space sector. A key area in which China excels is defence- and space-related technologies. China’s strides in nuclear-capable hypersonic missiles reportedly took US intelligence by surprise in August 2021.
China becoming the space-tech leader will have ramification in national defense and especially future energy systems. Innovation as China is well aware of isn’t just about AI or generating hype for Generative AI that isn’t even the right architecture for major progress to occur. If Silicon Valley operates on hype and moonshots, China is a bit more grounded in how it invests in the long-term future.
At a certain point, American BigTech will just be left behind as they are revenue and shareholder driven (short-term), not innovation driven. Outside of BigTech what does the United States even have but a world leading education system and immigration system to funnel talent to their same companies? America’s vast Venture Capital apparatus isn’t even investing in the right things to keep up.
The main conclusion from the ASPI report that syncs with my own assessment is simple: China is further ahead in more areas than has been realised. The U.S. media seem to not want to cover this reality. Thus you can see more Substack Newsletters delving into it instead as independent curators, researchers, analysts, academics and journalists.
Which other Countries are in the Mix in Emerging Technologies?
ASPI’s global assessment of technology is fairly well done: so Outside of China and the U.S. we can see as follows:
“The race to be the next most important technological powerhouse is a close one between the UK and India, both of which claim a place in the top five countries in 29 of the 44 technologies. South Korea and Germany follow closely behind, appearing in the top five countries in 20 and 17 technologies, respectively. Australia is in the top five for nine technologies, followed closely by Italy (seven technologies), Iran (six), Japan (four) and Canada (four). Russia, Singapore, Saudi Arabia, France, Malaysia and the Netherlands are in the top five for one or two technologies.”
China
United States
United Kingdom
India
South Korea
Germany
Australia
Italy
Iran
Now we turn to the main strength of the ASPI report: (easy conclusions from the analysis)
Technology Monopoly Risk Chart
ASPI really breaks it down for the U.S. vs. China race:
You will notice China’s lead in many areas means it cannot really lose the robotics, Space-technology, Space-construction and hi-tech races of the sci-fi future. Or even a prolonged hot military confrontation due to its manufacturing prowess. Just don’t expect Trump to show weakness even though this is obvious to National defense types and think tanks.
What becomes absurdly noticeable is how few of these categories the U.S. is leading according to ASPI. That is a fairly poor sign of America’s ability to compete in the 2030s in emerging technologies if we are looking to the future of technological supremacy by nation-state.
Advanced Materials and Manufacturing
Artificial Intelligence and Communications
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