CNBC’s The China Connection newsletter: A U.S.-China debate that’s becoming bigger than tariffs

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The debate between the United States and China over artificial intelligence is intensifying, moving beyond the tariff issue. The release of the Kimi K3 model by Moonshot and Xi Jinping’s speech on AI have sparked international backlash, leading Jensen Huang and over 20 other tech companies to sign an open letter against premature restrictions on Chinese open-source models. Donald Trump announced plans to discuss AI with Xi Jinping during the Chinese leader’s visit to the United States in September. Many American startups use Chinese AI models, creating commercial interdependence that complicates Washington’s stance. Z.ai is building a one-gigawatt data center to meet strong demand, while CXMT, a memory chip maker, completed a Shanghai IPO with a 470% surge in its share price.

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