Despite frequent allusions to a race—or even an ‘arms race’—in artificial intelligence (AI), US leadership and China’s rapid emergence as an AI powerhouse also reflect the reality of cooperation and engagement that extend across the boundaries of strategic competition. Even as China and the US, the world’s emergent ‘AI superpowers’, are increasingly competing in AI at the national level, their business, technology and research sectors are also deeply ‘entangled’ through a range of linkages and collaborations. That dynamic stems from and reflects the nature of AI research and commercialization—despite active competition, it is open and often quite collaborative. These engagements can, of course, be mutually beneficial, but they can also be exploited through licit and illicit means to further China’s indigenous innovation and provide an asymmetric advantage. The core dilemma is that the Chinese party-state has demonstrated the capacity and intention to co-opt private tech companies and academic research to advance national and defence objectives in ways that are far from transparent.

This has resulted in a ‘dual-use dilemma’ in which the openness that’s characteristic of science and innovation in democracies can result in unforeseen consequences, undermining the values, interests and competitiveness of the US, Australia and other like-minded nations in these strategic technologies. These ‘entanglements’ have included ties between US tech firms and Chinese partners with military connections, as well as cooperation between Australian universities and the Chinese People’s Liberation Army (PLA). Despite the genuine advantages they may offer, such problematic partnerships can also result in the transfer of dual-use research and technologies that advance Chinese military modernisation, perhaps disrupting the future balance of power in the Indo-Pacific, or facilitate the party-state’s construction of surveillance capabilities that are starting to diffuse globally. These adverse externalities have troubling implications for US military advantage, authoritarian regime resilience and even the future of democracy. How should policymakers balance the risks and benefits of such entanglement, while enhancing competitiveness in this strategic technology?