China’s Rapid AI Rise Sparks Security and Economic Concerns: Report

New Delhi — The rapid global expansion of Chinese artificial intelligence (AI) models is raising alarms among US policymakers, with concerns centering on national security, supply chains, and economic competitiveness, according to a recent analysis by War on the Rocks.

The report highlights a dramatic surge in the adoption of Chinese AI systems. From accounting for just 1 per cent of global workloads in late 2024, their share jumped to nearly 30 per cent by the end of 2025—signaling a major shift in the global AI landscape.

Leading Chinese tech companies like Alibaba, along with emerging players such as DeepSeek, Moonshot AI, and MiniMax, are driving this growth. Their AI models are increasingly being used across sectors, from academic research to enterprise-level applications.

However, the report flags a key concern: these models are often developed within China’s legal framework, which mandates cooperation with national intelligence agencies. This raises fears that sensitive data processed through such systems could potentially be accessed by authorities.

Experts warn that as businesses and individuals rely more on AI for tasks like coding, strategy development, and confidential communication, the risk of unintended data exposure grows significantly.

The analysis outlines four major areas of concern for the United States:

Vulnerabilities in AI supply chains
Potential intelligence gathering through AI systems
Increased capabilities for malicious actors
Long-term economic disruption

One particularly challenging issue is the difficulty in auditing AI systems for hidden “backdoors” or vulnerabilities—especially in open-source models. Researchers note that compromised datasets can carry embedded malicious instructions that are extremely hard to detect through conventional checks.

There are also concerns about data security when AI tools process information through servers located in China, particularly when integrated via APIs. In addition, the report suggests that some Chinese AI models may have weaker safety safeguards compared to Western counterparts, making them more prone to misuse, including generating harmful code or facilitating cyberattacks.

On the economic front, the rise of low-cost Chinese AI solutions could threaten the dominance of US companies, especially in developing markets where affordability often drives adoption.

Rather than imposing outright bans, the report recommends that policymakers focus on improving transparency, setting baseline safety standards, and strengthening supply chain accountability. This approach, it suggests, would help manage risks while ensuring continued innovation and competitiveness in the global AI race.

With inputs from IANS