Most executives already know China is pouring resources into AI. Far fewer have registered where that investment has already pulled ahead: manufacturing volume, cost, and how fast the rest of the world is adopting Chinese products.
More than 1,100 companies showed up in Shanghai this past July for the World Artificial Intelligence Conference. State media confirmed Chinese firms have built more than 400 different humanoid robot models, over half the world’s total. Annual output is projected to top 100,000 units this year.
Years ago I ran an innovation program for PepsiCo in Shanghai. I’d studied the market data before I landed. None of it prepared me for what the place felt like on the ground. The physical scale was palpable, and so was the competitive intensity, not just for my client but across nearly every industry there.
A U.S. company might face a dozen competitors in a specific niche at home. Multiply that by ten and that’s what you find in China, especially in a hot category like robotics.
Most leaders still benchmark China on one axis: does their best model beat our best model? By that measure, U.S. AI companies still hold an edge. That scoreboard misses where the long game is being played.
DeepSeek trained its R1 model for roughly $6 million, against a reported $100 million behind comparable American systems. Tesla projects its humanoid will eventually sell for $20,000 to $30,000. China’s Unitree just began selling a full-size humanoid for under $6,000.
You don’t lose to a competitor’s best product. You lose to their good enough product at a price you can’t match.
So here’s what I’d encourage you to do about it:
- Change your scoreboard: measure rivals on cost and volume, not only on whose flagship product is the highest performer.
- See it for yourself: put your team physically inside a competitor’s market if possible, whether that’s China or a trade show carrying Chinese products.
- Track adoption, not announcements: watch which players customers, suppliers, and the press rally around, because those are your fiercest rivals.
This Week
Competing with China’s scale starts with three moves.
Which one is your organization furthest behind on, and what would it take to close that gap by next quarter?
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