The global order is shifting, and the world is watching as the United States and China lock horns in a contest that goes far beyond traditional military or economic rivalry. According to a recent analysis by Foreign Affairs, the age of unipolarity—where the U.S. reigned supreme—is over. We are now squarely in the era of bipolarity, with the U.S. and China emerging as the only true superpowers, fundamentally reshaping the international system and the rules by which it operates.
What makes this rivalry so unique, and why does it matter now more than ever? The answer, as both Foreign Affairs and TokenRing AI report, lies in the escalating battle for control over the Artificial Intelligence (AI) supply chain, a contest that’s being dubbed the "Tech Cold War." This competition is not just about who builds the best algorithms or software. It’s about who controls the physical resources, advanced hardware, and specialized manufacturing capabilities that make AI possible—and, by extension, who will shape the future of global power.
Let’s start with the numbers. The Foreign Affairs analysis, grounded in rigorous quantitative research, finds that China’s economy today already surpasses the Soviet Union at its Cold War peak, both in absolute terms and relative to the United States. While China’s military spending is still lower as a share of GDP, the country has ample room to ramp up its defense budget if needed. The implication? China doesn’t need to match the U.S. in every metric to be a superpower. It’s already there, and the U.S.-China rivalry is now the defining axis of 21st-century geopolitics, spanning trade, technology, finance, global governance, and military influence.
Middle powers like India, Germany, Japan, and Brazil are growing fast, but according to Foreign Affairs, they still fall short of true great-power status. Russia, for all its assertive foreign policy, can’t secure dominance even in its own region, let alone challenge the West. The upshot is a world that is decisively bipolar, not multipolar, with smaller states increasingly forced to pick sides or risk being squeezed out of influence altogether.
This new era of bipolarity is playing out most vividly in the race for AI supremacy. As TokenRing AI’s late-2025 analysis explains, control over the AI supply chain has become a strategic imperative, dictating economic growth, national security, and the very distribution of global power. The stakes are sky-high: the infrastructure and alliances being forged today will shape decades of technological dominance.
At the heart of this struggle are advanced semiconductors—think GPUs, TPUs, and other AI accelerators—produced mainly by Taiwan Semiconductor Manufacturing Company (TSMC). Taiwan’s near-monopoly on leading-edge chip manufacturing makes it a critical geopolitical flashpoint. The U.S. has responded by imposing strict export controls on these chips and the equipment needed to make them, aiming to slow China’s technological ascent. In turn, China has flexed its own muscles, leveraging its control over roughly 70% of the world’s rare earth supply and a staggering 98% of primary gallium production. These minerals are essential for everything from high-performance chips to the magnets inside AI hardware, giving China significant geopolitical leverage.
But it’s not just chips and minerals. The energy demands of AI are reshaping the global landscape, too. U.S. data centers consumed 176 terawatt-hours (TWh) of electricity in 2023, and projections suggest this could more than triple by 2028, potentially gobbling up nearly 9% of the national grid by 2035. China, not to be outdone, is planning to build 150 new nuclear reactors by 2035, many of which will power AI infrastructure. Whoever can secure cheap, reliable, and low-carbon energy will have a major edge in the AI arms race.
There’s also the matter of manufacturing equipment. ASML, a Dutch company, holds a monopoly on Extreme Ultraviolet (EUV) lithography machines—each costing upwards of $200 million and crucial for producing the most advanced chips. The U.S. and its allies have pressured the Netherlands to restrict sales of these machines to China, creating another chokepoint in the global supply chain.
The implications for business are enormous. Tech giants such as NVIDIA, Alphabet, Microsoft, Amazon, and Meta now find themselves at the epicenter of this geopolitical storm. Export controls on advanced chips directly influence their bottom lines, particularly when it comes to accessing the lucrative Chinese market. These companies are increasingly acting as geopolitical actors in their own right, lobbying governments, securing supply chains, and, in some cases, even shaping policy.
Startups and smaller AI firms, especially those in restricted regions like China, are being forced to innovate with what’s available, sometimes leading to surprising breakthroughs in efficiency and alternative hardware. Meanwhile, semiconductor manufacturers like NVIDIA and memory chip makers such as Micron, Samsung, and SK Hynix are experiencing surging demand—but also the headache of developing downgraded, region-specific products to comply with ever-changing regulations.
This competition is fundamentally altering the nature of globalization. The world is moving away from pure global interdependence toward a model of techno-nationalism and selective decoupling. Countries are pouring billions into domestic AI capabilities, reshaping alliances, and prioritizing technological sovereignty over efficiency. TokenRing AI points out that the U.S. holds a commanding 74% of global AI computing power as of mid-2025, thanks in part to $109.1 billion in private-sector investment in 2024. China, for its part, is embedding AI into every facet of its economy, leveraging robust energy infrastructure and cost-effective hardware to drive rapid adoption.
It’s not all smooth sailing, though. The race for AI dominance has created acute vulnerabilities: supply chain disruptions, soaring energy and component costs, and the risk of "digital colonialism," where developing nations become dependent on technologies designed and hosted abroad. The fierce competition has also fueled a global talent war for top AI researchers and led to a patchwork of data sovereignty laws that threaten to fragment the once-borderless cloud. The concentration of critical chipmaking in places like Taiwan remains a persistent flashpoint, with any escalation of geopolitical tensions there capable of sending shockwaves throughout the global economy.
Looking ahead, experts agree that the next few years will see even more fragmentation as the U.S. and China harden their "techno-blocs," with stricter export controls, increased investment in domestic manufacturing, and a relentless focus on supply chain resilience. Longer term, AI will become as central to national power as oil or nuclear energy was in previous eras, fundamentally reshaping diplomacy, warfare, and economic development. The risk of a widening global AI divide looms large, with advanced economies racing ahead while developing nations risk being left behind.
In this high-stakes contest, resilience is king. Nations and companies alike are scrambling to diversify suppliers, regionalize manufacturing, and invest in domestic talent and infrastructure. The outcome will determine not just who leads in AI, but how safely, equitably, and openly this transformative technology is woven into the fabric of global society. The world stands on the cusp of an AI-driven future, and the choices made now will echo for generations to come.
