Daines cast his August trip to Hangzhou and Guangzhou as a "fact finding mission" that also served to lay groundwork for a meeting between President Donald Trump and President Xi Jinping later this month. It was his second China visit this year, following a bipartisan congressional delegation he led to Beijing in May ahead of Trump's state visit.
His itinerary mixed marquee companies and academic heavyweights. He stopped by EHang Holdings Ltd., which builds flying cars, and Manycore Tech Inc., a 3D design software maker counted among the "Six Little Dragons" of Chinese AI startups. He toured Zhejiang University in Hangzhou and met with the province's governor, Liu Jie. Zhejiang University has a reputation for producing leading AI experts, among them Deepseek founder Liang Wenfeng.
Speaking to Bloomberg by phone on Friday, Daines said the U.S. is likely undervaluing both the caliber and the sheer size of China's innovation engine. He argued Americans need sharper awareness of that landscape because the competition features "some of the very best and brightest in the world."
Despite strategic rivalry, he pointed to areas where collaboration could be a win, highlighting biosciences as a place where AI partnerships might speed up cancer treatments. Still, he told listeners not to expect a big AI breakthrough at the upcoming Trump-Xi meeting, calling it "the first step of a thousand mile journey." He acknowledged "deep disagreements and sharp differences," but said a face to face meeting and a state dinner are constructive steps. "This relationship is too big to fail," he said.
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U.S. officials are alarmed by how quickly Chinese open-weight models are approaching the capabilities of leading American systems at much lower user costs, even after efforts to restrict China's access to top tier technology. This week, U.S. government agencies said China-based developers including Alibaba Group Holding Ltd., DeepSeek and Moonshot AI "extracted billions of tokens across millions of exchanges/requests from US frontier AI models." The activity targeted versions of Anthropic PBC's Claude, Alphabet Inc.'s Gemini and SpaceXAI's Grok, and it has been ongoing from at least late 2024 onward.
Under President Donald Trump, the administration has taken a more restrained stance on AI cooperation with Beijing. Treasury Secretary Scott Bessent put it starkly at a Breitbart News event in Washington on Tuesday: "There is no day after tomorrow if China wins at this." He added that if China "were to pull away from us on AI, then nothing else would matter," suggesting even America's large defense budget would not shield the country in that scenario.
This meeting cycle has symbolism attached to it. A photo from Beijing shows U.S. President Donald Trump arriving at the Great Hall of the People for a state banquet hosted by President Xi on May 14, 2026. Between Daines' call for clear eyed engagement and the administration's warning about an AI gap, expect the conversation to swing between selective cooperation and hard edged competition.
For your money, that tug of war translates into a few practical watch points: cross border research ties, access to leading models and compute, and policy steps that could tilt costs or timelines for AI development. If AI is central to the next leg of global growth, who sets the pace will shape where value accrues.
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