America’s ‘biggest risk’ on AI is China getting ahead, Bessent says

US Treasury Secretary Scott Bessent on Tuesday said China surpassing the United States on artificial intelligence was the “biggest risk” of the technology – outweighing concerns over safety or job losses.
“The biggest risk to AI is China getting ahead of us,” Bessent said at the Economic Club of New York, adding that China’s willingness to discuss AI underscored America’s technological lead.
“I am one of the point people on our AI policy. I am the point person in terms of the economic relationship with China,” he said.
“I could tell you that the reason the Chinese are willing to have a discussion on AI is because we are ahead, so we have to stay ahead.”
Both countries agreed to hold formal discussions on AI governance following talks between US President Donald Trump and Chinese leader Xi Jinping in Beijing last month.

Chinese foreign ministry spokesman Guo Jiakun said in May: “As two leading AI powers, China and the United States need to work together to promote the development and improve the governance of AI to make sure that it will better contribute to the progress of human civilisation and common welfare of the international community.”
The Trump administration has placed competition with China at the heart of its AI strategy, prioritising US leadership in the field even as concerns over data centres and job displacement intensify at home.
Multiple polls in the US point to strong opposition to data centres – the most visible symbol of AI – driven by concerns over job displacement, safety, water use and electricity prices.
Despite this growing domestic backlash, Washington views the rapid buildout of AI infrastructure as a national security imperative.
To maintain its technological edge, the Trump administration has kept strict export controls on most advanced AI chips to China, making a rare exception for Nvidia’s H200 – though Beijing has actively discouraged domestic companies from adopting it.
In his address on Tuesday, Bessent also warned that any attempt to “weaponise supply chains” would face retaliation, without naming China.
“Attempts to weaponise supply chains, steal technology, evade sanctions, manipulate markets, or coerce our partners will not go unanswered,” he said.
The comments come a day after China placed export controls on 10 US entities, including two major rare earth firms, MP Materials and USA Rare Earth, in one of the most significant escalations since Washington and Beijing reached a temporary truce on critical minerals last year.
In addition to export controls, China on Monday blacklisted 46 US firms from government procurement, retaliating against the Pentagon’s recent decision to brand leading Chinese tech companies as military-linked entities.
Under the new regulations, exporters are strictly banned from supplying dual-use goods to the 10 restricted firms. The restrictions also block any organisation or individual worldwide from transferring China-origin dual-use items to these companies, emphasising the global, extraterritorial reach of the move.

China has increasingly leveraged its near monopoly on rare earths – a group of 17 critical metals essential for electric vehicles, robotics, electronics and defence systems.
Bessent said the US must lead in sectors such as AI, quantum computing, shipbuilding and critical minerals, adding that the Trump administration was seeking to build supply chains that could withstand crises, resist coercion and operate through pandemics or war.
“In today’s economy, supply chains are the domain in which that leadership is tested,” he added.