The United States remains ahead of China in the global artificial intelligence race, but its advantage is narrowing as Beijing expands the international reach of Huawei and other Chinese technology firms, former State Department official Keith Krach told FOX Business.

Krach, who served as Under Secretary of State for Economic Growth, Energy, and Environment from 2019 to 2021 and was a leading architect of the Trump-era "Clean Network" initiative to exclude Chinese telecom equipment from allied 5G networks, has warned for years that technology adoption decisions by developing nations lock in long-term strategic dependencies.

The competition extends well beyond which country develops the most powerful AI models. According to Krach, it also encompasses energy, infrastructure, semiconductors, talent, exports, and the technical standards that other nations will depend on for years to come.

"America is still ahead, but we are not comfortably ahead," Krach said.

His remarks come approximately one year after the Trump administration unveiled "Winning the Race" in July 2025, a national AI strategy comprising more than 90 federal actions. That strategy built on earlier measures including sweeping semiconductor export controls first imposed in October 2022 and expanded in subsequent rounds, which sought to deny China access to the most advanced AI-training chips and the equipment needed to manufacture them domestically.

Krach noted that the U.S. continues to lead in private investment, advanced chips, cloud infrastructure, universities, and entrepreneurial talent. China, however, has made gains in patents, industrial deployment, research, robotics, and lower-cost open models.

"We are leading today, but the race will be won by the ecosystem the world chooses to build on," he said.

Krach, who serves as chairman of the Krach Institute for Tech Diplomacy at Purdue University and CEO of Freedom 250, said the Trump administration's strategy correctly recognizes the broader stakes. He argued that success should be measured through new power generation, faster data center construction, greater semiconductor capacity, wider AI adoption, allied contracts, and technical talent.

Huawei is central to China's global technology push, Krach said, describing the company as a "vertically integrated delivery system" for technological and geopolitical influence. The Chinese technology giant can offer governments wireless networks, data centers, cloud services, AI chips, software, cybersecurity tools, and financing in a single package. Once installed, those systems can become costly, disruptive, and "politically difficult" to replace, Krach noted. Huawei has operated under U.S. sanctions since being placed on the Commerce Department's Entity List in May 2019, yet continues to expand its footprint across parts of Asia, Africa, the Middle East, and Latin America where cost and bundled financing often outweigh security concerns.

"The real strategic asset is not the hardware," he said. "It is long-term access to data, standards, software updates, technical dependencies and government relationships."

Krach said China's offering is built around integration, financing, speed, and state support. "America must counter it with a trusted full-stack alternative that performs better and strengthens, rather than compromises, a partner country's independence," he argued.

Countries will choose American technology, Krach said, when it is not only more trusted but also easier to finance, deploy, and expand.

To maintain its lead, the U.S. must expand energy production, data centers, semiconductor manufacturing, cloud capacity, and its skilled workforce, Krach said. He also called for faster permitting, support for both proprietary and open American AI models, and export packages that allies can easily purchase and deploy.

"China's advantage is [on a] coordinated scale," Krach said. "America's advantage is freedom, innovation, capital, entrepreneurship and allies. Our task is to organize those strengths without destroying what makes them powerful."