CNBC's The China Connection newsletter: Money or power? The key to winning the AI race

An AI-themed 'AGI Bar' in Beijing's tech-focused Zhongguancun district on Aug. 9, 2026.Pedro Pardo | Afp | Getty ImagesHi, this is Evelyn, writing to you from Beijing. Welcome to the latest edition of The China Connection — a snapshot of what I'm seeing and hearing from local businesses.Is the AI race about who can spend the most (the U.S.), or whose price is cheaper (China) thanks in part to state-controlled power costs? It may be neither.The big storyFor Beijing, the artificial intelligence race is a story of resolve.If China has one dollar left, "that dollar is going to be spent on AI rather than real estate," said Bruce Liu, CEO of Esoterica Capital.The goal is to be self-sufficient in AI, without relying on the U.S., he said. "They don't need to have the best AI in the world."Everything from China's national policy to district-level subsidies underscores those ambitions. So far, China's made strides in advanced chips for powering AI. But they still fall short of Nvidia's.Now Nvidia has gathered Wall Street titans to support $500 billion in financing for AI development, demonstrating the U.S. advantage in capital.Private sector AI investment in the U.S. is around 23 times more ...