Why the U.S. Wins in Artificial Intelligence Despite Global Competition
The U.S. has always led the race on frontier innovation for the past 50 years. Some people argue that the U.S. has fallen behind on several important aspects of innovation from lack of power generation growth, dependency on outsourcing labor to other countries, and being out worked. Although these are important, I think they are secondary. I am very optimistic about the U.S. tech innovation capabilities especially around leading the Artificial Intelligence race. I don’t think that will change for decades unless we see a black swan event. There are 3 major reasons as to why (i) A robust entrepreneurship ecosystem (ii) World’s largest capital markets and (iii) A risk taking population.
A Vibrant Entrepreneurial Ecosystem
The U.S. has the strongest venture capital community in the world. It is now in the sixth decade if you consider the birth of Sequoia and KPCB in the 1970s. The introduction of accelerators and incubators also rose in the past 20 years with the birth of Y-Combinator and TechStars. This has fostered decades of knowledge on how to fund and grow companies from Day 0 to global disruptors.
If you drill down to specific AI investment, the U.S. reached $67.2 billion in 2024 outpacing the second closest rival China who spent $7.8 billion.
The mentorship model prevalent in the U.S. further enhances this ecosystem. Industry veterans and successful entrepreneurs frequently mentor upcoming innovators, creating a cycle of knowledge transfer and sustained innovation. Notably, numerous billion-dollar startups have been founded by former employees of tech giants such as Google, Meta (formerly Facebook), Apple, and Amazon, illustrating the strength and effectiveness of this mentorship-driven apprenticeship. This can only arise from cycles of entrepreneurship.
Unrivaled Capital Markets
The U.S. possesses the deepest and most sophisticated capital markets globally, with robust stock exchanges such as the New York Stock Exchange (NYSE) and NASDAQ, and expansive bond markets. These markets are characterized by innovation in financial products, liquidity, and investor protections, fostering significant trust and participation from domestic and international investors alike.
Such capital market depth facilitates an efficient cycle of financial liquidity, allowing entrepreneurs, venture capitalists, and management teams to achieve timely and rewarding exits from their ventures. Successful exits subsequently lead to reinvestment of capital into newer ventures, perpetuating a virtuous cycle of innovation funding. Foreign investment reinforces this cycle, channeling substantial international funds into the American innovation economy, thereby bolstering the country’s position as a global leader.
Risk Taking Culture
The country is so young and one could argue the culture is founded and crafted by immigrants who are by nature, risk takers. The U.S. continues to attract top global talent in AI, with immigrants playing a significant role in the sector's growth. A study found that over 60% of leading U.S.-based private AI companies have at least one immigrant founder. There is no patience with U.S. culture. We want to do things fast and earn the results in our lifetimes.
The media shares so many tails of rags to riches stories. The market is priced fairly in the U.S. for meritocracy vs. the rest of the world. This allows people to take the proper calculated risk for reward.
The U.S. Dominant Cycle Has More Time
We have the unique innovation infrastructure, capital depth, and the talent magnet. These three elements form a barrier to entry that would take rival ecosystems decades to replicate, let alone surpass. As we enter what many call the Age of Abundant Intelligence, the payoff extends far beyond consumer chatbots. AI‑optimized logistics are already tightening military procurement cycles; real‑time subsurface models promise cleaner, cheaper resource extraction; autonomous U.S. manufacturing cells are re‑shoring high‑value production; and multimodal diagnostic AI is poised to cut mis‑diagnosis rates in U.S. hospitals by double digits. In short, the same flywheel that accelerated Silicon Valley’s software era now spins at a higher torque, set to lift every major sector—defense, energy, industry, healthcare, and beyond—into a new productivity orbit. I don’t think the rest of the world can catch up anytime soon.