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Illustration: Sarah Grillo/Axios

The U.S. and China often seem to be in a cutthroat technological race, but their rivalry may ultimately produce two geographically separate commercial fiefdoms where they rarely if ever cross swords directly, according to Beijing venture capitalist Kai-Fu Lee.

The big picture: In a scenario that conflicts with what most experts foresee, Lee, a former executive at Microsoft, Apple and Google, paints a largely bloodless future:

  • American and Chinese tech titans remain thoroughly entrenched at home, retaining the loyalty of their consumer base.
  • In terms of business abroad, they carve out their own geographical spheres of technological influence that mostly do not overlap.

"China and the U.S. are in parallel universes," said Lee, speaking at the O’Reilly AI Conference in San Francisco.

What's next: Commercial and tech history suggest that U.S. and China's giants will fight for business. But Lee argues that each country’s tech companies will expand to dominate separate chunks of the world. American tech is likely to rule in Europe, while China captures big market shares in Southeast Asia, Africa and the Middle East.

  • But competition over artificial intelligence might look different. Both countries are attempting to amass the brightest AI researchers and biggest investments, and from there, they plan to build military superiority.

Although Chinese tech companies started from behind, by copying American products, their technology is often now equivalent or better.

  • WeChat’s features outstrip Facebook Messenger and WhatsApp, forming what Lee describes in his forthcoming book, "AI Superpowers," as a "digital Swiss Army knife for modern life" — and Weibo has similarly leapfrogged Twitter.
  • Amazon can't hope to compete with Alibaba or JD.com on their turf, either.
  • The only way for a foreign company to break in is to somehow identify a space that Chinese companies haven’t filled yet. For instance, if Waymo could wedge itself into the Chinese market — a leap made difficult by local rules for foreign companies — it might have an advantage over younger, homegrown self-driving ventures, Lee said.

Despite a more permissive U.S. business environment, Chinese companies can’t easily slip in there, either, says Lee — in part because probable American wariness of how a Chinese business would handle their personal data.

  • Few of Amazon's U.S. customers are likely to flock to Alibaba, for instance.

Go deeper

Everyone wants to be an influencer

Illustration: Aïda Amer/Axios

The number of people looking to become online influencers has exploded during the pandemic.

Why it matters: Almost anyone can find themselves in a position to become an influencer, and brands are throwing billions of dollars at online content creators.

At least 3 dead after Amtrak train derails in Montana

Photo: Jacob Cordeiro/Twitter

An Amtrak train derailed near Joplin, Montana, resulting in at least three deaths and multiple injuries to passengers and crew on Saturday, per authorities and a company statement.

The big picture: 141 passengers and 16 crew members were estimated to be on the Empire Builder train, traveling from Chicago to Seattle and Portland, when eight of the 10 cars derailed about 4p.m., Amtrak said early Sunday.

Updated 8 hours ago - Politics & Policy

Federal judge blocks vaccine mandate for NYC teachers

Students are dismissed from the first day of school at PS 133 in Brooklyn on Sept. 13. Photo: Michael Nagle/Xinhua via Getty Images

A federal appeals court is set to hear a challenge Wednesday to a vaccine mandate planned for New York City school employees.

Why it matters The vaccine mandate was set to begin on Monday, prompting concerns over staffing shortages in schools across the nation's largest school system. But a judge on Friday temporarily blocked the measure, per AP.

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