As the U.S. and China struggle for dominance in artificial intelligence, they are locked in a parallel, behind-the-scenes race to master quantum technology, a contest that could result in lasting military superiority and a possible new industrial revolution.

The big picture: Though still far off, conquering quantum technology could result in uncrackable communications, supercharged radar and more deadly undersea warfare. And as of now, China has some serious advantages, Axios' Kaveh Waddell reports.

A new report from the Center for a New American Security draws on open-source material for a window into China’s quantum progress and aspirations.

• The report’s authors, Elsa Kania and John Costello, say that China has made substantial advances in some areas of quantum research, putting it in a position to overtake the U.S. in the science.
• Chinese advantages include a national vision for technological research, significant investments and tight bonds between the private sector and the military. By comparison, the U.S. yet to enact a quantum policy, though the White House recently added a quantum expert to its tech-policy staff.
• "China’s advances in quantum science could impact the future military and strategic balance, perhaps even leapfrogging traditional U.S. military-technological advantages," write Kania and Costello.

How it works: Quantum technology capitalizes on the unusual properties of super-tiny particles to surpass what's possible with normal, or "classical," computing.

Among its applications:

• Quantum cryptography, a leap over current techniques that would be nearly impossible to crack — and render modern encryption obsolete.
• Quantum computing, which promises to enormously accelerate computing, a breakthrough whose effects would be felt across the economy.

Kania and Costello argue that Chinese progress on quantum cryptography is world-class, demonstrated by the launch of the first-ever quantum satellite in 2016. And while China lags on research into quantum computing, it’s quickly catching up.

What's next? Quantum supremacy — the moment when quantum computers will be more capable than classical ones — is still well out of reach, but researchers in both countries are pushing aggressively in that direction.

Why it matters: Among the spoils of conquering the quantum space are computers that could decipher most of the world’s encrypted data, like the NSA’s store of intercepted communications, and overcome the U.S. stealth technologies on which the military heavily relies.

How they got here: China had a "Sputnik moment" in 2013, igniting a national plan that funnels billions of dollars and top scientists into quantum research, the authors write.

• Its unlikely instigator was Edward Snowden, whose leaks revealed the extent of U.S. spying in China, and sparked a feverish response meant to shore up China’s protections against cyber espionage.
• This inflection point mirrors another instigator in 2016: An Obama administration report outlining a future U.S. artificial intelligence policy. Afterward, Beijing scrambled to put together its own, far outstripping American planning, while the Trump administration has neither engaged Obama's policy nor formulated its own.

In a series of policy recommendations, Kania and Costello say the U.S. needs to initiate a plan that ensures quantum research is well-funded and attracts top scientists from around the world.

• The U.S. should also closely monitor the research of rival countries to avoid an adversary quietly decrypting sensitive military communications — like the U.K. did in World War II, using Alan Turing's Enigma codebreaker.

Go deeper: The race to build a quantum economy

Asians tend to be among the best-educated immigrants to the U.S., and they also land in some of the most lucrative careers. But, according to U.S. Census data, the image of privilege is true for only some Asians.

The bottom line: Data shows that income inequality is greater among Asian immigrants than for those arriving from anywhere else, Axios' Erica Pandey writes.

• Indians on average earn $64,000 a year, and 78.6% have college degrees.
• But but but ... Compare that to Afghans ($22,000), Nepalis ($25,000) and Laotians ($32,000).

How to read the chart (above), via Axios visual journalist Chris Canipe: The circles represent each country's population in the United States. Those on the lower left tend to have smaller average annual incomes and are less likely to have college degrees. Those in the upper right have the highest average incomes and are more likely to have degrees.

• Higher inequality is reflected in the wider spread of the Asian countries — represented by the red circles — across the chart.

On the first day of much-awaited hearings before the U.S. Federal Trade Commission, a series of speakers mocked Big Tech critics as populists peddling unmoored theories for guaranteeing a fair market for consumers.

What's going on: Today's FTC hearing came as public and political leaders in the U.S. and Europe are grappling with the sudden recognition of the immense commercial, political and social power held by tech giants like Amazon, Facebook and Google. On both continents, the companies face the potential for stiff regulation.

What they're saying: But most of today's speakers belittled proposals to regulate the companies, with some suggesting that it is not clear that they hold too much market power, or even what a tech business is.

• "An amorphous concept of bigness and fairness would lead to politically motivated enforcement" of anti-trust laws, said Janet McDavid, a leading anti-trust lawyer based in Washington, D.C.
• She said proposals she has seen are "poorly designed to attack social issues" that would be better addressed elsewhere, such as by legislators.
• Timothy Muris, a former FTC chairman and now a professor at George Mason University, said regulation would protect "less-efficient businesses," adding, "We've been down the populist road before."

The criticism appeared at least in part aimed at a much-circulated paper by Lina Khan, a recent Yale Law School graduate who recently was hired by the FTC. Khan's paper challenged the underpinning of current anti-trust law and argued that it fails to address unique market challenges posed by Amazon.

The paper helped to galvanize the current debate around regulating the Big Tech companies.

We reported in a caption yesterday that Archduke Franz Ferdinand was assassinated, triggering World War I, in 2014. It was 1914. We regret the error.

• In response to our Sept. 6 post on North Korea and future cyberwar, Robert Blain of Cedar Falls, IA, writes:

"I (along with a lot of other folks) fail to understand why the President hasn't declared a national emergency in regards to cybersecurity and/or Congress hasn't gone on a legislative blitzkrieg in regards to cybersecurity. I would think it reasonable to require ALL internet users to register, and mandate minimum anti-cybercrime security measures for all government agencies, military/national defense organizations, critical infrastructure companies, etc ... along with penalties for non-compliance."

• Yesterday, historian Robert Kagan told us that the world may be returning to the pre-WWII political "jungle." Ben Joyce of Annandale, VA, responds:

"From the snippets provided, it's clear that an underpinning to his thesis [is] that the U.S. must continue to absorb its outsized portion of the costs of maintaining world order for the sake of democracy.

"Additional insight could come from an Axios interview question that probes Kagan's view of the current-vs-future ability of the U.S. to absorb those out-sized costs indefinitely with no remedy — an economic vice geopolitical question that Kagan must consider for bolstering the legitimacy of his thesis. Failure in that consideration of ability plus remedies really leaves a Pollyanna thesis."

Technology and tyranny (Yuval Noah Harari — Atlantic)

Red flags over Trump's voting security order (Joe Uchill — Axios)

How China's middle class views the trade war (Cheng Li — Foreign Affairs)

Dan Neil reviews a flying car (WSJ)

You need to know math (Makada Henry-Nickie — Brookings)

Musk needs adult supervision (Liam Denning — Bloomberg)

Amazon has beat out most of its competition with a simple philosophy: endless choice at super-low prices. But now, two new trends could be a warning sign for that model.

Why it matters: Food, clothes and makeup firms are among sellers that are becoming either highly customized or, at the other extreme, one-size-fits-all, says CB Insights' Zoe Leavitt. The common goal — the elimination of choice, and the confusion that can accompany it, thus challenging the very calling card of massive retailers like Amazon and Walmart, Erica writes.

The hyper-personal:

• In Japan, Nestle is testing a diet program that collects blood samples from customers. From the DNA data, it sells them personalized teas and smoothies.
• Function of Beauty, a hair care company founded by MIT alums, says it uses science to blend you the perfect shampoo and conditioner.
• Bright Cellars, a subscription service run out of Milwaukee, sends members 4 curated bottles of wine a month after they fill out online surveys about their tastes.

The totally anonymous:

• Brandless, a startup that recently raised $240 million from Softbank, is selling cheap toilet paper, toothbrushes, milk and other unbranded basics that come in one choice only.
• Brandy Melville, a popular clothing brand among millennials, sells all of its apparel in one-size-fits-all — though it's questionable whether the clothes actually do fit everyone.
• Soylent, a Silicon Valley startup, pours meal replacement shakes into uniform, largely unmarked bottles for techies who are too busy to eat.

The bottom line: Brands can't compete with Amazon on price or convenience, so some are becoming expert curators, Leavitt tells Axios, promising top-notch quality in specific products and, now, eliminating the burden of choice.