At the weekend, Wembley hosted one of the biggest fixtures in English football, as Manchester City met Chelsea in the FA Cup Final. Two giants of the modern game, competing for a crucial title.

Globally, another heavyweight contest is playing out, with the US and China locked in a battle for technological supremacy.

Donald Trump’s visit to meet Chinese President Xi Jinping in Beijing last week brought warm handshakes and positive headlines. But underneath the diplomacy sits an increasingly intense competition around artificial intelligence (AI),semiconductors, electric vehicles, energy infrastructure and data centres.

And, just like we often see in football, the stats have a very interesting story to tell.

On paper, the US still looks like Manchester City. It remains the clear leader when it comes to cutting-edge AI development and investment. According to Stanford University’s AI Index, the US attracted $109bn of private AI investment in 2024, compared with just $9bn in China. American institutions also produced 40 notable AI models last year, versus China’s 15. That’s the equivalent of having, like Manchester City, stars Erling Haaland, Antoine Semenyo and Rayan Cherki in your starting eleven. The US also accounts for around 45% of global data centre electricity consumption, reflecting the sheer scale of its AI infrastructure buildout.

But competitions like this are rarely won by just having the biggest stars.

China looks more like a side with endless squad depth. Its advantage increasingly comes from scale. The country produces more than double the number of science graduates and ten times the number of engineering graduates as the US each year. Engineering accounts for around 33% of university degrees in China versus just8% in the US. Its economy is also still growing faster. The International Monetary Fund estimates China’s gross domestic product (GDP) grew by 5.0% in2024 compared with 2.8% for the US.

Then there’s the electric vehicle (EV) race. This year, Chinese carmaker BYD unveiled a charger capable of adding around 400km of range in just five minutes. That’s significantly faster than some of the quickest systems currently operating in the US.

Overall, China’s position is less like having world-class players in key positions and more like having strength in every position across the pitch.

China’s accelerating dominance in an increasing number of technological areas is just one of the reasons why we’ve added to the emerging markets exposure in our portfolios.

Key takeaway

The US has the biggest technology companies, the largest stock market and many of the world’s leading AI firms. However, China has manufacturing muscle, infrastructure, engineering scale and long-term strategic focus.

For investors, the key takeaway is simple. This is unlikely to be a winner-takes-all story. Just as football evolves in cycles, markets do too. Leadership rotates. Dominance fades. Challengers adapt.

Sometimes, the side with the deepest bench causes more problems than the side with the brightest stars. In both football and the race for a technological edge, it’s rarely wise to underestimate a challenger who keeps improving season after season.

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.