Dear Readers,

I just got back from China, and what I saw there changed the way I think about the global AI race. This issue is different from our usual format, because instead of covering a dozen stories, I went deep on one massive question: has China caught up to the West in AI and robotics, and if so, what does that mean for the rest of us?

The answer, backed by hard data and firsthand impressions from factory floors and exhibition halls, is more nuanced and more unsettling than either the "China is copying" crowd or the "China has won" camp would have you believe.

Today's deep dive walks you through the companies rewriting the rules, from DeepSeek's cost disruption and Unitree shipping 36 times more humanoid robots than its American rivals combined, to XPeng building cars, robots, and flying vehicles on a single platform, to DJI's iron grip on the global drone market that even U.S. regulators cannot seem to loosen.

Along the way, we look at why China's real advantage is not any single breakthrough but the full-stack integration of models, chips, devices, and distribution that Western competitors find almost impossible to replicate.

In today's opinion corner, I share what four days in China taught me about Europe's growing gap, and why the window to close it is shrinking fast.

All the best,

Kim Isenberg

Preface: As I write these lines of this deep dive, I am in China. It's my first time in the Far East, and I've taken this opportunity to reconcile my personal impressions with researched data. I want to try to understand how China, with the help of specific companies, has managed to catch up to the world's leading players. What makes these companies in the fields of AI, high technology, and robotics so special that they are putting pressure on the US, and where do they still lag behind, allowing the US to maintain its lead? Subjective impressions from a distant world, combined with in-depth analysis, and pictures shot from my iPhone form the core of this article.

Walk through the exhibition halls of the Beijing International Automotive Exhibition in April 2026, and you will notice something that would have been almost unthinkable a decade ago: Chinese companies are no longer imitating Western technology. They are defining it. Humanoid robots greet visitors in fluent Mandarin and passable English. Electric vehicles park themselves using AI systems developed entirely in Shenzhen and Guangzhou. On the show floor, a quadruped robot from Hangzhou trots across an obstacle course, while nearby, a startup from the same city quietly powers millions of AI queries around the world at a fraction of what Silicon Valley charges. This is not a glimpse of the future.

This is the present.