US-China Tech Rivalry Reshapes Global Innovation Map - Mehran Gul's New Book Offers Insights

New Delhi - As the US-China rivalry intensifies, one battleground stands out above all: technology, especially artificial intelligence (AI). In his new book The New Geography of Innovation: The Global Contest for Breakthrough Technologies, Mehran Gul explores whether Silicon Valley's tech dominance still holds or if global competitors like China's Shenzhen and London's tech corridor have emerged as true challengers. This shift is part of the broader AI revolution reshaping business across the globe.

Is Silicon Valley Losing Ground?

At first glance, China's rapid tech ascent seems to overshadow the US. The rise of tech giants like Tencent, Baidu, and ByteDance suggests a shifting power balance. However, Gul paints a more nuanced picture.

US Tech Strengths

• Still leads in pathbreaking innovation.
• Remains home to the world's only trillion-dollar tech firms:
  • 8 American tech companies have crossed the $1 trillion valuation mark since 2018, with Apple being the first.
  • No non-US company, including Chinese firms, has reached this milestone.
• New tech hubs are rising across New York, Miami, and Austin, continuing the legacy of Silicon Valley. This trend parallels why top tech leaders are leaving corporate roles for AI ventures.

Silicon Valley's Shift

• Described as a "vibrant rainforest turning into controlled farmlands."
• Innovation persists but is becoming more structured and less freewheeling.

China's Tech Surge: Fast But Constrained

China has made remarkable strides in technology development, particularly in areas like objective-driven AI that is transforming intelligence.

Strengths:

• Speed and scale of execution.
• Improved research quality and output.
• Creation of tech champions like Tencent, Baidu, and ByteDance.

Constraints:

• Tight government control, highlighted by the 2021 crackdown on tech firms.
• Universities that still lag behind top-tier American institutions.
• An innovation ecosystem directed by state policy, limiting grassroots disruption.

Despite its visibility and growth, China still lags in producing foundational, disruptive research on par with the US. Companies like Google are investing $75 billion in AI to maintain America's technological edge.

What Makes a Tech Ecosystem Work?

Gul's book concludes that there is no universal formula for successful tech ecosystems. However, certain traits consistently show up in the world's most innovative regions, similar to what we see in the emergence of agentic AI and autonomous intelligence.

Common Traits of Successful Tech Hubs:

• Openness to global talent and immigration.
• A culture that embraces risk and normalizes failure.
• Entrepreneurial ecosystems that support experimentation.

That said, local contexts play a decisive role.

India's Position: More Bengalurus Needed

India's Bengaluru has emerged as a strong tech hub, but Gul argues that one Bengaluru is not enough. This aligns with key trends shaping India's AI startup landscape beyond just LLMs and GPU chips. For India to compete globally in innovation and AI, it needs:

• A greater number of tech-friendly cities.
• Policy frameworks that reward risk-taking and entrepreneurship, supported by new foreign investment rules that could supercharge startup growth.
• A cultural shift that treats failure as a step toward innovation, not a setback.

Recent developments show promise, with Indian tech startup funding jumping 23% to $7 billion in 2024. Additionally, GitHub's growth story signals India's emergence as a global hub of AI and open-source development.

Major investments are also flowing in, with Databricks' $250 million India investment representing a strategic move for AI's future. Companies like Neysa are revolutionizing AI infrastructure with confidence and innovation, contributing to AI and AI agents powering India's $1 trillion software leap.

Core Takeaway

Societies more receptive to change tend to produce more tech success stories. This means being open to talent, ideas, innovation, and risk. The global race for technological dominance will ultimately be won not just by money or manpower, but by the ability to adapt, take chances, and create environments where new ideas can thrive. As we navigate this new landscape, understanding why humans remain irreplaceable in an AI-driven world becomes increasingly important.