TL;DR: Artificial intelligence (AI) is becoming a contest not just over technology, but over the people and knowledge needed to make it useful. China is treating AI expertise as a strategic asset as countries compete for an edge in the rapidly evolving field. At the same time, institutions such as the United States Internal Revenue Service are putting AI to work on complex problems, showing how the technology is moving from the lab into everyday operations.
Key Takeaways:
Knowledge and expertise in artificial intelligence (AI) and the intricacies of how it can work to everyone’s advantage are becoming a valuable commodity in the digital era, and China is among those stepping up to safeguard it as though the technology were intellectual property (IP).
In late September, the Chinese government announced the expansion of a regulation related to its AI talents, a move showing that it doesn’t play when it comes to AI amid heated tech and economic rivalry with the United States.
While traveling overseas remains unrestricted for the majority of tech professionals nationwide, the same freedom has now been limited to AI and chipmaking professionals in private firms, four months after implementing travel restrictions on selected talents involved in advanced and strategically sensitive AI work in state-backed corporations and top private companies, including DeepSeek and Alibaba Group Holding Ltd (NASDAQ: BABA).
According to a September 29 report published by The Japan Times, affected AI specialists, who are now being treated by the government as critical to national interests, will need to secure official approval before they can travel abroad in line with the expanded travel curb.
Available reports made no mention of whether this wider restriction will be strictly implemented for the immediate families of the AI talents, although two people who have knowledge of the matter but refused to be identified said government departments have already started notifying several people about this, adding that the administration is looking to add relevant individuals to the list in the future.
China, US trade barbs on AI advancements
China’s broadening travel restrictions were enforced following Meta‘s (NASDAQ: META) attempt to acquire AI startup firm Manus for $2 billion earlier this year, which forced the Xi Jinping administration to block the deal by leveraging the country’s antitrust law, investment restrictions, and regulatory authority in a move deemed to safeguard its innovation ecosystem, CNBC reported.
The U.S. saw this as Beijing’s growing AI competitiveness and openly expressed its disdain, with the administration of President Donald Trump accusing China of copying American AI models to develop its own through a process called distillation.
Washington’s accusation came as no surprise, as it had long suspected China of stealing IP from American companies, dating back to 2013.
While Xi’s government is known for its diplomacy, it did not let the recent allegations pass, with Foreign Ministry spokesperson Guo Jiakun saying that the “narratives of threat, confrontation, and malicious competition serve only to disrupt the process of global AI governance and are not in anyone’s interest.”
“All parties should work together to advance AI in a manner that is open, inclusive, beneficial to all, and oriented toward the good,” he said, as quoted by BBC.
Amid criticism, China lets its current position in the global AI race speak for itself.
Based on a Bloomberg Intelligence report published on October 5, American AI models continue to perform better than their Chinese counterparts, but emphasized that the performance gap has narrowed sharply.
The release of DeepSeek’s V4.1-Flash on September 10 has significantly helped narrow the gap by 3%, according to BI senior analyst Robert Lea. The figure was a sharp decline from about 9% in May and 15% earlier in the year, The Straits Times reported.
The close competition not only showcases China’s improving AI expertise but also raises doubts about the usefulness of Trump’s export restrictions on AI chips in curtailing Chinese AI advances and about whether the U.S. can maintain its lead in the coming years.
Trump previously said that Washington will continue with its AI innovation amid warnings from top experts at Anthropic about the risks of the technology, which they claim could kill more than 10% of humanity within the next decade.
IRS looks to AI in cutting identity theft delays
While the world’s top economies are busy battling for AI supremacy, notable institutions like the U.S. Internal Revenue Service (IRS) are finding ways to leverage AI in assessing the complexity of identity theft cases that have piled up for years.
Data from security.org showed that there were 860,383 identity theft reports lodged to the Federal Trade Commission (FTC) in 2004, with the figure exploding to 6.4 million by the end of 2024.
On top of the challenge of tracking the bad actors responsible for this, authorities are also struggling to provide a resolution for identity theft victims, who normally wait an average of 20 months for the IRS to process their case.
With hundreds of thousands of identity theft cases coming in yearly, the IRS lacks the necessary manpower to resolve these reports on time, prompting it to consider AI to speed up the process.
Factoring in the recommendation of the independent oversight agency, Treasury Inspector General for Tax Administration (TIGTA), the IRS said it will look into using AI in evaluating case complexity and support case assignment before they decide on the next steps, including the possibility of deploying an AI triage system that will assist trained Identity Theft Victim Assistance (IDTVA) assistors in dealing with the backlog.
According to recent estimates, the IRS had only 1,173 IDTVA assistors by the end of 2025, down from 1,548 the previous year. But despite not having current AI assistance, the institution managed to reduce its backlog by 35% between 2023 and 2025, ending September 2025 with nearly 316,000 unresolved identity theft cases.
FAQs:
Why is China restricting overseas travel for AI professionals?
China is expanding travel restrictions on certain AI and chipmaking professionals at private companies, requiring them to obtain government approval before traveling abroad. The move reflects the strategic importance Beijing places on protecting AI expertise amid intensifying competition with the United States.
Why is AI expertise becoming strategically important to China and the U.S.?
AI expertise is increasingly viewed as a critical national asset because advanced models and AI technologies can strengthen economic competitiveness, cybersecurity, and technological independence. The narrowing performance gap between Chinese and U.S. AI models has further intensified the race to retain and develop AI talent.
How could the IRS use AI to address identity theft cases?
The IRS is considering AI to evaluate the complexity of identity theft cases and help assign them to the appropriate personnel. A potential AI triage system could assist trained workers in prioritizing cases and addressing the agency’s large backlog more efficiently.
Can AI help governments tackle cybersecurity and identity theft?
Yes, AI can potentially help government agencies process large volumes of cases, identify patterns, assess case complexity, and prioritize resources. In the IRS’s case, AI is being considered as a support tool for trained staff rather than a replacement for human decision-making.
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