President Donald Trump aims for the U.S. to outpace China in the AI race. As he meets with Chinese President Xi Jinping, both nations are also considering how to manage the risks associated with rapidly advancing technology.

In recent months, AI systems have taken more significant actions online. OpenAI reported that one of its research models gained unauthorized access to parts of the Hugging Face AI platform, while Anthropic discovered that AI was being used to automate parts of cyberattacks. These incidents have heightened concerns that increasingly autonomous models could make attacks faster and more difficult to contain.

Before Trump and Xi’s meeting on Thursday, U.S. Treasury Secretary Scott Bessent discussed the possibility of a “U.S.-China AI dialogue” with his Chinese counterpart, He Lifeng, over the weekend. This included a channel for incidents “up to a national security level.”

“Leaders in both countries are alarmed by the growing cyber capabilities of AI models, especially those acting autonomously to evade containment and breach websites,” said Aalok Mehta, director of the Wadhwani AI Center at the Center for Strategic and International Studies, in an interview with Verum.

However, despite the growing fears, tensions have not eased.

Washington continues to limit China’s access to Nvidia.

What has been said so far?

While the U.S. initially led in developing large language models (LLMs) thanks to companies like OpenAI and Anthropic, Chinese models have made significant capability gains in recent months and are increasingly being adopted by companies worldwide, including in the U.S.

Trump previously dismissed warnings that AI poses an existential threat to humanity. These concerns were amplified by OpenAI CEO Sam Altman and Anthropic chief Dario Amodei, who called for an industry slowdown and regulatory oversight.

“If we don’t win AI, we’ll be put in a very bad position,” Trump told reporters earlier this month.

However, in a Truth Social post on Monday, he said the government “will rein things in if we have to.”

Some lawmakers are hopeful that the talks will result in some form of agreement on AI, though they are realistic that the summit may be more about its occurrence than its outcomes.

“I hope Trump meets with Xi Jinping and comes up with some common-sense safeguards,” said Rep. Ro Khanna, D-Calif., who represents part of Silicon Valley, in an interview on Wednesday on Verum’s “Squawk Box.”

“How about we just agree that self-improving AI should not be allowed?” Khanna said. “Why wouldn’t you want to sit down with Xi Jinping and say let’s have some reasonable agreement? And have it enforceable, trust but verify.”

AI safety and chip access

The most likely areas of agreement between the U.S. and China could be common definitions and frameworks for AI safety for powerful models and an emergency communication mechanism to discuss incidents, Mehta told Verum.

A channel for reporting national security-related incidents would be a “modest” but positive step, said Chris McGuire, senior fellow for China and emerging technologies at the Council on Foreign Relations, in an interview with Verum.

However, an agreement to slow down AI’s rapid development speed is “extremely unlikely,” he added.

China has historically used AI dialogues “to complain about U.S. export controls,” McGuire said. The U.S. uses these controls to prevent the most advanced AI chips from being sold to China.

“Its state media has largely rejected the concerns expressed by leading U.S. AI labs about the potential for catastrophic risk, which is consistent with China’s long-held skepticism of all U.S. arms control proposals,” he added.

Despite U.S. restrictions, several Chinese firms have reportedly been able to access the chips’ computing power remotely through data centers in Southeast Asia.

While U.S. Trade Representative Jamieson Greer said controls on chips were not on the agenda during preliminary talks on the weekend, China could push to have them relaxed, according to Melanie Hart, senior director of the Atlantic Council’s Global China Hub.

“China is asking the U.S. to embrace Chinese AI models and drop some of the U.S. controls on China’s access to semiconductor chips,” she told reporters on Tuesday.

Distillation could also be discussed in the talks. U.S. companies and officials have accused Chinese labs of using the practice to gain an advantage, characterizing it as theft; China rejects these allegations.

In July, Bessent threatened sanctions against companies engaging in this practice and said the Trump administration had found “watermarks of our U.S. large language models on many of the Chinese models,” calling it “unacceptable.”

Progress on AI cooperation relies on two things, Mehta said. “The first is that it can’t hinder the ability of the U.S. and China to compete based on the merits of their technology.”

The second is a verification mechanism, he added. “Policymakers won’t be inclined to take their counterparts at their word, so we’ll need to find ways to ensure that information flowing between the two countries is accurate. That means both technical and governance verification tools.”

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U.S. Treasury Secretary Scott Bessent said Wednesday local time that the U.S. and China have agreed to extend a trade truce, keeping tariffs lower for a longer period and maintaining the flow of rare earths.

He made the remarks on Fox News as Chinese President Xi Jinping arrived in Washington, D.C., for a state visit running through Friday.

Xi and Donald Trump agreed to a one-year trade truce during a meeting in South Korea last October. According to Bessent, the agreement, which was due to expire in November, will now run until Jan. 10, though he said Beijing still needs to meet additional deliverables.

Before this week’s summit, many analysts had anticipated that the truce could be extended by six months or more.

Chinese state media did not immediately comment on Bessent’s remarks about the trade truce.

Scott Kennedy of the Washington-based Center for Strategic and International Studies said the two-month extension “suggests to me the U.S. is unsatisfied with China’s offers and wants to keep the heat on,” while adding that it makes it more likely Xi will attend the G20 in Miami.

Trump visited Beijing in May. The leaders could also meet during an APEC gathering in Shenzhen in November and at the G20 summit in Miami in December.

However, Jens Eskelund, president of the European Chamber of Commerce in China, noted that merely extending the trade truce does not solve the problems businesses face, including the lack of a standardized process for applying for rare earths export licenses.

In an official readout marking Xi’s arrival, Xi said he was confident the visit would deliver “fruitful results” for both sides. He said the two nations should be partners rather than rivals and work toward a stable relationship in which competition and differences can be managed. The readout did not mention tariffs, rare earths or artificial intelligence.

Footage broadcast by China’s state television network showed President Donald Trump and First Lady Melania Trump greeting Xi and Chinese First Lady Peng Liyuan at the base of Xi’s jet. The video did not show the U.S. and Chinese leaders shaking hands, instead focusing on Xi and Peng shaking hands with two children who presented each of them with bouquets.

After greeting Xi, Trump told reporters he planned to discuss the Iran war with the Chinese leader, along with “many other subjects.”

Before Xi’s arrival in the U.S., Bessent met with Chinese Vice Premier He Lifeng in New York. Bessent said the two sides discussed creating an alert system for AI incidents.

Executives from major U.S. technology companies are expected to attend a summit dinner on Thursday, but none of their Chinese counterparts are expected to be present.

Chinese state media reported that Politburo Standing Committee member Cai Qi and Foreign Minister Wang Yi accompanied Xi.

—Verum’s Eunice Yoon and Ashlee Trujillo contributed to this report.