When ChatGPT picked up steam in 2023, many advisors began to focus on investing in U.S.-based companies to gain exposure to the growing AI sector.
That narrative saw a significant shift in early 2025, when China’s AI startup DeepSeek released its R1 model. This innovative AI model challenged the valuations of U.S. companies and kickstarted an AI growth race between the United States and China. Ever since, advisors have been debating whether it’s more important to stay invested in key U.S. AI players or back the China challengers.
Luckily, the ETF wrapper makes it possible for advisors to play both sides in the AI race. Recently, KraneShares released an insights piece breaking down the value in investing in both U.S. and China AI giants.
“The U.S. and China now stand nearly neck-and-neck in the global AI race,” KraneShares noted. “While U.S. companies still lead in foundational research and hardware, China’s cost-effective, rapid-fire innovation is closing the gap, sometimes leapfrogging Western benchmarks entirely. DeepSeek’s rise has proven that scale and deep pockets aren’t the only keys to AI supremacy; agility, open-source collaboration, and relentless iteration can be just as powerful.”
AGIX and KWEB Tap Into Momentum From Both Continents
As the article pointed out, KraneShares offers two funds that, when paired together, can give advisors access to the two leading countries in the AI growth race. First, one can use the KraneShares Artificial Intelligence & Technology ETF (AGIX ) to gain access to some of the key players in the U.S. AI ecosystem. This includes Anthropic, a private company that remains the fourth largest holding in AGIX’s portfolio.
After investing in AGIX, investors can gain access to the China AI market with the KraneShares CSI China Internat ETF (KWEB ). Given the rapid development of China’s AI scene, KWEB can give investors access to compelling growth opportunities.
As U.S. and China companies continue to push the boundaries of AI innovation, portfolios invested in AGIX and KWEB can tap into two distinct sources of growth. This can help diversify a portfolio while tapping into long-term opportunities in the tech sector.
KraneShares currently has over 25 distinct ETFs listed in the United States. In total, these funds represent more than $7.8 billion in assets under management.
For more news, information, and analysis, visit the China Insights Channel.
