The United States is poised to pivot from a strategy of restraining China’s technological rise to one centered on directly competing with it across key innovation sectors next year, according to a new outlook from Jefferies.
In their report, analysts including Aniket Shah and Charles Boakye said Beijing has already achieved “dominance” in much of the global technology landscape. They argued that the evolving contest between the world’s two largest economies represents “the most important question shaping geopolitics over the next few decades.”
Given that backdrop, the team expects a major strategic shift in Washington: “2026 will mark a turning point in the U.S.’s posture — from attempts of containment, to tech-competition across several fronts.”
They suggest U.S. leaders could ramp up industrial policy efforts and mobilize “key players including universities [and] national labs” to counter China’s ascent as a technological superpower.
Jefferies pointed to recent moves by the White House as early evidence of this transition. Last week, President Donald Trump signed an executive order creating a national initiative aimed at accelerating scientific breakthroughs through artificial intelligence. Under the program — called the Genesis Mission — the Department of Energy will oversee the creation of a new platform intended to unify research capabilities spanning federal labs, public institutions, and private-sector technology partners.
The initiative could speed up innovation cycles in emerging fields such as quantum computing, advanced materials, and biotechnology, effectively shortening the path from scientific discovery to commercial application.
For investors, Jefferies notes that Trump’s strategy places heavy emphasis on turning innovation into economic returns — an approach that “could reshape capital expenditures and how/who long term growth accrues to.” The analysts also warned that China has built a “structural advantage” over the past decade, particularly in industries like solar technology, robotics, and electric vehicles.
The report adds that forthcoming collaborations between U.S. national laboratories and major tech giants — including Nvidia (NASDAQ:NVDA), Alphabet (NASDAQ:GOOG), Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META), and Tesla (NASDAQ:TS:A) — “should provide an indication of where private partners are willing to commit resources.”
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