The United States and China are pouring resources into military artificial intelligence, and the contest is heating up on several fronts at once.

According to Moneycontrol, China recently used a military parade in Beijing to show off drones designed to fly alongside fighter jets, operating with a level of autonomy that would have seemed like science fiction a decade ago. The outlet frames this as part of a global AI arms race that is accelerating quickly.

On the American side, the Pentagon is moving on both policy and procurement. Reporting carried by MSN says Defense Secretary Pete Hegseth is steering Pentagon contracts toward defense-tech startups, a shift that could reshape which companies build the military's next generation of tools.

The same reporting describes friction between the Pentagon and the AI industry. According to MSN, the Pentagon publicly criticized OpenAI's Dean Ball over his stance on regulation tied to curbing Chinese AI, citing a 2026 law and pushing back on the idea that the effort was, in the department's words, "not some deep state scheme." The dispute, the report notes, raises questions about the future of OpenAI's relationship with the government.

Taken together, the sources sketch a moment in which autonomous weapons are moving from concept to hardware, the U.S. military is betting on newer, smaller contractors, and the government's ties to leading AI firms are showing public strain.

Why it matters: decisions being made now about who builds military AI, and under what rules, will shape both the balance of power between the U.S. and China and how much autonomy is handed to machines that can kill.