The News
Paulina McPadden, who runs the International Concentrated Growth Strategy at Baillie Gifford, told Bloomberg Tech she would not bet against China in the race for artificial-intelligence leadership. She tied that view to long-lived advantages in the semiconductor supply chain and to the steady flow of capital that supports it. McPadden also pointed to non-chip companies such as Shopify and MercadoLibre as early beneficiaries of AI tools that improve existing operations rather than replace them.
Context
The interview took place while the United States and China continue to tighten policy around advanced computing hardware and model development. Investors are now forced to judge not only which country fields the next large model, but which physical choke points in chip production can withstand export rules, subsidy shifts, and multi-year capital cycles. Earlier coverage focused mainly on U.S. restrictions and Chinese state funding; McPadden’s remarks move the discussion to the handful of suppliers that sit between the two governments.
Details
McPadden singled out TSMC, SK Hynix, and ASML as firms whose positions rest on decades of process know-how and equipment specialization. She described these moats as resilient even when political pressure on either side of the Pacific intensifies. The same logic, she argued, applies to capital allocation: firms that have already committed large sums to next-generation nodes and memory capacity are unlikely to lose that lead quickly.
Outside semiconductors, McPadden cited Shopify and MercadoLibre as platforms that can fold AI into recommendation engines, logistics, and customer support without waiting for frontier-model breakthroughs. She framed these gains as extensions of existing data and distribution advantages rather than new hardware dependencies. The comments were made during an on-air conversation with Ed Ludlow on Bloomberg Tech; no quantitative forecasts or timelines were offered.
The source material contains no specific performance numbers or product roadmaps. McPadden’s assessment therefore rests on qualitative judgments about supply-chain depth and the difficulty of replicating specialized manufacturing capacity.
Reactions and Counterpoints
No other investors or company executives appear in the segment, so direct rebuttals are absent. The broader market debate continues to weigh U.S. export controls against Chinese domestic investment programs, yet McPadden’s remarks do not engage those policy details directly.
Why it matters
Engineers and founders building AI systems still depend on a narrow set of fabrication and lithography providers whose output cannot be duplicated on short notice. When policy targets one nation, the physical constraints at these suppliers remain in place and continue to shape what models can be trained and where inference runs at scale. Companies that already operate large transaction platforms can test AI features on real workloads today, while teams waiting for unrestricted access to the newest chips face longer lead times. McPadden’s refusal to discount China follows from these concrete bottlenecks rather than from assumptions about future subsidies or regulatory relief.
The same constraints also limit how quickly any single government can insulate its domestic ecosystem. Suppliers that serve multiple markets have little incentive to sever ties that took years to build, which keeps capacity and knowledge distributed even under sustained political friction.
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Sources:
{
"publisher": "Bloomberg Technology",
"title": "How Can China Win the AI Race Against the US?",
"url": "https://www.bloomberg.com/news/videos/2026-08-10/how-can-china-win-the-ai-race-against-the-us-video",
"published_at": "2026-08-10T17:48:04.000Z",
"summary": "As the US-China AI race intensifies, investors are weighing not only access to chips and capital, but which companies have competitive advantages that can endure for decades. Paulina McPadden, investment manager of International Concentrated Growth Strategy at Baillie Gifford, discusses why she “wouldn’t want to bet against China” and the durable moats she sees at TSMC, SK Hynix and ASML. She also discusses how companies like Shopify and MercadoLibre are emerging as AI beneficiaries outside the semiconductor industry. She joins Ed Ludlow on \"Bloomberg Tech.\" (Source: Bloomberg)"
}
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