China-led AI bloc formed to rival EU and US rules
Twenty-nine countries have established a China-headed AI governance body in Shanghai, creating a rival to the EU’s regulatory framework that threatens to fragment global tech standards.
Twenty-nine countries signed a treaty on 16 July to establish the World AI Cooperation Organization (WAICO), an intergovernmental body aimed at promoting global AI governance. The organisation will be headquartered in Shanghai. China’s foreign minister, Wang Yi, signed on behalf of Beijing, while UN Secretary-General António Guterres attended the ceremony.
The founding coalition heavily features nations outside the traditional Western sphere of influence. Members include Russia, Belarus, Serbia, Cuba, Brazil, Venezuela, alongside 10 African and 12 Asian countries. Analysts describe the body as a deliberate effort to build a coalition of developing nations.
For Europe, the immediate significance of WAICO lies in its explicit positioning as an alternative to Western regulatory models. The new bloc is designed to operate entirely outside established frameworks, specifically the EU’s AI Act and the G7 process. This challenges Brussels' strategic goal of making European tech regulation the de facto global standard.
Beijing is capitalising on frustrations among emerging economies regarding the pace and cost of AI adoption. It is framing its low-cost, open-source models as a public good capable of narrowing global inequality. This contrasts sharply with the US position presented at a UN dialogue last week, where Washington argued that heavy regulation stifles technological breakthroughs.
“China has been making inroads with Southeast Asian countries in terms of AI capacity-building,” an Asian diplomat said. The diplomat noted that Beijing “portrays itself as speaking up for developing countries who are being left behind in the AI race.”
The treaty signing was timed for the eve of the 2026 World AI Conference in Shanghai. A linked High-Level Meeting on Global AI Governance will review the progress of WAICO. Xi Jinping is due to open the conference in person for the first time, where he is expected to detail China’s vision for the technology's future.
The absence of major US tech firms at the Shanghai conference underscores the deepening divide. The two superpowers are preparing for their first official AI talks under President Donald Trump, but the creation of WAICO signals that competing blocs are already solidifying.
European businesses and investors must now reckon with a permanently fragmented global AI market. Instead of a unified baseline, AI governance will be split between the EU's risk-based compliance regime, a lighter American approach, and a state-directed Chinese ecosystem. This tripartite split increases the cost and complexity of cross-border tech operations for European companies.
