New Delhi [India], May 2 (ANI): China is rapidly emerging as a force in Artificial Intelligence services, with its open-source models processing a volume of tokens comparable to US counterparts, while Europe faces growing economic and geopolitical friction over the ongoing conflict between the US and Iran, according to a research report by Jefferies.

The brokerage firm said that data from OpenRouter shows China's top nine AI models processed 4.37 trillion tokens in the week ended April 26, compared with 4.98 trillion for US models. This follows a record 12.96 trillion tokens processed by Chinese models in the week ended April 5, outpacing US models' 3.03 trillion. The trend highlights China's ability to leverage cheap energy and computing power to export digitally-delivered knowledge services.

China ranked as the world's sixth-largest exporter of digitally-delivered services in 2025, with exports rising at an annualized 15.2 per cent over 20 years to USD 245 billion, up from USD 14.4 billion in 2005. While this is still below India's USD 328 billion, the trajectory reflects China's growing role beyond manufactured goods.

Meanwhile, European frustration over the US-Iran conflict is becoming public. German Chancellor Friedrich Merz this week criticized Washington's strategy, saying 'the Iranians are clearly stronger than expected' and that 'the Americans clearly have no truly convincing strategy.' The comments mark a rare break from Berlin's traditionally cautious stance toward Washington since the Ukraine war, when Germany cut off cheap Russian energy in favor of US LNG.

The brokerage added that the economic toll is visible in Germany's GfK consumer climate index, which fell 5.2 points to minus 33.3 in May, the lowest since February 2023 and the sharpest monthly decline since October 2022. European leaders are also questioning the continued use of over 40 US military bases hosting 85,000 troops, with some floating the idea of negotiating directly with Iran to secure access through the Strait of Hormuz, through which 34 per cent of seaborne crude oil and 19 per cent of LNG passes.

Domestically, US polling shows 61 per cent disapprove of military strikes on Iran and 63 per cent disapprove of Trump's economic handling, adding pressure for a diplomatic off-ramp. The situation is compounded by the UAE's decision to exit OPEC on May 1, signaling growing fractures within the Gulf amid the conflict. (ANI)