China’s foreign ministry recently released a video on its social media feeds, complete with a voice-over in American-accented English, comparing the acceptance of U.S. President Donald Trump’s 145% tariffs to “drinking poison”.

“China won’t kneel down, because we know standing up for ourselves keeps the possibility of cooperation alive, while compromise snuffs it out… Imperialists are always arrogant. If they show a bit of reason it’s only because they are forced to do so”

-The narration said.

A Chinese official revealed that Beijing believes yielding or compromising now would only weaken China in the future and that it would authorize Trump to change the terms later. These ongoing tariff riots aren’t superficial, rather, they are a reflection of deeper tensions in the ongoing US-China rivalry, particularly over dominance in emerging technologies such as artificial intelligence.

READ ALSO: 12 AI Stocks Analysts Are Talking About Right Now and 10 AI Stocks in the Spotlight This Week.

In the initial days of the tariff frenzy, former Canadian Deputy Prime Minister Chrystia Freeland had called on President Donald Trump to take the threat of tariffs off the table. She argued that the U.S. will need Canadian energy in the race to achieve dominance in artificial intelligence.

Freeland has deemed the tariffs as “the dumbest trade war in history,” stating how the U.S.-Canada trade relationship is largely balanced when oil, gas, and electricity are excluded. She said that the tariff threat needs to be taken “definitively off the table.”

“You are really lucky that Canada is the country that sells you oil and gas and electricity. We are a much more reliable supplier than, say, Venezuela. And the fact is, particularly with AI, America’s needs for energy are only going to increase.”

-Freeland told CNBC’s “Squawk Box.”

Canada aside, the artificial intelligence boom is being slowed due to the overall global trade war triggered by the Trump administration. Upcoming earnings reports from tech giants and utilities powering the massive data centers will reveal whether tit-for-tat tariffs, particularly between the U.S. and China, are making businesses change their plans for building data centers and other infrastructure.

China plays an important role in the production of AI hardware. It was excluded from a 90-day tariff reprieve earlier. According to analysts, the 145% U.S. tariffs on Chinese goods will sharply increase data center costs if an exemption on electronics is rolled back.

“Much of the electrical infrastructure and data center equipment is manufactured outside of the U.S. In many cases this equipment is in short supply and demand is high globally. Tariffs will likely make this more challenging, especially if foreign suppliers divert this equipment to other markets.”

-Pat Lynch, executive managing director for data center solutions at CBRE, a commercial real estate services firm.

For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points  (see more details here).

12. Vuzix Corporation (NASDAQ:VUZI)

Number of Hedge Fund Holders: 13

Vuzix Corporation (NASDAQ:VUZI) is a multinational technology company engaged in the production of artificial intelligence (AI)-powered smart glasses, waveguides, and augmented reality (AR) technologies. On April 29, the company announced that it has acquired a full R&D and production facility in Milpitas, California, strategically positioning itself in the heart of Silicon Valley. The acquisition will enable Vuzix to scale its development of next-gen waveguide optics, the core tech behind AI-powered smart glasses. The newly acquired site, formerly operated by a major global tech company, already has state-of-the-art ion milling and custom batch processing equipment installed. This advantage will allow Vuzix to ramp up production of compact, high-performance optics immediately. With major tech companies intensifying their efforts toward AI and AR convergence, Vuzix’s move will allow it to play a central role in bringing AI wearables into the mainstream.

“Vuzix continues to drive innovation in waveguide optics and display technology, enabling the development of next-generation AI-powered smart glasses. This facility strengthens our ability to support our partners with the highest-quality waveguide solutions, ensuring they have the technology needed to bring advanced, fashion-forward smart glasses to market. AI and AR are converging rapidly, and Vuzix is positioned to lead the way in this evolution.”

-Paul Travers, President and CEO of Vuzix.

11. Bloom Energy Corporation (NYSE:BE)

Number of Hedge Fund Holders: 42

Bloom Energy Corporation (NYSE:BE) develops solid-oxide fuel cell systems for on-site power generation, helping meet the growing energy demands of AI data centers. On April 30, Morgan Stanley analyst Andrew Percoco maintained a “Buy” rating on the stock with an associated price target of $35.00. The firm is highly confident in the demand for Bloom’s fuel cell technology, especially in serving data centers. This is because GPUs and AI investments continue to drive demand for them. Even though there are concerns regarding project timeline delays due to the current macro and policy environment, Percoco still sees upside for the stock. All in all, Bloom holds the potential to capitalize on the market opportunities regardless of challenges.