What is ‘tokenomics’ and how would China gain the edge in an AI era?

The chip designer’s helmsman wants to recast his company not as a silicon vendor but as the architect of what he calls “AI [artificial intelligence] factories”, whose standard product is “token”.

While Nvidia is busy writing the rules of a new token economy, a parallel debate is emerging in China around the idea of “token exports”. AI-generated intelligence is essentially a tradeable good measured by token, and China is positioning itself across the value chain – from energy and computing power to models and output.

This explainer examines how “tokenomics” works – and why some believe China has the edge.

What is a token, and why does it matter?

In AI, a token is the smallest unit of data an AI model processes or generates. Unlike crypto tokens – which encode ownership or speculative value – AI tokens are purely computational: they are what users pay for, and what models produce.