What exactly are we competing with China for?

I’m asking this in good faith. I’m an American and I’m trying to get to the root of what it means to “compete with China” with respect to AI. As far as I’m concerned, AI is software that runs on a computer. I can’t hold it in my hand or eat it. If China has better AI models on their computers than the US, what EXACTLY does this imply for the world. Why and how are they going to dominate us? Are they going to build a weapon that kills us all? Are they going to seize control of every economic market? They’re already doing that without AI. I’m asking these in good faith. I’ll read posts on this subreddit that, with respect to the AI race, only speak of it in a “meta” manner. By that I mean, I’ll see references to how China has better engineers, better models, they are “innovating” better, but it’s all references to the technology itself. Never what this tech will ultimately be used for. It makes me feel that we have collectively become enamored with tech for techs sake without any broader consciousness towards what it’s all for. What problems are we trying to solve? I’m an engineer(not software), I use ChatGPT to help automate simple coding processes, it definitely has practical use to me(unlike crypto/nfts), but I feel “too stupid” to grasp what all the data centers are for, why these aggressive companies are forcing me to embrace this.