A US congressional commission on Tuesday proposed a Manhattan Project-style initiative to fund the development of AI systems that will be as smart or smarter than humans, amid intensifying competition with China over advanced technologies.

The bipartisan US-China Economic and Security Review Commission stressed that public-private partnerships are key in advancing artificial general intelligence, but did not give any specific investment strategies as it released its annual report.

The Manhattan Project was a large-scale collaboration between the US government and the private sector during World War Two that produced the first atomic bombs.

"We've seen throughout history that countries that are first to exploit periods of rapid technological change can often cause shifts in the global balance of power," Jacob Helberg, a USCC commissioner and senior advisor to software company Palantir's CEO, told Reuters.

"China is racing towards AGI ... It's critical that we take them extremely seriously," Helberg added.

Noting that energy infrastructure is a significant bottleneck for training large AI models, Helberg suggested that streamlining the permitting process for data centers might be an example of how a public-private partnership could accelerate AI development.

ChatGPT maker OpenAI, which last week released a proposed blueprint for US AI strategy, has also called for more government funding for artificial intelligence.

The USCC, established by Congress in 2000, provides annual recommendations on US-China relations. Known for its hawkish policy proposals, the commission aims to guide lawmakers on issues of economic and strategic competition with China.

Other recommendations in this year's USCC report include repealing the de minimis trade exemption that allows Chinese goods under $800 to bypass tariffs with minimal paperwork and inspection, ending preferential capital gains treatment linked to Chinese companies on government watchlists and requiring approval of Chinese involvement in biotechnology companies operating in the US

Commissioner Kimberly Glas said at a briefing on the report that immediate elimination of de minimis treatment for e-commerce goods was one of the most critical recommendations from the panel, given that the enormous volume of packages makes it difficult for Customs and Border Protection to stop the flow of dangerous products into the US, including fentanyl chemicals and pill presses.

"Just to give you a sense of the trajectory, it's 4 million boxes a day, estimated to be 1.4 billion de minimis shipments over this past year, according to CBP," Glas said. "It is impossible to police what is in those boxes.

"In the 1930s de minimis was created so we could bring back trinkets from abroad and not have to pay a tariff. In the e-commerce environment, it has become a funnel for Chinese products to receive duty-free, no-scrutiny treatment," she said.

Republican and Democratic lawmakers have also introduced a series of bills that aim to rein in de minimis, particularly for shipments from China. But bipartisan cooperation has been elusive in a tumultuous election year, and the shipping industry and pro-trade groups have lobbied against such measures, arguing it would disrupt e-commerce.