China has demonstrated a willingness to forego money in the name of the common good. In the name of protecting workers and protecting labor. And so even if China is more structurally exposed to AI, even if that is the case, my assumption is that the Chinese government will bend the economy to its will in order to protect Chinese workers. What I know about America is that the total opposite is true.
While uh the US spends 12 times more on compute this from the private sector versus the Chinese private sector uh China is spending 42% more on the robotic sector uh than the United States and apparently this gap is going to widen so this is two very different uh I would say modalities but I think that the robotic race, especially the AI component of it, uh, is a really exciting one and it's where China actually has distinct advantages, not just in the hardware, but potentially the software, too.
The real problem with deterrence is that it requires your adversary to believe you will actually follow through. And historically, the United States has had a credibility problem — we draw red lines and then don't enforce them, which is an invitation for adversaries to probe and push.
Another war in the Middle East. A retreat from the international order. A presidency built on self-dealing and arbitrary power. It's enough to make you think the U.S. is in a steep decline — but Fareed Zakaria thinks otherwise.
The U.S. has been the world's dominant military power for so long that we've forgotten what it's like to have a peer competitor. And the scary thing is that China isn't just catching up — in some domains, they've already surpassed us.
I have no leverage. Trump is me in the Hungarian forest right now. Because he never bothered to consult Congress and offended them. Because he never even signed up or even briefed European allies. Because he did not in any way coordinate anything around intelligence around the Straits of Hormuz, getting expats out of the Gulf, figuring out putting in place the right defense mechanisms.
The problem is what you don't see on the box, the resilience, sovereignty and competition risks that come when a growing chunk of rural New Zealand's connectivity, including some mobile towers, schools and businesses, depends on a single foreign owned satellite provider.
The sort of closeness that we've seen between Russia and China since the Russian invasion of Ukraine is probably the most consequential geopolitical shift that we've seen in the world over the last decade.
We discuss why magazine depth matters for the American industrial base, lessons from Ukraine, and what the rise of neo-prime defense companies will require from Congress.
We recorded this conversation in the middle of the Iranian contingency, and we spent most of our time on what winning actually means in a theater like Iran.
Both sides now openly acknowledge that the US and China no longer see trade and technology as economic issues alone. They see them increasingly as national security weapons.
Amid the barrage of messages and misinformation swirling online and on Capitol Hill, about what damage U.S. military sites incurred during the conflict with Iran, a Times analysis of satellite imagery shows 18 sites in seven countries were hit.
I would say all of this to me means that the rivalry has entered a new phase. The White House is talking about exploring measures to hold foreign actors accountable. That's the phrase they use for industrial scale distillation campaigns. To me, I think the important thing is that politically, geopolitically, this is a step change.
The German chancellor publicly said the United States is being humiliated. The French president publicly said that the US president um the Russian president, the Chinese uh president are all directly against Europe uh acting together against Europe. Those are those are things that at best you usually hear with inside voices.
If you're Iran, this is even before the deadline. I understand that Israel is the one doing the bombing, not the United States. But from Iran's perspective, those bombs kind of feel the same, right?
It allows China yet again to claim the diplomatic high ground from the US presenting itself as a peacemaker while leaving people to draw their own conclusions that the US is a wararmonger.
China is still a highly transactional power. It doesn't have allies with the exception of one and that is North Korea. It has a formal treaty with North Korea signed in 1961. But aside from that, China has no treaty obligation to go in and protect and defend any other country were that country to be attacked.
Billions of Saudi dollars were already reshaping the US economy. And now many of those tech companies are vulnerable as Iran targets their infrastructure in Saudi Arabia and other Gulf countries in the ongoing war.
Energy is upstream of everything and more importantly food the the fertilizer production coming out of that region. Um and it's planting season so it's a very bad timing for the world's agricultural supply chains.
China has captured America's most famous company. It's an extraordinary realization that Apple is worth about 3.7 trillion US dollars on the stock market, but it isn't really the company's shareholders that actually call the shots, at least not in China. In China, it's the Chinese government that calls the shots.
anybody who knows the Cubans and Cuban history, this, you know, this island nation just off our shores knows that it has, to an unusual degree, a profound nationalist sentiment when it comes to its own sovereignty, its independence, and especially vis-a-vis the United States.
It's the most extraordinary thing that the most critical issue facing American financial markets is whether to believe the American president or the Iranian leaders about what the Americans are doing.
if one or two places can change their relative importance in technology within such a short time span, you know, five to seven years, and it's not just China, you know Canada, for instance, the outsize role that it has played in AI research. You know, much of the AI boom that we see today comes from just a couple of major advancements in AI that happened, for instance, alexnet, which was this seismic event in neural networks.
By banning the export of chips to China, the cost to China of a Taiwan invasion decreases. And so if China can't access TSMC chips anyway, it's a lot less risky to go to war.
The more the economies are interlinked, the less likely there is a conflict. So all of this underscores the importance of TSMC Arizona Samsung Intel broadly as well as startup fab projects.
if one or two places can change their relative importance in technology within such a short time span, you know, five to seven years, and it's not just China, you know Canada, for instance, the outsize role that it has played in AI research.
The Chinese are playing a long game in the Middle East, but also a long game around the world. So the China of today is far deeper in the Middle East, including the Gulf, including Iran, including Iraq. When Western companies are not so forthcoming to build things, the Chinese are always there to build things.
if this war is extended if it if if we see um no offramp for for for the US and Israel and it has to continue and therefore that choke point stays closed. At some point we're going to see you're going to see a supply crunch and that's what that that's really the the major fear.
there are about 20 million barrels of oil that transit the straits of Hormuz every day. That's almost three times as much as Russia exports. So, you know, this is a problem three times as great as the problem that created the panic on global oil markets at the start of the Ukraine war.
roughly 20% of the world's oil production is flowing through that every day and so whether you're looking backward or looking forward there is no replacement whatsoever for opening that strait and keeping it open.
I think people are probably just beginning to realize that this is not going to be a two-day affair. It should be a two-day affair because if if Iran was run by a normal government that had the interests of its own people at heart, they'd have surrendered 24 hours ago or 48 hours ago because there's there's no way that they can win.
China wants to plant a flag on the moon when it puts a person onto the South Pole. This is a big part of the China Luna missions and I think it's going to be fascinating to watch.
Just beneath the surface of the global economy, there is a hidden layer of dealmakers for whom war, chaos, and sanctions can be a great business opportunity.
