Behind the Curtain: Trump's America-First AI risk
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The two most durable and decisive geopolitical topics of the 2020s are fully merging into one existential threat: China and AI supremacy.
- Put simply, America either maintains its economic and early AI advantages, or faces the possibility of a world dominated by communist China.
Why it matters: This is the rare belief shared by both President Trump and former President Biden — oh, and virtually every person studying the geopolitical chessboard.
- David Sacks, Trump's AI czar, said this weekend on his podcast, "All-In": "There's no question that the armies of the future are gonna be drones and robots, and they're gonna be AI-powered. ... I would define winning as the whole world consolidates around the American tech stack."
The big picture: That explains why the federal government has scant interest in regulating AI, why both parties are silent on AI's job threat, and why Washington and Silicon Valley are merging into one superstructure. It can all be traced to China.
- Trump is squarely in this camp. Yet his short-term policies on global trade and treatment of traditional U.S. allies are putting long-term U.S. victory over China — economically and technologically — at high risk.
To understand the stakes, wrap your head around the theory of the case for beating China to superhuman intelligence. It goes like this:
- China is a bad actor, the theory goes, using its authoritarian power to steal U.S. technology secrets — both covertly, and through its mandate that American companies doing business in China form partnerships with government-backed Chinese companies. China has a lethal combination of talent + political will + long-term investments. What they don't have, right now, are the world's best chips. If China gains a decisive advantage in AI, America's economic and military dominance will evaporate. Some think Western liberal democracy could, too.
- China then uses this technology know-how and manipulates its own markets to supercharge emerging, vital technologies, including driverless cars, drones, solar, batteries, and other AI-adjacent categories. Chinese firms are exporting those products around the world, squashing U.S. and global competitors and gathering valuable data.
- It then floods markets with cheap Chinese products that help gather additional data — or potentially surveillance of U.S. companies or citizens.
The Trump response, similar to Biden's, is to try to punish China with higher targeted tariffs and strict controls on U.S. tech products — such as Nvidia's high-performing computer chips — sold there.
- The downside risk is slowing U.S. sales for companies like Nvidia, losing any American control over the supply chain that ultimately produces superhuman intelligence in China, and cutting off access to AI components that China produces better or more cheaply than the U.S.
- Nvidia CEO Jensen Huang recently called the export controls "a failure" that merely gave China more incentive to develop its industry.
- You mitigate this risk by opening up new markets for American companies to sell into ... fostering alternatives to Chinese goods and raw materials (Middle East) ... and creating an overall market as big or bigger than China's (America + Canada + Europe + Middle East + India).
But Trump isn't mitigating the risk elsewhere while confronting China. He's often escalating the risk, without any obvious upside. Consider:
- Canada, rich in minerals and energy, is looking to Europe, not us, for protection and partnership after Trump insulted America's former closest ally. Trump continues to taunt Canada about becoming an American state.
- Europe, once solidly pro-American, has been ridiculed by Trump and Vice President Vance as too weak and too cumbersome to warrant special relations with America.
Zoom in: Trump's tariffs spooked these two allies and many others who could legitimately form a massive, united counterweight to China. That has slowed discussions of a united front in case America and China fully decouple.
- In fact, Europe and China are now talking more actively, in a sort of "the trade enemy of my trade enemy is my friend" dialogue.
- Trump has tightened relationships with rich nations in the Middle East, and sees the Saudis and others as displacing European nations as part of the global American coalition. But those same nations are close to China, too, and have little incentive to pick sides so decisively.
- The Trump-Biden export controls rely on countries involved in the cutting-edge chip supply chain — Japan, the Netherlands, South Korea and Taiwan — agreeing to harm their own companies' business in China to form a united front with the U.S. Trump has given them reason to reconsider.
Zoom out: Trump, in public, has been all over the place on China, much like he has on trade policy. He talked tough early, slapped on 145% tariffs — then sent Treasury Secretary Scott Bessent out to argue the broader trade strategy was a chess move to isolate China.
- But then Trump reduced the tariffs, suggested peaceful competition was possible, and reignited trade talks. Now, he's back to talking tough and firing off social media warnings about calling them off again.
Meanwhile, China keeps racing ahead on drones, cars, quantum computing and batteries.
- At the same time, Beijing holds all the leverage on the rare earth minerals the U.S. so desperately needs. And JPMorgan Chase CEO Jamie Dimon, just back from China, warned last week that America's internal issues leave the nation unprepared for war abroad. "If you put a team on the field and the team's torn apart, they're gonna lose," he told the Reagan National Economic Forum. "And that's kind of us right now."
The other side: Administration advisers tell us there's more coherence to the Trump strategy than meets the eye. Trump believes he'll ultimately create a coalition of willing trading partners, with more favorable terms for America, to rival China.
- He also believes his tactics will nudge Canada, Greenland, Ukraine and others to share essential minerals and AI ingredients — and that U.S. workers will benefit from better-paying jobs in this new economy.
Understanding that countries need AI and just choose between the U.S. and China, Trump sees the opportunity to leverage the U.S. AI lead to both bring countries onto U.S. systems — and to get investment back into the U.S. to fund critical AI infrastructure, including OpenAI's Stargate.
- An OpenAI official who has worked closely with Trump officials told us the administration excels at AI diplomacy and is executing a sophisticated strategy. "They get it," the official said, "particularly when it comes to making sure the world is going to build out on U.S.-led AI rails, while also using the interest in U.S. AI to get reciprocal investment into U.S.-based infrastructure."
The potential flaw: Trump is making an epic gamble. And China sees the opening.
- Axios' Ben Berkowitz and Dave Lawler contributed reporting.
Go deeper: "Behind the Curtain: A white-collar bloodbath."
