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, Jim VandeHei and Mike Allen write in a "Behind the Curtain" column.

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:

1. 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.
2. 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.
3. 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.

Column continues below.

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. Beijing holds all the leverage on the rare earth minerals the U.S. so desperately needs.

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.

• Share this column ... Ben Berkowitz and Dave Lawler contributed reporting.

Eight people were injured in Boulder, Colorado, yesterday when a man "used a makeshift flamethrower and threw an incendiary device" at a group of demonstrators calling for the release of Israeli hostages held by Hamas, the FBI said.

• The agency called it a "targeted terror attack" and said the suspect — identified as 45-year-old Mohamed Sabry Soliman — yelled "Free Palestine." The suspect is in custody and the FBI believes he acted alone.

The victims had been participating in Run For Their Lives, a weekly walk on Pearl Street — a popular pedestrian strip lined with restaurants and shops.

• The injuries range in severity. Two victims were airlifted to a burn unit.
• Authorities were called to the scene after receiving reports that people had been "set on fire."

Between the lines: The attack occurred barely a week after a man who also yelled "Free Palestine" was charged with fatally shooting two Israeli embassy staffers outside of a Jewish museum in D.C. (AP)

• Get the latest.

U.S. trade policy is making China great again — at America's expense, Axios' Emily Peck writes from a Morning Consult analysis.

• Why it matters: The drop in America's reputation is already costing the country economically through a fall in foreign visitors turned off by White House policies, and even the decline of the dollar.

Keep reading.

Ukraine launched unprecedented drone strikes deep inside Russia yesterday, targeting dozens of strategic bombers at several bases, Axios' Barak Ravid writes.

• Why it matters: The wide-ranging attack took place shortly before Ukrainian President Volodymyr Zelensky announced he is sending a delegation to ceasefire talks with Russia in Istanbul today.

A Ukrainian official told Axios the operation codenamed Spider Web was conducted by the country's security service and was planned for a year and a half.

• Zelensky said that the Ukrainian intelligence agents managed to work for months inside Russia under the nose of the Russian FSB domestic security service.

🔭 Zoom in: Ukrainian intelligence agents launched 117 attack drones from trucks that have been covertly placed near Russian air bases — some of them in Siberia, thousands of miles from Ukraine.

• Around 40 Russian military planes — most of them strategic bombers — were reportedly hit in the attack.

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The AI-fixated tech industry is rapidly dismantling the old web, with no game plan for how to replace it, Axios' Scott Rosenberg writes.

• Why it matters: Chatbots have already begun to intercept web traffic and drain publishers' revenue.

Now tech giants and startups aim to remodel the devices and browsers we use to access web pages, using AI to summarize or pre-empt the content that people and publishers post online.

• Firefox debuted an experimental browser tool last week that provides AI summaries when users hover over links.
• Also last week, the Browser Company, maker of the Arc browser that's beloved by some power users, announced it was pivoting to focus on a new AI-powered browser called Dia.

Keep reading ... Get Axios AI+.

Walmart leads the Fortune 500 for the 13th straight year, according to the magazine's annual ranking — out this morning.

The top 10 (U.S. companies, ranked by FY 2024 revenue):

1. Walmart.
2. Amazon.
3. UnitedHealth Group.
4. Apple.
5. CVS Health.
6. Berkshire Hathaway.
7. Alphabet.
8. ExxonMobil.
9. McKesson.
10. Cencora (pharmaceutical solutions; formerly AmerisourceBergen).

☀️ Between the lines: California is home to the most Fortune 500 companies for the second year in a row with 58 — beating Texas (54) and New York (53).

• Explore the list.

Abbey Higginbotham and Travis Meier — co-authors of Axios Kansas City, which launches today as the 33rd city for Axios Local — salute the skyline of Kansas City, Missouri, from Percheron Rooftop Bar, atop the Crossroads Hotel.

• Abbey tells me: "Kansas City is the first place that's ever really felt like home. I grew up a military kid and moved constantly. But I've been here on and off since 2017 — long enough to fall for the skyline at golden hour, the old buildings with stories baked in, and how people here treat strangers like neighbors. I'm drawn to stories with character: hyperlocal politics, small businesses with big personalities, and the people quietly shaping what KC becomes. Readers want that too — not just what's happening, but why it matters and who's really behind it."
• Travis, who was recommended to us by the great David Von Drehle, tells me: "Kansas City has this infectious hometown energy that's hard to resist and just plain fun. Since moving to KC in 2019, it's been a whirlwind of record-breaking sports — combined with an urban renaissance, massive population growth, and supercharged international attention. I've become obsessed with telling stories about the people here who build cool things, whether they be businesses, stadiums or skyscrapers."

We're very proud of this Axios Local map — 34 great American cities, each with full-time journalists on the ground (most of them born-and-bred), with their own locals-only newsletter.

• Get Axios Kansas City ... 33 more cities.