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US-China AI race: Dueling strategies and potential risks
In this episode of "Ask Ian," Ian Bremmer explores the evolving AI landscape and competition between the US and China.
Both countries lead in AI capabilities but differ in strategy. The US focuses on developing foundational Large Language Models (LLMs), aiming for consumer engagement and significant valuation increases. In contrast, China seeks to deploy AI in core industrial sectors like biotechnology and space. Ian notes that China wants “more efficiency, they want better energy use.”
Ian also highlights a shift in US policy, citing Nvidia's deal with Trump on chip sales to China. He contrasts the geopolitical significance of TikTok to Trump's agenda with how Taiwan matters to Xi Jinping.
Lastly, Ian warns of societal risks due to AI's psychological impact, advocating for stringent regulations and cautioning against unchecked consumer AI deployment: "We need far better regulations, and we need far more safety for society and for our mental and emotional well‑being.”
Nvidia founder and CEO Jensen Huang speaks to journalists as he arrives for a press conference at Mandarin Oriental Hotel in Beijing, China, on July 16, 2025.
What We’re Watching: China bans Nvidia chips, Fed holds big meeting, Saudi Arabia pulls plug on music lounges
China bans Nvidia’s last AI chip as its domestic industry catches up
China has ordered major tech firms, including Alibaba and ByteDance, to stop buying Nvidia’s RTX Pro 6000D AI chips, effectively banning them. The move shows Beijing is confident that its own rapidly-advancing domestic producers can now rival Nvidia’s offerings. Curiously, the decision comes just weeks after US President Donald Trump gave Nvidia the green light to sell chips in China in exchange for the US government getting a cut of the revenue. Will Beijing’s new ban stay in place, or is China merely jockeying for leverage ahead of an expected Friday phone call between Trump and President Xi Jinping?
A Fed cut is coming – but what are the caveats?
The US Federal Reserve is expected to lower interest rates for the first time this year at its meeting today, with investors anticipating a quarter-point cut. A rapidly-cooling labor market is pushing the Fed to cut rates. There are things to watch: first, what are the Fed’s predictions about growth and inflation later this year? Prices jumped last month as the effect of Trump’s tariffs filtered through, strengthening the case against further rate cuts. Second, how will Trump respond? He has threatened Fed Chair Jerome Powell with removal for not lowering rates fast enough, and is embroiled in a legal fight about whether he can fire Fed governor Lisa Cook.
Saudi Arabia’s liberalization streak faces the music
Authorities in Riyadh and Jeddah have shuttered at least two dozen music and performance “lounges” in recent weeks. The venues, which permit shisha smoking and mixing of the sexes, have proliferated since Crown Prince Mohammed bin Salman began a sweeping liberalization of the Kingdom’s ultra-strict social rules several years ago. Authorities officially cite public health concerns as the cause for the closures, but the move comes amid a backlash against the venues from conservative Saudis, who view them as vice-promoting nuisances.
In a first-of-its-kind deal, Nvidia and AMD will hand 15% of revenues from AI chip sales to China over to the US government in exchange for export licenses.
Graphic Truth: US government to get 15% of chip sales to China
In a first-of-its-kind deal, Nvidia and AMD will hand 15% of revenues from AI chip sales to China over to the US government in exchange for export licenses. The arrangement, greenlit after Nvidia CEO Jensen Huang met with Donald Trump, reverses an earlier ban and has national security hawks on edge, warning the chips could boost China’s military AI capabilities. The move comes amid ongoing US-China trade talks and pressure from Beijing to relax tech controls. Here’s a look at what the US’s coffers stand to gain through the deal, based on Nvidia’s estimated sales in China this year if export controls had been lifted.
Jensen Huang, CEO of Nvidia, speaks during the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, June 11, 2025.
What We’re Watching: Nvidia chips head east, Trump threatens tariffs on Russia, India balances alliances
US will end restrictions of AI chips exports to China, says Nvidia
The US-based chipmaker Nvidia is on a hot streak. After becoming the first ever company to be valued at $4 trillion, the firm said that the Trump administration ended its export limits on US-made H20 artificial-intelligence chips to China. The initial White House decision to curtail these exports, made in April, came after the Chinese firm DeepSeek released a powerful AI model that required far less computer power than its American cousins. Nvidia CEO Jensen Huang argued that these restrictions were counterproductive, because they spurred Chinese firms to develop their own chip industry. His argument appears to have resonated, and shares in Nvidia shot up 4% on Tuesday morning.
Trump threatens tariffs to force Putin into peace deal
US President Donald Trump increased pressure on Russian President Vladimir Putin to negotiate an end to the war in Ukraine on Monday by imposing a 50-day deadline for Moscow to strike a peace deal or face 100% tariffs on the few goods still traded between the US and Russia. He also threatened harsh secondary sanctions — up to 500% tariffs — on any other countries still doing business with Moscow. That could in principle cripple Russia’s economy, but it would put the US at odds with major trade partners China and India, which still import most of their crude from Russia. Are people buying Trump’s threat? The ruble reversed quickly initial losses on the news, buoyed by the 50-day grace period and Trump’s tendency to extend deadlines on his most severe threats.
India’s juggling act
During a visit to Beijing this week for a gathering of the Shanghai Cooperation Organization, India’s lead diplomat Subrahmanyam Jaishankar praised China’s leadership of an organization it hails as an alternative to Western clubs like the G7. It’s another reminder that Prime Minister Narendra Modi’s government, which is also a member of the Quad security group with the United States, Japan, and Australia, and buys large volumes of Russian crude oil, is working to protect solid relations with all the major players on the world stage. Relations with China, though improved, are the most difficult balancing act, given recent violence along disputed parts of the India-China border.
Myanmar's military chief Senior General Min Aung Hlaing leaves after a military parade on Victory Day, marking the 80th anniversary of the victory over Nazi Germany in World War Two, in Red Square in central Moscow, Russia, May 9, 2025.
HARD NUMBERS: Myanmar monastery suffers deadly airstrike, US State Department to cut staff, Nvidia sets valuation record, Mahmoud Khalil sues US government, Haiti’s gangs kill thousands
23: At least 23 people were killed on Friday in an airstrike on a Buddhist monastery in northern Myanmar. The attack is believed to have been carried out by the country’s ruling military junta. Since seizing power in a 2021 coup, the junta has been locked in brutal civil war with several powerful rebel groups.
15%: The US State Department is about to lay off 15% of its 18,000 US-based staff, as part of an efficiency drive. Secretary of State Marco Rubio says the move will make Washington’s foreign policy more agile, while critics say it will downsize America’s diplomatic capabilities at a critical moment.
$4 trillion: The AI chipmaker Nvidia has become the world’s first company valued at more than $4 trillion. Its remarkable rise in value is one of the fastest in Wall Street history, leaving its main domestic rivals Apple and Microsoft feeling.. Nvious indeed.
$20 million: Former Columbia University student and Palestinian activist Mahmoud Khalil filed a $20-million claim Thursday against the US government for damages incurred during his Immigration and Customs Enforcement (ICE) detention. The lawsuit accuses ICE of false arrest and imprisonment, malicious prosecution, abuse of process, and intentional infliction of emotional distress. The Department of Homeland Security dismissed Khalil’s claims as “absurd.”
5,000: Gang violence has killed nearly 5,000 people in Haiti since last October alone, according to a new UN report. The Caribbean country has been mired in a deepening political, economic, and humanitarian crisis since the 2021 assassination of president Jovenel Moïse. An international police force sent to the island last year has failed to dislodge the gangs, which control large swathes of the capital, Port-au-Prince.The flag of China is displayed on a smartphone with a NVIDIA chip in the background in this photo illustration.
Nvidia delays could slow down China at a crucial time
Chinese tech giants like Tencent, Alibaba, and ByteDance are buying chips as they race to build AI systems that can compete with American companies like OpenAI and Google. The shortage means these companies might face serious delays in launching their own AI projects, some of which are based on the promising Chinese AI startup DeepSeek’s open-source models.
It also comes at a critical time when China is pouring resources into developing its own AI industry despite having limited access to the most advanced computing technology due to US trade restrictions. New shipments are expected by mid-April, though it could mean months of waiting for Chinese firms to go through the proper channels.
The NVIDIA logo seen at the American GPU manufacturer NVIDIA Taipei office.
Nvidia forges deals in American Southwest and Southeastern Asia
The California-based chip giant is negotiating with Taiwan Semiconductor Manufacturing Company, or TSMC, the world’s top contract chipmaker, to manufacture its top-of-the-line Blackwell AI processors at TSMC’s Arizona facility. TSMC has invested billions to bring its high-tech manufacturing to the Southwest US, thanks in part to a $6.6 billion cash infusion from the Biden administration as part of the CHIPS and Science Act. Apple and AMD have reportedly already signed on to get their chips made in the Arizona plant when it starts production in the first half of 2025. That said, the chips won’t be entirely made in America: Final packaging is done back in Taiwan, which complicates and prolongs an already lengthy manufacturing process.
Halfway around the world, Nvidia CEO Jensen Huang met with the Thai and Vietnamese prime ministers last week as the company makes inroads in Southeast Asia. Nvidia also announced plans to establish Nvidia’s first research and development center in Vietnam, along with the acquisition of Vietnamese healthcare startup VinBrain for an undisclosed sum. In Thailand, the company signed a cloud deal with a company called SIAM.AI Cloud. Huang also emphasized the importance of “sovereign AI,” meaning that every country should have its own AI infrastructure and models.
In China, however, Nvidia is facing new scrutiny: The State Administration of Market Regulation is reportedly investigating whether the chipmaker violated antitrust laws when it acquired the Israeli-American company Mellanox in 2020. China previously gave conditional approval of the nearly $7 billion deal, but more than four years later, with the US restricting Nvidia from selling its most powerful chips to Chinese companies, the country is seeking new ways to gain leverage. A Nvidia spokesperson said the company is “happy to answer any questions regulators may have about our business.”
Hard Numbers: Doctor vs. machine, Pony rides to an IPO, Hot chips, Foxconn’s crazy demand
4.5 billion: A Chinese self-driving car company, called Pony AI, is attempting to go public on the Nasdaq stock exchange. The company, which is backed by the Japanese automaker Toyota among others, is seeking a $4.5 billion valuation for its initial public offering. The company previously tried to go public in the US through a blank-check company, but plans fell apart when China cracked down on such deals.
72: Nvidia's new Blackwell AI chips are reportedly overheating when installed in server racks designed to hold 72 chips. The company has already faced delays due to design flaws with these chips and is now asking suppliers to modify the designs of the racks numerous times. This issue could further delay sales to the largest tech companies in the world, such as Google and Meta.