Why do leaders with vast expert bureaucracies at their fingertips make devastating foreign policy decisions? Tyler Jost, professor at Brown, joins ChinaTalk to discuss his first book, Bureaucracies at War, a fascinating analysis of miscalculation in international conflicts.

As we travel from Mao’s role in border conflicts, to Deng’s blunder in Vietnam, to LBJ’s own Vietnam error, a tragic pattern emerges — leaders gradually isolating themselves from their own information gathering systems with catastrophic consequences.

Today our conversation covers…

• How Mao’s early success undermined his long-term decision-making,

• The role of succession pressures in both Deng’s and LBJ’s actions in Vietnam,

• The bureaucratic mechanisms that lead to echo chambers, and how China’s siloed institutions affect Xi’s governance,

• The lingering question of succession in China,

• What we can learn from the institutional failures behind Vietnam and Iraq.

Listen now on your favorite podcast app.

Mao, Hitler, and “Hot Hand” Leadership

Jordan Schneider: Let’s kick it off with Mao Zedong. You start the clock after independence. I’m curious, when you think about leaders like Mao who followed their instincts to achieve a remarkable place in world history — Mao bet on himself again and again and won. When Stalin pressured him to make a deal with the Nationalists, Mao said, “No, we’re going to fight and we’re going to win in the end.” Then the Japanese invaded and shifted the balance of power, and in the end, history worked in Mao’s favor.

Most leaders experience a series of successes and luck over the decades it takes them to reach power, which can build psychological confidence in their own instincts. As we think about the interaction between bureaucracies and leaders — when leaders trust their gut over other advice — how does that confidence in their instincts shape their later decision-making? When their instincts conflict with expert advice, do they trust themselves over the system?

Tyler Jost: That’s a great question. You could probably break it down into three categories of explanation.

First, some psychologists think human beings are hardwired to be overconfident. There’s a baseline tendency across the human population that when presented with gambles, people make riskier choices than they probably should, given a dispassionate look at the data.

Second, there’s a category which I think Mao probably fits into — certain personalities tend to be more risk-accepting than others. This could be because some people are comfortable with risks and taking gambles. It could also be because the way we perceive risk can vary among people. Some people might perceive the gamble of war as less risky than others. Mao probably falls into that category.

The third category has to do with the political phenomenon you’re talking about. In foreign policy decision-making, we often study the decisions of presidents, prime ministers, and dictators — leaders who have climbed up the political ladder. They’re already in office. That could trigger a “hot hands” phenomenon — “Look, I was able to get here, this must mean my views are good, and as such, I should trust those instincts as opposed to the data around me.”

Jordan Schneider: I’ve been going back to Ian Kershaw’s histories of Hitler. There are just so many calls in the 1930s where Hitler’s gut was right and the Allies folded. Invading Poland kind of worked out, and invading France went better than anyone could have imagined. There was a point when Hitler’s generals were about to kill him because they thought the calls he made in the late 1930s were too risky.

Then he made some epochal blunders — declaring war on the US, invading the Soviet Union — it’s understandable that someone who went from jail for a failed coup to nearly dominating Europe 20 years later could become overconfident and make terrible calls.

Tyler Jost: This is a book about miscalculation. Both historians and political scientists often try to evaluate individual decisions based on outcomes — if things turned out well, it must not have been a miscalculation, whereas if things didn’t, it must have been. That’s actually a problematic approach to history.

You can make a decision that ends up working out even though it was based on horribly inaccurate views of the world, and vice versa. If we really want to study the quality of decision-making, we have to start with temporal analysis. We have to look over time rather than examining any single decision.

If you had a 5% chance of things going your way according to the data, then that’s still a 5% chance. But if you keep making that bet over and over again, eventually it will catch up with you. For methodology— and this applies equally when doing historical analysis — you want to take a bird’s-eye view. What is the pattern of success and failure over time as opposed to specific instances in isolation? The book tries to go deep in particular cases to illustrate the mechanisms, but it’s important to start with base rates.

When Mao Stopped Listening to Bureaucrats

Jordan Schneider: You can tell a story of the 1930s where the international world is weak and ripe for toppling, but suddenly the most Jewry-Bolshevik infested one happens to be the one still fighting even after losing millions of people in the summer and fall of 1940. You can draw terrible extrapolations based on a limited set of data points.

Let’s return to Mao. From an epistemological perspective, you have a ton of material from the Nianpu 年谱 of what the daily leaders are discussing and the documentation of their decision-making. Were you surprised that all of this was out there for you to sink your teeth into once you started investigating?

Tyler Jost: The Chronicle of Mao Zedong or Mao Zedong Nianpu 毛泽东年谱 was released just before I started graduate school. I don’t think I realized then how lucky I was in my timing. The party archives publishes compendia of daily activities of senior revolutionary-era leaders, such as Mao’s meetings with his advisors and Mao’s meetings with the Politburo. Not just the ones that were released or publicized in The People’s Daily 人民日报, but the private ones as well, where the real action happened.

I stumbled into this, knowing I was interested in writing a dissertation about decision-making. It so happened that the most detailed records pertaining to Mao’s decision-making had just been released by the party.

Jordan Schneider: Give us an overview. You periodize Mao’s administration from 1949 to 1962 and from 1963 to 1976. Let’s start in that early era. What was the national security decision-making apparatus that he was working around?

Tyler Jost: Through all of these frameworks, start with the leader. I’m interested in miscalculations about questions of war and peace. The assumption at the starting point — this is a theoretical assumption you could question, but I try to show empirically that it’s sound — is that you have to get the leader on board. Leaders make the final call on big decisions in foreign policy. There could be other subsidiary decisions that low-level bureaucrats get to make on their own, but the starting point for any analysis has to be the leader.

This is an easy assumption that aligns with the historical understanding of Mao’s era. Mao was a dominant force in decision-making. The reason I say that the period between 1949 and 1962 was different from roughly 1963 to the end of Mao’s life is that the system Mao created when they founded the government in 1949 was, comparatively speaking, quite integrated.

What do I mean by integrated? There were many mechanisms by which the leader was able to reach down into the Chinese party-state and extract information needed to make decisions. There was an unusually high status of the Foreign Ministry, which was a function of the fact that many individuals who went into the Foreign Ministry early on had been part of the military and had revolutionary credentials. This included Zhou Enlai 周恩来, who was the first foreign minister and concomitantly the Premier 总理 of the country at the outset. His replacement, Chen Yi 陈毅, was similar — one of the Ten Marshals 元帅/大将.

So that’s a diplomatic core or critical mass of diplomatic information that Mao had access to. Then obviously there’s the military. The military already had a high standing and good access to get information up to Mao. From the late 1940s to the early 1960s, Chinese leaders’ ability to get the information they needed from the state system was pretty good.

Jordan Schneider: Okay, let’s take it to 1962. What was happening between the mainland and Taiwan?

Tyler Jost: 1962 is four years into the Great Leap Forward. The Chinese economy is doing incredibly poorly. There’s a suspicion that perhaps the regime is not fully stable. In the spring of 1962, Chiang Kai-shek, who had been monitoring the situation on the mainland very closely, got it in his head that this was his last favorable opportunity to take serious military action (“Project National Glory/國光計劃”) against the mainland to foment a revolt that would ultimately topple the communist regime.

He takes a series of actions, from writing in his diary about how serious he is about military action against the mainland to setting up internal Taiwan military bodies, convening military planning meetings, and reaching out to the Americans to see whether they would support something.

Unfortunately for Taiwan — and this is eventually what’s discovered by Mao — this is a year after the Bay of Pigs in the Kennedy administration. The US and Taipei had signed the Mutual Defense Pact a couple of years prior, which essentially gave veto authority to the US for any major military operations, including the one Chiang had in mind in 1962. Chiang essentially has to decide whether he’s going to go it alone, go back on the treaty commitment, or just back off. That’s the scene setter before we get to the mainland side of things.

Jordan Schneider: What did Mao know? When did he know it, and what was the decision space he was facing once he started hearing whispers of Chiang restarting the civil war?

Tyler Jost: Mao gets a pretty early wind that something serious is happening in the spring of 1962 through intelligence channels. He immediately engages with the bureaucratic establishment. There’s a series of Politburo, Central Military Commission, and Leading Small Group 领导小组 meetings, all of which are activated to determine what China should do.

What’s remarkable about this — because this is 1962, four years into the Great Leap Forward — is that the Foreign Ministry is at the table, military officers are at the table, and there’s pretty candid discussion, particularly given that Mao early on in the crisis seems to indicate he’s taking the chance of an invasion seriously.

Beijing eventually lands on a two-pronged strategy. One in which the PLA is going to mobilize, but do so publicly to showcase that it’s aware of what’s happening and prepared to defend itself militarily. But then critically — and this is where the Foreign Ministry and Zhou Enlai play a big role — they activate a diplomatic channel that the PRC has with the US.

Remember, this is the Cold War, so there’s no formal diplomatic recognition between the two countries, but there is an ambassador-level channel in Warsaw through which the two sides can communicate. The Foreign Ministry officials, including Foreign Minister Chen Yi, have this intuition that Chiang Kai-shek is probably going rogue, and it’s unlikely the US is behind it. If the US isn’t behind it, they’ll likely be able to rein Taipei in.

That’s exactly what they do. They reached out to the US in Warsaw in the summer of 1962, and received a message loud and clear that was personally approved by Kennedy. It’s fascinating — I trace that message from Kennedy to the US ambassador in Poland to Wang Bingnan 王炳南, the representative from the PRC side. We have both the US cable and now the Chinese cable. We know the distribution list for the cable on the Chinese side. It goes not just to Mao Zedong, but to all the senior Politburo members, members of the Diàochábù 调查部 (the domestic and foreign intelligence agency at the time), Foreign Ministry, CMC, and so forth.

Wang says in his memoir — and I think this is proven by Mao’s subsequent actions — that the information coming through the Foreign Ministry channel had a big impact on Mao’s thinking. You can imagine it breaking very differently. Think about the First Taiwan Strait Crisis or the Second Taiwan Strait Crisis — Mao had previously used violence to achieve his military goals. He doesn’t in ‘62 — he’s more circumspect, in part based upon the information the Foreign Ministry was able to gather for him.

Jordan Schneider: There were other times in the 50s where he saw the upside of escalating — in the Korean War and then in the Taiwan Straits, where he seemed to think, “We need to make sure our revolutionary fervor is still high.” It’s interesting that the Great Leap Forward, as you argue, has him calibrate down how aggressive he’s willing to be in running risks. So Mao, good job, you avoided World War III in 1962, but seven years later you’re back at it again. What was he thinking in the China-Soviet border disputes in ’69 that almost brought us to global thermonuclear war?

Tyler Jost: It’s probably an exaggeration to say either of those would have resulted in a world war. Things certainly were worse in ’69 compared to ’62.

Again, it’s important to provide some context. By 1969, the Sino-Soviet Split 中苏交恶 was well underway, and the two sides were increasingly confrontational, both vying for leadership in Africa and Southeast Asia, and also along their shared border. They had unresolved territorial disputes dating back to the founding of the PRC. A series of skirmishes, particularly on the northeastern part of China’s border, began to escalate in the late 1960s.

Alongside this is the Soviet invasion of Czechoslovakia under the so-called Brezhnev Doctrine in 1968. The combination creates real anxiety in Beijing about what might happen. Mao gets it in his head that some sort of Soviet military action needs to be countered, and the right strategy is through a clear demonstration of military force — hit first, demonstrate resolve, and the Soviets to back off.

Mao was wrong on two fronts. First, the Soviets would not back off. Second, he misjudged the severity with which the Soviets were contemplating military action prior to China initiating conflict in March of ’69.

From the behavioral indicators of the Soviet Union — what does the Soviet Union do in response to the ambush in March of ‘69? They escalate, both locally in the northeastern part of the border and by August, opening another front in the western part of China’s territory. By fall 1969, the Soviet Union was making veiled nuclear threats. How serious those threats actually were is debated quite fiercely among historians. But China took the threats seriously.

Based upon the Soviet records we have prior to March 1969, there’s no indication that military action was in the offing. In other words, Mao creates the type of military escalation he fears through his own actions. From that perspective, I argue that the Sino-Soviet border conflict in 1969 was a miscalculation on Mao’s part.

There are many ways of trying to rescue rationality or good judgment from disaster. There are potential ways to say, “Well, maybe Mao was after this or that,” and in the book, I try to address each one. But the argument the book makes about why this miscalculation occurs has to do with how institutions linking the leader to the bureaucracy had changed.

Unlike ’62, the lead-up to and then the Cultural Revolution 文化大革命 itself had decimated the connective tissue between Mao and the foreign policy bureaucracy. This begins around 1962 as Mao starts contemplating his own death. The quote nominally ascribed to him is “What will happen after I die?” Mao increasingly feared that what he observed during the Great Leap Forward was a premonition of the lack of revolutionary zeal that would overtake the Party after he was gone. In that regard, he was absolutely right.

How do you prepare for that? You need to begin attacking key leaders within the bureaucratic establishment who you perceive to be not revolutionary enough. This happened as early as fall 1962 and continued. The way Mao made decisions in ’63, ’64, ’65 shifted. The forums he used became more insular and exclusionary. All of this built up to the atomic bomb that Mao unleashed upon the foreign policy bureaucracy in the Cultural Revolution.

Jordan Schneider: Is it fair to consider ideology versus cold calculation as a variable? In 1962, he was burned by a dumb series of ideologically driven decisions that starved tens of millions of people, and he was reconsidering. By 1969, he was at a very different point, and he was seeing ghosts — both in the Party and around the world — which led him to read the Soviet Union poorly.

Tyler Jost: There are several ways to think about ideology. I want to emphasize that it’s important as a driving force in foreign policy decision-making, not just in China but in other countries as well.

One way to think about ideology is as a baseline set of left and right limits about what is permissible to political debate.

In Beijing, the Cultural Revolution narrowed the range of politically permissible opinions one could potentially have. This is bound up in how the institutions I discuss in my book are expressed. These institutions are the rules governing how a leader and a bureaucrat are supposed to interact. There’s a literal sense in which those rules can shape information flows between actors.

If I eliminate the Politburo, that removes a mechanism by which information flows upward to the leader. The transaction costs associated with getting information to the leader might be higher, but there’s also a strategic element to how bureaucratic actors respond to rule changes.

The rupture of connective tissues between leaders and bureaucrats — fragmenting the system — signals to bureaucrats about the political and ideological environment. In environments where this connective tissue has been stripped away, bureaucrats become more cautious in their reporting.

They end up spending energy not on determining the true state of the world, but rather on figuring out what they think the boss believes.

In that type of environment where information flow between leaders and bureaucracies is poor, bureaucrats focus on three questions: “How can I find out what the boss thinks? How can I find information that confirms that prior belief? And if I can’t do either of those things, how can I make my report so vanilla that no matter what the leader actually thinks or what actually happens, I remain safe?”

The result is either ideologically charged information designed to confirm what the leader has deemed ideologically correct, or reports so stripped of meaningful content and filled with ideological dogma that they’re no longer useful to the leader.

Jordan Schneider: This reminds me of Hitler. There was someone who walked around with what they called a “Führer machine” with big fonts because Hitler’s eyesight had deteriorated by the time the war started. Whenever they saw Hitler feeling down, they would print out an article saying how awesome and amazing he was and how everything was great. When you reach the point where you need psychological boosters of feeding leaders information that makes them feel good, you’re probably not in the best state for good, hard-nosed national security, analytical decision-making.

Tyler Jost: Indeed. One argument I encountered early in this project was that once leaders destroy this connective tissue, they know they’ve done so. They know their subordinates, being rational and strategic players, have incentives to provide biased information. Shouldn’t a rational leader then discount everything supplied to them?

In that fragmented institutional arrangement, it might seem to revert to a single leader making decisions independently, without necessarily making the situation worse. The argument I make in the book is that while this might theoretically be true, if we accept that human beings are prone to bias and enjoy hearing good news about themselves without properly discounting information that confirms their priors, then this situation can lead to an echo chamber.

Jordan Schneider: Another interesting dynamic you explore is fears of a coup. This was obviously relevant in Hitler’s case and very relevant for Mao as well. They began to wonder, “Are my generals going to shoot me and throw me overboard?” With Mao, Stalin’s case hung over him as the disaster he wanted to avoid — losing revolutionary edge and having the founder of the nation thrown under the bus.

Tyler Jost: Precisely. The book argues that these institutions don’t arise deus ex machina — they don’t appear out of nothing. They’re political choices informed by leaders’ calculations about how much threat the bureaucracy poses to their political survival and agenda, and how much they need that bureaucracy to accomplish their goals while in office.

The most troubling combination, exemplified by the Cultural Revolution, occurs when leaders perceive the bureaucracy as threatening.

In Mao’s case, he was concerned about what the bureaucracy would do after he was gone and felt the need to rekindle revolutionary fervor in the party. The worst scenario is when leaders both fear the bureaucracy and are inwardly focused on domestic rather than international policy.

You can imagine a different world where you fear the bureaucracy but face a threatening international environment and have ambitious international goals. In that case, you would need to balance your fear with the demand for information that only the bureaucracy can provide. The worst combination occurs when you fear the bureaucracy, but you’re inwardly focused and have no need for their expertise. In that situation, why assume any risk? You simply cut them out.

The Other Vietnam War

Jordan Schneider: Let’s fast forward to Deng Xiaoping in 1979. What was Deng thinking in ’79 when he ended up invading Vietnam?

Tyler Jost: The 1979 case is a forgotten war, but it shouldn’t be because it’s really consequential, both in terms of the geopolitics of the Asia Pacific region for the last stretch of the Cold War and what it tells us about decision-making in China and its potential pathologies.

China decided to launch a punitive war against its southern neighbor, Vietnam, in 1979. The logic that Deng consistently articulated both internally and externally was that China needed to punish Vietnam for its invasion of Cambodia and its growing relationship with the Soviet Union through a demonstration of battlefield strength.

The PRC planned to invade for a short period of time to display the power of the People’s Liberation Army (PLA). They frequently used the phrase that they were going to “teach a lesson” to their southern neighbors. The analogy at the forefront of decision-makers’ minds, particularly Deng’s, was the 1962 war with India, where this strategy worked reasonably well.

In 1962, the Indians underestimated Chinese military capabilities. The battlefield demonstration that fall showed that the PLA was a force to be reckoned with. They had the upper hand at the border, and India revised its policies accordingly.

That success wasn’t replicated in 1979. To be fair to Deng Xiaoping, China did eventually achieve its tactical military objectives. However, the strategic motive — the real reason why China invaded in the first place — was not met. There are these quotes from newly available Vietnamese archival evidence where they state, “It was not China who taught us a lesson; it was we who taught them a lesson.”

Even though the PLA eventually reached its tactical objectives, the high casualty rate and slow advance demonstrated how severely the Cultural Revolution had damaged the PLA. The military prowess that the war was supposed to highlight in the eyes of Vietnamese decision-makers failed to materialize. From that perspective, the strategic calculation failed.

Jordan Schneider: What were the analytical errors that Deng made in this decision?

Tyler Jost: Part of it stems from misunderstanding the state of the PLA. Most evidence suggests that Deng eventually realized this prior to the invasion, around January. Ironically, most good information Deng received right before the invasion came through informal channels because people were afraid to speak candidly in more formal settings.

By that point, Deng had already committed himself to pushing this forward as part of his political agenda, making it difficult for him to back down by January.

There was another set of geopolitical and diplomatic errors: a lack of consideration for how Vietnam would respond if the PLA didn’t perform as well as it had in 1962, and a failure to assess what that would do to Vietnamese perceptions of PRC capabilities and resolve. That question was never asked. The debate around the war was very shallow.

In December 1978, the months prior to the war, they also misread the US. This is interesting because it’s sometimes suggested — partly as a political strategy Deng employed after the war failed to achieve many of its strategic objectives — that the war was a way of demonstrating China would be a good ally to the US. The narrative implies the US was secretly encouraging China to take this action, and Deng was taking one for the team to establish good credentials and secure normalization and healthy relations against the Soviet Union in the 1980s.

What we now know from US archives is that President Jimmy Carter actively discouraged the invasion. Deng Xiaoping took his famous trip to the US in January 1979, right before the invasion. Carter discouraged him both in small groups of advisors and in one-on-one meetings. Carter told Deng, “You have other options available to you. You could move your forces to the border and engage in a series of limited operations which might draw some Vietnamese forces north away from Cambodia without risking the international backlash this war will create.”

Jordan Schneider: The Vietnamese had defeated the Americans. Did the Chinese think the Vietnamese were unprepared? Regardless of the internal assessment of the PLA, the fact that Deng thought Vietnam wouldn’t be ready for a fight after spending 15 years battling the most advanced military in the world — and that they couldn’t stand up to China — is absurd.

Tyler Jost: It’s interesting. This dovetails with your first question about why people tend toward optimism in their assessments when they don’t examine data. This would be one potential data point supporting that first category of explanation.

Jordan Schneider: What do you think about Joseph Torigian’s argument that this was actually just a way for Deng to solidify power domestically? Hua Guofeng 华国锋 was leaving the scene, Deng was coming in, and almost everyone in the bureaucracy disliked the decision. But Deng said, “I’m going to show who’s boss. We’re going to do this anyway.” This was how he fully demonstrated to the system his control over the PLA — by forcing them into doing something they didn’t want to do, showing he was the new Mao.

Tyler Jost: There are two ways of thinking about this argument. Joseph’s book discusses it, but the most detailed articulation of this political motivation comes from Xiaoming Zhang’s excellent book Deng Xiaoping’s Long War.

The first interpretation, which Professor Zhang emphasizes, is that the PLA needed reform. Deng needed to demonstrate the military weakness of the PLA to drive organizational reforms within the military. The interesting thing is that the primary evidence for this logic comes from a speech given toward the end of the conflict.

There are two ways to read this. Deng was certainly aware of what he called “bloatedness” within the military in the 1970s. However, it’s very difficult to find anything in the historical record prior to the war where he states that the war would allow him to pursue this political agenda.

One interpretation of the fact that this document appears toward the end of the conflict is that perhaps he felt this way all along, which is certainly possible. We must be circumspect about asserting what leaders believed at certain points. But to me — and Joseph wrote this in his book as well — that speech reads quite defensive, as though Deng was trying to justify what he’d done. From that perspective, one could argue it was an ex post rationalization for what China gained from the war, rather than a belief Deng held throughout.

The second interpretation is as you articulated it — Deng knew the position would be unpopular, but pushing through an unpopular policy would demonstrate political strength, affirming his position vis-à-vis Hua Guofeng. That’s also possible.

The weakness in that argument is the intimate involvement Deng had in planning the war. If we accept that the war didn’t go as Beijing hoped and Deng was responsible for planning it, that’s an enormously risky move because he tied himself to the planning process. While possible, this explanation wouldn’t account for many other aspects of the overall decision-making process.

Jordan Schneider: More broadly, do you get more erratic decision-making when you have a leader who feels comfortable in power, or when they’re at the beginning or end of their reign, or when they perceive domestic threats?

Tyler Jost: Going back to our discussion about the Cultural Revolution, there’s an analogous argument here as well. The political contestation inside Beijing is important to the story I tell in my book.

Elite politics were quite contentious in the mid-to-late 1970s, making it beneficial to keep institutions fragmented.

The connective tissues ripped out from the Chinese system during the Cultural Revolution weren’t repaired. Most attempts to restore connections between leaders and the bureaucracy didn’t happen until after the Hua-Deng power struggle subsided in the 1980s.

Jordan Schneider: Fast-forwarding to 2025, much discussion revolves around whether Xi Jinping will stay in power. It’s important to internalize that China’s last major military action began right after a power transition. Xi will eventually die, leading to another power transition with volatility that might cause leaders to make terrible decisions. This insecurity appears in many of your case studies, causing people to narrow their information sources and make increasingly reckless decisions.

Tyler Jost: That’s exactly the right question to ask. While I don’t speculate about Xi Jinping and Taiwan, the succession problem and the institutional choices Xi must make to navigate those perilous waters deserve more attention. War could theoretically result from power balance shifts, perceived lack of American resolve, or miscalculations before that point. However, the succession problem remains the unnoticed elephant in the room that will become more obvious as time passes.

Jordan Schneider: Is there another case study of succession-driven decision-making?

Tyler Jost: Mao’s case is the primary succession example. You can view the 1969 conflict as rooted in institutional choices Mao needed to make to secure his legacy after his anticipated death in 1976.

The succession problem can also be viewed from the other side of the transition — whoever inherits power is likely in a politically precarious position because of the types of people that leaders, particularly personalist ones, bring into their inner circle toward the end of their tenure. These successors inherit foreign policy problems and dysfunctional institutions that make them prone to miscalculation. That’s what happened in the 1979 war.

Jordan Schneider: Toward the end of a leader’s tenure — whether democratically elected or autocratic — you argue, the quality of their advisors declines. Can you choose a case study to illustrate this?

Tyler Jost: One of the most fascinating aspects of foreign policy decision-making is how political selection institutions — what we typically describe as the difference between democracy and autocracy — both matter and don’t matter.

One benefit of democracy is that outgoing leaders don’t have to worry about what happens after they leave office and face constraints on how they can arrange the political landscape after their departure. In that sense, autocracy creates more opportunities for the pathological institutions my book discusses.

Nevertheless, democratically elected leaders can still fear what bureaucracies might do to them politically. Two cases examine this in depth. The first is the Indian side of the 1962 Sino-Indian border war and Nehru’s apprehensions about the foreign policy establishment, particularly the Defense Ministry and military and intelligence apparatus.

The second example occurred right here in the US — the reconfiguration of the National Security Council under Lyndon Johnson after he assumed office following JFK’s assassination in 1963.

Jordan Schneider: Let’s discuss Vietnam. After JFK was assassinated, LBJ was suddenly in charge of JFK’s people, who hated his guts and were about to kick him off the ticket before JFK died. Take it from there, Tyler.

Tyler Jost: The argument in my book is that these dynamics you described — this unusual path to power in 1963, coupled with LBJ’s psychological predispositions — led Johnson to be tremendously paranoid that the bureaucracy threatened his political agenda. His primary focus was passing two hugely consequential pieces of domestic legislation pertaining to civil rights and the Great Society. We have him on record, both during and after his presidency, saying that these were his priorities.

Jordan Schneider: You quote him saying that Great Society legislation was “the one woman I truly loved.” As a serial adulterer, that statement carries weight coming from LBJ.

Tyler Jost: Earlier, we discussed the worst possible political environment for institutional efficiency and effectiveness. It’s a situation where you deeply fear the bureaucracy while focusing on domestic agenda items. The irony is that while Johnson inherited a reasonably well-functioning foreign policy decision-making apparatus, he intentionally took steps to undermine it.

Johnson established a very insular forum for his decision-making process known as the “Tuesday Luncheon,” which excluded a vast swath of the national security bureaucracy from important discussions. His reasoning was clear. In a retrospective interview quoted in Doris Kearns Goodwin’s book Lyndon Johnson and the American Dream, Johnson stated he knew the bureaucracy would punish him through information leaks that would make him look bad. He believed that when he held National Security Council meetings, information would “leak out like a sieve.” In contrast, these Tuesday luncheons never leaked anything.

Johnson’s logic for reorganizing the decision-making institutions was entirely political — a careful calculation he made. However, he paid a big cost for this approach. While making the most consequential choices of the second half of the Cold War for the US, he committed perhaps the biggest blunder in American Cold War history. It cost him politically in 1968, and he decided not to run for reelection because he knew he would lose.

Jordan Schneider: Let’s dive deeper into 1965. What information didn’t Johnson receive that might have led him to avoid escalation in Vietnam?

Tyler Jost: You can trace this back even further to the summer and fall of 1964. Several key individuals expressed deep apprehension about escalation in Vietnam — George Ball, Chester Cooper in the National Security Council, and others in the State Department’s intelligence apparatus (INR), like Allen Whiting.

All these individuals were systematically sidelined. There’s a myth that George Ball was given a voice in the spring of 1965, but in my book, I demonstrate that his influence was minimal compared to what he tried to communicate to Johnson earlier in the summer and fall of 1964.

As a result, all key decisions regarding escalation occurred in a very insular setting. LBJ was advised principally by McGeorge Bundy (National Security Advisor) and Robert McNamara (Secretary of Defense), with Dean Rusk present but clearly suffering from a degree of imposter syndrome. Johnson made the call for escalation based on a very narrow set of information and considerations, and the results speak for themselves.

The Making of Siloed Institutions

Jordan Schneider: Fast forward to 2016. Let’s discuss Trump’s national security decision-making in this context.

Tyler Jost: I should caveat this by saying that the study doesn’t consider the Trump administration’s decision-making institutions in any way, shape, or form, but it has a theoretical framework that we could apply. We can think about Trump’s position coming into office in 2017 and what happened within the decision-making structure.

Generally speaking, President Trump inherited a number of international problems in 2017, ranging from North Korea to Afghanistan to other parts of the Middle East. The demand for information and advice from political advisors or the national security establishment remained substantial. However, Trump came in with healthy skepticism and limited experience dealing with the foreign policy bureaucracy.

These two countervailing forces — the threatening aspect of his position and the demand for solutions to Afghanistan and North Korea — placed him in a middle ground that the book discusses.

I call it a “siloed institution” where you limit what any single bureaucracy can do independently while still depending on them.

It resembles a hub-and-spoke system with the leader at the center. Individual bureaucratic nodes gain access and relay information upward, but they don’t communicate effectively with one another or coordinate particularly well.

Some evidence suggests this might have occurred, at least at the margins. Journalistic accounts have revealed that lower-level components of the National Security Council system — which have existed for decades and serve as connective tissue at the deputies and sub-deputies levels for information sharing, policy coordination, and analysis — were perhaps less frequently utilized. This would be consistent with the arguments.

The outward-facing signaling or messaging strategy sometimes appeared confusing. While it’s possible Trump was orchestrating some strategic plan behind the scenes, from an outside observer’s perspective, it seems some foreign policy actions weren’t as well-coordinated as they could have been. That said, in the broader scheme, the first Trump administration doesn’t resemble anything like what we saw under LBJ, much less during the Cultural Revolution. It’s important to maintain this comparative reference point.

Jordan Schneider: What about in Trump’s second term?

Tyler Jost: It’s early days. Trump hasn’t revoked the National Security Council. He may have established some parallel structure behind the scenes that we’re unaware of, similar to the Tuesday luncheon, which would send signals to the bureaucracy with a chilling effect even at the highest levels. Within the framework of the book, which focuses on high-level institutional interactions between leaders and bureaucracy, it’s difficult to ascertain from the outside how much Trump has pushed things even in the direction of LBJ.

Warning signs exist, however. The reorganization of USAID is particularly informative to people within the bureaucratic establishment. To be fair, having a Foreign Ministry or Department of State oversee USAID’s responsibilities isn’t unheard of. Placing their personnel within the State Department isn’t outlandish. It’s entirely reasonable for a president to have a foreign policy agenda that curtails foreign aid distribution.

Whether we agree with that policy is separate from how it affects the decision-making process. The means, process, and scope of organizational change bound up in the USAID actions represent the biggest warning sign. We shall see what unfolds in the coming months and years.

Jordan Schneider: I take your point, Tyler, about it being early days on the bureaucratic reorganization front. However, you can also examine the personnel perspective regarding the types of senior advisers now in place, which presents a very different complexion than what we saw in Trump’s first term and feels more like late Mao than early Mao.

Tyler Jost: That’s a fascinating point. The book doesn’t focus centrally on appointing loyalists versus experts, but other areas of political science address that trade-off. They don’t necessarily conceptualize institutions as I did — they think more in terms of hiring criteria, whether it’s credentials for the job or absolute fealty to the leader. It’s an analogous political problem.

The book can’t speak as directly to this question, making it somewhat more difficult to apply the framework to the first versus the second Trump administration along this dimension. Nevertheless, it’s an important question we should continue to monitor.

The “red versus expert” debate is simply one way of articulating the standard expertise-versus-loyalty trade-off that many economists and political scientists have discussed. Some people think this debate is unique to China, but while the formulation may be uniquely Chinese, this represents a perennial political problem.

Jordan Schneider: It’s an LBJ issue, too — he didn’t want people leaking. What do you gain and lose by leaning “red” or leaning “expert”?

Tyler Jost: You can think about this issue in both functional and strategic terms. In the functional sense, imagine a stylized model where you have two candidates. One possesses all the indicators and benchmarks suggesting they’ll excel at the job. The other lacks those attributes but demonstrates complete loyalty — they’ll do exactly what you want once in office.

Often, these indicators aren’t so stark, and typically, you seek people with elements of both qualities. But keeping the model simplified — from a functional perspective, if you choose the candidate without expertise (defined by indicators of job performance), you’re reducing government capacity. You’ve screened candidates solely on loyalty rather than competence, limiting their ability to perform effectively.

The strategic dimension requires more nuanced thinking. Imagine both candidates secure positions and face choices about how to perform their duties and what risks they’ll take to advocate for what they believe is right. The candidate with strong performance credentials has something to fall back on when speaking truth to power. They can justify diverging from the leader’s view because they have experiences underpinning their judgment.

Contrast this with the candidate chosen solely for political loyalty. They have little foundation except the leader’s trust in their allegiance. This fundamentally shapes how they seek information. They’ll likely pursue data confirming what the leader wants to hear and demonstrate risk aversion in identifying new developments in the international environment. This leads to those bland, vanilla reports characteristic of fragmented institutions.

Jordan Schneider: It’s a leveraged bet on the leader’s gut instinct — if you go more “red,” you get more of the leader in whatever policy emerges, for better or worse.

Tyler Jost: Precisely. The book was inspired by a wave of political science literature examining how individual leaders shape foreign policy — something that captured my imagination in graduate school. Where my analysis intersects with this approach is recognizing that when institutions tear away the connective tissue between leaders and the bureaucracy, foreign policy increasingly shows the leader in absolute terms. This isn’t necessarily beneficial — that’s the twist my book offers. Only when institutions incorporating bureaucratic perspectives are established do outcomes begin to look substantially different.

Jordan Schneider: Let’s conclude with Xi. We discussed the post-Xi era, but let’s talk about Xi himself. How is he handling all this?

Tyler Jost: We should be even more cautious about drawing inferences regarding Xi than with Trump because the information environment is quite poor. I’ll make two points.

First, I’m reasonably convinced Xi Jinping inherited those middle-ground siloed institutions I described — the hub-and-spoke model where information reaches the leader but with limited horizontal sharing between bureaucratic actors. This conclusion stems partly from the system’s own statements justifying institutional changes they implemented, such as establishing the National Security Commission early in Xi’s first term.

Some argue that these institutional reforms solved all problems, but I’m skeptical for several reasons. The National Security Commission essentially renamed its predecessor, the National Security Leading Small Group, signaling Xi’s political power — similar to Joseph Torigian’s argument about Deng Xiaoping pushing for war with Vietnam as a power demonstration. But the composition of these groups didn’t change substantially. Additional staff may have been added, but public reporting indicates the National Security Commission has focused more on domestic issues than international security problems.

What made the system “siloed” when Xi took office was primarily the segregation of military decision-making via the Central Military Commission from the civilian bureaucracy. That division between these two systems remains the most prominent feature of what Xi inherited. His response hasn’t been to integrate the military with civilian bureaucracy at lower levels. Instead, he appears to have doubled down on direct, unilateral control of the military through the Central Military Commission. This gives him more control but at a cost — it allows the military to channel information directly upward without vetting by other bureaucratic elements.

Second, we might ask whether the system has deteriorated under Xi. Unlike the Cultural Revolution, where systemic changes were obvious to outside observers, the formal structures of decision-making haven’t undergone a dramatic transformation. However, the dismissal of minister-level positions in the Foreign Ministry and military apparatus operates at a different level — focusing on personnel rather than institutions. This likely creates a chilling effect. Lower-level bureaucrats report fear of speaking truth to power, which isn’t surprising.

We must be careful about these inferences, though. Most indications of the chilling effect from Xi’s anti-corruption campaign and personnel decisions come from very low levels. What remains unclear, at least publicly, is how the bureaucracy interacts with political leadership — the primary focus of my book, which argues this is the most important area to examine. We don’t know if the same fear of speaking truth to power shapes those higher-level interactions. It may be some time before we can conclusively characterize decision-making under Xi’s system.

Jordan Schneider: From a Western policymaker perspective, given these new uncertain variables about how information travels upward, what should officials be thinking or doing differently if they might be in this complicated situation rather than a clean information environment?

Tyler Jost: This is an important question with both assessment and strategy components — what we should think and what we should do.

On the assessment side, we should incorporate into our calculations the possibility that Beijing may develop a completely different perspective on the international environment. This could result from Xi Jinping’s independent judgment or from judgments based on the information presented to him, combined with his personal understanding of the situation.

Regarding strategy, the challenge is substantial. It requires a two-step approach: first, identifying early signs of misperception forming on the Chinese side; second, attempting to correct that misperception. However, if the institutional structures themselves are causing China to develop misperceptions, then direct interaction with the leader may be the only effective channel for shaping their worldview.

If the bureaucracy won’t transmit quality information for any of the reasons we’ve discussed — whether related to personnel, institutions, or other factors — then lower-level interactions won’t be effective. Military demonstrations, actions in the South China Sea or Taiwan Strait, export controls — all these signals get filtered through the bureaucracy in ways that may prevent belief changes at the top. This forces us to consider that altering beliefs on the Chinese side might require direct interaction with the Supreme Leader, making face-to-face diplomacy one of the few means available to meaningfully influence the situation.

“We Were Wrong, Terribly Wrong”

Jordan Schneider: Tyler, across all your case studies, is there one moment or meeting you wish you could have witnessed firsthand?

Tyler Jost: Probably all of them. There’s the meeting in fall 1961 with Nehru and his advisors, where foreign policy was pushed to its limit. There were meetings in January, February, and March in Beijing between Mao and his subordinates that led to the Sino-Soviet border clash.

There’s also January 29, 1965 — the date when the “Fork in the Road” memo was drafted primarily by Bundy and McNamara and delivered to LBJ. I believe they met that same day. While different theories exist about the true turning point of the Vietnam War, my personal assessment, as presented in the book, is that this was the decisive moment. It would have been fascinating to witness these meetings firsthand.

Jordan Schneider: Can we discuss how terrible that memo was? It was high school-level, B-minus work. It’s embarrassing.

Tyler Jost: What’s interesting is that, unlike the Iraq War generation of American leaders who maintained until their deaths that they did nothing wrong, the Vietnam era advisors were deeply troubled by what happened. McNamara states in his memoirs that, “We were wrong, terribly wrong.”

McGeorge Bundy, who didn’t publish memoirs but left a draft available in the Kennedy Library in Boston, makes two points. First, he acknowledges that communism in Asia could have been contained at much lower cost than the escalation in Vietnam — undermining the rationale that motivated him. Second, he identifies his greatest mistake as National Security Advisor as the shallowness of analysis he provided to LBJ, which is remarkable since that was his primary responsibility.

Bundy understood this was his job, particularly from his years with Kennedy. However, Johnson’s choices made it difficult for advisors like Bundy and McNamara to perceive the situation accurately. Bundy, in particular, was a hawk, so Johnson’s system allowed the analysis to excessively reflect Bundy’s personal perspective. This bias is evident in both the memo we mentioned and in several others Bundy wrote the following month, most notably after the attacks at Pleiku.

Jordan Schneider: It’s fascinating that these Vietnam era officials didn’t gaslight us, while the Iraq War ones maintained their positions until death. My assumption is that the independent variable is 58,000 versus 4,000 American military casualties. There’s an undeniable truth to that number and a shock to the societal fabric that might not have seemed as important when compared to Korean War, World War II, or World War I death tolls.

Vietnam crossed a threshold of public awareness in the US.

That factor, combined with the definitive way the war ended, made a difference. By the time Rumsfeld died, we had ISIS in Iraq, but the outcome remained somewhat unresolved, unlike in Vietnam where the Viet Cong clearly took over the country.

Tyler Jost: You should consult some of my colleagues who have studied the Iraq War in depth. This comparison between Vietnam and Iraq officials is an interesting point about the independent variable. I’ve used this comparison multiple times without explaining the difference. What strikes is how unusual it is for advisors to admit they made mistakes in the decisions they were most responsible for. This tells us something important was happening in the lead-up to Vietnam.

Of course, other explanations exist. There are more self-interested interpretations where they might have been trying to salvage their reputations. At certain points in his memoir, McNamara’s analyses about why they were wrong seem completely misguided. For example, he claims the US had extensive expertise regarding the Soviet Union but none regarding Southeast Asia. This is objectively false.

The problem wasn’t a lack of experts in the State Department or National Security Council. The problem was that when these experts wrote memos to be sent to the President, officials like McNamara blocked them, saying, “No, absolutely not. This isn’t going anywhere.” McNamara did this for specific reasons, and we can understand why he acted as he did.

Tragedy appears in the opening lines of my book. These events are tragic and with the benefit of hindsight, one wishes things had been different. The cold reality is that these outcomes are so firmly rooted in politics that even if we hope decision-makers would rise above such forces, politics remain powerful enough to ensure these patterns will continue perpetually as a result of contestation between political actors.

Jordan Schneider: Let’s close with your opening lines then:

“One of the tragedies of international conflict is that it often achieves so little. History is replete with examples of states charging headfirst into international confrontations that left them no better off and often much worse off than where they started.”

Here’s to hoping.

Mood Music:

Rob Lee, a former Marine and Russia expert at FPRI, has spent significant time on the frontline in Ukraine. He joins Shashank Joshi, defense editor of The Economist and of Breaking Beijing and our newly minted Second Breakfast podcast to discuss the war in Ukraine, technology on the battlefield, and the future of warfare.

Today, our conversation covers:

• Whether Ukraine represents a revolution in military affairs and what lessons the war holds for other theaters

• Why 80% of casualties in Ukraine are caused by UAVs,

• The limits of FPVs and UAVs, tactics to counter UAV attacks, and the role of unmanned ground vehicles,

• Institutional friction within the Ukrainian forces,

• How Chinese components and commercial drones from DJI are shaping the battlefield.

• Drone incidents over Europe, burden sharing, and what NATO is learning from the war,

• Plus: what music Ukrainian soldiers are listening to on the battlefield.

Thanks to the Hudson Institute Center for Defense Concepts and Technology for sponsoring this show.

Listen now on iTunes, Spotify, or your favorite podcast app.

A Transparent Battlefield

Jordan Schneider: A defense-tech talking point is that 70% of casualties on the battlefield today are caused by drones. Rob, what should we make of that?

Rob Lee: We should question statistics when they don’t have a clear source, because they anchor our views of modern warfare. Are the percentages authoritative? Are they replicable in other conflicts?

I visited the front line in Ukraine last summer and spoke with more than 15 battalion and brigade commanders, or their intelligence officers (S-2s). I asked each the same question, “What percentage of current casualties are from Unmanned Aerial Systems (UAS)?” 80% was the most common answer, with a range of 75-95%. This is the number cited by senior Ukrainian officials, like Pavlo Palisa.

Artillery and UAS are complementary, so it’s hard to distinguish between them. In many cases, artillery is important for destroying tree lines, which allows UAS to drop grenades on exposed troops. Artillery also helps to canalize Russian units — Russian infantry avoids open fields, sticking to tree lines. UAS can then drop mines to funnel them in a specific direction — there’s a profound psychological effect of having a 155mm or 152mm shell land near you. Artillery isn’t obsolete. Commanders of elite UAS units said that although UAS cause more than 50% of casualties, they do not operate in isolation, and artillery plays a key role.

I think 80% is a decent estimate for the majority of casualties on both sides. It’s impossible to know the exact number. I would caveat that brigade commanders do not see all casualties — some are outside their direct command. They also do not see all Russian casualties from HIMARS strikes, for example. This high percentage also shows Russia adapting to infiltration tactics — they often move only one or two soldiers at a time. Using artillery on a single soldier doesn’t make sense, it is more efficient to use a First Person View (FPV) drone or a Mavic to drop a grenade. 80% is a good estimate.

This number is dictated by the nature of the fighting in Ukraine — the infiltration tactics and the prevalence of dismounted, small-scale infantry assaults are why UAS play an outsized role. In large-scale dismounted infantry assaults, artillery is the main killer. I spoke to the Deputy S2 for a battalion fighting North Koreans in Kursk. He said that during the first days of the North Korean assault, so many Russian Intelligence, Surveillance, and Reconnaissance (ISR) UAVs flew overhead, the Ukrainians couldn’t use their own artillery effectively. Once that changed and they could use artillery again, they inflicted heavy casualties on the North Koreans, forcing them to shift from platoon-sized attacks to smaller, squad-sized units.

Keep in mind, in the next war NATO fights, UAS may not cause 80% of casualties. In a large-scale, conventional war, artillery would likely be the main killer, at least initially. Things have changed dramatically since the 2022 invasion. A brigade commander estimated that in the summer of 2023, artillery caused 90% of casualties. He now believes 80% are from UAS. That shift is important. It is important to ask how this will apply to future conflicts.

Shashank Joshi: We saw an essay a couple of months ago from General Zaluzhnyi, who was the commander-in-chief of Ukraine’s forces. He’s now based in London, away from the front, so take his views with a pinch of salt. In his office, there are banks of video screens where he watches drone strikes from Ukraine. He’s still digitally plugged into the front.

In his essay, he supports the 80% figure and writes that traditional means of protection, like fortifications, armor plating, and even individual body armor, are negated by the scale, lethality, and accuracy of modern UAVs. Someone with a bird’s-eye view of the conflict reached that conclusion.

I agree it’s a mistake to cite that figure without considering the role UAVs play in other operations. Even with artillery strikes, the observation is going to be facilitated by UAVs. I see UAVs and artillery as symbiotic means of firepower, or nearly symbiotic. It would be a mistake to ignore that context.

Tony Stark: Are we talking about catastrophic kills or disability casualties? What is the modern FPV capable of in terms of disabling and disrupting enemy operations?

Rob Lee: Employing armor is very difficult, and UAVs are the main problem. Early in 2023, FPVs were overhyped — they were a new, immature technology. How to employ them wasn’t clear — there weren’t many available radio frequencies, so you couldn’t use many in proximity to each other without signal interference — and there were other issues. FPV capabilities have since matured, and crews are now experienced using this technology.

For vehicle losses, it depends. For units that fought at Kursk, repelling Russian assaults from both the Russian Airborne Forces and Naval Infantry, Javelins played a big role. This is surprising because Javelins have a greater risk at an accurate range. Armor assaults are uncommon now. We are seeing some in the eastern direction where overcast weather limits the ability of ISR UAVs to fly, and Russia is trying to take advantage of that before winter. But many vehicle losses are due to UAS — a combination of remote mining, FPVs, or night bomber UAS.

Social media can be distorting. One of the best night bomber UAV units in Ukraine is the Lasar Group of the National Guard. They have about 90 crews, are extremely well-led, and have a very efficient targeting cycle. According to their internal data, they’ve damaged or destroyed 2,000 tanks and more than 3,000 BMPs or BTRs, and a large number of artillery systems. They mainly operate at night because UAVs are easier to shoot down during the day. Their success has pushed Russia to keep its tanks further behind the front line at night. In June, they destroyed more artillery than the top four or five UAV units combined. But you do not see this because they aren’t posting footage.

For armored assaults, more than 50% of losses are from FPVs or mines dropped from UAVs. Anecdotes are important here. In May, the 20th Mechanized Brigade faced two turtle tanks — well-made by former Wagner fighters. The brigade told me it took more than 60 FPVs to stop those two tanks, and the first tank wasn’t even stopped by FPVs but by its own gearbox, which exploded. The UAV commander said if that hadn’t happened, the tank would have made it to their front line — it was that well-built. There’s a video of the tank afterward with a lot of FPVs stuck in the external wiring, none of which stopped it. The vast majority of vehicle and infantry casualties are from UAS.

Tony Stark: There is a discussion about battlefields becoming more transparent with modern technology. I’m not sure I agree. How do you conduct surprise at the tactical and operational level, given those circumstances?

Rob Lee: The last time there was an operational surprise was the Kursk offensive. The Kursk operation is interesting for a bunch of reasons, but the operational security was very tight. My understanding is that General Syrskyi led it himself, taking direct command. The brigade commanders had to sign non-disclosure agreements — they weren’t allowed to tell their superior command that they were moving to Kursk.

The reconnaissance was compartmentalized. There are a lot of lessons for us about how to conduct such an operation, but also what you can and can’t tell subordinates before an offensive. Most of the soldiers who were moved to Sumy thought they were defending, not preparing for an offensive operation. That was the last time we’ve seen a real breakthrough. At the time, Russia didn’t have strong UAS capabilities in the area. The Russian units there were not well-trained — they were conscripts. They had built good fortifications, but they weren’t tied into a coherent defensive system.

Since then, we’ve not seen an offensive breakthrough or much success on either side. Ukraine has made some attempts — in March, there was an operation in Belgorod to relieve pressure on Kursk. In April, they conducted an operation towards Kursk with some of their best assault units, including the 225th and 425th assault battalions, and ran into substantial issues there. Without the element of surprise, success is difficult.

Neither side can achieve air superiority or effectively leverage aviation to set the conditions for breaching well-fortified defenses. My view is that success depends on degrading, suppressing, and destroying UAS teams. The reconnaissance and fires aspects are also key. Both sides are prioritizing those, but neither has successfully set the conditions to take more than a village or launch a small-scale tactical assault.

Modern communication technology also complicates the situation. Everyone has a cell phone — you can’t really prevent people from having them, so you have to plan with that in mind. Both sides know their soldiers will call home — both sides have signals intelligence capabilities and listen in on those conversations.

Commanders sometimes lie to their soldiers, saying, “We’re getting rotated off the front line, we’re going this direction,” to misdirect their adversary. Both sides are using deception tactics.

Jordan Schneider: Why don’t they ban cell phones then? Are cell phones necessary for communication, or is it that in 2025, you can’t send someone anywhere without one?

Rob Lee: Cell phones are used for military communications — probably too often — and this is true on both sides. If you go to a command post, you’ll see Discord and Google Meet open. I know soldiers who use Google Meet to talk to a drone pilot during a firefight. On the Russian side, Telegram is often used to overcome their internal communication problems.

Both sides are scaling up their Signals Intelligence capabilities. I do not know enough to speak intelligently about it, but it’s clear they pull a lot of data. A big priority now is figuring out how to sift through all this data quickly and make it actionable. That will be a major focus of AI and machine learning development for the military — how to turn raw information into intelligence.

Shashank Joshi: The cardinal principle has always been that it is easier to persuade an adversary of what he already suspects than to introduce a new idea. We saw this in the planning for D-Day and the Normandy landing. A key element of the Kursk offensive was the ruse that Belgorod was the real target — that deception boosted Ukraine’s chances.

Deception is a fascinating topic now because it is difficult to pull off in the modern world. Creating false chatter on your comms is an age-old technique, but you have to maintain the deception across all channels of communication. You have to make the Belgorod operation appear real in every way.

On a tangent, Jordan, I know you read widely. R.V. Jones, the wartime British scientist, wrote a great book, The Wizard War.

Jordan Schneider: Oh, what a classic!

Shashank Joshi: He gave a lecture at CIA headquarters in 1993 called “Some Lessons in Intelligence.” It’s a fantastic reflection on the nature of modern deception, taking lessons from World War II and considering how to apply them to new conflicts. I encourage everyone to read it.

Where is the Frontline?

Jordan Schneider: Rob, Michael Kofman asked you where the drone swarms are? We’ve now seen soldiers using Xbox controllers to guide drones — it seems like many of these roles could be automated in 5, 10, 20 years. You and Shashank wrote that infantry stationed on the front line for 200 days were instructed not to shoot enemy soldiers crossing their positions. If that’s true, then why are they even there? So, why are humans still sent to the battlefield? From what you’ve seen, which roles will be automated first, and what tasks will still need a person on the ground?

Rob Lee: I’ve been hearing people say we’re going to have swarms “this year” for the last two years. There is a Ukrainian company called Swarmer working on this — the Wall Street Journal wrote an article about them a few months ago. I do not know the full extent of their success. There is often a lot of talk about AI in a swarm, but “AI” is often a misnomer. In many cases with FPVs, there’s a form of terminal guidance where, once the camera is on something, you can click a button and it will more or less follow the target. That will mitigate the loss of the video feed. I wouldn’t call it AI, but some people do.

I know there are attempts to improve a UAV’s ability to read terrain and target on its own, without a human in the loop. I think the goal is being able to send a UAV into a grid square and have it locate targets on its own. I do not know how soon that will be. In some ways, it’s less important for Ukraine right now because they are mostly targeting Russian infantry, one or two guys at a time. You do not need sophisticated AI for that.

I do not think we should assume infantry will be obsolete anytime soon. You still need someone on the ground to hold territory. It is an interesting point about Ukrainian infantry being told not to engage unless they have to. It calls into question what they actually hold — what is the front line? How real is it? Are these soldiers an observation force, even though they aren’t fighting all the time? I’m not sure how to describe their role.

One of the problems recently is that the maps we use for Open Source Intelligence are increasingly less accurate. This is not because the cartographers are worse, but because with infiltration tactics — where soldiers are walking 10 kilometers past the front line — it’s unclear what a geolocated reference point means. Does it mean they’re holding the point? Does it mean they just dropped a flag there? The Russians will drop a flag from a UAV and post it publicly so their commanders will think they have advanced further than they did.

One thing we’ve seen throughout this war, as in most wars, is a constant innovation, countermeasure, adaptation cycle. There is a lot of work on creating mesh networks and on creating UGVs and UAVs that can operate and bounce signals off each other. Some people are skeptical of that. Part of the issue in Ukraine is that only a few companies, like Silvus, make radio signals that are strong enough to create a mesh network, and they’re expensive and only available in low quantities, making it cost-prohibitive. There are other adaptations, like using cell towers near the front line to improve 3G connections.

Using UAVs and Unmanned Ground Vehicles (UGVs) is still a manpower-intensive activity. An FPV team is normally four soldiers, and you have to constantly rotate them out. UGV teams may be larger. When Ukraine conducts an assault, the task organization for a 4-8 man assault group will include an FPV team, a night bomber UAV team, and two Mavic teams in support. That’s four UAV teams supporting a 4-8 man infantry team. The ratio of UAV operators to infantrymen in those cases is 2-to-1 or 3-to-1. One of the big questions going forward is what that ratio should look like for us. It’s not clear what the perfect ratio is. It’s also difficult because Ukrainian brigades are mostly defending. They’ve been defending for two years, few units have recent offensive experience, and the technology keeps changing. Assault units are compensating by fielding more UAV operators than infantrymen in operations.

Jordan Schneider: Why does it take four people to run a drone team? And why can’t the pilots be a thousand miles away?

Rob Lee: The pilot can be a thousand miles away. That’s one of the unique things. Operation Spiderweb was conducted by pilots in Ukraine, hitting targets all across Russia. The Lazar group’s pilots operate from Kyiv to deploy the drones to the front line, hundreds of miles away. In reality, we could have pilots in America piloting UAVs in Ukraine right now if we wanted to, though there would be some interesting legal implications. We’re moving in a direction where pilots can operate far from the front lines.

For FPVs, it’s typically a team of four because they deploy relatively close to the front line. You have to have someone deploying the UAV somewhat near the front. One person will be an engineer in charge of the munitions — depending on the target, you want to use a different munition, and you have to know how to use the initiator properly. A lot of people have lost hands or been killed by improperly assembling FPVs, as many munitions are homemade. So, one person is an engineer. The pilot and co-pilot roles are interchangeable, but the co-pilot often navigates. You’ll often have a fourth team member flying a Mavic to spot the target and talk the FPV onto it. It could even be more than four people. You might have one person managing antennas, and another as a driver. They often have to walk the last two or three kilometers to their position without a vehicle, so you need enough people to carry all the equipment.

With UGVs, maintaining communications is difficult. You often have to have a UAV acting as a repeater for the signal to the UGV. You also need the UAV for the pilot to see, because looking from the UGV’s camera on the ground, you do not see very much. You also need a maintenance person and other support. Ukraine is looking at creating UAV battalions in all its brigades. They’re forming UGV companies that might become battalions. We’re talking about hundreds of people. The task organization and the table of organization for these units are changing, and it’s going to have to change for our military as well.

Shashank Joshi: When we talk about swarms, people often think a swarm is a lot of UAVs all at once. That’s not what it means in a technical sense. A swarm is when each UAV is communicating with the others — there’s a degree of coordination within the group. The technical case for this is clear — you can overwhelm an adversary and also minimize the amount of pilot involvement. Imagine a single pilot able to select a target and launch hundreds of UAVs that can then autonomously approach it.

We have missiles that can do this. The Brimstone missile, that the UK has provided to Ukraine, is an example. Ukraine fires them off trucks, which I’m not sure the UK is even capable of doing. Those Brimstone missiles, which were designed about two decades ago, can each observe what the other is doing. If one missile picks a tank, another missile in the swarm can pick a different tank, so you’re not wasting munitions on the same target. That’s the fundamental appeal, along with saving pilot capacity.

The problem is that physics is a thing. If there is intra-swarm communication, how is that message being sent from one airframe to another in flight? Typically, there will be some kind of radio signal. It may not be subject to the same jamming as the main control signal because it will have a different frequency and strength, but you still have to send these signals between drones that are close to one another. When you get to a large number of UAVs in flight, there is more interference, and you struggle to send signals. This is a problem with all uncrewed systems — theoretical capabilities are different from practice. The simple issue of getting messages to and from the drone is at the heart of the operational limitations.

Rob Lee: Weather also plays a bigger role for UAVs and UGVs than it does for artillery. It is a consistent problem, including for the Starlink systems used in many of these UAVs. As Shashank is saying, there are so many basic problems that come up that make this much more difficult than people imagine.

Tony Stark: Autonomy on the battlefield is an iron triangle between capabilities, cost, and survivability. Capabilities include both effectors and sensors, as well as computing power. Cost includes not only the price of a single system but also industrial scaling. Survivability isn’t just about surviving enemy fire, but also about resistance to dust and required maintenance. Trying to get that equation right in a swarm is really hard. You can have effective, jam-resistant means of communication, but that also makes the swarm cost more than you want at a tactical level. When you actually see a swarm on the battlefield, it will be because someone has solved that equation.

Jordan Schneider: Or solved it for a point in time until the adversary adapts. The underlying question is whether we’ve lived through a revolution in military affairs. Even if advanced AI can replace pilots, you still need someone nearby to set up the system — drones can’t fly that far without trade-offs.

Shashank Joshi: When you’ve made a system that has a long range, can operate in all weather, is jam-resistant, can communicate with other aircraft in a swarm, and has a large payload to cope with up-armored defenses — congratulations, you’ve invented a cruise missile. You can do it cheaper than existing cruise missiles, but at that stage, you have only invented a very decent cruise missile.

Tony Stark: I saw a video over the weekend of a Ukrainian soldier being evacuated by a UGV. I’ve heard reports of this for a while. As a former infantryman, the idea of an unaccompanied wounded soldier being evacuated by a UGV makes me uncomfortable, but I understand operational necessity. How common are UGV evacuations? Is that the best use for them right now? How does it compare to other applications?

Jordan Schneider: Is a UGV a ground robot that can walk like a dog, or is it a little truck?

Shashank Joshi: Normally, they trundle along on treads instead of ambulating.

Rob Lee: UGVs have become a significant focus for Ukraine this year, primarily to offset their shortage of infantry personnel and reduce casualties by taking over dangerous missions. Roughly 90% of UGV missions are logistics — last year, probably 70% or more of UGVs were procured for this purpose. Some units that invested in this technology early, such as the 3rd Assault Brigade and the Khartia Brigade, are more experienced in their use, but adoption is becoming common across all units.

UGVs excel at transporting heavy equipment — up to 300 lbs of ammunition, food, and water. They can carry items that are too heavy for UAVs, such as a .50-caliber machine gun. This ground-based logistical support complements the use of night bomber UAVs, like the Vampire drone, that were previously the main method for resupply. Now, it is common for the engineer sections within Ukrainian brigades to operate both UGVs and night bomber UAVs to support their battalions.

While UGVs have been tested as remote weapon systems, their use in direct combat is challenging. The camera often shakes, making it difficult to aim, and an observation drone is usually needed overhead to confirm where rounds are landing. More critically, signal loss is a frequent problem. UGVs are vulnerable targets — they’re smaller than a truck, but big enough to be easy targets, and Russian forces constantly hunt them with FPV drones. Both sides heavily target roads and supply routes, and any vehicle spotted — be it a truck, an infantry squad, or a UGV — will be attacked. UGVs are often hit.

UGV casualty evacuations are becoming more common, though I’m not sure of their scale. Many brigades reserve this function for extreme situations where the UGV is the only viable option, such as reaching a wound that cannot be treated at the front line or accessing positions that are nearly impossible to get to otherwise. There are reports of soldiers with catastrophic injuries, including lost legs, remaining at the front for days or weeks before evacuation is possible.

The main risk for these missions is signal loss. A disconnected UGV can leave a wounded soldier stranded, alone on the battlefield. There are videos of Russian FPVs striking UGVs during an evacuation and then dropping grenades on the wounded soldiers, highlighting the danger of these missions.

The fundamental challenge for all UGV operations is maintaining a stable signal. Unlike UAVs, which operate high in the sky with a clearer line of sight to their antenna, UGVs are on the ground where the Earth’s curvature, terrain, and obstacles consistently interfere with the signal. To overcome this, operators often need a UAV to fly overhead and act as a signal repeater. Some UGVs are equipped with Starlink for satellite communication, but Starlink doesn’t work under tree cover or in forests. These necessary redundancies make operating UGVs more complex and expensive.

Successful UGV deployment requires more meticulous route planning than for UAVs. The operator must balance the need for concealment from enemy drones with the need to maintain a clear signal, as the very features that hide the UGV can also block its connection. While some units deploy ground-based signal repeaters from elite manufacturers like Silvus, this is a costly solution limited to specific areas. Ultimately, a UGV’s effectiveness is limited not by its battery life, but by its signal range, which is shorter than that of a UAV.

There is a significant need for a terrain-mapping system that would allow UGVs to navigate autonomously, but this technology is underdeveloped. For now, their applications are mostly logistics, with some casualty evacuation and limited remote weapon use. Mine-clearing and demining are also valuable roles for UGVs. Additionally, they are used as “kamikaze” drones; some small units are used for this purpose, but in more extreme cases, UGVs have been loaded with 500-pound aviation bombs and driven into targets like bridges to destroy them.

Europe’s Homework from the Battlefield

Shashank Joshi: These systems are being used extensively elsewhere — the Israel Defense Forces (IDF) have used them in Gaza. For them, it is an easier task, as Gaza is a much smaller piece of ground — the entire territory would represent a minuscule patch of the Ukrainian front line. That makes visibility and communications easier. The IDF has used UGVs for a variety of missions, patrolling, sentry duties, setting explosives to breach targets, and the long-standing UGV task of mine and bomb clearance. Ukraine isn’t the only testing ground where we are seeing these developments.

Tony Stark: How many of these lessons are European allies and the American military absorbing? The US seems willing to adopt only the convenient lessons. How much does this translate into budget and policy changes, rather than just a discussion in military schoolhouses?

Shashank Joshi: We need to ask two questions. First, whether we are living through a true revolution in military affairs or seeing incremental changes that, while tactically important, are not a transformation of warfare. Second, which lessons from Ukraine are relevant to other conflicts, and which lessons are unique to Ukraine? These debates are ongoing, partly because we do not know the context of the next war, but also because the answers themselves are unclear. Different observers reach different conclusions.

At the tactical level, the British are in an interesting position with regard to Ukraine. Like the US, they have supported Ukraine at the theater and strategic levels, helping train and advise Ukrainian forces from European headquarters and maintaining a close relationship with the Ukrainian high command. But British forces have been tactically involved inside Ukraine to an extent that the US hasn’t. When I look at British Army training and doctrine, I see an effort to absorb lessons from Ukraine on force organization, the structure of squads and companies, and how to build more effective “kill webs” in an environment of constant surveillance.

The UK is still reluctant to adopt the Ukrainian model of warfare. Admiral Sir Tony Radakin, the UK’s Chief of the Defense Staff, said, “We would not fight like Ukraine. The British way of warfare is rooted in an expeditionary and maneuverist mindset.” He has suggested the UK would prefer to fight like Israel, citing the Israeli attack on Iranian sites using long-range air-launched missiles.

Jordan Schneider: Everyone would like to fight that way.

Shashank Joshi: That’s the criticism. You may not be interested in positional warfare, but positional warfare is interested in you.

Last summer, the British Defense Review stated that ~10% of new spending should go toward innovative projects. A source involved in that review later regretted its vagueness, because it allowed existing systems like the F-35 fighter jet and attack submarines to be mislabeled as “innovative capabilities” — the exact interpretation the authors wanted to avoid. The lessons from the Ukraine war are part of an ongoing intellectual debate. There is no consensus on new ways of fighting, or different equipment and spending patterns.

Jordan Schneider: Describing it as an “intellectual debate” is generous. The real question is whether you are being serious about it. What would be your barometer for gauging if institutions are responding to this war with appropriate seriousness and first-principles thinking?

Shashank Joshi: If you look at what NATO does, you do see lessons being learned. For example, NATO has contracted Palantir to build the Maven Smart system, a digital targeting web that can fuse intelligence from different sources. It is a command and control system that brings us closer to the vision of “any sensor, any shooter” that we’ve discussed before.

General Chris Donahue, head of Allied Land Command, is developing the “Eastern Flank Deterrence Line,” which invests in low-cost interceptors and firepower and merges them into a Ukraine-like system. But they’re concerned that current UAV systems may be obsolete in 18 months — should they buy today’s models or wait for tomorrow’s? NATO thinks it needs to invest in the command and control systems that allow it to deploy UAVs most effectively.

For me, the true test would be if armed forces are running exercises, simulations, and modeling that test a wide range of scenarios. If Ukrainian officers visit these exercises and recognize elements of their own fight, and see it as a serious effort, that would be a measure of success.

Jordan Schneider: The split screen in my head is that we need to have less DEI and more warrior culture and to start a war with Venezuela. Thoughts on all of this?

Rob Lee: According to my contacts in the US military, they are trying to learn from Ukraine. I’ve noticed younger service members often see developments in Ukraine on social media platforms like Twitter and Telegram. Older senior generals are less plugged into this open-source information and may be missing key developments, like the role of FPVs.

European countries are making this a priority. The UK is focused on it, and I hear Denmark is as well. The Baltic countries know this war is directly relevant to them. But there are legitimate questions about how these lessons apply to a different kind of war, such as one against China in the Asia-Pacific, which is the US Marine Corps’ focus.

For European defense, if Russia is the main threat, then Ukraine is the ultimate teacher. Ukraine demonstrates daily what is and isn’t effective against the Russian military. The sense of urgency in Ukraine, that exists nowhere else, drives adaptation. There is a lot we should be learning, including that FPVs are here to stay. Other low-cost adaptations, like using a small number of helicopter crews to shoot down thousands of Shahed drones with a significant success rate, are things we should at least be practicing. Ukraine is doing this for a reason.

Russia also keeps adapting and innovating — scaling up its UAV force and creating an unmanned systems force. Elite units at the Rubicon Center, a very effective organization, are responsible for all unmanned systems development — UAVs, UGVs, and naval drones. They have at least eight or nine combat detachments in Ukraine and are constantly spreading lessons and innovations, and using analytics to inform their research and development. This unit is a priority for funding and personnel. The Russian military we see in the future could look very different from 2023.

The innovation cycle in Ukraine is very quick, and both sides are learning. Anytime Ukraine develops an adaptation, Russia copies and learns from it faster than we do because the lessons are more painful for them. I guarantee you, Russia learned more from an embarrassing operation like “Spiderweb” than we did. They’re probably already thinking about how to conduct a similar operation against European countries. In some ways, any new Ukrainian innovation eventually becomes a threat to us, because Russia will learn from it and could apply it against NATO. There’s a tremendous amount to learn, but countries are learning.

Jordan Schneider: We’ve now seen drones fly over airports all over Europe, which is an alarming development. I remember shortly after it happened, you said on a podcast with Mike Kofman that everyone should be aware that this could happen anywhere in the world. It’s shocked me that there isn’t a sense of urgency, at least in America, to install drone defense systems around airports or elsewhere. Shashank, are you surprised Putin’s play hasn’t triggered more concern? Describe the response so far.

Shashank Joshi: There’s a genuine attribution problem here and an intelligence gap. When you speak frankly with officials, they suspect the drones in Europe were Russian activity, but for the drones on the US East Coast last year, they also believe an element of mass hysteria was involved. Distinguishing real threats from false alarms is difficult.

Two weeks ago, I interviewed Mark Rutte, the Secretary-General of NATO, and pressed him on why they could not confirm these drones were Russian. It became clear that they do not know. The official line is that the investigation is ongoing. This suggests one of two possibilities, either the intelligence is so highly classified that they can’t publicly attribute the drones to Russia — rendering the information useless because it can’t trigger a public response — or there is a genuine lack of intelligence.

Another factor is that even if you suspect the drones are Russian, you have to be very careful about shooting them down. As we speak, the British Defense Secretary is loosening the rules of engagement to allow more shoot-downs of drones over military bases. But, imagine if downed UAVs fell on a village or a vehicle, killing or injuring civilians, it would be a political scandal 10x worse for the minister in charge than the fact that a hostile state flew a surveillance drone over a base. The political incentives are a major constraint.

There’s also an economic problem — how do you develop cost-effective interceptors? How can you shoot down enough drones without depleting the stock of interceptors needed for wartime? This is less of a problem for a few quadcopter sightings over a base, but it is a critical concern for decoy drones flying into a country like Poland. You can shoot down one or two, but expending your entire stock of air-to-air missiles on these drones is a strategic win for the Russians. We desperately need an alternative solution.

I am seeing those solutions emerge in the form of low-cost interceptors designed by various companies, as well as other means of interception, including directed energy. Progress is being made. But this isn’t only a technical problem; it’s also a problem of political incentives.

Made in China Neutrality

Jordan Schneider: When you are talking to people on the front, does China come up? Is it a relevant variable in their calculations? Are they annoyed or confused about China’s role in the conflict?

Rob Lee: The UAVs — either as complete systems or components — are mostly coming from China. The DJI Mavic is arguably the most important UAV in this war, particularly the Mavic 3, the Mavic 3T, and now the new Mavic 4 line. Autel, another Chinese company, also produces common quadcopter-type UAVs. These drones are used for reconnaissance and for dropping grenades. They’re cheap, costing only a few thousand dollars, and the Mavic 3T, with its effective thermal camera, is the main reconnaissance system for nighttime operations.

A critical technical step for Ukraine is that they have to hack, or “jailbreak,” the firmware for every Mavic they use. The standard DJI software reveals the operator’s location — this feature needs to be disabled before use on the front line. The Ukrainians report that the Russians receive their Mavics pre-jailbroken from China, whereas Ukraine has to do it themselves for every Mavic. In March, Vadym Sukharevsky, commander of Ukraine’s unmanned forces, estimated Russia had a 6-to-1 advantage in the number of Mavics, which he considered significant. The supply of drones is a major issue. A Ukrainian brigade commander in the Pokrovsk area told me that the biggest problem for adjacent units was a lack of Mavics, even more so than ammunition shortages.

China is also the source for fiber optic cables, with supplies reportedly increasing significantly this year. These cables can be used to make FPV drones immune to electronic jamming, which is a key advantage. Russia is also operating several new UAVs, such as the Garpiya — a knockoff of the Shahed drone — and other modern kamikaze drones like the VTU, which are built with Chinese components.

While China isn’t providing direct military equipment like ammunition, its role in providing dual-use technology is a major advantage for Russia. Ukrainian commanders know they’re at a disadvantage because Russia can procure these systems from China so easily. Ukraine also sources engines and other components from China, but its procurement process is more difficult. While China hasn’t provided direct military aid, given the dominant role of UAVs in this war, its support is an important factor.

Jordan Schneider: China’s Foreign Minister, Wang Yi, reportedly told some European diplomats, “If we were actually supporting Russia, this war would have been over years ago.” Shashank, what are your thoughts on that comment?

Shashank Joshi: He is being cocky — raw industrial capacity alone is not the recipe for victory. But there is a kernel of truth to his point. We spend a lot of time analyzing what China is giving Russia and how close it’s come to providing direct armed support. On certain systems, such as armed UAV designs, China has arguably crossed that line. Even if China isn’t transferring the explosive payload, it’s transferring UAVs designed to be armed. But it isn’t happening on a decisive, war-winning scale compared to what Russia is producing itself — it’s a niche capability.

There was a moment in this conflict where Russia could’ve been in a more difficult position. Had the Ukrainians been able to press their advantage in late 2022, or if the 2023 offensives had gone differently, Russia could’ve been in serious trouble. I think if the Russians had been facing a potential collapse, China would’ve been more likely to step in. They had the stockpiles and the industrial capacity to fill many of Russia’s needs for basic artillery and other systems.

The reason they didn’t is twofold. First, the threshold for engaging was very high because it would’ve meant blowing up their relationship with Europe, which the Chinese want to protect. If they were going to take such a drastic step, it would’ve to be out of necessity, and it was not necessary. We know the Russians gave wish lists to the Chinese early in the conflict, and the Chinese didn’t provide the bulk of what they wanted, even covertly.

Second, China’s motivation would have been to prevent a major Russian defeat, not to accelerate a Russian victory. If you look at the conflict now, while Ukraine’s forces face problems of corrosion and Russia faces long-term economic troubles, no one would seriously argue that the Russians are on the verge of collapse. As long as that’s true, China has other geopolitical interests to protect. The more uncertain US-China relations become, the more China will try to preserve some flexibility in its relationship with Europe, and that will restrain it from providing all-out military aid to Russia.

Jordan Schneider: Oh my god, the UK-China spy scandal.

Shashank Joshi: Crazy, crazy story. Total mess.

Jordan Schneider: Absolutely.

Shashank Joshi: I can’t tell you definitively why this case collapsed. Initially, my gut feeling was that the Crown Prosecution Service — which is independent from government leadership, unlike in the US, I’m sorry to say — dropped the case because government witnesses wouldn’t testify that China is a national security threat. This is a requirement under the arcane 1911 Official Secrets Act used to charge the two individuals. If the government wouldn’t provide a robust assertion that China is a national security threat to satisfy the Official Secrets Act, then I could see why prosecutors dropped the case.

But after seeing the government’s evidence — specifically the three witness statements by Matthew Collins, the Deputy National Security Advisor — that explanation doesn’t hold. Those statements lay out the full spectrum of Chinese espionage. They discuss China’s authoritarian status and the challenge it poses, its influence operations, and its willingness to co-opt people early in their careers to influence policy, not just steal secrets. Taken together, I do not know what more the prosecutors could have wanted. They claim they were only 5% short of what they needed for a potential conviction, but I can’t imagine what more they needed.

Jordan Schneider: It’s wild and ridiculous. I’m not a UK legal expert, but it seems like there was a political decision to pull this case. I do not see another explanation.

Shashank Joshi: No, I do not think that’s true. We should not underestimate the Crown Prosecutor’s (CPS) independence. Prime Minister Starmer is a former Director of Public Prosecutions and former head of the CPS. He is strictly by the book on these matters and wouldn’t quash the case behind the scenes. That’s not how the system works.

It’s possible they decided to withhold evidence to avoid declaring in open court that “we are petrified of China and China is a massive national security threat.” But the witness statements do not soft-pedal the threat from China, if they were trying to avoid a diplomatic row, these are not the statements they would have provided. I think the prosecution was overly risk-averse or incompetent.

As this was going on, the government was grappling with its broader position on China, including the major decision to approve the new Chinese Embassy in East London. The proposed site is the former Royal Mint, where the Opium Wars ransom was taken in the 1840s. Amazingly, this detail has not been picked up by the British press. I find it incredible that the Chinese want to build their gigantic, Bond-villain-style mega-embassy on that exact spot. That decision was delayed again, and we are back in limbo, with the Chinese threatening grave consequences if the project is not approved. The hot potato has been kicked down the road again, to mix metaphors.

Trump’s ADHD Peace Process

[note: this show was recorded before Trump announced sanctioned on Russian oil]

Jordan Schneider: We will have to check on this again in a month or two. It seems likely the Trump administration will be inconsistent on this issue — wanting a quick solution and being agnostic about the long-term consequences. How much of these high-level summits and political dramas ripple down to the people on the front lines?

Rob Lee: There is an element of this that affects the Ukrainians who are fighting. They want American support, and for some, there is an idealistic view of the US as the leading democratic country and a global supporter of freedom. They see themselves as fighting against authoritarianism and oligarchy, and for democracy. For Ukrainians who deeply American ideals, it’s hard to see the US come short of its values.

For most soldiers, they may be frustrated, but their day-to-day reality is unchanged. The Russians have not stopped attacking. They know that even if the US increased weapons deliveries, it wouldn’t immediately end the war or the threat from Russia. Most Ukrainians are realistic — they understand that Russia will be a long-term threat even after a ceasefire or a peace deal is reached.

Ukrainian soldiers do watch developments in the US. During the Trump-Zelensky meeting in February, I was on the front line and watched the video with a mortar battery commander in his apartment. It was a very awkward moment that no one was happy about. It’s always a strange feeling for me, as an American, to be there and wonder what they think of me and if these events change their trust. In the end, we all recognized that the meeting went poorly and hoped for things to get better. By contrast, I was at the front during the recent Trump-Zelensky meeting in July, and the mood was more positive.

While Donald Trump’s rhetoric changes constantly — sometimes favorable to Ukraine, sometimes very negative — what matters is what the US is actually doing. Since taking office, Trump has continued providing the aid and intelligence sharing that the Biden administration had established. It seems that intelligence sharing is as strong, if not stronger, than it was before. If the US is providing intelligence for deep strikes into Russian refineries, that’s notable. The big policy change was the creation of a system allowing European countries to buy US munitions for Ukraine, and that appears to be continuing. Other systems, like air-launched missiles, are expected to arrive in the next few months.

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The rhetoric will go up and down, but if the US continues to provide critical weapons that Europeans cannot produce themselves — like Patriot interceptors and Guided Multiple Launch Rocket Systems (GMLRSs) — and Europe can buy these systems, it’s not the worst-case scenario. Some Ukrainians probably have a lower opinion of the US than they used to, but many still view the US favorably and don’t judge us for Trump’s rhetoric.

The key question is whether the Trump administration will coerce Ukraine to accept Russia’s proposal. If they threatened to cut off Patriot interceptors, GMLRS, or intelligence sharing, that would be significant. But if the US continues to assist Ukraine while stating a desire for a deal, there’s no real policy change.

Shashank Joshi: There are two fundamental points here. First, Donald Trump has not endorsed the Russian demand for land swaps — where Russia would cede claims in Kherson and Zaporizhzhia in exchange for the unoccupied parts of the Donbas. Instead, he favors a freeze in the conflict. I think a freeze could benefit Ukraine, if it’s followed up properly, a view I might not have held 18 months ago.

Second, Trump is still selling the Europeans weapons to provide to Ukraine. I asked NATO Secretary-General Mark Rutte if selling these weapons on commercial terms was less beneficial than the previous policy. He said no, the PURL scheme is at cost price, not commercial terms, and is relatively favorable. So long as those sales continue, and depending on whether you believe systems like Tomahawks were ever seriously on the table, US policy is fundamentally unchanged.

As the Europeans accept more financial burden for arming Ukraine, we need to consider what a European-led peace process might be. If the situation in the spring is unchanged — Ukraine’s position stabilizes after a brutal winter campaign against its energy grid, and Russia continues achieving minimal gains at a high cost — Russia may reconsider its position. Europe needs to have a vision for a peace process. For all his faults, Trump did initiate a peace process, albeit in a cack-handed and ludicrous fashion. Europeans need to accept that reality, but I don’t think the mentality in Europe is ready for that.

Rob Lee: The negotiation on Tomahawks at the last meeting was notable as a signal that Trump was less afraid of escalation than the Biden administration, not because the missiles themselves would be a game-changer. The number of Tomahawks provided would have been small, with minimal effect on the front line.

The important question is what other systems Trump might provide through the PURL system, such as Army Tactical Missile Systems (ATACMS). If his stance is that he won’t offer aid, but will sell whatever Ukraine wants, then some of these systems could be quite useful. The ERA air-launched missile, if it works, is low-cost and well-stocked, and could make Russia’s position difficult.

We focus too much on Trump’s ever-changing, daily rhetoric instead of what the US is actually doing. Looking at 2026, the war will become more costly and risky for both sides. Both economies are strained, while deep-strike capabilities are improving and critical infrastructure is frequently targeted, and casualties are very high. Although Russia is incurring immense losses, it is not clear where its breaking point is — be it economic, political, or in casualties. Russia has an unusually high tolerance for cost. Can Ukraine, a smaller country, continue to bear similar costs?

Shashank Joshi: Key variables on both sides are obscure or finely balanced. Russia’s demands are so draconian, it’s easy for Ukraine to reject them. If Russia offered a reasonable deal and a secure future for Ukraine, the decision to keep fighting would be harder. For now, it is in Ukraine’s interest to run these risks. Victory isn’t guaranteed, but it has a good chance of frustrating Russian objectives and sowing doubt among Russian leadership.

But we should be humble and accept that the balance could tip. After a rough winter, a Russian reconstitution, or a change in European politics — which I do not see on the horizon — the prognosis for Ukraine could worsen. I’m not confident predicting the outcome.

Jordan Schneider: The day after the Trump-Zelensky meeting in the White House, Rob and I discussed this with Mike Horowitz. Rob’s interpretation was the “taco trade,” where nothing changes, Trump doesn’t move in one direction or the other. But in a year, who knows what he’ll think. There’s a chance he could swing wildly, either siding with the Ukrainians and sending the CIA to blow up oil refineries or siding with Russia.

Shashank Joshi: People have to remember it cuts both ways. Trump isn’t taking risks on behalf of Ukraine. But the reverse is also true — he won’t spend massive resources to please the Russians either. If Trump thinks Putin is dragging his feet, he will detach himself. His tendency to retreat from difficult situations cuts both ways. He won’t coerce Ukraine in a meaningful way, because Ukraine still has things to offer him. We need to detach from the swings of Trump’s pendulum and focus instead on the longer trajectory of his vision, which is limiting the US’s exposure.

Jordan Schneider: The likely scenario is that the US keeps selling weapons to Europe and providing intelligence. Maybe there is a 10% chance Trump swings towards Ukraine, and a 10% chance he swings towards Putin. What I count on most is his deep and abiding ADHD. If something is not working, his attention will be diverted before he goes too far in any direction. That doesn’t mean adopting a different strategy — if yelling at Zelensky in the Oval Office does not get him anywhere, sending ICE to New York City will become his new focus.

Ukranians Soldiers Listen to Lady Gaga

Jordan Schneider: What is popular in the bunkers in Ukraine? What playlists are people downloading on Spotify before they go into airplane mode?

Rob Lee: You hear Western music. There is a song called “Fortress Bakhmut” that became popular during the battle, and it’s still played. Some songs are made for the military or are about the war.

Jordan Schneider: What genres of music are common? Pop, rock?

Rob Lee: It is the military, so there are probably a lot of metal and a lot of rap, similar to music tastes in the US military. I am sure it varies a bit. There are also a lot of women fighting, and they may have different music preferences. There is a joke that a lot of soldiers, even in the tough branches, like “white girl music.” There is always a love for Lady Gaga or Katy Perry. “Bad Romance” came out right before my Afghanistan deployment, and that became the song of our deployment.

Jordan Schneider: From an entertainment perspective, if they are on these two-to three-month rotations, are soldiers downloading shows on an iPad on Netflix to watch? They can’t be busy all the time.

Rob Lee: For Ukrainians, it depends. The infantrymen who go to the “zero line” don’t have tablets. They probably have phones, but connectivity is limited by heavy jamming, so they’re probably not watching TV. For the soldiers at a command post a couple of kilometers from the front line, everything is available. They can play video games and watch Netflix. If you go into a battery command post, and the movie Delta Force may be on one screen and an Xbox on another. It is a mix of entertainment, similar to what US or UK military personnel do downrange.

Jordan Schneider: Well, if anyone wants to write a review of Battlefield 6 from the perspective of someone fighting in Ukraine, I would be happy to run that article.

Japanese politics have brought a lot of drama these past few months. To catch us up, we interviewed , author of the Observing Japan newsletter.

We break down how Takaichi triumphed and what her rise means:

• How LDP moderates fumbled their chances and handed victory to the right,

• Takaichi as Abe’s protégé and policy wonk — and her “Japan First” instincts,

• Why Takaichi is pushing for higher defense spending, a tough line on the foreign population, and a CIA-equivalent for Japan,

• The intricate political maneuvering that secured her power — rewarding allies, sidelining others, and turning Cabinet appointments into chess moves,

• The coalition challenges ahead and why Japanese politics feels like The Hunger Games,

• Japan’s hawkish international stance, the Trump visit, and the limits on the Japan-America love affair.

Thanks to the US-Japan Foundation for sponsoring this episode.

Listen now on your favorite podcast app or on YouTube.

Japanese Electoral Drama

Jordan Schneider: Tobias, on the last show we did, Ishiba was on the ropes. Why don’t you pick the storyline up from late July 2025?

Tobias Harris: We last spoke during that weird interregnum. There had been some premature media reports saying Ishiba was going, which he then denied. After that, the pressure from within the LDP for him to leave just ratcheted up. He had lost two elections and lost the LDP’s control of the Diet — how could he not take responsibility? He managed to push that off for about a month.

Finally, in early September, the LDP released its Upper House election autopsy, analyzing what went wrong and how they got into this situation. The report’s overall conclusion was that the LDP had lost touch with too much of the electorate. There were sins of omission and sins of commission, but the bottom line was that Ishiba had not done enough to fix the situation. The subtext, of course, was that he was going to have to go. His situation became untenable, and within a few days, he was out.

This led into September and a relatively more subdued leadership campaign compared to last year. We had five candidates instead of nine, though in practice, it was really a race among three. The campaign was shorter and involved less crisscrossing the country. The ambitions of the candidates seemed scaled back. It was just a very different experience compared to last year — and last year was not that long ago. The comparisons were very fresh and made it apparent just how much the party had changed in a year’s time.

Jordan Schneider: Who were the contestants?

Tobias Harris: All five had run last year. That was the other thing — we had heard from all of them, so what were they going to say that they didn’t last year?

We had, of course, the now-new Prime Minister Takaichi Sanae (高市 早苗). Koizumi Shinjiro (小泉 純一郎), who was Ishiba’s second agricultural minister, also ran again. We had the now-former Chief Cabinet Secretary Hayashi Yoshimasa (林 芳正), and Motegi Toshimitsu (茂木 敏充), who had been a foreign minister and senior cabinet minister for much of the second Abe administration and into the Suga administration. Rounding out the group was Kobayashi Takayuki (小林 鷹之), the young, generational-change candidate of the right wing.

We had all these familiar names and very familiar dynamics. It really ended up being a race between Hayashi, Takaichi, and Koizumi for the job.

Jordan Schneider: Was this a case of Koizumi dropping the ball? Did Takaichi really blossom this time around? How do you want to apportion the blame and the credit for how this election turned out?

Tobias Harris: It’s a mix of all of the above, which may be a dodge.

As a quick refresher on LDP elections, they had the option to use emergency rules but didn’t. They held a full election, which means every dues-paying member who meets certain qualifications gets to vote. Those votes determine proportionally how votes are distributed among the candidates, equaling the number of votes cast by the party’s national lawmakers. That’s the first round. If no candidate gets a majority, it goes to a runoff.

What ended up happening was that Takaichi, who is pretty popular with a plurality of the LDP’s rank-and-file, was poised to do well. She actually ended up outperforming her polling by anywhere between five and 10 points.

That was a pretty sizable polling miss. Either that, or there wasn’t a lot of polling in the final days of the campaign, and it’s possible many late-breaking, undecided voters broke for her. That’s certainly possible.

Even so, when you really look at it, Koizumi only underperformed slightly. I don’t think that’s ultimately why he lost. He lost because he wasn’t quite strong enough with the rank-and-file, and Hayashi ended up being a little too strong with them. When you look at their combined vote, they got around 47% together, compared to Takaichi’s 40%. The moderate part of the party just did a bad job strategically. If they had decided, “You know what, one of us has to be the person to inherit the mantle of Ishiba and Kishida, carry it forward, and we’ll join forces,” I don’t think Takaichi wins in that circumstance.

Before the race, there was a lot of talk about how Kobayashi would hurt Takaichi’s vote. That didn’t happen — Kobayashi wasn’t really a factor. But Hayashi and Koizumi were both strong enough to hurt each other, yet not strong enough individually to overwhelm Takaichi. That really is the story.

In fact, I went and crunched the numbers. Things could have gone very differently if just two or three thousand votes across the country had swung. It didn’t just matter that Takaichi won overall. It mattered where her votes were distributed. In the runoff, what matters is the 47 prefectural chapters, each of which has one vote. According to party rules, those votes are awarded to the candidate who wins the most votes in each prefecture.

Takaichi won 36 of the 47 prefectures. But when you look at the margins, there were something like 11 prefectures where Koizumi was within 500 votes of winning. If he had flipped those, it would have given him more votes. More importantly, a lot of the Diet members were following the results in their home prefectures. You probably had enough on-the-fence lawmakers who looked and thought, “Well, okay, the voters in my prefecture voted for Takaichi. Therefore, I guess that’s how I’m voting.”

If Koizumi flips more of those prefectural chapters, the race maybe looks different. It might have been an even closer race than it ended up being. It didn’t end up being that close in the second round, partly because many of those swing voters just went to Takaichi because she won the popular vote. But it could have been a very different race if the votes had been distributed just a little differently.

Jordan Schneider: What are the meta takeaways from this? Given your argument that there wasn’t a big shift in the electorate towards the right, is there a structural problem with the LDP moderates that they can’t get their act together? Do we just have two big egos? Of course, we have two big egos — these are people who want to be prime minister. What brought us down this path, aside from a handful of coin tosses?

Tobias Harris: Look, Ishiba won last year, so clearly the reformist, moderate part of the party has strength. One of the reasons it was surprising that Takaichi won is that the LDP’s electoral defeats last year and this year were concentrated among the right wing. The parts of the party that suffered most, like the former Abe faction, lost 40 or 50 members over the last two elections. There was every reason to think it would be difficult for Takaichi to even match her performance from last year because the parts of the party she needed were smaller. It certainly looked as if she was coming in with a disadvantage.

What ended up happening was not a big swing to the right. As we’ve established, she won because she had a unified plurality while the other part of the party was divided.

In that context, she also had an argument that was perhaps clearer than what either Koizumi or Hayashi were making. Her argument was, “Look, the reason why we’re suffering is that the party has moved too far to the center. We’ve lost the voters who were excited about Abe, and they’ve gone to Sanseitō and the Democratic Party for the People. The answer to our problem is simple — we just need to shift back to the right. Those voters will return, we’ll get them excited, and everything will be fine.”

Were enough voters convinced of that logic? I suppose you could say that. Koizumi’s answer was somewhat vague. I don’t think he had a clear, one-line explanation for how to fix what ailed the party. Hayashi, even more so, as Chief Cabinet Secretary under both Kishida and Ishiba, wasn’t really in a position to say, “We need dramatic change.” He was somewhat handicapped by having to be the continuity candidate.

In some ways, it’s hard to beat something with nothing. It’s not that Koizumi was offering nothing — it just wasn’t a clear, strong signal that could match what Takaichi was saying. Now, whether it works remains to be seen. There are real questions about whether that strategy will prove to be a cure-all. We’ll see what happens.

Takaichi’s Background, Rise, and Style

Jordan Schneider: Takaichi. Who is this person? What should we know about her?

Tobias Harris: She’s been in politics for a long time. She was elected the same year Abe was first elected, 1993. The “class of 1993” has now produced Abe as Prime Minister and Kishida as Prime Minister. It’s been around for a while.

She actually spent some time in parties other than the LDP early in her career because the ’90s were tumultuous. You had parties breaking apart, new parties forming, and the LDP was out of power when she first entered the Diet. It was a confusing time.

In the ’90s, she quickly gravitated towards Abe as part of this emerging group of new, young, ideological conservatives. They saw the end of the Cold War, the LDP being out of power, and the breaking of the economic bubble as an opportunity to make a new kind of politics and introduce wide-ranging reforms. She was quickly part of this group, wound up in the LDP, and really rode Abe’s coattails in some ways in her career.

She was pulled along when he became Prime Minister for the first time, and she was around him when he was “in the wilderness.” When he came back, she ended up in important roles throughout his second administration. He really was her patron. He helped her along and sponsored her. When she ran for the leadership for the first time in 2021, he was basically her campaign manager. She very much sees herself as committed to the same project, as carrying his work forward, dedicated to the “unfinished task of Abe-ism.” That’s very much who she is as a politician.

I will say, personality-wise and just who she is, she’s very different from Abe in a few important ways.

Unlike Abe, she is not a dynastic politician. He was a political blue blood through and through — grandson of a prime minister, son of a long-serving foreign minister who should have become prime minister. Abe felt he had inherited a political legacy he was responsible for carrying forward, which helped him move to the top of the LDP quickly.

Takaichi was not that. She’s from a more middle-class or working-class family in Nara and had to rise on her own. The expectation was that a college education wasn’t even appropriate for her. Her parents discouraged her from going to Tokyo. She really had to pull herself up and into politics. She did not have a parent helping her along and pushing her into the family business.

That makes her different in important ways. It gives her a more approachable charm and probably explains the pretty fanatical following she has among some of the grassroots. People really respond to her in ways that I think are quite genuine. She’s not everyone’s cup of tea, but for parts of the party, they really respond to the fact that she is, I guess you could say, more “salt of the earth.” Some people find that very appealing.

The other thing about her is that she’s really a policy wonk. She really commands the details of many different issues, through and through. She likes talking about it. When she has these conferences, she’ll speak at length and really likes to get down into the details.

This is very different from Abe. The thing about Abe was that he was a big-picture visionary — “This is the way I want to take the country,” and “This is how I think about what Japan needs to be.” With Takaichi, I find her visionary image-spinning can be a little derivative of Abe’s. She is much more comfortable when she starts getting into the details of policy. She’s a very, very different kind of politician in those ways.

Jordan Schneider: Let’s talk a little bit about having the first female prime minister.

Japan has a relatively low percentage of female Diet members compared to other democratic countries. Is it surprising that Japan’s first female prime minister comes from the right wing? How do we put all this together?

Tobias Harris: Given that the number of non-LDP prime ministers since 1955 is very small, the odds obviously favored someone from the LDP. The LDP, in particular, has few women. I was looking at these numbers today — the LDP has 38 female lawmakers between the two houses of the Diet, which is less than 10% of its 395 lawmakers. Apparently, between cabinet and sub-cabinet posts, a little more than 25% of those female lawmakers are now in the government in some form. There just aren’t a lot of women.

There’s something a little sui generis about Takaichi’s path. Not many women have endured as long as she has or successfully navigated LDP politics to get to a position where she could actually contend for the leadership. There haven’t been many female candidates for the leadership in the first place.

Did she get there entirely on her own? Clearly, she needed Abe’s patronage. I don’t think she gets to where she is without Abe giving her positions when he was able to do that. That’s not to diminish her political talents or her capabilities. She is a capable retail politician and has a strong command of many different policy issues. She’s formidable. But with the LDP being what it is, I don’t think that alone was sufficient to get her to the top, unfortunately. That’s just the reality.

Subsequently, whoever the next female prime minister ends up being may be able to do it by being a power in their own right, not someone who needed an Abe to pull them along. Or maybe Takaichi ends up being that patron herself. One thing to look at is how she’s using her power. Not so much the cabinet posts — only two of her 18 cabinet members are women — but more of the sub-cabinet posts are going to the younger generation of women. Clearly, she sees herself as being in a position to cultivate the next generation of female talent in the party and give them opportunities to develop those skills. So they won’t be as dependent on a powerful man using his power to help them along. It’s a little different, and it just reflects the time she was coming of age in Japanese politics. That was her pathway.

Jordan Schneider: She’s married to a parliamentarian who brought three kids from a prior marriage. Are any of them in politics? Is there a dynasty in the making?

Tobias Harris: I don’t get the sense that that’s what she’s trying to do. But if your father and stepmother are both Diet members, the chances you might be drawn into politics are probably high. Sometimes, though, the opposite happens. Abe’s older brother, for example, was exposed to it, hated it, and wanted nothing to do with it. It’s possible they might just find the whole thing repellent and have no interest.

One more note about Takaichi herself — she is a thoroughly political being. She is just so steeped in it — it really is her life. Yes, there are lots of stories about her hobbies — how she’s a fan of the Hanshin Tigers, she likes cars, and she had been a heavy metal drummer — but ultimately, this is someone who is thoroughly in the arena, a lot like Abe was. Ishiba teased her for her work ethic, the fact that she is really tireless, keeps long hours, and is just devoted to doing the work. That really is who she is as a politician in a lot of ways.

Jordan Schneider: Let’s talk about some of her policies. We’ll start with international relations and national defense. What’s remarkable about her agenda?

Tobias Harris: She is a hawk through and through. There’s really no question about that. She sees the world as dangerous, which is pretty much a consensus position in Japanese politics now, but she sees it with a greater urgency and has been sounding the alarm for longer. She sees the risks Japan faces being on the front lines, facing off against three nuclear-armed states right in its neighborhood that are working increasingly close together.

She sees a world of challenges. That includes traditional military threats, but it’s also food security, energy security, economic security, supply chains — it’s all of that. She sees many threats that Japan must essentially steel itself and harden itself against. Both last year and this year, when you look at how she has campaigned, that has been the essence of her message — we need a strong Japan because it’s a dangerous world, and I’m going to do what it takes to meet those threats.

Jordan Schneider: ChatGPT told me that one of the kids is a prefectural assembly member in Fukui.

Tobias Harris: The prefectural assembly is usually a stepping stone to national politics, so I wouldn’t be surprised.

Jordan Schneider: Yes, around 40 years old. ChatGPT can find basically nothing about the two daughters. Good for the Japanese press for keeping them under wraps. Will it stay like that?

Tobias Harris: I don’t know if that state of affairs will last. In general, the first ladies and the family aren’t in the spotlight nearly as much as they are in the United States. When family members of prime ministers in Japan wind up in the press, it’s usually because something has gone wrong.

Abe’s wife, Akie, was involved in the scandal with a school getting a sweetheart deal on some land. She was a patron of it, which resulted in a lot of unfavorable attention on her and her associations. That wasn’t great. There was also the scandal with Prime Minister Kishida’s son, who was working as one of his father’s aides and basically using government resources to go on shopping trips. Generally speaking, when the children of leaders are in the public eye, it means things aren’t going well. Something’s wrong.

Jordan Schneider: It’s just such a split screen from Kamala’s step-kids and how out there they were, or Biden’s grandkids as well.

Tobias Harris: Maybe it tells you that America doesn’t have a monarch and yet treats its presidents’ families and presidential candidates’ families as if they are royal families, more so than Japan, which actually has an imperial family. The imperial family, of course, gets lots of press coverage and their goings-on get lots of attention. The media focuses on them instead of the family of the head of government.

Defense and Dealmaking

Jordan Schneider: Referring back to her agenda, what is her vision, and how, if at all, does it contrast with our most recent two prime ministers?

Tobias Harris: When you look at what she wants to do, a lot of it is putting Japan’s strengthening of its capabilities first, before anything else. Before cooperation with the United States, before cooperation with other countries, Japan has to do a lot more to defend itself. That means more defense spending, efforts to strengthen the Self-Defense Forces, and acquiring new capabilities for them.

One theme she’s been pretty insistent on for some time is Japan’s need for a proper equivalent of the CIA. You need a true national intelligence director. Right now, Japan has disparate intelligence functions spread across different parts of the government. She wants an intelligence agency directly under the cabinet and the Prime Minister, basically at the same level as the National Security Secretariat created at the beginning of Abe’s second administration. You’d have the National Security Advisor and, I guess, Japan’s DNI, for lack of a better term. She feels Japan has a real deficiency in its intelligence-gathering and analysis capabilities and needs to do more.

There’s a whole range of steps that need to be taken to raise Japan’s capabilities to another level, to complete the work of giving Japan a full national security establishment. I’ve argued in my book and elsewhere that building that establishment was one of Abe’s goals and accomplishments, but clearly, there was more to do. It took Kishida to get defense spending raised to another level. The intelligence apparatus questions were not really addressed systematically during the Abe years. There’s more to do, and she seems poised to move that to another level.

Jordan Schneider: We also have Koizumi as Defense Minister.

Tobias Harris: Yes, which is not bad for him and his resume. He’s done agricultural policy, he’s been the Environment Minister, and he’s done a lot of work in a party capacity on Social Security reform. He has not really had the foreign and national security policy portfolios. He is not necessarily a defense policy expert.

What we have seen in the Defense Ministry over the last several years is that the ministers are generally drawn from what are called “policy tribes” (zoku) in the LDP — groups of specialists in different policy areas. For the most part, with a couple of exceptions, the Defense Minister has been drawn from those ranks. Koizumi is not one of them.

He would probably say that because he comes from Yokosuka, which has a large U.S. Naval base and a large Japanese Maritime Self-Defense Force base, he has an innate understanding of defense issues from being in the constituency and working with military authorities. But he’s going to be doing a lot of work to get up to speed. He’s going to be in a position of dealing with big questions with the United States, signaling Japan’s ability to spend more on its own defense. We’re going to be coming up on host-nation support talks in the not-too-distant future. These are big issues, and he’s going to have to step it up.

Jordan Schneider: What was her calculus in putting him there?

Tobias Harris: Both Hayashi, Koizumi, and Motegi are in the cabinet, and Kobayashi is in a senior party post. In the interest of party unity, she wanted to keep all the rival candidates on her side to try to head off some sort of anti-Takaichi movement headed by one of them. It’s the Lyndon Johnson line about wanting your enemies inside the tent.

Ultimately, it’s about giving them work to do, keeping them on board, and forcing them to be part of making the Takaichi government a success. Abe did this as well. He was always trying to co-opt his would-be rivals. This is an old technique.

Jordan Schneider: Can we be serious on national defense if Koizumi is running the defense establishment?

Tobias Harris: Look, it’s a parliamentary system. Oftentimes, you get people doing different jobs and building up expertise on their way up. There are very few political appointees in any ministry, so there’s a lot of dependence on the bureaucracy and, of course, increasingly on uniformed Self-Defense Forces personnel. That’s all just part of it being a parliamentary system — you do the jobs, and then you acquire the expertise and experience.

If it goes well, he can end up in a position where he now has this expertise in addition to his other experiences. I don’t think it’s necessarily cause for alarm, any more than some other, perhaps more concerning, Cabinet appointments we could talk about, maybe less from a national security standpoint.

If you listen to some parts of the Japanese commentary, there’s this idea that Koizumi is somehow not smart, that he’s...

Jordan Schneider: A lightweight.

Tobias Harris: Yes. I frankly have never understood that line. If anything, from the moment he arrived in the Diet, he has been very reluctant to buy his own hype and has repeatedly shown a willingness to put in the work. He’s done not-particularly-glamorous jobs and taken on things that are not the most high-profile positions.

We saw this when he became Agricultural Minister earlier this year. Deployed correctly, his star power and his ability to command media attention can be useful. He took over while the government was dealing with a rice price crisis, and he immediately threw himself into high-profile measures — “I’m going to sit down and talk to retailers.” He used his ability to command media attention to actually move the government’s agenda.

Deployed correctly, he could be a real asset. There’s just a tendency to write him off as just a pretty face, but I don’t actually think that’s true. He has shown an ability to learn, to do the work, and to try to become a more well-rounded political leader.

Jordan Schneider I’ll give him six months to bone up, but we’ll be expecting a ChinaTalk appearance. Apparently, he does speak halfway decent English. The offer is outstanding. We won’t go straight for the PM. We can start with the Defense Minister.

Were there other remarkable aspects of her Cabinet announcement or her first few days on the throne?

Tobias Harris: We can talk overall about the Cabinet. This goes back to her including Hayashi and Koizumi in it. There are a lot of different philosophies about forming a cabinet. Ishiba’s cabinet, for example, relied heavily on friends and allies. In some ways, that might have done him in. He did not reach out to Takaichi to give her a high-profile job, nor did he reach out to the right wing of the party. His cabinet was very much, “I want to be in power with the people I trust most. I feel like I can’t trust anyone else.” It ended up being Ishiba surrounded by his lieutenants.

I don’t know if that ultimately did him any favors. It meant a lot of his most vociferous opponents were not in jobs that restricted their ability to speak out. He ultimately had this persistent bloc of the party that had nothing better to do than criticize how he was governing. That didn’t work well for him.

Takaichi, perhaps recognizing that her victory was not as overwhelming and preponderant as it seemed, reached out to Koizumi and Hayashi. There’s a pretty broad balance of distribution among members of various former factions, representing all different stripes. This is not just a bunch of right-wingers.

One thing I have flagged, though, is relevant to how Japanese governments work. The composition of the cabinet matters a lot for political reasons. But if you want to look at how the government is actually going to work, you have to look at the Prime Minister’s Office (the Kantei) and who is in the jobs most immediately around the prime minister. That tells you who the sounding board is, who’s sitting around the table making decisions and setting priorities, who’s delivering the prime minister’s will directly to the bureaucrats, and who’s deciding how the government communicates its messages.

That group is much more conservative. The people around her — her Chief Cabinet Secretary, her Deputy Chief Cabinet Secretaries, the aides and advisors — are much more uniformly from the right wing of the party. For the cabinet posts, she did the politically expedient thing. She brought in rivals and people who had to be rewarded. But when you look at who’s in the key decision-making roles, it’s a much more conservative group.

Jordan Schneider: How are you expecting her conservatism (and that of her team) to manifest?

Tobias Harris: The most obvious thing will be on a couple of issues. One is national security. To some extent, there’s a consensus here. Kishida was the one who got the deal done to get defense spending to 2% of GDP in the first place. He pushed through changes that allow Japan to acquire strike capabilities. There’s a pretty broad consensus in the party. This isn’t necessarily a conservatives-versus-moderates issue.

Will having this conservative team give it more of an edge, a little more stridency, a willingness to push harder and faster? Yes. She has already talked about how she wants to move up the timeline for revising the three strategy documents, which outline, among other things, the five-year plan for defense spending. On the normal schedule, that wouldn’t be until 2027. She said at her first press conference yesterday that she wants to do that sooner.

Had Koizumi or Hayashi won, I don’t think they would be talking like that. The tone is different on that score. In general, you can see what she is doing that Ishiba was not. Pressing on the gas pedal on defense is one thing.

The other thing: to be a conservative in the LDP now is to be a fiscal dove. She tried to tone back some of the rhetoric. Last year, she ran as practically a modern monetary theorist. This year, she tried to trim it back and at least gesture in the direction of fiscal responsibility. But fundamentally, she still thinks deficits don’t really matter — that there are urgent needs, and if it means running bigger deficits to spend more on defense and other things, then we’ll do that.

That is something that absolutely differentiates her from pretty much any other candidate who might have become prime minister. Everyone else was much more cautious about it. Ishiba was very cautious. The question is whether she’s going to be able to get away with that, given the condition of the bond market already. The bond vigilantes are keeping a watch out. That’s going to be one of the major questions that determines her durability. It’s a major difference and something that will color how she governs.

Other things that might make her different — clearly, even though the consensus within the LDP and across parties on foreign population issues has changed, she centered that in her campaign more than any other candidate. She talked about the need to get foreign tourists to “behave themselves” more and cracking down on lawbreaking by foreign residents. She took a much more strident stance on that, has already created a cabinet portfolio to deal with these issues, and will likely be setting up a headquarters to oversee them. She’s going to move in a more strident direction, partly because she’s trying to head off a threat from the LDP’s right, from Sanseitō as well. She has to have an answer to these issues. That’s another area where she’s going to lean into taking a more hawkish stance compared to others.

Coalition Challenges

Jordan Schneider: Let’s jump forward to her policy agenda. The LDP doesn’t have a majority on its own, so she’s in a coalition government. She swapped. We have a new partner. What is that dynamic? How stable is this all likely to be, Tobias?

Tobias Harris: We have to step back. This has been one of those months where a decade’s worth of events seem to have happened. From the moment she won on October 4, less than a week later, six days later, the LDP’s 26-year-old coalition with Komeito ended. Komeito is a centrist, nominally pacifist Buddhist party that supported the LDP both in government and during their three years in opposition. That coalition broke down.

To some extent, the writing had been on the wall for a while. Komeito’s electoral strength had been declining, and plenty of people on the LDP’s right had tired of relying on a party that consciously described itself as a “brake” on the LDP’s more right-wing tendencies. There was a sense that the coalition would break sooner or later.

This immediately created a problem for Takaichi. By not bringing Komeito into the government, instead of going into the prime ministerial vote with a minimum of 220 votes (13 shy of a majority in the lower house), she was 37 votes shy. This was a much trickier challenge. It created a window of opportunity for opposition parties to try to organize a campaign for someone else to become Prime Minister. The talks got started and looked like they were making progress in overcoming policy differences, but they ultimately failed.

They failed because the LDP managed to pry away one of those parties — Ishin no Kai (日本維新の会), the Japan Innovation Party. This is the Osaka-based party. You could describe it as neoliberal, quasi-populist, or conservative. Ishin had been in talks to possibly elect Tamaki Yuichiro (玉木 雄一郎) as Prime Minister. Then, they got a call from the LDP saying, “We’ll talk.” Within a couple of days, it became clear there would be an arrangement between Ishin no Kai and the LDP to ensure Takaichi would become Prime Minister.

Jordan Schneider: Are they just hanging out in bars? How is this actually going down in real time?

Tobias Harris: There’s a lot of that in Japanese politics. In the back alleys of Nagatacho and Akasaka, near the Diet members’ office buildings, a lot of business gets conducted in drinking establishments. Does it exclusively happen there? Not necessarily. Some of it is formal conferences, and some of it is text logs and surreptitious messages. My understanding is the dialogue between Takaichi and Ishin actually started with a text, which then led to more formal discussions. Politics is politics, right? Same anywhere.

The thing that was uncertain is that Ishin is a weird party. I’ll freely admit I struggle with them because I don’t know Osaka. I’ve spent loads of time in Tokyo. Every time I’ve lived in Japan, it’s been in the greater Tokyo area. I’ve been to Osaka, but never for long, so it’s a mystery to me. Ishin no Kai has had almost a monopoly on power in greater Osaka for 15 years now. I don’t entirely understand how they’ve made it work.

I wrote a review of a Japanese book I read on the first decade of Ishin no Kai. I was trying to understand their ups and downs. It seems they have these periods where they look like they’re booming, expanding nationally, and becoming a major third party to challenge the LDP from the right. Then, everything collapses, they retreat to Osaka, and they have to fight to hold on to it. A couple of years later, they have another boom. This has happened two or three times. It’s a very strange party, and I don’t understand how they’ve endured in Osaka as they have. But that’s who the LDP is now relying on.

It’s not a straightforward coalition. It wasn’t a one-for-one swap because Ishin decided they didn’t want any cabinet posts. They have an “external cooperation agreement.” As far as I know, looking at the text, all they promised to do was vote for Takaichi to become Prime Minister, which they did. Now they are in a position to say, “You’re not doing what you promised,” regarding a lengthy document listing all the policies the LDP has now promised to implement.

In most cases, the promises are vague — “We’ll study this,” or “We’ll set up a headquarters to study that.” But some promises are very specific and have specific timetables. If the LDP backs away, the barriers to exit for Ishin are very low.

I should note, it has been two days. They signed this on Monday — it’s Wednesday. One of the leaders of Ishin has already come out saying, “If we feel the LDP is not living up to its bargain, we will leave.” Takaichi has been Prime Minister for one day, and her partner is already threatening to quit.

Jordan Schneider: What happens if they do?

Tobias Harris: In practice, nothing. You just have a minority government. Technically, they are a minority government now. Unlike in other democracies with external partners, this is not a “confidence and supply” agreement, as far as I know. Ishin has not promised to side with the government on a no-confidence motion. It has not promised to vote for the government’s budget. All of its support is conditional. It is entirely conditional on Ishin feeling that the LDP is acting in good faith to implement the policies it wants.

In theory, they could leave, and Takaichi would still be Prime Minister and her government wouldn’t collapse. The question becomes, would they feel so bitter over the LDP’s breach of faith that they would support a no-confidence motion? That’s the real question.

If it happened before the budget passes, it would be a crisis. We can presume the assumption is that Ishin will vote for the budget next year. The government will ensure Ishin’s preferences are included when drafting it. But if Ishin is dissatisfied before then, all of that is up in the air. What does the budget look like? Where will the LDP get the votes? That becomes the most important question. But that’s only if Ishin leaves before late March.

Jordan Schneider: Okay, so the coalition splits off, it’s a minority government, and they can’t pass a budget. Do we get elections? What happens next?

Tobias Harris: If things are so bad they can’t pass a budget, yes, we’d likely get a no-confidence motion that passes, which would trigger an election. They would “fight it out” at the polls. That would be my presumption if the relationship with Ishin broke down that badly.

Passing a no-confidence motion is hard. There’s a reason Ishiba didn’t actually face one — only one party, the Constitutional Democrats (CDP), is big enough to submit one independently, and they were reluctant. No other party wanted to take the lead. Ishiba escaped without one. You still have to get all the opposition parties on the same page, agreeing, “Yes, this is the time.” It also depends on Takaichi’s popularity. Are things going her way? (Presumably, if the coalition falls apart, they aren’t.) There’s no guarantee, but that would be the mechanism.

The reason one of Ishin’s leaders is already threatening to quit is that they made compromises that are causing friction. The LDP and Komeito broke up, proximately, over political finance reform. This was the fallout of this slush fund scandal that destroyed the factions, at least nominally, and really dragged down the LDP support. The party was supposed to really commit to tightening up regulations on donations — basically who can donate, who can receive donations, how should they be reported.

Earlier, at the start of this year, there had been some pretty extensive debates between the government and the opposition parties about what that should look like. Those talks ultimately broke down because on the one hand you had parties like the CDP and Ishin no Kai calling for basically a total ban on corporate political donations. The LDP is saying, “No, we can’t do that, that’s too much, but we should have a bunch of rules to increase transparency, much more accessible reporting, lower thresholds for reporting and things like that.”

Then you had this middle solution that Komeito and the Democratic Party for the People came up with, which was, “Well, we don’t want an outright ban, but it’s not enough to just do more transparency. Let’s limit the organizations that can receive donations.” Instead of every politician having their little fundraising support group, if corporations want to give money, it has to be to either the national party or prefectural party. That was the compromise proposal.

In the coalition talks, Komeito said, “Hey, we have this proposal. We want you to sign on to it. We want to make this happen.” Takaichi generally has just thought the LDP didn’t have to reform anything — this was not a real issue, not a serious issue. It might also have to do with the fact that the right wing of the party is where the slush fund scandal originated from, and the people implicated in it tend to be her supporters. She was maybe constrained in taking a more aggressive approach to this issue. That ultimately is what led Komeito to say, “Okay, fine, we’re done. We can’t join the government because you won’t sign on to this.”

Enter Ishin no Kai, which has an even more hardline position on this. The LDP is like, “We just pushed away our longtime coalition partner, who was offering a more modest proposal. Sorry, your proposal for a total ban is a complete non-starter.” Ishin no Kai says, “Okay, fine.”

Jordan Schneider: Why do they want corporate money in politics? Why is it important to the LDP?

Tobias Harris: Elections are expensive, and the LDP is really good at raising corporate money. Those majorities don’t fund themselves. If you have an overwhelming advantage in fundraising, are you going to unilaterally disarm? It makes sense that smaller parties want restrictions — they are more dependent on public funding, while the LDP supplements public funding with private funding.

The LDP told Ishin the ban was a non-starter. Ishin then turned around and said, “Okay, if we can’t do that, we have another core political reform idea: there are too many Diet members. Let’s eliminate 10%.”

Jordan Schneider: I love this as an idea.

Tobias Harris: I actually hate it. When you do the math, the lawmaker-per-capita number in Japan is much better (fewer voters per representative) than in the United States, which has three times as many people. Having worked for a Diet member, I’ve seen the relative lack of distance between national lawmakers and voters, and I think that’s a good thing. When that ratio is lower, you have more opportunities to actually see your representatives, interact with them, and be listened to by them. Frankly, there’s no reason for Japan to cut the number of lawmakers.

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For Ishin, this is partly about the urban-rural split. There’s been some correction, but urban Japan (where Ishin is centered) is still relatively underrepresented. They see too many seats for rural Japan, and this is a blunt instrument for fixing that.

They came back with this counterproposal and said, “We’re not going to accept, ‘we’ll study it.’ It has to be done during the Diet session that started yesterday.” You have until the end of the year to draw up this legislation and get it done. Takaichi said, “Fine, we’ll do it.”

She didn’t run this by her party. Immediately, LDP members were saying, “Wait a second. What seats do you plan on cutting? Whose seats are on the chopping block?” You immediately got pushback. You have the Secretary-General of the LDP saying yesterday — one day after signing the agreement — that this is going to be difficult to do. You also have pushback from other parties saying you can’t make a change like this without all-party buy-in. This is too big of a reform to just be something that “we’re the government and therefore we can just at a stroke get rid of a bunch of seats.”

They are setting up a pretty brutal fight within the LDP, between the LDP and Ishin, and between the government and the opposition. Public opinion hasn’t weighed in yet because basically they had a week to process this. Some of those voters who may feel like they’re going to lose representation may have thoughts about this.

Jordan Schneider: How do they kick people off the island? That was why I was so excited about this — the Hunger Games nature of it.

Tobias Harris: It wouldn’t happen until the next election. It’s like redistricting between elections. They just eliminate a district and say, “Good luck finding another,” which does create these “Survivor” situations. In depopulating prefectures, they’ll say, “You had four constituencies, now you only have three.” That means…

Jordan Schneider: Whoever gets the most donations from Toshiba gets to…

Tobias Harris: You end up with these scrambles. It’s not just the incumbent — other parties had candidates in that constituency who also want to run. You get a musical chairs situation where they’re taking a chair away.

There’s talk that if they do it, they would mostly eliminate seats from the proportional representation (PR) lists, not the constituencies. The electoral systems are mixed. This has small parties really upset because they rely on PR seats. The LDP would probably stand to gain the most, even more than Ishin, because the LDP does best in the single-seat constituencies. Small parties have a hard time winning those.

The interests slice in many different directions. It is a big change to spring on everyone, and they only have two months to figure it out. We’ll see.

Jordan Schneider: Any other dynamics to watch? “Japan First”?

Tobias Harris: We haven’t really talked much about the United States. Trump will be in Japan in less than a week. A week from now, he’ll be on his way home. This is a test for Takaichi right out of the gate.

There has been a lot of fretting, particularly in articles over the last couple of weeks, when it was unclear whether Japan would even have a new prime minister. The Foreign Ministry was worried the new leader wouldn’t have enough time to be briefed properly. When Ishiba first met Trump earlier this year, he had about 36 hours of briefings, and the ministry wanted the new prime minister to have at least that much. They needed the new leader in place by a specific date to get that done. It’ll probably be fine.

There’s already talk that this will be an “Abe nostalgia tour” for Trump. They’re expected to go to many of the same stops he visited with Abe in 2019, and Trump is scheduled to meet with Abe’s widow, Akie. Takaichi, at least in the near term, will be able to play that “Abe card.” The fact that she was so close to him means they can bond over their shared affection, which will play a part in ensuring this initial meeting goes well.

This probably explains why she immediately said, “We’re going to move quickly to raise defense spending.” In practice, working out the details will still take time, but being able to tell Trump, “Hey, last week I became prime minister, and the first thing I announced was raising defense spending,” is not a bad opening line.

Her team is also positioned for this. She made Motegi foreign minister, and his calling card has been “I negotiated a trade deal with Trump during the first Trump administration and he called me a tough negotiator. I’m going to be able to really build a good relationship.” The relationship’s in good hands. Akazawa, who negotiated the trade deal for Ishiba, is still in the cabinet in a different role, but will still probably be a channel for communication. In the near term things will probably be okay.

The bigger questions remain — How interested is this administration in Asia in the first place? How durable is the commitment to defend Japan? How committed is Trump to a mutually beneficial trading relationship? There are real questions about the implementation of the trade deal that was signed.

All those questions are for after next week. Next week is about the immediate rapport. Will they get along? What relationship will they have off the bat? I suspect it will be fine.

Jordan Schneider: It’s helpful that she’s a politician through and through. She knows she just has to subsume herself to this. She presumably has plenty of experience subsuming herself to horrific male egos over the course of her career. Having to hold that for two days... I don’t know. We’re rooting for her. I feel like she’s got this.

Tobias Harris: Yes, it will be nerve-wracking, and everyone will be watching to see what the rapport is like. But just from what we’ve seen of Trump — to the extent we can understand his feelings — the way he talks about Abe suggests a real, genuine affection, to the extent he feels genuine affection for anyone. There does seem to be real sentiment there. The fact that Takaichi certainly shares that affection will go a long way.

Even if Abe were alive and somehow Prime Minister again, he wouldn’t have gotten a pass on the tough negotiations. He still would have had to negotiate and find a package that would make Trump happy. The result probably would have looked very similar to what Japan ended up getting under Ishiba. Ultimately, Japan’s interests are Japan’s interests, and any Japanese government would try to hold the line in much the same way Ishiba did.

Takaichi, to the extent that she does what this administration wants — raising defense spending, contributing more to host-nation support, signing up for economic security measures regarding China — can minimize friction.

The question is, will there be a point at which the Trump administration asks for things Japan doesn’t want to do? As Takaichi herself said during the LDP leadership campaign, is there a point — like this idea of Japan giving the U.S. $550 billion — where the actual mechanics are very unfair to Japan? Is there a point where it becomes very hard for Takaichi, or any Japanese leader, to say, “No, we can’t go along with this”? We don’t know yet because we’re still waiting for the details, but that’s a real question.

Takaichi is a nationalist. She wants to stand up for a strong Japan. That includes saying “no” if the United States does something that makes Japan look weak or harms its interests.

This is the duality of the Japanese right-wing. They are very committed to the U.S. alliance. There’s an appreciation that the alliance is the best pathway to bolster Japan’s strength and relevance, and practically, Japan needs the U.S. for regional security. On the other hand, in some corners, there is outright anti-Americanism. In other corners, it’s more “America-frustration” or skepticism, recognizing that the two countries are not aligned 100% on everything.

Sometimes, particularly (but not only) when Democrats are president, there’s a feeling that US values are not necessarily Japanese values. For the right wing, this often surfaces around historical issues. Republicans have criticized Japan over historical issues. The George W. Bush administration and Abe had a fight over the “comfort women” issue. Republicans in Congress were criticizing Abe for his statements about that issue. The bottom line is that the Japanese right has a complicated relationship with America.

Jordan Schneider: I started listening to this meta-podcast called The r/BillSimmons Podcast about The BS Report, about how Bill Simmons’s podcasting has changed and gotten worse over time. One of the main critiques is that basically he doesn’t watch the games anymore. His heart’s not in it. He doesn’t even know what he’s talking about. He’s just making dumb jokes.

Whenever I do a show with you about Japan, Tobias, I feel like I’m inhabiting that post-pandemic Bill Simmons energy. On the tech and China stuff, I actually know what I’m talking about, but not at all when it comes to the minutiae of intra-Japanese party drama.

I’d like to thank you, Tobias, for your patience, and thank the audience as well for their patience as I go on this long journey to understand this country better. Thank you to the US-Japan Foundation for sponsoring this podcast.

Tobias, it’s always a pleasure. I learn a ton and I can’t wait to check in in a few months — once the government falls apart, or not. To be sure, there will be plenty more drama to come.

I spent two weeks around the Bay Area in September. What follows are my reflections.

Dreamers encouraged. Writes Didion, California is “out in the golden land, where every day the world is born anew. The future always looks good in the golden land, because no-one remembers the past. Here is the last stop for those who came from somewhere else, for all those who drifted away from the cold, and the past, and the old ways.”

On the East Coast, if you start a conversation about the new thing you’re building, the first five questions you’ll get will be about how it won’t work. After experiencing the Bay Area energy, my wife decided that she could found a company and has spent the past month furiously vibecoding.

I’ve been bugging a prominent SF-based podcaster to do more political coverage with little success. I get it now. The weather is too nice, nature too inviting. I heard some light H-1B chatter, but we’re in the AI boom times, there’s too much tech to be excited about to get too worried about something as normie as the state of the Republic. And thanks to Lurie, homelessness is now tamed enough to make the poors someone else’s problem again.

DOGE energy is defensive to a level I haven’t come across in people politically involved before. The mantra that “DOGE is net positive and anyone who doesn’t agree can go fuck themselves” seems pervasive for anyone who’s stuck it out. Honestly, it’s understandable cope for the young SWEs who signed up to improve government services but ended up getting blamed for (/actually) taking vaccines away from babies. It’s striking that many people in the tech right I met say that good things are happening but that early DOGE really set back the one thing they have the most context on.

I was last in SF in 2023 and on that trip spent an afternoon at OpenAI’s office. Even six months after ChatGPT dropped, it still felt like a plucky research lab, albeit one with money for Tartine pastries and a lobby cueing off the Amazon Mr. and Mrs. Smith reboot aesthetic.

It’s now Meta, complete with the novel addition of door guards with American flag eyeglass straps and general SOF energy who will under no circumstances let you tailgate into the building.

The best neighborhood is the Presidio, a federal land run by a trust that keeps the park nice, new buildings out, and serves as a great landlord for hedge funds. One guy who worked there said a main draw was that “it’s federal land so none of that homeless shit flies here, baby!” It’s gorgeous but should probably be YIMBY’d out of existence. If Trump ever truly splits from the Elon/Thiel nexus, it would be a great troll move to throw some Trump Towers on top of their family offices.

Banyas, Berkeley, and South Bay

I went to a Slate Star Codex meetup at Lighthaven. There was an EUV lithography textbook lying around, so I read that, spotted Aella crocheting, and chatted with Pradyu about the Singaporean economy. A twenty year old told me he was founding DoorDash for Swaziland (“It’s pretty developed so it makes for a great beachhead”). Sam Kriss said something ahistorical about political violence and it started to rain so I went home.

The next day, I did not have the energy to make it to the banya, so deputized voice-of-a-generation JASMINE SUN to report:

The sauna visit is planned in an 87-person Signal chat with strict attendance enforcement. It’s inspired by the Jewish “schvitz”—a Yiddish word that can also mean “to sweat” or “to be nervous” or “to persevere”—but here describes the ritual of men gathering in steam rooms to gab about politics and business. Our host isn’t actually Jewish, but rather a garrulous New Yorker who self-identifies as spiritually so. He often invites acquaintances to schvitz within 15 minutes of talking. I find him very persuasive.

At 8:30pm on a Monday, I take a $24 Uber to Archimedes Banya in the far southeast of the city, then pay $67 to enter for up to three hours. If your last experience in a sauna was at a Korean-style luxury jjimjilbang, with unending plates of tiled dragonfruit and crab-in-the-shell, featuring nap pods and pool tables and rooms of pink Himalayan salt, the rawness of the SF Archimedes Russian banya experience will come as something of a shock.

It’s crowded on a weekday night. It has a clothing-optional policy, heavy on the optional; you’re guaranteed to see skin of all ages and genders and kinds. The staff are gruff and only speak in a yell. The hot room is extraordinarily hot. If you happen to be wearing jewelry, you’ll soon feel it burn. A steady stream of sweat pours down from my chin to my collar. Next to us, a hairy man lies face-down getting whipped by a prickly bundle of branches and leaves. He’s paying extra for this service. I try not to look.

I’m here with a troupe of nine 20-somethings. Seven are men and half work at a16z. The host is eager to share various snippets of banya lore: Did you know the Warriors come sometimes? Ilya used to play chess here. Have you read the n+1 piece about our New York schvitz? Apparently the New York chapter is more bond talk and less AI; another person says he’s “raising funds” for a DC venue. The host reminds me that he’s turned down several reporters’ requests to attend, but I’m just a lowly Substacker, which grants me a slot.

We discuss the NVIDIA lobby, the state of media, and the Chinese century. “You’ll never hear me say a bad word about China,” one says, waist deep in the pool. “[David] Shorism is Maoism,” another adds without elaboration. We then implore a visiting East Coast friend to move to SF. “This is the only place where anything happens,” we say with the confidence of people who really believe it. He says he’ll do it if he gets a job with the Lurie administration. “But he hasn’t texted me back.”

A friend apologized for the “off-road experience” after I pulled onto his Berkeley side street. “It’s scheduled for a 2027 repave!”

With Airbnb practically illegal, I used Kindred to book a place in Northern Oakland for what came out to $50 a day. I had a great experience on the platform and highly recommend it. Referral link here.

Berkeley Bowl is overhyped. I see the novelty of fresh pistachios and fourteen apple varietals, but if the cost is rotting fruit and $18 black lives matter bread loaves, I’m fine buying at Whole Foods, where grocery spend helps to underwrite AI chip demand! Also, Union Square Cafe blows Chez Panisse out of the water.

Berkeley is integrated into a city, while Stanford is a country club that keeps the plastic on its furniture. It’s set back from its town, which is oriented not at college kids but 50-something VCs. A state school with 10k undergrads per grade compared to Stanford’s 1,700 gives the Berkeley campus so much more life. The kids seemed to be having more fun, not stressed about software jobs disappearing before they graduate. And Stanford campus having a Rodin’s Gates of Hell sculpture creaking every few minutes is terrible energy.

Palo Alto’s library had a book sale of primarily Asian language titles. My favorite sighting was a textbook for national-level competitive high school chemistry in Chinese. At the playground, I heard mostly Beijing accents having anxious-brag conversations about their kids’ education.

The South Bay’s suburbs, bland food, and perfect weather felt as alienated from the rest of the country as the perfect suburb dug underground in Hulu’s Paradise. Marin, though, offers an endgame lifestyle.

Mill Valley houses nested in hills gave off Oahu suburb energy, accented by backyard redwoods. The town, one friend quipped, “boasts the highest ratio of black lives matter flags to black lives in the nation!”

We drove out to an elk reserve at the tip of Inverness. It felt like Altus Plateau from Elden Ring.

On the road back, we stopped at Point Reyes and had perfect pastries in the lavender garden of a bakery. Next to it was a small park that doubled as a NIMBY temple celebrating all the farmers that the Marin Agricultural Land Trust had subsidized to stay operating. One property they were particularly proud of saving from houses has “breathtaking reservoir views, easy access to major highways, and residential zoning.” Thanks to MALT, cows instead of humans will get to enjoy that view!

This trip was partially a test to see if we wanted to move to the Bay. Even with two weeks of perfect weather, I’m not sold. Hiking and utopian energy does not outweigh a real metropolis, community, and family.

My first day back, I had a meal at Cafe Mono (with a very friendly ML researcher who dropped in from SF), checked in on the Met’s China collection, and saw a superlative production of The Brothers Size. Better luck next time, California.

Bay Area food and ‘hiking with stroller’ recs behind the paywall. One includes a croissant that my wife said “tasted as good as the one I had immediately after giving birth.”

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Jon Czin spent years as a top China analyst at the CIA, served as China Director on Biden’s National Security Council, and now works at the Brookings Institution. We discuss what Xi’s fourth-term means for China’s top leadership and military, Taiwan, and the US. We cover:

• How Xi’s mafioso-style “decapitation strategy” has kept the PLA in line and why he’s purged more generals than Mao.

• Cognitive decline and how end-of-life thinking might be shaping Xi’s succession plans and Taiwan strategy.

• Tariffs, rare earths, and China’s appetite for pain vs. America’s.

• Beijing’s parochialism and its limits in the Russo-Ukrainian conflict.

• What intelligence work on China actually looks like and whether or not Xi’s era is duller than previous generations.

Plus: who might succeed Xi, comparing the Politburo Standing Committee to a frat house, and why chips and TSMC matter much less in Xi’s Taiwan calculus than most think.

Listen now on your favorite podcast app or on YouTube.

Killing the Monkeys to Scare the Chickens (杀猴儆鸡)

Jordan Schneider: Let’s start with the PLA. You have this remarkable line in one of your pieces that Xi has now purged more members of the Central Military Commission than Mao ever did. What are we to make of this?

Jon Czin: Yeah, it’s a little bit of – to use George W. Bush’s term – fuzzy math. It depends on how you count, and we spent a lot of time looking at this. But he’s on pace right now to have numbers that are comparable. Half of the uniformed members of the PLA have been removed or are missing.

Every summer we get this germination of rumors about Xi’s health or the possibility of a coup, but it felt even more intense this summer, in part because there were so many purges in the PLA. Some people saw that as a potential sign of weakness. Some argued that Xi was somehow losing his grip on the military.

But as we make clear in the piece, I’m skeptical of that argument. From practically day one of Xi’s tenure in office, he has been laser-focused on ensuring that the PLA is under his thumb. The anti-corruption campaign has been an important tool – there are genuine reasons he wants to pursue anti-corruption, but there’s an important instrumental purpose. It’s the key lever of power, and it’s been very clear from the outset that he wants to subordinate them to himself.

The second aspect that I added in a separate piece is that it’s also a question of who’s been purged from the PLA so far. My very rough heuristic for understanding the people in Xi’s network is that it’s a two-tiered structure. If Xi is the center of his own political solar system, there are two echelons to it. There are the people who are inside the asteroid belt – most of the Politburo Standing Committee. On the military side, I’d include people like Zhang Youxia (张又侠), where it’s not just that they’ve crossed paths in their careers. There’s an affinity that goes all the way back to their fathers, who both served in the Fourth Field Army in China’s Civil War together. You see that in Joseph Torigian’s excellent biography of Xi Zhongxun.

For others who’ve been removed, like Li Shangfu (李尚福), the former Defense Minister, or He Weidong (何卫东)), there might be some personal nexus – maybe they crossed paths. There’s this school of thought that if you were in the 31st Group Army in what used to be the Nanjing Military Region and you crossed paths with Xi, that could accelerate your career. But from my perspective, these guys are disposable. Xi can make them and he can break them. His ability to do that only enhances his authority rather than diminishes it.

Jordan Schneider: Generals being disposable was not really a thing for most of Chinese history. Generals had a ton of staying power in Mao’s China. But fascinatingly, instead of doing the pussyfooting around with purges in the PLA that you saw post-Mao, as you very colorfully point out, he went after the monkeys instead of the chickens in his first few years. How does that reform push relate to his broader priorities? And why are we still seeing this 15 years later?

Jon Czin: There are several reasons. When Xi got back to Beijing– keep in mind, it was the first time he was back in Beijing since serving as mìshū (秘书) (secretary) for Minister of National Defense Geng Biao (耿飚) back in the early ’80s – he was frankly appalled by the extent of corruption inside the PLA. The Arab Spring only accentuated that anxiety that corruption was rife. The Xu Caihou (徐才厚) case was all about pay-for-promotion. You can’t build a competent organization if people are getting promoted because they’re greasing palms. That’s a very real concern for him.

Part of Xi’s heritage as a princeling is that he understands how important and central the PLA is to political power. It’s the opposite of the approach previous Chinese leaders took, especially in the post-Deng era, where the military, because of its insularity, was the last place they were able to shore up their political position. Xi said, “This is going to be the place that I start, because if I can figure this out – it’s high risk, but high reward – I will dominate the system because I will have subordinated the PLA to my will.”

Another reason that’s less instrumental and more about policy is that the PLA reforms we saw in that 2015-2016 period were really a centerpiece of Xi’s reform agenda. Especially in the post-Mao era, we tend to see economic reforms as the locus where senior leaders want to focus their political firepower. But for Xi, it was really those military reforms. The system was overdue for a correction. They had a very antiquated command structure and it only became more cumbersome over time. It’s about getting it under his thumb, but there’s also a real substantive policy reason why he wanted to do it. There’s also a compounding effect, because the fact he was able to shake up the high command and streamline it only further enhanced his authority and power over it.

Jordan Schneider: Once you’re the king, you can mess with these poor little nobles all you want, because at the end of the day, it’s your kingdom. Being able to establish that as early as he did seems more reflective of confidence than worry about an internal coup.

Jon Czin: Exactly. By going after Xu Caihou and Guo Boxiong (郭伯雄), the guys who would have signed off on every general officer promotion – it’s very risky. To use the mafia analogy, it’s like going after made men and living to tell about it. It’s a decapitation move. You’re going to cut off the head of the network instead of the usual approach of nibbling around the edges and going after people’s pawns or protégés on this political chessboard. By doing that, you send a powerful signal to everybody else in the PLA to be on notice, because they all would have owed their promotions at some level to Xu Caihou, even if they didn’t have a direct nexus with him. Just by doing that and doing it with impunity, instantly people are terrified and Xi gets a lot of wasta inside the system.

Jordan Schneider: I want to come back to 2011-2013. Are you more scared of the Arab Spring – remembering that the PLA did not jump to attention in 1989? Or are you more scared of generals not liking the way you’re treating them and their subordinates and their bureaucracies, and being worried about an internal uprising or coup? It’s clear that Xi chose Route A instead of Route B. To what extent do you think that was a choice that was baked in or something from his personal background or just a sign of the times in that moment? Maybe it comes back to a broader question: to what extent was a centralizing leader in 2012 something that the Party was inevitably going to produce versus one who was going to continue to play by the Deng-era rules?

Jon Czin: Yeah, this is the theory – if Xi didn’t exist, he would have to be invented. I tend to think that Xi had an opportunity. There was a sense of malaise in the Party at the end of the Hu Jintao era. The leadership was adrift, and people, even inside the system, were calling this a lost decade and saying that Hu Jintao and Wen Jiabao were basically living off borrowed time and the vigor and reform efforts of Zhu Rongji (朱镕基) and Jiang Zemin from the previous administration.

From my perspective, though, to pursue that line of thought is to deny Xi his unique agency. There was an opening. There was an appetite for greater central control. There was a sense of drift in the Party, but Xi took a crowbar to that opening. The people who backed him in the system didn’t necessarily think that they were going to be the ones who ended up getting hit in the head with the crowbar in some instances. That was always going to be his impulse.

Part of the impulse inside the system is that power in that system tends to be monistic anyway. There’s a tendency for it to centralize. Alice Miller, citing Aristotle, has a great line about this in a very old issue of China Leadership Monitor from 20 years ago, where she talks about how oligarchies are subject to both centripetal forces and centrifugal forces. The natural correction when you start to see this drift, like we saw in the Hu Jintao era, is for the centripetal forces to kick back in and try to say, “No, we need to get our act together. We need a leader who can pull us together.”

Xi was very adept in how he did this. This has always been my mental model of how he operates and the way he was able to centralize control. Because he’s a princeling and he has these networks throughout the system that he was born with, the way Xi approaches the political networks inside the CCP is like – if an electrician comes to my house and I took back the wall and started messing around with the wires, or if Hu Jintao started to do that, even though he’s an engineer, we’d probably get electrocuted. But Xi knows which wires he can touch and which ones he can cut safely and which ones are going to zap him.

Jordan Schneider: Were there ever any wires that could have zapped him at any point?

Jon Czin: Going after people like Zhou Yongkang (周永康), Xu Caihou, Guo Boxiong – that was dangerous. It looks obvious in retrospect, but at the time, if you’re Xi Jinping and you’re a brand new leader just getting up to speed, this is really dangerous. There could have been some meaningful backlash. Part of the art of what he did – maybe it made it a little bit easier by going after elders and people who had already retired from the system, and their links were somewhat attenuated at that point. It also made it more gratuitous. I remember some people saying at the time, “Well, why would he go after these people? They’re already retired. Why not just neutralize them and let them die a quiet death or live a quiet retirement?” But you’re going after the guys in the system with the guns. It’s as simple as that. That’s going to be challenging in that system.

Jordan Schneider: The other thing that he did so smartly was to do it right away. It’s like the idea of the President’s first hundred days. You can undermine or wait out a guy who’s got a year left, two years left, but eight or nine years? For everyone else in the system who’s seeing this battle – who are you going to side with? What’s the better bet? If you don’t have time on your side and you see this actor who’s moving with real agency, who’s young and vigorous, who just beat out other competitors. We already saw Bo get put aside. His ability to push rivals into jails is something that has been demonstrated once in a very spectacular way. For him not to allow anyone to start complaining or build up a rap sheet against him, for the first moves to be these anti-corruption moves – that probably really helped.

Jon Czin: That’s right. It was a blitzkrieg – speed was definitely one of his big advantages. By going after the retired guys, if you’re a mid-ranking officer or even a relatively senior officer, which horse are you going to back? The guy who just retired or the guy who’s going to be making all the decisions for the next 10 – now we’re going into 20 – years? That changes everybody else’s calculus throughout the system.

Red and Expert in the PLA

Jordan Schneider: Let’s talk about the dynamics of red versus expert in the PLA, what Xi saw, and how he’s tried to shape it over the past 10 years.

Jon Czin: He’s definitely put more emphasis explicitly on the red part of this. What’s really interesting is that there’s this casual notion that the PLA over the last 20 years has been professionalizing. I talk about this in the piece, but that’s not quite right. There was maybe an incipient tendency in that direction during the Hu Jintao era, that because they were becoming more proficient, they were modernizing. But from the Party’s perspective, they don’t want a professional PLA in the sense that Samuel Huntington would have called it – apolitical and politically neutral.

You can see that on the pages of Jiefangjun Bao (解放军报 PLA Daily) on a regular basis where Xi excoriates this idea and reminds them: “You are the armed wing of the Chinese Communist Party. That is mission number one, two, and three.” You could even see that earlier in his tenure. You would see signs of a backlash against the idea of having a state military. We wouldn’t see the debate or the advocates saying we need a state military, a national military rather than a Party one, but we would see the backlash – which suggests to me there was some debate percolating at that point that Xi very much wants to squash.

He wants them to be red. That is paramount to him. But he hasn’t gone light on the expertise necessarily. It’s not like the guys that he’s elevated to these positions lack the competence or the wherewithal, even if they’ve gotten helicopter promotions. One of the things that’s very much on Xi’s mind is the fact that the PLA hasn’t been to war since its war with Vietnam in the late ’70s and then maybe some skirmishes throughout the ’80s. It hasn’t seen blood, it hasn’t been shot at in anger. Given how small the pool is of people with that experience, there are people in the high command who were involved in that fighting, and Xi’s put a premium on that.

Jordan Schneider: Aren’t there two guys who were majors in 1979 and who’ve stuck around past age 67?

Jon Czin: Yeah, that’s right. Xi likes that. He wants somebody who’s been shot at, who has seen blood in the field. Now that I think about it, it comports with Joseph Torigian’s biography of Xi’s father and what it means for Xi’s own mindset. Xi likes people who suffered a little bit, who’ve been hardened, who’ve been tempered. He doesn’t want somebody who’s only known ease and glory and prosperity.

Jordan Schneider: Talk about the idea of a political versus apolitical military.

Jon Czin: There is a real difference, and it can feel a little abstract sometimes. In our own system, for instance, we have a long tradition of having an apolitical military – one that doesn’t insert itself into politics. In addition to that long-standing culture, you also have various layers of mechanisms to ensure civilian control of the military. You have civilians who populate the Office of the Secretary of Defense who have to sign off on things. We obviously have a civilian Secretary of Defense. China has none of that. That’s a really stark difference. They don’t have the same kind of checks and acculturation to ensure political neutrality and to ensure that the Party doesn’t get involved in politics.

But it’s also not part of their self-conception. Part of the PLA’s conception in its own mind is that they are the ones that conquered China for the Chinese Communist Party. Especially for the ground forces, that is their history and that is their legacy. One pithier way to bring this home for listeners: imagine this would almost be like if there were an armed wing of the Republican Party or the Democratic Party, and they come to power and that’s who becomes the armed forces. They are loyal to them and their job is to keep them in power. That is the PLA’s original raison d’être. That is an important facet that is core to its being.

Jordan Schneider: The argument you’re making, which is interesting, is that in the early years when Xi showed up to Beijing, he didn’t necessarily see that red energy, but saw an organization which was entirely a self-contained institution that was professionalizing. It was more like 1870s Germany than this bleeding red mechanism.

Jon Czin: That’s right. They were more preoccupied with operational proficiency, building out their navy, maybe even acquiring overseas military access – the big flashy stuff – rather than with long sessions of indoctrination in Marxist ideological tenets. It’s important to keep in mind that in any system, even in a highly professional one, by design the military is a relatively insular institution. There’s a reason people in Washington call the Pentagon the puzzle palace. It’s very technologically advanced, it’s got its own culture, its own intricate layers of bureaucracy and personal networks. That’s true of any military.

But if you’re talking about the PLA, the only real meaningful bridge from the civilian side of the Party to the military is Xi Jinping himself. You might have some contact or exposure as a provincial official – maybe there are mobilization exercises and you might have some contact – but really that nexus with the PLA, because it’s so politically salient, is so closely guarded. That’s why there are no other civilians on the Central Military Commission. Even when Xi is hanging out with the Central Military Commission or the PLA, he’s in a uniform, he’s not in civilian garb.

Jordan Schneider: I love this line where you say that Xi hauled the entire high command to historic revolutionary sites where Mao institutionalized the Party’s control of the military. You wrote this before the Quantico shenanigans over the past few weeks…

Jon Czin: I originally said “schlep,” but the editors took it out and made me say “hauled.”

Jordan Schneider: This is why you don’t write for Foreign Affairs and you write for ChinaTalk instead.

Xi’s Taiwan Playbook

Jordan Schneider: Let’s talk Taiwan. You make this argument that Xi’s had a lot of success in power consolidation, corruption fighting, and PLA modernization. The economy? TBD. But also, does he really care all that much? It seems like second or third priority for him. But with Taiwan, which is clearly something he cares about deeply, we haven’t seen much momentum towards a solution that he would be proud to have written in the history books next to his time as party chairman. Let’s reflect on the past decade-plus of Xi Taiwan policy and how it could potentially evolve into a fourth term and a post-2028 election.

Jon Czin: That’s a great point. In my mind, what really stands out is that if you rewind to a decade ago, Xi’s Taiwan policy, following from the Hu Jintao policy, was actually bearing some fruit. The big culminating event would have been 10 years ago when Xi Jinping shook hands with then-Taiwan President Ma Ying-jeou in Singapore. That would have been the first time you had a meeting like that between the head of the CCP and the head of the ROC since the Marshall Mission in 1946 when Mao met with Chiang Kai-shek. For Xi, he loves that kind of historical precedent. But it also ended up being a high-water mark for his Taiwan policy. Of course, he’s had to deal with Tsai Ing-wen and the DPP ever since then, pretty much.

Going into the last election on Taiwan in early 2024, I was worried that Xi and those around him were going to realize, frankly, the intellectual bankruptcy that’s been at the core of their Taiwan policy. What you’ve had over a longer trajectory – initially going back to Hu Jintao – was a softer approach, a very Marxian approach. The line of thinking was that if we change the economic structure, the political superstructure will change. As China’s economic clout grows and economic ties with Taiwan become closer, Taiwan’s just eventually going to come into China’s orbit. It’s going to fall like an apple off a tree into their growing gravity.

After the election of Tsai, you see a clear pivot from Xi towards a more coercive approach. But that hasn’t really been working. What they’ve done in Hong Kong, as everyone knows, has only further alienated Taiwan. It seems like politically the island has actually only gotten further away from the mainland. Where does that leave Xi and his strategy?

During the election in 2024, there was probably a real alignment between China’s outside voice and inside voice in the sense that they were relieved that the KMT won in the LY (Legislative Yuan). They were saying publicly afterwards, “The fact that the KMT has won in the LY election shows that most people don’t support the DPP and its pro-independence policies, yada yada.” But that’s also how they soothed themselves that night, saying, “It’s okay, our policy is still viable, we don’t need to do a fundamental rethink yet at this point.” It keeps hope alive.

Frankly, the failure of the DPP’s recall campaign this summer probably gives Beijing a bit more consolation – maybe they don’t have to really think about this. But what if the DPP did have a full sweep in 2024? Where does that leave Xi? Does he start to get antsy? That’s part of what I worry about, and I argue this in the China Leadership Monitor piece: what happens when Xi gets to his fourth term and he’s staring down the barrel of 80? If the DPP is still in power, does he have to have a deeper rethink?

He’s shown a proclivity throughout his career that when he gets frustrated, he does something to try to shake up the dynamic. As we saw in Hong Kong, he’s not just content to let things stay on cruise control if he doesn’t think it’s going in the right direction. That doesn’t necessarily mean he’s going to all of a sudden have an appetite for the million man swim after 2028. But you could see him giving a long and hard look at some of those more coercive options that people talk about in Washington.

Jordan Schneider: Yeah. The idea of him all of a sudden, overnight turning into Putin seems a little far-fetched with the track record that we have of over a decade of him not just straight up invading countries.

Jon Czin: That’s right. In some ways, Putin is obviously an important partner for him, but he’s also a useful foil for him. Xi has a much greater appetite for risk than others in the Chinese system, e.g., a Hu Jintao or Jiang Zemin. But that’s, in the big scheme of things, that’s a low bar to clear. He doesn’t have that same penchant for outright violence and risk-taking that Putin has. He’s much cagier and much more methodical in how he goes about taking risks. It’s not that he doesn’t take them, but they’re much more calculated risks than gambling on the roulette table.

Jordan Schneider: Jon, often in conversations I have, people don’t start with domestic Taiwanese politics or Xi end-of-life thinking, but they start with this idea of the Silicon Shield. Where do you put the availability of access to Taiwanese chips or the broader economic fallout that an escalation could impose in the calculus?

Jon Czin: No pun intended, I would decouple the two. The chips and TSMC actually rank very low on Xi’s priorities when it comes to this. Even though he’s got this techno-industrial fetish, he has enough confidence that China will figure it out over time. If he made the decision to go for Taiwan, he’d scuttle it. He’d do what he needed to take the island, and it wouldn’t factor very high in his considerations.

That’s separate from the broader economic fallout. The kind of cataclysm that could produce is very much on his mind and really gives him real pause. The way I think about it is that if he were to go for some full-scale invasion, he’s basically gambling not just with his legacy, but with everything that the Party has achieved since the death of Mao – all the progress it’s made, all that it’s built up. It could really damage or undo the Party’s legitimacy. He feels like if he’s going to go in, he wants that level of surety because it’s really putting all the chips on the table. He’d rather not do that.

What he’d rather do in the meantime, with a coercive approach, is to demoralize Taiwan over time, keep up the drumbeat of pressure, and hope that it starts to cause the foundations of Taiwan’s polity to crumble over time. He doesn’t necessarily want to go for the blunt force trauma first. That’s the optional last resort, given the costs.

Jordan Schneider: The irony of all of this is that if China evolves in a different direction, this all of a sudden becomes a lot more appetizing. The carrots that have been placed in front of Taiwan since the death of Mao have not been that compelling. The early ’80s was the height of this discussion when we had the most liberal version of domestic China. For it to ever really happen in a happy way, that’s really the development we’re going to have to see. But coercion into this just does not seem like a viable strategy.

Jon Czin: It’s interesting because you make that point about in the early ’80s when this was really a real possibility. Again, Joseph’s biography has been on my mind all year after reading it this summer, because it’s so good. Who would have been the person in the central leadership secretariat with the most experience dealing with Taiwan and the KMT and doing united front work? It was Xi’s old man, Xi Zhongxun.

That gets to another important facet of this. If you poke around in the open source material, it’s not clear who has Xi Jinping’s ear on Taiwan policy. There’s not somebody like a Liu He (刘鹤) you can point to and say, “This guy’s very influential with him.” A lot of that is because, again, he’s a princeling and Xi Zhongxun’s son in particular. He thinks that he’s got his own best handle on this issue because he understands this idea almost genealogically. Who knows how much they ended up discussing it? But if you pair that with his own career trajectory as well...

Jordan Schneider: And Xiamen, right? He dealt with this stuff.

Jon Czin: He dealt with this stuff in Xiamen and Fujian and Zhejiang. He would have been vice governor during the Taiwan crisis in the ’90s. He would have had a front-row seat to this whole dynamic for the previous 30 years. My suspicion about this is that rightly or wrongly, he has a lot of self-assurance on this particular set of issues. That’s why we haven’t seen somebody as his obvious consigliere on this in particular.

Succession Without a Script

Jordan Schneider: Let’s talk cognitive decline. The actuarial tables give us a 3% chance a year of a dramatic stroke or him dying, and that steadily creeps up to 3.2%, 3.5%.

But there’s also: “the guy gets old” and even if he’s still around and can be on for five, six hours a day – we’re already seeing him dialing it back with this Li Qiang dynamic where Xi’s doing less international travel, meeting with less of the Prime Minister of Swaziland, etc. Setting aside a stroke or some very dramatic thing where he’s out of commission, what are the different pathways to think of Chinese politics over the next five or ten years if he’s just slowly losing his edge over time?

Jon Czin: There are the actuarial tables, but as I note in the CLM piece, there’s also just common sense observation. This is a guy who’s now in his 70s. He’s obviously overweight and a smoker – maybe former smoker. He’s been doing this impossible job of governing the world’s largest country for the last dozen or so years. He’s got to be tired. That just takes a toll on him. He’s living in this highly fractious political environment where he’s doing things like purging people on a regular basis. He senses threats even when there might not be any. That is just emotionally exhausting. If you’re living in that environment your whole life, and then you’re the king and you’ve got to deal with this on a daily basis to make sure you’re on your A game, in and of itself…

Jordan Schneider: Maybe it works the other way too. Is this just what gets him out of bed every day? Mao always wanted to be a poet at some level, right? And that’s what he got to do during his repose as emperor starting in the ’60s and ’70s. I mean, Xi lives for this. This is what gets him out of bed every day, I’m sure.

Jon Czin: You’re probably right. It’s like a shark – he’s got to stay in motion. Without the game, he would wither. That’s probably a real possibility for a guy like him. You’re right about Mao too. Mao became a poet, but to everybody’s detriment, because now we’re left with this Delphic model of leadership where people go to him and they’re like, “Okay, I talked to the boss, but what does he really want us to do?”

That becomes one of the dangers as Xi ages. People talk about the succession question, but this is going to be one of the real conundrums. Number one, does he name a successor? I don’t think he will until he gets into his fourth term. But then the perennial challenge is always, you’ve got to build your successor up enough that he can stand on his own two feet once you’re gone, but not so much that you feel like they become a threat to you. Even if he does start that process of building up an heir, does that mean he in some ways moves to the second line and you end up with this more fractious political environment, like we saw in the Mao era, where he’s just giving oblique or unclear guidance, and then people are running with that until they run afoul of the line? That becomes a much more precarious political dynamic.

What does Xi think about it? But then what do people around him start to think? They can observe the boss even at a distance. They can do the math and realize that this guy is just getting older. At some point he’s going to have to deal with this question, especially since by the end of his fourth term in office, he’d be 79 pushing 80. It’ll shape the political jockeying that happens around him as people try to ingratiate themselves. “Maybe I could be the heir apparent, or maybe my protégé could become the heir apparent, and I could be some kind of party grandee.”

Big picture, there are two ways for this movie to play out. It’s either going to look like Death of Stalin where the military is going to be involved, where it’s potentially punctuated by violence or a nominal heir apparent being displaced. Or it’s going to be like the movie Conclave – where there is a lot of subterfuge and backstabbing, but it all happens quietly and much more subtly offstage. All anybody sees at the end is the black smoke emanating from the chimney.

Jordan Schneider: Speaking of Xi leaning into the late Deng model or the Mao model, unless health really puts him on his back foot – being Deng and having to fire Zhao Ziyang and having to fire Hu Yaobang – that’s not something that must excite him. The fact that he has two historical examples of this going really badly, plus the fact that we have this whole cult of personality. He likes a lot of this job. He surely thinks he is absolutely indispensable to the future of the Party. There’s so much of him which is going to just try to push off dealing with this whole succession thing. Him moving to the second line strikes me as a very low probability event absent real health issues.

Jon Czin: Yeah, that’s a very fair point. He would be disinclined to do that unless he really feels himself slowing down. Deng and Mao each had to run through three successors before they ultimately landed on somebody who stuck, but not really, even in the case of Hua Guofeng. As a princeling. Xi’s got to be cognizant of that at some level. He undid the old model that Deng put in place where China had figured out some peaceful way to transfer power, even if it was rocky or imperfect. He’s blown up that old system. But he’s got to figure this out at some point. As I say in the paper, he’s created a Henry VIII problem for himself. Whereas Henry VIII spent his whole life obsessed with who was going to succeed him, Xi has done the opposite. He’s tried to procrastinate as much as possible about this question and at the same time, destroy the old way of doing it.

Jordan Schneider: As you point out, the potential successors who don’t have real PLA connections, like Hua and Zhao and Hu – they don’t stick around because some other Party person is going to have that connection. The fact that he is just not letting that develop at all is going to make it really hard for whoever else shows up to stick.

Jon Czin: Yeah, that’s exactly right. Xi had a leg up even though he had relatively thin military credentials. What did he have? He had three years as a mishu to Geng Biao in the late ’70s, early ’80s, he had Peng Liyuan, his wife, and maybe some peripheral exposure during his time in the provinces. In the post-Deng leadership, his princeling connections put him head and shoulders above Li Keqiang or anybody else from his generation. It’s the old line: “ in the land of the blind, the one-eyed man is king.” That’s Xi Jinping. He may not have been Deng when he started, but his colleagues weren’t Chen Yun and Yang Shangkun and other guys who were powerful in their own right.

One other aspect of this that’s really interesting in terms of how the succession plays out: there’s a big difference between Xi getting one or two chances to orchestrate his own succession and dub his own heir versus him just dropping dead tomorrow. They’re both going to be fraught and pretty rocky. But in terms of who gets top billing, how this all plays out – that will be very consequential going forward.

Jordan Schneider: Please elaborate.

Jon Czin: Okay, let’s go with the “he drops dead tomorrow” playbook. What happens then? It’s unclear. Some people don’t appreciate the fact that there is no line of succession in Chinese politics like we have in the United States. It’s not like you go from the president to the vice president to the speaker of the House. There’s nothing like that that’s codified. In fact, for most of Xi’s tenure, the vice president is a sinecure for an otherwise retired official. They’re not even on the Politburo Standing Committee. It really throws open the door to who gets the ring.

If I had to take a guess, the person who would seem potentially most well-positioned to do that would be Cai Qi (蔡奇). He holds so many of the key portfolios in the Party. He’s running the General Office from the Politburo Standing Committee, which, by the way, is the job that Stalin had under Lenin and became the General Secretary position eventually. Cai is also on the National Security Commission, giving him another leg up because of the link to the PLA. Unlike other members of the Politburo Standing Committee, it gives him an excuse to engage with those other power ministries – with the security services and the PLA. The downside for a guy like Cai Qi, if I think about this, is that could also make him the guy who has a target on his back right away.

If I can deduce this all the way from Washington, surely his colleagues in Zhongnanhai can figure this out too. I think of the Death of Stalin scenario. Does he become like Beria, the guy that everybody else decides to gang up on? He obviously doesn’t have the same kind of stigma that Beria had, but...

Jordan Schneider: He hasn’t killed everyone’s aunts and uncles.

Jon Czin: Yeah, exactly. He doesn’t have that kind of hideous reputation, and he’s not the source of resentment in the same way. But it’s possible everybody else gangs up on him and then they decide among themselves who should get the ring. My suspicion is that they will probably be able to figure this out, though. This has been a limiting factor even in a crisis like Tiananmen. As fraught as that was for the leadership, they still have a sense that this needs to be bounded. Because if this gets out of control and leaves the corridors of power, and you had people doing what Zhao Ziyang did and reaching out to constituencies and the public, then things could really unravel.

Especially for these guys that are like what Jiang Zemin was in 1989, where they don’t have a power base of their own necessarily – they are mindful of that as well. They need to preserve the system and figure this out. So there’ll be conflict, but it’ll probably be bounded in some ways, would be my guess.

Jordan Schneider: Like the hang together versus hang separately.

Jon Czin: Yeah, exactly. But it’s totally different if he has an opportunity to start to groom somebody.

Jordan Schneider: Let’s tease out that scenario.

Jon Czin: If he has the chance to groom somebody, maybe that person sticks, but it’s just then the main question is going to be a function of time.

Jordan Schneider: Let’s stay on this for a second. Where is he even getting data points about 50-somethings? Is he having dinner with these people? He’s getting reports on their mayoral performance? It’s a hard information problem because he doesn’t have personal relationships with the people who aren’t in his age cohort.

Jon Czin: Yeah, bingo. This is the downside of Xi having populated the whole Politburo Standing Committee with his old buddies. I’ve jokingly called this Xi’s frat house. Can you imagine walking into a meeting of the Politburo Standing Committee where you’re the boss and you look around the table and with the exception of Huang Kunming (黄坤明), you’ve known all these guys for 30, 40 years?

Jordan Schneider: Yeah. Weird.

Jon Czin: Yeah. That’s got to be very comfortable for him.

Jordan Schneider: It’s interesting because usually presidents have one of those guys or two of those guys. But then everyone else is from the professional class. We’re going to have Bobby Kennedy, but then we’re going to have 10 other pros.

Jon Czin: It’s got to be very comfortable for him in some ways. If he does abide by the informal term limits – the “seven up, eight down” rule, which he actually has for the most part (he’s made some exceptions, like with Zhang Youxia and others, and he could make more exceptions, but in ones and twos) – that means that a lot of those guys on the Politburo Standing Committee who he has those deep relationships with are going to have to go at the next Party Congress. Then what is he going to have to rely on? It’s going to be his protégés’ protégés, or what I like to call his friends’ friends. Not necessarily the people who are truly in his own inner circle.

It’s a great question – how does he get information about them? The people who are in Xi’s orbit, even the ones who are inside the asteroid belt, my suspicion is that they don’t all necessarily like each other. If you look at their backgrounds and where Xi connected with them, he collected these guys at different points in his career. They don’t all necessarily like each other. This is why it’s so important that people around him will start thinking about the succession process even if Xi doesn’t. All those people who are in that inner circle, would start thinking about how to position their own protégés to ingratiate themselves with Xi so that somebody from their network is the person who ultimately gets the nod rather than somebody else. That creates a much more frothy and fraught political environment in Beijing, even more so than what we’ve seen already in this third term.

Jordan Schneider: You’d almost rather have six people in their 50s show up as opposed to just one person in their 50s show up. Because then there’s just this whole weird dynamic, succession drama. “Okay, I got to purge this guy.” If we’re thinking on a 10-year horizon and we’re going to do this two more times. Then yeah, let’s have these people hang around for a little while and...

Jon Czin: You’re planning to live to 150 so you’re squarely middle-aged at 75.

Jordan Schneider: The thing is, does only he get to live to 150 or does the frat house also get the quantum livers and what have you?

Jon Czin: It probably depends. If you stay in his good graces, you still get the magic serum.

There’s another conundrum. Maybe he would want to pick somebody who’s from that inner orbit to be an heir apparent, somebody that he could trust, somebody that could carry on his legacy. But the problem is, you can’t trust anyone.

Trust falls are not part of the CCP indoctrination system, I don’t think. Also, to the extent that these are people you trust and would think about handing the mantle to, they’re also old. What’s the benefit of handing the mantle over to somebody who’s just five years younger than you and could also have similar health problems and people could also be eyeing him as well? You’re going to want somebody that’s a lot younger, and for Xi, they’re going to look like whippersnappers to him.

Jordan Schneider: For those people in their 50s, there’s this very interesting dance where they have to look good but not too good because you can’t overshadow the guy or you can’t have too many new ideas. Just the fact that we have this ideological Xi Jinping Thought cage around all these folks means that their ability both to distinguish themselves as the most capable of their age cohort is limited. But then, you have to make sure this guy doesn’t think you’re too handsome and vigorous and popular. There’s some golden mean there.

Jon Czin: Yeah. It’s the old line, “the nail that sticks up ends up getting hammered down.” That’s the name of the game for their system. It’s exactly the needle that Xi threaded. People forget this because it feels almost like ancient history at this point, but Xi went into Shanghai as Party Secretary after becoming the heir apparent at a time where they had just gone through a major corruption scandal. Under Hu Jintao, the then-Party Secretary Chen Liangyu (陈良宇) had thumbed his nose at the leadership. Hu Jintao, for the first time or the only time I can think of in his tenure, mustered himself to go after this guy and topple him from the Politburo.

Xi trod very lightly in Shanghai. It was Scylla and Charybdis for him. He had to do enough to show that he was serious about anti-corruption, but not so much that he started to piss off the wrong people and jeopardize his own chances. It was a hot potato to take that job and pull that off. It’s such a striking contrast with what we were talking about earlier about once he came into power and how hard he went after everyone once he had the ring.

The other point I wanted to make too, Jordan, is going back to the summer with the coup rumors, but the tacit assumption of that is that it’s going to be Xi Jinping versus some other constituency in the Party. From my perspective, that moment passed a long time ago. If there was going to be a backlash against him, it would have had to materialize much earlier – when he was going after the monkeys instead of the chickens during that first term and he was taking down a lot of these made men. Once he did that, it became much harder for other people in the system to conspire against him and marshal their forces. It’s almost like a bad game theory problem. If I reach out to you to depose the boss, you have every incentive to sell me out to the boss and ingratiate yourself and further climb up.

This is part of what I’m trying to argue in the piece. The real dynamic now is not about Xi versus some other constituency. I hesitate to reach for the Mao era analogy, but it’s almost like the Mao era in the sense that they’re all Xi Jinping acolytes, but the fractiousness is going to be among each other as they try to muscle out their rivals for positions and promotions and for the sake of their own network. That is going to be the really crucial dynamic in the next 5 to 7 years. Not Xi versus some antipode in the system because he’s eviscerated all those possibilities. It’s going to be among his own people.

The American Dimension

Jordan Schneider: I’m proud of us for doing an actual, quote-unquote, traditional ChinaTalk episode. We haven’t really mentioned America in our first whole hour, but I do want to talk about what agency, if any, America and Western allies have on these internal succession dynamics.

Jon Czin: For the most part, very, very little. Never mind having an impact on them. It’s very hard for a lot of people even to see into and to get a sense of what’s going on inside the system. We are not a big factor. To the extent that we are, it’s not necessarily in the foreground, but we’re seen almost in these very Leninist terms as a structural force of history – as the avatar of late finance capitalism. We’re declining, we’re dangerous, and we’re very powerful, and you’re going to need a leader who’s got the stomach and the wherewithal to deal effectively with the United States and who is strong enough to shepherd China for the next phase of what Xi likes to call the “new era.” But outside of that, on a more tactical basis, day to day, it doesn’t play a large role for these internecine politics.

In the past, as an American policymaker, there’s this notion that you want to try to cultivate some kind of relationship with key people inside the political system. But what’s counterintuitive is that having that nexus actually makes it much harder for that person to ascend the ranks. It’s baggage. That makes them vulnerable to criticism that they’re too sympathetic or too cozy with the United States.

Jordan Schneider: And you only got promoted because of your CIA bribe. There’s a kiss of death. It’s the mirror-image of America funding the NGOs in Russia.

Jon Czin: Yeah, exactly. It’s like, “Hey, you were really smiling in that photo op in the Great Hall of the People. That was like two degrees too much smiling.”

Jordan Schneider: Speaking of standing up to American imperialism, Liberation Day was followed by retaliatory tariffs and a rare earths ban. This is potentially the most dramatic Chinese coercive move against the US that we’ve seen since their support for Ho Chi Minh. It’s a very dramatic disjuncture from what you saw in Trump 1 or in Biden, where Trump’s trade war seemed to be just, “All right, we’re going to keep this with the trade war things and some stuff will get more expensive, whatever.” But if I was Xi, I think I’d be taking the lesson of the impact that the rare earths controls had on getting the Trump administration to really rethink their Chinese economic and broader policy to heart. What’s your read on them deciding to push back at the beginning of Trump 2?

Jon Czin: The way you contextualize it is right. In the first Trump administration, during the first trade war, it was almost palpable that Xi and his lieutenants were groping around for some adequate countermeasure to the initial tranche of tariffs. My operating model for how they were behaving at the time was they wanted countermeasures, and the paradigm was “no escalation, no concessions.” They wanted to do enough to show that they were pushing back, but at the same time, try to make as few meaningful concessions as possible.

From my view on the inside during the Biden administration, I was really struck by how little pushback we got for a lot of our competitive actions. I was involved in planning for President Biden’s first in-person meeting with Xi Jinping in November 2022. Just a month before that was when we dropped the first big export controls. The reaction was very muted – they kvetched, but not that much. They didn’t really do anything for a long time. Even with the subsequent efforts to tighten those export controls and plug some of the gaps, you didn’t really see much movement from the Chinese side or much in the way of a response, which was really striking. Maybe not until summer of 2023, but even then they were relatively restrained.

Jordan Schneider: Let’s stay on that diagnosis here. Do you think they were surprised? They didn’t listen to ChinaTalk, didn’t realize how big a deal it was? Did they just think they could build the chips on their own? What’s your analysis of what the Biden administration did right in boiling the frog?

Jon Czin: It was clearly the lack of access to ChinaTalk first and foremost. But the other factors – one is that we were very focused on our competitive actions, but we did have this parallel track of diplomacy. We were managing the competition, to use the phrase that was getting thrown around at the time. Those diplomatic engagements helped offset the pressure that would accrue from pursuing these competitive actions against China.

They were also surprised, especially with the initial tranche that came out. It took them a while to figure out how exactly they wanted to respond. But having that regular cadence of high-level diplomatic engagements made it hard for them to say, “Well, now is the time for us to retaliate.” It constrains them in some ways because when you have those meetings, they’re by definition positive meetings. They backstop whatever it is that you’re pursuing or put a limit on how harsh the response might be. When you got to Trade War 2.0 and Liberation Day, we didn’t have that. We didn’t have that diplomacy to backstop it.

Jordan Schneider: I want to stay on 2022 for a second. What was your experience with the Pelosi visit, Taiwan missiles – how was that experience for you, Jon? Everything you wanted and more from government service?

Jon Czin: Yeah, I got three years of government service in a single year. That was a remarkable year in so many ways. If you rewind, you go back to February 2022 – Russia invades Ukraine. Shortly after we had the engagement between National Security Advisor Jake Sullivan and Yang Jiechi in Rome. That was a very intense period and I disappeared into a giant vortex for a period of time. I went back to work in the new year and I basically disappeared. When I came out on the other side of that, after Jake had met with Yang Jiechi and President Biden did his phone call at the end of that week with Xi Jinping, it was springtime and flowers were blooming in my backyard, and I hadn’t seen any of that happening in the preceding several months.

The other moment that year that was really crucial, that was really punctuated by a high point of tensions, was the Pelosi visit to Taiwan. That was incredibly intense. I basically disappeared that summer and did not see my family – sent them on vacation on their own and just moved into the office.

Jordan Schneider: What were the dynamics that summer in particular that you were trying to manage?

Jon Czin: It was definitely an anxious period. The key thing was how do you bound this problem set and keep things from getting out of control, especially given the way that Beijing responded. From my perspective, this was a manufactured crisis on Beijing’s part. They chose to react this way. The Trump administration had sent the HHS Secretary but they chose not to lob missiles over Taiwan. We cited the precedent at the time that Newt Gingrich had gone to Taiwan back in the 1990s. There was precedent for this. It’s a separate branch of government. Pelosi was going to go.

Jordan Schneider: But she’s part of the Democratic Party, Jon. Of course, you have agency to tell her what to do.

Jon Czin: And of course, both of our political parties have central discipline inspection commissions that enforce the party’s code? No. That’s the big difference. That’s what you wonder about – where is the breakdown in their system? Because you do have people in the system like the embassy, of course, but even people like Yang Jiechi (杨洁篪), who had been an interpreter on the Chinese side and who was the top foreign policy official during that time. There are pictures of him interpreting for Deng in his meetings with Reagan going back to the ’80s. He clearly has a very finely grained sense of our system and how it operates. But I don’t know if that expertise necessarily percolates all the way up in the system. I don’t know if it was people just not getting it and mirror-imaging and saying, “Yeah, but they’re part of the same party and therefore there’s command and control and this is intentional,” or if it was convenient – this is a way to put pressure on the US and hold them accountable for the choices of Congress. That was a key facet of all of this.

Then, how do you signal that this is not okay? That our objective is to preserve peace and stability in the Taiwan Strait and deter additional Chinese countermeasures that could be even more escalatory. What’s striking is that it was a choice on their part. But if you consider a larger historical arc, after all of the military modernization, as dramatic as it’s been, the response, you could argue, was qualitatively similar to what happened in the 1990s, where they got angry and lobbed missiles over Taiwan.

There were things that they did differently in this go-around. Obviously, they had the capacity to operate on the eastern side of Taiwan and have more of a chokehold than they did in that previous crisis. But it was a similar response, after all is said and done. It’s not clear to me from their perspective what they actually accomplished. I suppose you could argue that it created a new normal in the Taiwan Strait and we’ve seen an uptick in military activity that’s been sustained in the Strait since then.

Jordan Schneider: Yeah. But do you trade that for convincing Biden to put export controls on chips? It’s a tricky calculus.

Jon Czin: It was clear that the technology piece was going to be part of the administration’s policy throughout. The big question was when and how big the scope should be. Even the creation of a separate directorate on the NSC for technology and security policy signaled its importance.

Jordan Schneider: Let’s pick up on the other piece of this. American officials over and over telling China not to give Russia weapons. By the end of the Biden administration, Blinken was saying, “You guys are doing this. We see you.” Then over the past few months, you had even more explicit reporting. Wang Yi (王毅) went to Europe a month or two ago and basically said, “Look, without us, they’d have lost this war already.” Reflections on American agency over that dynamic over the past five years.

Jon Czin: You’ve seen Wang Yi’s talking point from a couple of other Chinese diplomats as well: “No, no, no, we’re not supporting Russia because if we were, they’d be winning this war.”

Jordan Schneider: He said it both ways. He said they would have lost already and they would have won already.

Jon Czin: It’s another great example of saying the quiet part out loud. It was especially surprising coming from Wang Yi, who’s usually otherwise very deft in these engagements, saying, “Yeah, they have to win because if the US is no longer focused on this, then they’re just going to turn towards us, toward China.” Truly saying the quiet part out loud.

But I would say this – we are an important factor in this entente between Russia and China. But what people don’t appreciate is how important this was to Xi, even going back to the start of his tenure. The data point I always point to is that Xi’s first state visit after becoming General Secretary and President was to Moscow to meet with Putin. That was a very clear signal early on that he wanted to put a premium on this relationship. Of course there’s the stat that in the years since then, they’ve met 40-plus times, they’ve called each other best friends. There’s a little bit of a bromance there that may or may not be real, but that’s certainly the image that they want to project.

What the war in Ukraine really did was intensify that dynamic that was already underway. There was already an entente between the two sides. It accelerated and intensified that dynamic. They have gone further and have deepened that relationship. The US is a factor in this. They very much see things through that Kissingerian triangular dynamic, and they want to hug each other close because they see themselves in this longer, tougher competition with the United States. That’s an important factor.

The tactics we use to entice one side away from the other don’t really matter that much because it’s so baked into their worldview. The strategic choice has been made. At this point in the war, from Xi’s perspective, even if there’s grumbling among experts or people in the system about it, he feels like he made the right bet. This was a smart play – back the Russians and keep them in the game and keep them involved in this fight to make sure that Putin doesn’t lose this war.

I don’t think it’s really possible to drive a wedge between the two of them, given how they see a deep alignment of their strategic interests. The best you can do is limit it to the extent possible. Even that is very challenging and quite difficult because you are dealing with two very formidable powers in their own right.

Jordan Schneider: For the record, this was July of 2025. The reporting said that Wang Yi told the European Union’s top diplomat that Beijing didn’t want to see a Russian loss because it feared the US would shift its whole focus to Beijing. Then he said the negative version: Wang rejected the accusation that China was supporting Russia’s war effort, insisting that if it was doing so, the conflict would have ended long ago. I don’t know if he’s right about that.

It’s not necessarily just a materiel thing. There’s also some stochastic element. If Russia’s doing better, then the amount of aid that the West would have given Ukraine would have increased. He’s arrogant here. We’ve seen surges of new Western wonder weapons not do what they’re supposed to do. It also doesn’t seem to be Russia’s problem that they have enough materiel to do their stuff. That’s not really the limiting factor here. What’s your take on that as an analytical assertion?

Jon Czin: It’s wonderful because it’s so impolitic because it puts down the Russians at the same time that it allows China to deny that they’re playing a role. Look, their support has been consequential. There have been other US officials who have said this on the record. It’s real and it’s not trivial. But if you’re playing with the counterfactual – okay, if China supported Russia, but what kind of support would that be?

People forget about this too – because we’ve become accustomed to thinking about China as a global power, yes, China cares about its entente with Russia. Does China care what happens in Ukraine? Not especially. Which is in and of itself a limiting factor. They don’t want to see Putin lose. They have some negative end states they want to avoid. They want to maintain Russia as a strategic partner. But what actually happens in terms of the specifics on the ground? There’s a certain parochialism to how they conduct their foreign policy. It’s like, “How is this going to affect me? Is this going to affect me? You guys figure it out and we will posture as the proponents of peace in the meantime.”

Jordan Schneider: Yeah. The Elbridge Colby-Xi Jinping parallel – there are some nice little lines to draw there. But no, it’s an interesting counterfactual. Are they going to do the North Korean thing of literally sending troops? In no universe would that happen. Then we get to the stocks of old stuff. Would you send old artillery shells? Is that going to win the war for the Russians? I don’t think so. For the more exquisite stuff, China has limited capacity for all their fancy missiles, just like the West does. How much? Even if they wanted to lean in, were they really going to hand over all of their long-range strike capabilities? Are we going to give fighter jets? Are we going to put our economy on a war footing to manufacture 10 or 100x more drones for the Russians to use? Also no. The reasonable ceiling of what even a different leader besides Xi wanted to lean in more was probably just giving them old stuff, which I don’t think would have been decisive over the past three years.

Jon Czin: Yeah, maybe. There are probably a few different ways it could play out. But this idea of putting all the chips on the board was probably not in the cards because it wouldn’t necessarily serve their interest to get directly involved. I had this really funny moment. Joining a think tank, I now participate in all these track-two dialogues with Chinese counterparts. We were talking at one point about this very issue, and it was right after North Korea had sent in its own troops to support Russia’s war. I had a Chinese counterpart, someone who had towed the party line for hours on this issue, lean into me and say, “It’s so stupid. Why would they do that?” This is why you do these things. Because you sit there for hours listening to stuff that you could use ChatGPT to generate, and then you get that one little illuminating nugget that’s really telling about their strategic thinking on this issue.

Jordan Schneider: It’s also illustrative of how seriously we should take the Taiwan war invasion. Because if you really wanted to do something, you would want to test your gear against what NATO is bringing to the table and you would want to have your command and control ecosystem actually do the thing.

Jon Czin: I could see some constituency making a case for that in their system. But yeah, it’s a big step.

Jordan Schneider: It’s a big step. Fair. All right. I took us on a 30-minute detour. We should get back to rare earths.

Jon Czin: You can fix it in the editing and make it linear.

Jordan Schneider: Absolutely not. Okay, we have China not physically punching back around Mariupol, but economically using rare earths to reportedly surprise the Trump administration and cause a substantial rethink in how aggressively America is going to economically take on Beijing. What’s your interpretation of all that?

Jon Czin: My interpretation is that a lot of this got lost. What was striking to me were the not-so-subtle signals that China started sending after election day, after Trump won the election in 2024 and before Inauguration Day. At the end of the Biden administration, there were obviously all these export controls and competitive technology policies that were getting buttoned up during that period or pushed out during that period. We saw China respond, unlike that 2022 period or earlier, with great alacrity. They were responding and they were responding fairly forcefully and pretty quickly.

The take at that time, especially in the Wall Street Journal and the Financial Times, was, “Oh, they’re sending a signal to the new administration.” But what they were also doing was building up leverage in anticipation of Trade War 2.0. They had very clearly spent the intervening years thinking about how they would respond to this and how they would retaliate. That was the first wave of them test-driving some of these new toys and tools that they had come up with in the intervening years.

There was a real misdiagnosis about how China was going to respond to this. In fairness to the administration, a lot of people who would have served in Trump 1.0 would have said, “Look, we can push the Chinese and they’re not going to do much in response. Look what happened in Trump 1 – we hit them with these tariffs, the sky didn’t fall. They wanted to negotiate with us, so it’ll be okay.” In fairness to them, if they looked at what happened in the Biden administration, there really wasn’t much of a meaningful response to a lot of these measures. You could see why they would feel, if not complacent, pretty assured that China’s response might be muted.

The other thing that happened is that a year ago in 2024, all the discussion in Washington was about Peak China because of their economic doldrums. I haven’t heard this firsthand, but my suspicion is that whoever briefed Trump on China’s economy as they were gearing up for Liberation Day and Trade War 2.0 – if they were smart, they would have led with the fact that China’s real estate sector was a mess and was the locus of all their economic problems right now. That would just leap out at his imagination and make him think, “I’ve got a lot of leverage. If I hit these guys, they’re not going to hit me back.” That’s the story of what happened in the first trade war. There was an exaggerated sense of the fragility of China’s economy that fed into this. They underappreciated the ways in which Xi and his team had been thinking about this methodically and preparing for it over the intervening four years.

When this happened, it was clear just from the speed with which they responded – they weren’t formulating new options. They clearly were locked and loaded for Trade War 2.0 when it happened, which is why it escalated so quickly. They were ready for this. It’s remarkable to me that they’ve gone just within the space of six months or so from getting hammered by the Trump administration to now seeming like the administration is trying to mollify them in the run-up to a leader-level summit.

Jordan Schneider: Yeah, I just read an article in Semafor that said America doesn’t have economic escalation dominance over China, which is wrong. But it’s interesting that you saw Bessent recently saying, “Oh, we could do stuff around engines, we could do stuff around chemical inputs.” There clearly is a menu of things that if Trump wanted to continue to raise the stakes, he could have. But the psychological game that Xi was able to do, getting the CEOs of Ford and GM to say, “Look, we’re not going to be able to make cars anymore” wormed into his head. Say you’re still sitting in the White House and the President asks you, “All right, what’s my tat if they gave me the rare earths tit, aside from buying 10% of every minerals company in America?” What coercive stuff would be on your menu?

Jon Czin: There are things we could do, but the bigger question is then to what end? Are you trying to escalate so you get them to back off eventually? It’s not just a question of what tools you have, but what appetite do you have for pain? That’s the really hard part. Xi demonstrated during this – he’s got more appetite for pain than we do. He’s not going to have voters who are going to start complaining about an expensive Christmas, and he’s not going to have to deal with that.

We do have points of leverage. There are select things we could do. The aviation sector is the obvious one that people like to point to. But again, to what end is that really going to accomplish what you’re trying to do if your goal is to try to demonstrate that you have escalation dominance and get them to back off? I’m not an economist, but if you look at Trade War 1.0 and 2.0, it hurt China, but the effect was on particular firms or particular sectors. It didn’t necessarily have a big macroeconomic impact on China.

Jordan Schneider: One of the many initial theses around Liberation Day was that this is a way to force America and the world to decouple from China. We’re recording this October 7th and we’re sitting in the middle of a government shutdown. There’s this Republican line: “we don’t even care about the government being shut down because then we can fire all these people and this actually plays into our hands.” The world where China concedes is the one where China believes that Trump doesn’t care about the pain. But what we’ve seen over the past six months is that he, in fact, does care about the pain. The closer we start getting to midterms, the more salient it is. This sequencing that some Republican influencers talk about – “All right, we’re going to settle the Ukraine war and then turn our energy to China” – the window is closing for there to be any kind of domestic energy behind eating the economic costs that would come from taking a more escalatory route from an economic perspective.

Jon Czin: I’ve heard this before. “After we’re done dealing with these global hotspots, we’re going to pivot to Asia. It’s really going to happen this time.”

But the other salient point is that time is actually on Beijing’s side in this negotiation. It’s one of the chief assets they have, aside from these countermeasures. Beijing’s banking on the fact that as the administration gets closer to the midterm elections, they’re going to want to have something to show for this prolonged negotiation with China. The Chinese side thinks this means Trump may start negotiating against himself or get antsy for a deal.

That’s only going to augment Beijing’s leverage in these discussions. If you look back at Trade War 1.0, that’s what happened. That’s how we ended up with Phase One. Trump got antsy for a deal and he said, “Just let’s just do the deal and we’ll call it Phase One, and then we can figure out the rest of it later.” From Beijing’s perspective, that’s what they’re trying to do.

Having the summit – President Trump saying we’re going to do two more engagements – only buys China more runway. The President of the United States has publicly committed to additional meetings, even though China hasn’t necessarily. That gives them, if their goal is to run out the shot clock, a lot of runway.

I hate to say it, but I give them credit for how well they have played this so far. Even if you rewind to earlier this year, when there was the initial meeting between Bessent and Greer and He Lifeng, after that agreement, rather than having this grand coalition that was going to focus on China’s unfair non-market practices – which probably has some merit to it – instead, the only two countries at that point that the United States had some kind of side deal with for tariff relief were our closest ally, the United Kingdom, and our nominal chief rival, China.

From Beijing’s perspective, that’s an amazing feat of diplomacy. And what did they pay for this? All they did was go back to status quo ante before Liberation Day. All they did was pull back the measures that they had imposed. They’re getting all of this on the cheap.

Jordan Schneider: Let’s come back to cognitive decline. Both leaders are trending in that direction over the next three years and banking on three years of everything being hunky-dory seems like a wrong bet. It’s hard to project out. Is it a balloon? Is it this? Is it the Tibet border or something? But I don’t think it’s going to be this chill the whole time.

Jon Czin: No, that’s right. The name of the game for Beijing, even if there are exogenous shocks like a balloon or whatever the case may be, is that they have an incentive to try to manage it for the next year for the reasons I laid out. Right now in the run-up to a summit where the US side, for example, is trying to mollify Beijing. There are issues like the soybeans that are cropping up. The Commerce Department just added a variety of Chinese subsidiaries to the Entity List. It’s fraught.

What I worry about is that coming out of the summit, if there are good vibes coming out of it and it doesn’t go off the rails, you’re going to have a resuscitation of this discussion about détente with China or some kind of meaningful rapprochement. But these first few months demonstrate that you can give pretty remarkable concessions on two of the chief sources of friction in the relationship – on Taiwan and on technology competition – and still not really have any meaningful attenuation of the structural drivers of the competition. It doesn’t feel warm and fuzzy right now, necessarily. It’s more of a ceasefire than some kind of more meaningful or deeper détente.

Jordan Schneider: Interesting. Let’s stay on the cognitive decline stuff.

Jon Czin: Yeah. It’s going to be a thing, because you’re dealing with two leaders who are in their 70s and aging in very stressful jobs. It’s emblematic of the state of the competition between the two countries, and this is something I’ve been thinking about a lot. Yes, the US and China are both superpowers, but they’re both really dysfunctional in really profound ways. China obviously has its own deep pathologies with corruption. The real estate sector encapsulates so many of those pathological dynamics where it’s embedded with corruption and the failings of local government financing.

As an objective observation, our own system is not functioning the way it should. We struggle to pay our bills on time and we don’t make the repairs we need to our infrastructure. If we were in a homeowner’s association, we’d be on some kind of probationary status.

Sometimes the competition gets framed in terms of which side is more dynamic, but it’s really about two older people who have a lot of maladies, and the question is, who can cope better with their maladies? It’s about sprinting across the finish line. It’s like the movie Grumpy Old Men – it’s like Walter Matthau and Jack Lemmon shaking their fists at each other as they approach the finish line on their walkers. Not to be glib about it, but that’s my mental model for how this competition is going to play out in the next few years. It’s going to be cranky, and it’s going to be ugly, and it’s going to be cantankerous.

Jordan Schneider: That was a dark... That’s probably the most accurate summation of the next five years of US-China relations you’ve heard on this podcast, Jon.

The Life of a China-Watcher

I want to think about your intellectual development. On the one hand, being in the Agency the whole time, you get to read the secrets, but you don’t really get to go to China. I’m curious about the strengths and weaknesses of developing as a China watcher when that is the intellectual milieu that you grow up with over the decades.

Jon Czin: It is interesting. Unfortunately, this has become true for a lot of China watchers now, especially after COVID and everything else. It’s hard to peer in. The first resort for many China watchers is you’re relegated to doing textual analysis. That’s just part of the price of doing business if you’re doing this kind of work – going through the Party Congress work reports, going through the press conference from the NPC, and not just reading those, but then doing side-by-side juxtaposed readings to see what’s changed over time.

My job wasn’t to opine about US policy the way I did just now. On a day-to-day basis, my job was to think about how this looks from Xi Jinping’s desk. As someone who had majored in political science in college, what was striking was that this was not a social scientific enterprise. I wasn’t thinking about this in terms of some regression analysis or plotting points. To do this work, whether you’re in government or out, is much more humanistic in my mind and it requires a lot more moral imagination. It’s more like being a historian where you’re just going to read a mountain of paper and then try to make sense of it and try to tell a story that is coherent and faithful to the evidence that you do have.

I don’t want to say it’s literary, but you are trying to think – if I’m this guy and I put aside my priors as a Western, small-L liberal, how does this world look? How do I try to navigate it? There’s actually a lot of discipline that comes along with that in order to be able to do it well. But that art of trying to see how it looks from Xi’s desk is something that’s harder to find on the outside. There are obviously people, like I keep talking about Joseph Torigian, who are able to do that. But that perspective can sometimes get lost because it is such a big, crunchy dynamic. You can spend all day thinking about other aspects of the competition or thinking about what the US should be doing to respond to what we’re seeing from China.

Since I’ve left government, that’s always my starting point. When I’m thinking through these problems, the first thing I try to do is look at what the Chinese are saying, look at what they’re doing, because the context is so much more important than the text. Then thinking about, how does this look from Xi’s desk? And then you work from there.

Jordan Schneider: On what dimensions do the secrets help you build mental models and develop your sense of the place? And when is it irrelevant or beside the point? Can we answer that one?

Jon Czin: It’s challenging. It’s just having other sources of information. But the real core part as an analyst is building that mental model in the first place and doing it in a rigorous way. The way I was trained is that you’re not just chasing the latest reporting and then retrofitting some kind of interpretation on what’s going on in Chinese politics. You want to have some kind of a priori notion of what’s going on. Then to be intellectually honest, you do basic things like lay out signposts. “Okay, if there is going to be a coup against Xi or if Xi is losing power in the system, these are the things that I would expect to see.” Having that in place ahead of time helps you sort the evidence as it comes in, rather than saying, “I saw this wild video on YouTube from the Epoch Times, and there’s clearly going to be a coup.” That’s a big part of the rigor of it.

What’s valuable about being at the Agency to do that kind of work is that there’s a focus on it in a way that you don’t necessarily get in academia and on the outside. This is hard to study from the outside. It’s not necessarily in vogue to focus on leadership politics in other countries if you’re trying to get your PhD in political science. If you’re a comparativist, you’re trying to put things in comparative perspective and do a lot of math around it. That’s challenging. Whereas, when you think about the CIA and what it was designed to do, it was designed to follow a country with a big scary military and an opaque leadership. This is the place’s original raison d’être. That’s what I would say about how this has all shaped my perspective on how I do this kind of work.

Jordan Schneider: Yeah, it’s interesting because you have a cohort doing this. You have this bright line of “look, we’re not analyzing American politics,” which does not exist in think tanks. It’s so much easier and more natural to start with the end of the report instead of the beginning or middle – “Okay, what should America do about this?” – and then you back into your reading of the Chinese system. Because that’s how the funding works and the incentives are all about having impact on policymakers. But maybe the most useful thing is just to build a mental model of who the actors in the system are, what they’re working towards, and how successful or unsuccessful they are over time.

Jon Czin: It’s funny you say that. Coming from the Agency and having grown up there professionally, especially when I started doing policy jobs. I would go from analyzing things and then I would have my boss when I was at the Pentagon say, “Okay, so what do we do about it, Jon?” For me personally – I’m a lifelong runner – it’s like if you’re a runner and you think, “Yeah, I can do a triathlon,” and then you get on a bicycle and you’re like, “I’m feeling a lot of burn in places I didn’t expect to.” You thought you were in good shape, but this is an adjacent muscle set. It’s good to have both. But I obviously got a huge dose of that at the NSC.

Leaving government too, it’s really striking to me. When I engage with people in my current role at Brookings, I walk into the mindset of “Okay, have I read everything Xi has said in the last week? Do I have my ducks in a row?” I’m still in that groove from being an analyst. But then 80% of the questions are about doing Pekingology on the Trump administration. In the early days, it was like, “Where does Musk fit in his orbit? Who’s up? Who’s down?” I’m comfortable doing this, but for their system.

Jordan Schneider: Yeah. Is there any aspect of – both of us were born at the wrong time in the sense that Xi’s kind of boring? We had this big bang – he comes in, he does all this stuff – but we’re in cruise control on a lot of different dimensions. The leadership stuff, even the PLA modernization stuff, the economic reform stuff, it’s all status quo. They just keep drawing out the line. But you know, ’40s, crazy; ’50s, crazy; ’60s, crazy; ’70s, crazy; ’80s, crazy; 2000s, some stuff. China is more important than it’s ever been as a percentage of global national power, but from an elite politics dynamism perspective, we are at a true nadir.

Jon Czin: That is so funny to hear you say that. I had a friend and mentor when I was in government who spent a good chunk of his career in the Hu Jintao era. When people were committing suicide and Bo Xilai is getting purged and Guo Boxiong is getting purged and Xu Caihou and all these guys who were seen as untouchable. It’s this incredibly volatile and dynamic moment in Chinese politics and I remember this colleague saying to me, “Jon, this is so cool. You get to cover all this stuff now. I spent most of my career in the Hu Jintao era. I feel like a middle-aged divorcée. I gave Hu Jintao the best years of my life.”

At one level, I see what you mean. It can look kind of boring, especially when you’re doing the medicinal work of plowing through all the speeches. You’re right, there is a lot of continuity. But if you try to see how the system looks from the inside, if you’re an official, what’s been going on in China over the past year is almost operatic. From the politics perspective, you have a vice chairman of the Central Military Commission who’s just gone missing with no explanation. You have people disappearing left and right. You have people getting rotated out of key positions like the Organization Department. This got lost in the shadow of Liberation Day – people just getting swapped out of their positions out of nowhere, which is usually not a great sign for one’s political health. It is one of those things where you kind of have to squint a little bit to see it.

But that’s part of one of the things that makes following Chinese politics so interesting. On the surface it looks really smooth, but if you peek under the hood a little bit and think about how it looks to people in the system, it’s Game of Thrones.

I’ve talked to colleagues and friends who are Russia specialists, and there’s always such an interesting juxtaposition if you look at the two political systems. Putin is obviously also a very personalistic autocrat. But there is, as a casual observer from the outside, a level of chaos in that system and violence that the CCP just doesn’t tolerate. Even watching that horrible tragedy with Navalny, all I could think as a China watcher was they would have squashed this guy 20 years ago. There’s no way they would have let him on social media posting all this stuff. This guy would have disappeared a long time ago. Or even this phenomenon of people falling out of windows. Yes, people in the CCP get purged and bad things happen, but it’s all kept quiet or kept in the family.

Jordan Schneider: Yeah. We talked about the military adventurism dynamic, but there aren’t CCP assassination squads in Europe and America or Tokyo killing these dissidents on YouTube. The level of obnoxiousness of democratic subversion…

Look, it’s there. You have stuff happening in city councils. We had this big mess in the UK Parliament, but it’s just an order of magnitude more conservative than what Putin has done abroad.

Jon Czin: Yeah, right. Nobody’s getting polonium in their tea. But it’s an interesting compare and contrast exercise when you think about US engagement with Russia, because even though the relationship is more fraught and more violent, there’s also this kind of built-in familiarity from the Cold War. We’ve all seen this movie before and we watched it together. It was striking to me when I was at the NSC – the Strategic Security Dialogue that we had with the Russians about really sensitive issues about nuclear weapons and nuclear doctrine, those continued until pretty much the outbreak of the war.

Whereas – and my old boss Kurt Campbell just had an essay about this in Foreign Affairs – getting the PLA to talk about anything even remotely adjacent to that is almost fantastical. You’re kind of chasing a unicorn to have those conversations. It’s interesting because in a lot of ways we’ve actually had a much closer relationship with China over the previous four decades. We have closer people-to-people ties and we obviously have the commercial relationship. Despite all that, when it comes down to those really sensitive geopolitical issues, we can still talk to the Russians in a way that is very hard to fathom with China.

Jordan Schneider: Yeah. My two cents on that is – if you go through the late ’50s and early ’60s with another country, you kind of get it. About how this isn’t a joke. And China has never had a nuclear scare. There’s a level at which their system just doesn’t take this stuff all that seriously. Then on the Russia side, there is an aspect of, “Oh, we’re still talking to the Americans about nukes, that means we’re a great power.” Whereas China can get that “oh, we’re in the game” feeling from other dimensions than discussing ADIZ zones.

Jon Czin: Part of it from the Chinese perspective too is, “You want to talk to us about nuclear weapons, you talked to the Soviets about nuclear weapons, and how did that turn out for them? What’s the angle here? What’s the trap?” But you’re right, because there is an impulse in some quarters of Washington that I’m sympathetic to – people want to get to some kind of détente. If we’re in this kind of more 1950s-like moment with China, people say, “Well, how can we fast forward and get something more like the 1970s between the US and the Soviet Union, where it’s a more stabilized competition?” I can understand that impulse, but from the Chinese side, without having had that shock or that scare, it’s going to be very hard emotionally and intellectually for them to get there.

The things that have gotten the US side on this path – everybody always goes back to EP-3 as the touchstone moment. From our side, that was an “oh, shit” moment. “We need to have meaningful crisis communications or military-to-military engagement or those sorts of things.” I don’t have evidence of this, but I think that from the Chinese side, they saw that as an effective model of crisis management. They were able to hold onto the pilots for more than 10 days.

Jordan Schneider: They got their apology.

Jon Czin: They got their apology. What’s the problem here? Going dark is part of what we need to do because in that system you need to confer and get your act together. But also as a tactical matter, you could easily see somebody in that system making the case, “This was actually quite effective. Going dark and being opaque actually enhances our leverage with the Americans. The longer we go dark, the more cautious they’re going to be and the more they’re going to try to reach out to us.”

Jordan Schneider: The idea of an accidental World War III starting between the US and China over jets hitting each other or something just strikes me as pretty far-fetched. I’d be curious for your take on that, because that is the whole line of thinking of why this is important, although it just seems like an incredibly low probability event.

Jon Czin: I get that perspective. But I’ve been thinking about this a lot lately. I worry about the risk of some kind of accident, some kind of collision. It’s probably inevitable at some point, just given the nature of how much steel is out in the water and how much is up in the sky. But does that necessarily lead to some kind of cataclysmic conflict? You’re right. Objectively it’s harder to see that.

Part of the challenge for the policy community is that if you’re in the seat, you want to foreclose that possibility. The issue is that there’s a trade-off for constantly trying to pursue this. You’re constantly going after the PLA and you’re constantly going after an institution that has little to no interest in talking to you. Even in a crisis, they still have to respond to the political bosses and that’s really the crucial channel. You’re not going to be able to figure it out on your own between the Joint Staff and the Minister of National Defense who, oh, by the way, is not even in the CMC anymore. Not even a state counselor. At this point, it’s like talking to a glorified errand boy.

Jordan Schneider: If we’re in a situation pre-boats crashing into each other where both sides do not want war to happen, then the argument that a war or a dramatic escalation is that something would have to change in either leader’s mind or a shift in the domestic political temperature, from not wanting a conflict to actively wanting one, or escalating to the point where the other side has to escalate. It just doesn’t strike me that an event we both agree is an inevitability, like Taiwanese troops getting run over, or a collision in the Philippines (which is kind of unbelievable that it hasn’t actually happened yet) would be a trigger. Yes, that we haven’t had deaths. But it’s just, everyone’s got to price it in at some point. If you want to start a war, you’re going to start it in a more clever way than running into a boat and then launching an invasion nine days later.

Jon Czin: Yeah. There’s this presumption sometimes that it’s going to be the Chinese side that’s going to feel the pressure to up the ante, that they’re going to have to placate the nationalists inside the system. But actually, with Xi Jinping so powerful and so dominant in the system and having been so tough with the United States, I don’t really think he has to cover his political flanks in the way a Hu Jintao would have or a weaker leader would’ve had to. That’s the paradox. Xi is tougher on the United States in some ways, but because he has so much control, he also has more flexibility than a weaker leader might have to fend off those voices and say to the PLA, “Settle down, guys.” Or whoever else in the system might perk up in that kind of moment and say, “Xi, you’re being too weak on the Americans or you’re being too weak on Taiwan.” I don’t think he has to worry about that.

You’ve seen that with how they’ve played the trade war – they got very inflammatory with the rhetoric after Liberation Day, and now we’re on the path to a summit just six months later. It’s not like necessarily they’ve got total control and their ability to control this is mechanistic. But I don’t think they have to worry about it as much as some people on our side think. The same goes true for how this plays out politically in the United States. If there is an accident, people will be upset about it. But will people really have the appetite or the willingness to go to war, especially in this kind of political moment right after what happened after 9/11 and the response that we had that was so over the top, especially when you’re dealing with an adversary that is so formidable?

That’s a big rationale for China’s military modernization, of wanting to be prepared for an actual conflict, but also an element of deterring the United States. “Yeah, you guys can come into theater, but this is not going to be 1996 redux, where we actually have real capabilities and we’re able to hold your assets in jeopardy.”

One last thing that I would leave you with too, Jordan, is that I’ve been very struck since I left government, especially since there’s been so much conversation about the National Defense Strategy. There’s a bipartisan commission that’s charged with evaluating the Pentagon’s progress against the National Defense Strategy. The National Defense Strategy gets promulgated and then there’s this independent commission done through RAND. It assesses, “If these were your objectives, how did we do? Or how are we doing against the criteria this administration has laid out for the National Defense Strategy?”

If you look at the last one that came out, the last commission report and what it had to say about China in particular, the language in it is very stark. The last two NDSs have said that China is the pacing challenge for the US military. China’s military continues to outpace the United States in a growing number of domains. There’s actually one line in there too where it says they’ve negated the US military’s advantages in the Western Pacific.

Jordan Schneider: I was just going to come back to India and Pakistan.

The fact that they’ve figured out how to keep a lid on it. I mean, they do have more practice, and there is a dance which you’ve seen a number of times. But that as another counter-example to a crisis leading to World War III is something that folks should price in at some level.

Jon Czin: Because you mean India and Pakistan have grown accustomed to dealing with this and have figured out how to…

Jordan Schneider: Yeah. A thing can happen over 72 hours between two nuclear-armed powers and then cooler heads can prevail repeatedly. These are two very big, scary militaries, but if the leaderships don’t want to do it, you can even start escalating but get off the ladder at some point before cities start getting wiped off the map.

Jon Czin: I always think about the history of this when you go back to the ’50s, the Quemoy-Matsu crisis. It was in the second one, if I recall correctly, where the Chinese were shelling Taiwan on alternating days. Mao’s telling everybody to settle down and scaring the hell out of Khrushchev because he’s like, “It’s fine, it’s fine.”

Jordan Schneider: Alright, we’ll call it there. Thanks Jon. It was a ton of fun. Thanks for being a part of ChinaTalk.

* = don’t sleep on it

China + AI

China’s New AI Plan

Released 34 days apart, the US and China’s AI action plans reveal starkly different governance philosophies despite surface similarities. In this piece, Irene Zhang breaks down what we can learn by contrasting these two strategies. For example, China’s State Council document is comprehensively techno-accelerationist, targeting 70% AI adoption by 2027 and 90% by 2030 across everything from manufacturing to “philosophical research,” with job displacement explicitly accepted and trial-and-error encouraged society-wide. The Trump administration’s plan, led by OSTP, David Sacks, and NSA, frames AI through US-China competition, mentioning “national security” 24 times versus China’s single mention, focuses on worker retraining and careful sectoral experimentation, dividing the world into American versus Chinese technological spheres.

Kimi

Moonshot AI’s Kimi K2 — an open-weights, 1-trillion-parameter MoE “non-reasoning” LLM — represents an alternative development path from DeepSeek’s hedge-fund cocoon. Built by a globally trained team, backed by Alibaba VC, and shaped by China’s compute limits, K2 openly borrows DeepSeek V3’s EP+DP/MLA architecture, exemplifying a fast-iterating, open-source research culture that Chinese labs are now embracing.

Alibaba Gets AGI-pilled

In this column, Afra makes the case that Alibaba CEO Eddie Wu is an AGI believer. At its 2025 Yunqi Conference, Wu delivered a sermon on Artificial Superintelligence — calling AGI inevitable and ASI humanity’s next leap. This newfound prophetic tone departs from China’s usual instrumentalist, utilitarian tech discourse. Since the 2020 Ant IPO crackdown, Chinese firms have avoided grand visions and focused on compliance — but Wu’s speech could represent a “vibe shift” toward ambition and imagination.

China’s AI Education Hype

China’s exam-oriented education system creates a paradox for AI adoption — while wealthy urban students access robotics and coding, most Chinese schools remain dominated by pen-and-paper exams until university, with rural schools suffering from dangerous buildings, half the schooling years of Beijing (Tibet), larger class sizes (45+ students, some 56+), and fewer teachers per capita than the US (1:16 vs 1:13.26). Minister of Education Huai Jinpeng is pushing AI integration to address these inequalities — advocating for “smart campuses” and the creation of a national education LLM.

Cheating Apps: China’s Latest Tech Export

Chinese homework-solving apps like ByteDance’s Gauth and Zuoyebang’s Question.AI have dominated US download charts, with Gauth reaching 2 million daily active users globally versus only 800,000 for its Chinese equivalent “Doubao Loves Learning.” Lily Ottinger argues that the international versions are deliberately optimized for cheating — showing answers before steps, featuring aggressive monetization, and solving problems across all subjects for free — while Chinese versions emphasize educational features like study planners, parent oversight tools, and detailed explanations. Gauth’s superior performance on advanced calculus problems suggests ByteDance invests more resources internationally, where homework-dependent education systems create greater demand compared to China’s exam-heavy system. Both apps employ selective censorship: Gauth initially blocked criticism of Trump but now answers freely while subtly misrepresenting China’s presidential term limits as “informal” rather than constitutional; Question.AI refuses Tiananmen Square questions entirely. Ottinger warns that these apps risk creating educational inequality — wealthier students will attend tutoring centers while others automate homework — and predicts potential US bans if regulators notice Chinese companies profit from undermining American education while offering more pedagogically sound products at home.

History

The Party’s Interests Comes First

Joseph Torigian’s biography of Xi Zhongxun reveals the CCP as simultaneously a religious organization and mafia — where suffering paradoxically deepens loyalty and persecution is a badge of honor. Our epic two-part interview explores the life of Xi Zhongxun, father of Xi Jinping, from his life as a young revolutionary to his purge and eventual rehabilitation.

*The Long Shadow of Soviet Dissent: Disobedience from Moscow to Beijing

This ChinaTalk episode with historian Ben Nathans and longtime reporter Ian Johnson explores how Soviet dissidents built a moral and intellectual movement by demanding that the USSR live up to its own laws — a strategy pioneered by mathematician Alexander Volpin that later echoed in China’s rights-defense (维权) activism. Through episodes like the 1966 Sinyavsky-Daniel trial, dissidents transformed “socialist legality” and show trials into moral theater, using underground samizdat networks to expose the state’s hypocrisy and preserve truth.

The Pacific War

We explore Ian Toll’s incredibly expressive Pacific War trilogy, examining both his innovative narrative techniques and strategic questions about WWII’s Pacific theater. The conversation covers whether Allied victory was predetermined after Pearl Harbor, how Japan’s domestic political instability drove its military aggression abroad, the evolution of kamikaze tactics as a resource-scarcity solution, and the crucial role of media management in shaping military leaders like MacArthur and Halsey into national heroes. Part 1 and Part 2 here.

Xi and Putin Weaponize WWII’s Legacy

This article by Joseph Torigian examines how Xi and Putin have leveraged the 80th anniversary of WWII’s end to legitimize authoritarianism and territorial expansion from Yalta to Kaohsiung. Both leaders lost family in the war, and now view themselves as inheritors of an unfinished struggle against Western hegemonic forces. Yet their instrumental use of history — through censorship, patriotic education, and civilizational rhetoric — carries risks. As Russia suffers from war fatigue, brain drain, and demographic decline, and China must manage the tension between anti-Western signaling and its dependence on Western trade.

Taiwan Confronts its WWII Legacy

This article by Jordyn Haime examines Taiwan’s fraught relationship with its WWII history — - while the ROC did the majority of the fighting against Japan in the mainland, over 200,000 Taiwanese served in Japan’s Imperial Army as colonial subjects, and 2,000 Taiwanese women were enslaved as “comfort women.” While Taiwan’s DPP government celebrated the anniversary by praising the liberal international order, Haime attended the non-governmental memorial in Kaohsiung honoring the Taiwanese who fought under Japan. After the KMT takeover in 1945, these veterans were politically “forgotten” during 38 years of martial law to avoid labeling them as Han traitors (漢奸). Taiwan’s democratization has reopened space for confronting these contradictions, but Haime argues that achieving true transitional justice will require acknowledging Taiwan’s role in supporting the Japanese war effort.

Taiwan, Ukraine, and the Future of War

*Closing the Taiwan Strait Deterrence Gap: Lessons from Air University Wargaming

Air University’s extensive 2023-2024 wargames challenge the conventional wisdom that Taiwan cannot defend itself without direct US intervention. The study found that a $14.6 billion force modernization centered on asymmetric capabilities could destroy up to 75% of PLA amphibious assets and “stop an invasion cold.” The optimal force design abandons prestige platforms indigenous submarines, Abrams tanks, and large warships in favor of 7 XQ-58 drone squadrons ($756M), 20 Chien Hsiang anti-radar drone squadrons ($2.54B), layered air defense systems ($7B), 30 Kuang Hua VI missile boats ($369M), 300 “Sea Baby” and 400 “Jet Ski” unmanned surface vessels ($166M), 200 unmanned underwater vehicles ($100M), 400 Hsiung Feng-III/IIE anti-ship missiles ($1.7B), and enhanced space/cyber ($2B). This strategy targets PLA’s two-phase invasion plan with simultaneous swarms of aerial, surface, and subsurface drones plus subsonic/supersonic missile salvos that “no fleet in history” could counter. Taiwan’s reported $20 billion supplemental defense budget now under Legislative Yuan consideration appears aligned with these asymmetric recommendations, representing potentially “the most decisive move in that direction in modern Taiwan history” if passed.

*Second Breakfast

The ChinaTalk team has launched a new defense podcast! Second Breakfast brings together a handful of washed vets to talk current events and the future of warfare. For example, our third episode discusses what Ukraine and Lebanon teach us about the U.S.’s blind spots, why the U.S. homeland is vulnerable to adversary attacks and cyber sabotage, and whether Taiwan’s semiconductor “shield” is a deterrent or liability.

Read a transcript with some highlights here or check out the full playlist on YouTube.

Deterring a Taiwan Invasion: Lessons from Imperial Japan

Imperial Japan’s 1944–45 defense plan for Taiwan, Operation Sho-2Go, rapidly transformed the island from a logistics hub into a fortress. Amid fierce resource jockeying, this posture convinced US planners that invading Taiwan (Operation Causeway) would be far costlier than taking Okinawa. Drawing on Japanese-language archives, JASDF Col. Hirokazu Honda shows Sho-2Go’s mix of force buildup, concealment, and asymmetric shock as the key to deterrence. The piece argues modern Taiwan can adapt these lessons: rapidly scale active/reserve forces, expand subterranean and redundant C2 infrastructure, prioritize mass asymmetric systems over exquisite platforms, and signal resolve — proving credible deterrence is achievable even under adversary air/sea superiority.

Robotics

Why Robots are Coming

Robotics researcher Ryan Julian outlines the near-term trajectory of general-purpose robots, arguing that widespread deployment in logistics, material handling, and light manufacturing is “baked in” over the next 3-5 years. Unlike self-driving cars, industrial robots can provide linear utility at partial autonomy (50% labor reduction still creates massive value), allowing faster deployment in commercial spaces where safety bars are lower. Julian predicts hundreds of thousands to millions of industrial robots within a decade, followed by more dexterous manufacturing tasks (bolts, wiring harnesses) in 7-10 years.

ChinaTalk

Why Robots are Coming

8VC is hosting a meetup for ChinaTalk this coming Thursday. Sign up here if you can make it…

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2 months ago · 48 likes · 2 comments · Jordan Schneider and Lily Ottinger

How Hangzhou Spawned Deepseek and Unitree

DeepSeek didn’t spring from nowhere, argues: it grew from Hangzhou’s distinctive ecosystem that empowers private firms without classic Silicon Valley ingredients like deep VC pools and elite university clusters. Hangzhou hosts a budding tech scene — the “six little dragons” (Unitree, Deep Robotics, Game Science, BrainCo, Manycore Tech, plus Alibaba) — but this piece argues that Hangzhou’s edge is “flexible governance,” where officials act like facilitators that fast-track IP, smooth out licensing agreements, and solve practical problems for small, scrappy companies.

Decoupling and Export Controls

Smuggling Nvidia GPUs to China

Gamers Nexus editor Steve Burke unearthed the complete GPU smuggling supply chain from the US to mainland China in a three-hour YouTube documentary, contradicting Nvidia’s claims that GPU smuggling is a “non-starter.” Burke interviewed US-based Chinese buyers purchasing export-controlled chips on Craigslist, Chinese middlemen who aren’t even sure which chips are banned, repair shops, and university researchers using smuggled A100s. This episode is packed with crazy characters — definitely worth revisiting if you missed it the first time.

The full documentary is now available on YouTube (after initially being removed via DMCA).

*MP Materials, Intel, and Sovereign Wealth Funds

In this podcast, Daleep Singh, Peter Harrell, and Arnab Datta argue that critical minerals markets are broken due to extreme price volatility and a lack of WTI-equivalent futures infrastructure. To tackle Chinese dominance in REMs, the July 2025 DoD-MP Materials deal uses Defense Production Act authority creatively, but makes MP Materials “a national champion… crowned without contest.” This interview discusses whether the deal can succeed and explores alternatives like a Strategic Resilience Reserve or a sovereign wealth fund, and is particularly relevant today as the trade war has heated up again.Modern Japan

Abundance

Dan Wang

Dan Wang joins the podcast to discuss his book Breakneck, exploring China’s “engineering state” versus America’s “lawyerly society” through the lens of brutal social engineering projects. Wang argues China’s engineering mindset — treating society “as liquid flows” where “all human activity can be directed with the same ease as turning valves” — enabled four decades of 8-9% growth lifting hundreds of millions from poverty but also created “novel forms of political repression humanity has never seen.” We also did a show with Dan Wang + Ezra + Derek!

Reading Abundance from China

Afra hosted a Chinese-language reading group for Ezra Klein’s Abundance with Chinese immigrants — academics, lawyers, AI investors, engineers — who jokingly called themselves the “Ezra Thought Study Group.” They discuss the poverty of the American imagination, China’s bureaucratic advantages, America’s “China envy,” and the consequences of the US and China “doomscrolling each other’s social feeds.” Participants highlighted Bay Area defense startups (Anduril) as innovation bright spots compared with China’s widespread “crossing the river by feeling American stones” approach.

Career Advice, Travel Notes, and Best of China

Policy: An Early Career Guide REVISED!

Jordan presents a practical playbook for breaking into China-adjacent policy, from learning Mandarin to starting a Substack. Expect to be wrong sometimes, state confidence levels, welcome critique, and cultivate humility. Bonus guidance covers security-clearance common sense, book reviews as a low-risk on-ramp, developing long-form depth in your writing, time/attention hygiene for social media, and first-hand tips on finding a niche.

Notes on Kyrgyzstan

Lily Ottinger takes a look at Kyrgyzstan — Central Asia’s most democratic state, which has seen rapid growth and record-low unemployment in the wake of Chinese investment. Post-2013 BRI projects now dot Bishkek and Osh — highways, airports, a BYD factory, and a mega ski resort (target winter 2026) — while Chinese buses and equipment support public transit and parks. Public opinion, once wary of Beijing and warmer to Moscow, flipped markedly after 2022. On the ground, Chinese migrants are present in mining, restaurants, and import retail, often without Russian/Kyrgyz language skills. Overall, Kyrgyzstan’s boom showcases BRI-enabled development and rising pro-China sentiment alongside enduring sensitivities about foreign labor and elite capture.

China’s Best Music of 2025 (So Far)

Jake Newby, author of the China music Substack Concrete Avalanche, presents his official playlist of China’s best new music. It includes Kazakh and Tibetan experimental folk, Shanghai cold wave, and post-rock with an electrified guqin.

China’s best short fiction of 2025

The Cold Window Newsletter surveyed nearly all new 2025 Chinese short-story collections and finds the “no good literature” complaint false: despite domestic distrust of establishment writers, a recent plagiarism scandal, and limited overseas attention, standout work — often by women of the post 1980’s generation — thrives, mixing dreamlike, speculative intrusions and internet realism, with serious treatments of abuse and many long novellas. The top five picks: Shao Dong’s grounded realism (notably “Recreational Dancing”); Mo Yin’s genre-literate, reference-dense sci-fi (“City of Dreams”); Guo Shuang’s sharp class/fandom portrait (“Push Out the Pig”); Du Li’s dense, unsettling nightmarescapes (“The Cuckoo Vanishes”); and #1 Zhang Tianyi’s exuberant, idea-rich myth/pop-culture remixes (esp. “The Beanstalk”).

Polling and Prediction Markets

Nate Silver on AI, Politics, and Power

This grab-bag conversation with Nate Silver explores reputation and legacy-building as a public intellectual, how AI will and won’t change politics, and the future of prediction markets as aggregators of knowledge. Regarding the future of American politics, the conversation covers the impact of bad models and public narrative formation (including misconceptions about DeepSeek), as well as how to shift the public’s political opinions over the long term.

Betting on Chaos: Professional Political Gamblers

This interview with Domer, Polymarket’s top trader, explores the emerging profession of for-profit political forecasting — where bettors wager millions on elections, wars, and policy moves. Domer explains how prediction markets evolved from small hobbyist platforms to billion-dollar ecosystems offering real-time price discovery for geopolitical risk, yet still operate largely as solo “rōnin” endeavors. He details how traders gain an edge through deep research and emotional detachment, and how biases (including the tendency to overestimate unlikely events like a Taiwan war) and insider-trading risks shape market behavior. Markets can create feedback loops, where wealthy actors manipulate odds to manufacture political momentum, and they now react to news within seconds. Domer argues these markets discipline punditry by forcing participants to “put skin in the game.”

Tarun Chhabra is the head of national security policy at Anthropic and previously served as the Deputy Assistant to the President and Coordinator for Technology and National Security on Biden’s NSC.

Today, our conversation covers…

• Why the US needs to maintain an advantage in the race for AI development against China,

• Whether the US’s AI industry is prepared for future competition from China,

• The lawyers vs. engineers debate, and what the US needs to build AI supply chains,

• How government and industry can work together to across the AI development process.

Listen now on your favorite podcast app.

Race for the AI Frontier

Jordan Schneider: Part of the original justification for banning exports of American chips and semiconductor manufacturing equipment was the idea that these pieces of technology could directly contribute to PLA capabilities. We’re recording this during the week of a military parade, and I’d love to hear you give your most convincing unclassified case for why these technologies directly contribute to arming a strategic adversary.

Tarun Chhabra: Thanks again for having me, Jordan. The Wall Street Journal just published a good piece this week about how the PLA is using commercial AI technology. But this really goes back to when Jack Ma 马云 disappeared — that was essentially the end of any dissent or pushback from China’s tech companies regarding support for the national security apparatus.

It’s been a safe assumption since then that dual-use technologies enabling capabilities for the PLA or China’s intelligence services will be used that way. You can ask your favorite LLM for examples, and you’ll find plenty. One that obviously comes to mind — particularly because it was a focal point of the outbound investment restrictions — is cyber capabilities.

A straightforward example is Chinese hyperscalers providing the equivalent of cloud services and cybersecurity services to national security actors in China. Obviously, they’re going to offer AI services as well. Unless you think the AI somehow won’t be part of that package — which I don’t know how you’d conclude — it’s a pretty straight line from cloud and cyber services to frontier AI models.

Jordan Schneider: We have different layers of an AI race. I’m curious about your topology and how you’d rank them on their ability to build defensible advantages.

Tarun Chhabra: I think about it as the race to the frontier, the race for diffusion globally, and then the race for adoption — which encompasses both national security and economic applications.

On the race to the frontier, it’s about power, talent, and chips.

This is partially why Anthropic focuses so much on addressing power and permitting barriers to build more AI infrastructure in America, and why we emphasize export controls — because we think hardware is our advantage for the next several years.

On the diffusion side, it’s also why we focused on export controls. We don’t think our hardware should be powering Chinese data centers, either to help them reach the frontier or to compete with U.S. companies or other trusted companies globally. The same principle applies to adoption. The more we succeed in adoption, the more compute you’ll need at the enterprise level for national security actors as well.

Jordan Schneider: When debating how to structure export controls, let’s start on the chip-making side. What are the variables you tried to optimize for, and what should current policymakers focus on moving into 2025?

Tarun Chhabra: We have a significant advantage when it comes to chip making. The U.S., together with allies — obviously Taiwan, and stemming from our dominance in the supply chain along with close allies like the Netherlands and Japan — holds this position.

The question is, how long can we ensure that we maintain that advantage? This comes down to our ability to control that technology during the period in which China has yet to indigenize it, certainly at the level that enables scale in production or very advanced production. It also entails working on components and servicing as well.

Irrespective of who’s in office, here are the next things we ought to be doing: We should do more on the component side — this is also in the interest of the tool-making companies to defend their advantages. The servicing piece is really important as well in the industry. These are the next steps we should take to defend our advantage in chipmaking.

Jordan Schneider: How much do you buy the argument about China’s will to indigenize? The will and capability to indigenize remains a live subject of debate across all the different layers of our AI future.

Tarun Chhabra: The shot was fired during the first Trump administration with actions against ZTE and Huawei. From that point forward, maintaining dependence on the United States for advanced dual-use technologies was a bad bet from their perspective.

But there’s also a broader historical story here, which you’ve probably discussed with Dan Rosen and others — the history of China’s industrial strategy over the last several decades. Name any sector where it has worked for us to say we’ll just keep them addicted to the technology.

The pattern in China’s playbook is pretty clear — buy it until you can make it. Once you can make it, kick out the U.S. competitor. Eventually, once you can make it at scale and subsidize it, try to eat up their global market share. It’s happened over and over again. You name the sector, and given the leadership’s focus on AI, there’s next to no likelihood that we can stop the indigenization train.

The real question — which I know you’ve talked to Lennart Heim and Chris Miller about — is what do we do in the interim? The other question I would ask is: where would China be today if we didn’t have the controls? We can cite various developments, but where would they be if they had the talent, the energy, and also had the chips? We’d be in a much tighter race today, and we don’t want to be there from a national security perspective.

Jordan Schneider: Why is that hypothetical such a confusing thing? The SMIC base case is that they would be further along than even Intel is today if not for controls. Is this a particularly hard hypothetical?

Tarun Chhabra: You and I tend to be in violent agreement on this point, which makes it hard for me to understand why that isn’t the question we should ask. That’s why someone like Dario Amodei says DeepSeek shows the importance of maintaining, if not strengthening, controls. They have incredibly talented AI engineers in China, power, and capital — it’s just about the hardware, and it’s for this window.

The other layer of controversy is, how much does this window matter? Our perspective is, we’re not seeing a significant slowdown in the saturation of benchmarks. We still think you’ll see transformative capabilities over the next three years.

We should all discount this in a healthy way, but if we believe it’s just over — more likely than not, or 60% or 70% — and you talk to folks about how they assess that, the implications are significant from a grand strategy perspective. We ought to be preparing for that, and from my perspective, we shouldn’t try to make this a close race.

Jordan Schneider: The other wrinkle that folks haven’t necessarily priced in is that you guys are training on Trainium, and Google’s figured out how to train on TPUs. The idea that CUDA is this “one layer to rule them all” — that if you can get them stuck on it, you’ll have control forever — we’ve seen multiple companies already figure it out, and they only had commercial motivations, not their head of state telling them they had to do it.

Tarun Chhabra: I was just having this conversation with some of our colleagues internally this week, and they’re making the same point. Yes, Anthropic is a well-funded company with really talented engineers working on the hardware problem, but if we’re able to do exactly what you just said, and a nation-state is committed to doing it, then they can probably get there.

Jordan Schneider: You mentioned increased capabilities — this is weird sci-fi stuff. I’m curious, looking backward, how much that ethos or that single-digit, low double-digit probability played into policymaking. What’s your perspective going forward on how folks should adapt for the possibility of those types of futures?

Tarun Chhabra: What we’re seeing right now with our coding model — our engineers are using it for about 90% of tasks. That’s going to take longer to diffuse across the economy or even the broader tech sector, but people doing national security work often need to do a lot of coding, especially for cyber operations. The applications in cyberspace are pretty significant.

We have a demo showing what it would cost to replicate the Equifax breach — you could probably do it for well under fifty cents of tokens. If you tried to replicate that globally, you could probably do it for under $10,000. That alone should ring the alarm bell, and that’s with current capabilities.

If we think about nation-states trying to make cyber operations more autonomous in their attacks against us, and the need to defend against them and have a viable policy in cyber defense alone, that’s a clear and present problem today.

Jordan Schneider: In trying to talk people into this worldview, what typology of skepticism do you run into nowadays in Washington?

Tarun Chhabra: That’s a good question. Some skepticism is pegged to “this model came out and it wasn’t everything I expected it to be” — whatever model that might be. Using a data point of one isn’t a great way to assess this necessarily.

Another skepticism is that adoption is slower than the most optimistic projections suggested for certain uses, like coding. Then there’s the view that it’s taking longer to penetrate the physical world in manufacturing than very optimistic projections thought it might.

But going back to the counterfactual, we ought to re-baseline the questions. If I had told you three years ago that we would have coding models that could do 90% of our software engineers’ development work today, or that we could have a significant impact on cybersecurity, you might have believed me, but many people would have been understandably quite skeptical.

When the chip controls went into place in 2022, although a big focus was LM development and views on where that was going, the easiest thing for people to understand at the time was that the chips themselves are used in computers that do nuclear modeling or design weapons systems. That’s true, but not at the scale that would really be impacted by export controls. This has been a perpetual issue — how do you get people to think a year or two ahead when you’re on this exponential curve?

Jordan Schneider: You used to be a speechwriter. The Jake Sullivan line that will ring out in national security textbooks for years to come: “Given the foundational nature of certain technologies such as advanced logic and memory chips, we must maintain as large of a lead as possible.”

As you said, 1%, half a percent, maybe 2% of these chips are probably going directly toward nuclear modeling or similar uses. The ongoing tension is that the vast majority will be for commercial use. You can have different opinions about whether the U.S. should be supporting broad-based growth of China, but this tension is built into anytime the government gets involved with technology — these aren’t night vision goggles.

Tarun Chhabra: The key issue here goes back to the question you asked at the beginning: we know this dual-use technology will end up supporting national security capabilities for a country that is actively planning military operations against the United States.

You have to accept that there’ll be some collateral impact in some cases to address that problem. Then you adjust based on what kind of advantage you think these capabilities are going to provide. If you think they could be transformative, then you take more risk on that front.

Jordan Schneider: There’s that level, and also the strategic level of what you’re doing to the relationship with your enemies and with your allies by controlling this technology. What’s the right way to conceptualize how the U.S. should be relating with the world — excluding China, Russia, North Korea — when it comes to AI?

Tarun Chhabra: We want to build as large of an ecosystem as possible that’s trusted and where U.S. AI and U.S. technologies are prevalent and even dominant. That’s the world we’re trying to build.

The question is: how do you do that? This is a decision not just between enterprises, but also one that governments will take. We often talk about the United States and fellow democracies working together on these issues. This is important not just from the standpoint of opening up markets — it’s also really important for our intelligence relationships with key allies. We want to make sure we continue to be interoperable across many layers of our relationships, both national security and economic.

But I want to come back to the point about “as large of a lead as possible.” Understanding the historical context is important because if you go back to the days of CoCom, the idea was not that we would give the Soviets an “n minus 2” advantage. That concept basically came after the collapse of the Soviet Union, when we did not have an arch geopolitical foe plotting to fight a war against us.

Jordan Schneider: We were selling arms to China as of 1995.

Tarun Chhabra: Exactly. That was the context in which the “n minus 2” concept became more popular. If you believe we are in a strategic competition with China, if you see that they are planning to fight us and target our troops and critical infrastructure, then you have to revisit that concept.

Software, Hardware, or Both?

Jordan Schneider: The idea of AI contributing to a new revolution in military affairs — we have Andrew Marshall saying: “The most important goal is to be the best in the intellectual task of finding the most appropriate innovations in the concepts of operation, making organizational changes to fully exploit the technologies already available and those that will be available in the next decade or so.” It’s not just having the models, it’s figuring out how to use them. This is a thing you guys are doing now. Where are we on this? Why don’t you respond to that quote?

Tarun Chhabra: This is where I’d actually give real credit to the current administration because they’re really focused on AI adoption, certainly across government, but also in the national security space. You see that with contracts from the Defense Department. Anthropic has one, OpenAI has one. Google and others have these as well. They’re laser-focused on accelerating adoption.

It can’t just be a question of “let’s use the chatbot” or “let’s bring the model in.” It needs to be, how can we use the models to re-engineer some of our mission space? That’s what Marshall was talking about. That’s really the much harder task that people are rightly focused on right now in the administration. That’s what we want to do together as well and have people on our team who are focused on partnering with the national security agencies to do exactly that. I see that as core to our mission. If we say we’re focused on helping support democracies, protecting national security for the United States and allies is foremost in that as well.

Jordan Schneider: The divide historically has been the ideation that Andrew Marshall was involved in. The doctrinal innovation that Andrew Marshall is talking about happens in-house basically. Then the military has toys, and they figure out how to play with them in different ways. Over the past 10 years or so, as you’ve seen on many different dimensions, commercial technology has leaped past what the department and the services are comfortable with or have an understanding of.

We have more of defense as a service, and you see more players trying to sell into the government, not only with products that are required, but with products that fit into their vision of a doctrinal future that they try to sell into Congress and the Pentagon. This makes sense at one level, maybe a little scary at another. I’m curious — how forward-leaning should you be? What is the right posture for someone coming in with new capabilities to bring into these organizations?

Tarun Chhabra: The responsibility of companies that are developing new capabilities is to ensure that policymakers and the military and the intelligence community have insight into where we think the technology is going, and certainly insight into where we see early adopters in the private sector taking the technology so that they can try to get on top of it as soon as possible and figure out how to employ it in doctrine.

That’s something we definitely can do. But obviously, the doctrine needs to come from the government. The planning needs to come from the government. There are lots of ways where we can have a really productive exchange, pressure-test some ways of doing things at the invitation of the government, of course, and say, “Hey, you could do it this way.” But look, that’s not a foreign concept. We’ve done that with a lot of other technologies, too.

Sometimes we take the idea too far that AI has come out of the totally private sector, with no government involvement. A lot of technologies that have been really important for national security — they may have been funded, yes, there may have been research funding that helped get them going. But there has been a lot of adoption of civilian technologies, as you know, and then they’re brought in and there’s a give and take between the civilian sector, the private sector and the military about how to adopt them.

Jordan Schneider: We see a bit of the future of warfare in what Israel is able to do in Iran and what is happening in Ukraine. But these are trend lines that you can trace and track over time, and you see things changing. When folks imagine the world of fast takeoff, you can paint futures in which there are very radical discontinuities in what militaries can do. I’m curious about your perspective on this.

Tarun Chhabra: You will see some discoveries that come out of leading corporations or the research community that are using the compute and using the models, particularly when they have access to certain kinds of data, specialized data. But where we want to go for the government — I hope we can empower them — is to be a force in their own right in some of these discoveries.

When we get to capabilities like that, an example that’s probably fairly straightforward today is the Department of Energy national labs. The labs have developed over decades a corpus of really incredible scientific data, in some cases experimental data. The question is, is there a way for them to use that data to potentially build a new platform for scientific discovery? As you know, the labs often are important partners for the national security community as well. That’s one example where today you could already see if we put the pieces together, there might be real capability to take advantage of transformative capabilities in the near future.

Jordan Schneider: I feel like it would be hard to imagine today someone really pulling a rabbit out of a hat — pulling the equivalent of a nuclear weapon out of a hat — given the current technological paradigm we have on September 4, 2025. If things get faster, that may change, right? Or could it not change because everyone’s going to be feeling this at the same time?

Tarun Chhabra: Well, that particular example — we actually just did some work that we announced a couple of weeks ago, where we worked with the NNSA on classifiers because we actually want to make sure that people can’t do what you just said out in the wild. That’s something we’re working through with the Frontier Model Forum. We hope that other frontier labs are going to adopt similar safeguards as well.

But there’s one way to answer your question: are we prepared in the physical world for what capabilities may be coming online? That is honestly one of the things that worries me most, which is a topic you’ve talked to many of your other guests about. If you do the net assessment of where we are in our defense industrial base — U.S. versus China today — in our broader manufacturing base, are we doing enough to be poised to take advantage of some of these capabilities down the line?

That’s another responsibility that we have as frontier labs to help ensure that we will be poised to do that. Some of our best partners in that space are going to be some of your recent guests — people who run defense firms that are AI-centric and are already using frontier models and thinking about how they’re going to be able to use that to scale production. But that is a space where we actually need more people thinking two years ahead about what happens if we reach this capability but we have the status quo in our defense industrial base.

Jordan Schneider: This is really fun doing two shows in the same day that echo each other because I get to ask you the same exact questions and see what your different answers are. Thank you for that provocation from Dan Wang: “I can’t distract us from broader American deficiencies. If the U.S. and China were ever to come to blows, they would be entering a conflagration with different strengths. Would you rather have software or hardware?”

Tarun Chhabra: We need both. The answer is not to accept the status quo. From my perspective, the answer is to prepare to take advantage of the capabilities that are going to come online. That means much more work with the physical world.

Jordan Schneider: AGI and nihilism can run in a lot of different directions. One thing I just alluded to — the idea that you can spawn Dr. Manhattan from your data centers and then just stride the globe and do whatever you want. Something that also comes out of that is, yeah, you don’t have to do the hard work of building munitions capacity, and you also don’t have to do the hard work of dealing with annoying allies, because whatever, you’ll have God on your side in maybe not two to three years, but whatever, you’ll extend it out a little bit. I wouldn’t say Dario maybe doesn’t buy into all of that, but you can squint at some of his writing and see some echoes there. What are the futures that people should really consider and what are the fallacies of AI solving all of your problems that folks shouldn’t fall into?

Tarun Chhabra: Look, I don’t think nanobots are going to save the world next year, but some of this comes from a view that it’s hard to know what these capabilities are going to yield in a relatively short period of time — by which we may mean a couple of years. It’s hard to know what advances they may give us in advanced material development or in manufacturing processes.

There’s actually, maybe counterintuitively, a dose of humility in saying it’s pretty hard to say that we ought to just build more of the status quo infrastructure when we may be on the cusp of some of those capabilities. It’s actually going to be a hard thing to manage — how do we build an infrastructure that might look really different, or could look really different, with the capabilities that are coming online in a couple of years?

Jordan Schneider: Just tech as a component of national power and how it ranks and fits into the other components of that if you’re looking at great power competition.

Tarun Chhabra: Well, I’m a little biased probably right now, but I’ve been of the view that frontier AI and biotech, and particularly the convergence of the two, are going to be very powerful tools, and they’re going to be potential vulnerabilities if we fall behind or don’t make certain investments.

But look, it is a physical and real reality today that if your adversary thinks you’re going to run out of munitions in a couple weeks into a conflict, you’re going to have a hard time doing serious deterrence. We have to live in the current paradigm and we have to ensure we’re strengthening, bolstering deterrence while we prepare for a totally new paradigm that’s really still hard to actually piece together in the mind’s eye.

Jordan Schneider: There’s a Williamson Murray quote that I won’t read in full because people will hear it in the prior interview. But basically the idea that revolutions in military affairs happen at the tactical and operational level and oftentimes strategic decisions — smart or poor — wash out whatever cool stuff you come up with with your blitzkrieg or deep battle or what have you. As we talk about all these things, does it even matter if our treaty allies go a different direction or India decides that they actually really do want to be super friends with China?

Tarun Chhabra: It matters a lot from so many vantages. But to your question about the tactical level, this is why it’s a really good idea that the army has Detachment 201, because that will help people start to use the technology and think about the technology and how to operate with the technology at the tactical level and not just how we drop it into ConOps at a super high level. We have to do both at the same time. That’s really hard to do.

But frankly, it’s a reality that most people in the business world are dealing with right now. Every day, you have CTOs who are saying you will adopt this technology. You’ll tell me how you’re re-engineering your business processes. At the same time you’ve got to use the stuff today with your current process. That’s just how everyone is doing it right now.

The national security community, in that sense, is not distinct. We often will bring together senior national security policymakers with the frontier labs, which is good to do, but in some ways their peers are more so the C-suites of major companies that are trying to adopt really quickly and are in a competitive atmosphere trying to do so. The worry about it is that competition is very real day to day in the market for a lot of companies. When it comes to militaries and intelligence, it may sometimes be harder to see until you have some sort of strategic surprise, which we want to avoid.

Lawyers vs. Engineers

Jordan Schneider: Okay, what we do here is think about the next 20 years of U.S.-China relations and try to think of a net thing. Yeah, it’d be nice to have better frontier AI. It’d be nice to have AI adoption. But would I trade that for Japan maybe? Probably not. You know, on the hierarchy of things you would want America to get right over the next 20 years, my sense is that screwing up the relations with the other most important developed and developing countries is something that has a higher probability to be a bigger deal for the rest of the 21st century than export control policy or whose model passes which benchmark first.

Tarun Chhabra: Look, there is a way to do all of these things together.

There’s a way to try to maintain strong bonds with your allies and also try to maintain AI leadership within the alliance.

That is particularly where you have allies who are actually bought into the strategic threat posed by China. A lot of them are, but they’re also facing countervailing economic interests. In some cases they’re getting pressure, coercion from China as well.

It requires really active efforts, really active diplomacy to keep those bonds strong. I hope that’s something that we can continue to do. If you say that you really want to ensure that it’s American AI that’s used around the world, you want to start with your allies. You want to make sure they trust that AI, they believe they’re invested overall in the stack, feel like they’re a part of the supply chain where that makes sense because ultimately these are high stakes, high dollar, big corporations involved. There’s a political calculus too for a lot of this, just given the stakes.

Jordan Schneider: You spent a lot of time doing tech diplomacy. What takeaways do you have from that experience? What works, what doesn’t, how to do it right?

Tarun Chhabra: Connecting the dots in an allied government is not always straightforward. It’s not always straightforward in the US government either. Leadership from the White House really matters in that regard — having your Commerce Ministry, your defense and intelligence interests, and your diplomatic interests all come together to make decisions that can be really hard for allies. When it comes to market share worries about coercion from China, there’s really no substitute for that kind of coordination. This isn’t to say there isn’t an important role for many actors in government, but without the White House being involved and without their counterparts being involved in head-of-state offices, it can be really hard to get things done.

The other key factor is that being a first mover really matters sometimes. Seeing the seriousness of purpose that presidential decisions bring into relief shows allies that the US is serious about certain decisions and that we need allied support to make things happen. I found that pretty consistently over and over again.

Jordan Schneider: Any countries you want to shout out for being good at this?

Tarun Chhabra: Some of our key allies are actually building new muscle in this space. There were governments that consulted with the previous administration about building new offices in their head-of-state offices to coordinate technology policy because they shared the view that there needed to be some head-of-state coordination mechanism. Frankly, I saw most of our top allies building that new muscle — whether Japan and Korea, who are calling it economic security (and it does go beyond technology to include dual-use technologies), India, or Australia. Everyone’s doing it differently, but everyone was basically building that muscle between technology competitiveness and economic security. That’s a really good thing — having some coordination function to figure out where we can make our interests align.

Jordan Schneider: Let’s talk about more ligaments. There’s an analysis piece, there’s a future-casting piece — doing chip controls pre-ChatGPT took some foresight. Then there’s an execution piece where once you do this thing, you need the people to run with it and make what you say a reality. Do we still need new offices? Is it just talent? What are the building blocks that the US government should invest in?

Tarun Chhabra: You definitely need the talent, and that’s really hard. Finding people who have the technical depth and can also operate in the policy world is not easy. I was lucky to have an incredibly talented team working on these issues. But I really think the role matters. Having folks whose job it is to wake up every day and think about the technology war that China is fighting against us, and whose job is to try to make America much more competitive in key technologies, really matters. Without that, there are countervailing interests — trade interests, bilateral relationship interests that encompass much more. If that interest isn’t at the table, it has a real impact.

Jordan Schneider: You were a lawyer, used to wrangling with lawyers, and now you’re working with lots of engineers. Continuing on Dan Wang’s view of the world — America as now a lawyerly society in contrast to China’s more engineering-focused approach — people were frustrated, myself included, at the pace of the rollout of a lot of these controls. It felt like there were lawyers or maybe other things getting in the way. Did you buy this? Is this what ails America? Too many laws or too many lawyers?

Tarun Chhabra: We have lawyers, too. But look, we work with some of the most amazing engineers anywhere in the world today who are building amazing technologies. Even outside the company, there are amazing engineers who want to use the technology and are developing stuff that we wouldn’t have imagined. That’s the magic. I’m not sure that I buy the full typology — I love Dan, but we have a healthy argument about this sometimes.

The question about the pace of controls or debates we have over technology policy, especially when it comes to restrictions, is a give-and-take about industry interests, national security interests, and trying to strike the right balance. We built an architecture to entertain that debate. The problem becomes when you’re missing a piece of that set of interests at the table. If you ask the person who was leading technology and national security policy whether we could have done more, faster, of course the answer is yes. But the key thing was bringing the questions to the table, bringing the proposals to the table, having a strategy to maintain our technology leadership — when for a long time, China was fighting the war against us and we weren’t fighting back. Credit to Matt Pottinger for getting that going, especially in the 2018-2019 timeframe with some of the big actions they took then.

One thing I’m proudest of is that we built a really strong bipartisan consensus for a lot of the action. Some of that was very apparent in statute — there was the CHIPS bill, there was action on TikTok. But there was also broad support for executive actions, whether that was export controls to maintain AI leadership, outbound investment restrictions, data security restrictions, or ICTS actions on vehicles coming from China because of the cybersecurity risk posed there. That’s something that is sometimes underappreciated.

Jordan Schneider: That’s lawyer energy building bipartisan consensus, not engineering energy.

Tarun Chhabra: Look, if you think you’re in a multi-decade contest with China over technology, there’s no other way to do this. There’s got to be a bipartisan consensus that can transcend administrations. I was very privileged to inherit work that Matt and his team had done at the NSC with others in the first Trump administration. We tried to build on that and broaden the consensus more and fight back on a much broader range of sectors.

Jordan Schneider: Another piece of tech diplomacy is directly with China. The shoe that didn’t drop until 2025 was rare earth controls. I’m curious about any reflections you have on being able to ramp up what you did without having the type of response that we’ve seen from China over the past few months.

Tarun Chhabra: There was a very concerted strategy to be pretty clear internally on the actions that we needed to take for US tech leadership, while also maintaining a diplomatic channel and explaining really clearly why we were doing it and why we were doing it when we did it. That strategy was designed to ensure we could take all the steps we needed while trying to mitigate that blowback. I can’t speak to how the administration thought about where we are today, but the situation China wants us to be in is one where they get our most advanced technologies in exchange for commodities. That was definitely at play when it came to efforts to coerce our allies. As you know, there were restrictions put in place on gallium and germanium against US allies in retaliation for some of the tech controls already, but not at the level that was imposed later.

Jordan Schneider: Before this, you gave us a list of some of your greatest hits — outbound investment, ICTS. Pick your favorite. Which one doesn’t get the love it deserves?

Tarun Chhabra: One thing I worry about not getting much limelight today is biotech policy. There’s lots of attention on AI policy, rightly so. The National Security Commission on Biotechnology did a great report. [ChinaTalk has some thoughts on that…] There were bipartisan members of Congress who were on that commission. They made some pretty astute observations about where China was going and where we will be in a net assessment if we stay on the current course — the kinds of dependencies we’ll be in on China and the long-term economic impacts of doing that. I would highly recommend that report and hope it gets much more attention. I hope that we find a way to invest in our R&D architecture while China is increasing theirs very, very quickly.

Jordan Schneider: That was my takeaway. Spending a lot of time thinking about this and reading that report deeply, the levers are not nearly as straightforward and sexy as the ones that the government is able to pull when it comes to manufacturing equipment and AI chips. It’s not fun stuff like FDA reform and investment into universities, as opposed to “here’s this machine where if we take it out the whole edifice crumbles.” It’s harder to have something be salient when the upside is more drugs for people.

The disturbing part of that report for me was their italicized vision of the future where China cures cancer, but we’re not allowed to get it or we’re charged exorbitantly for China’s cancer cure. It’s like, “Well, but we cured cancer,” right? The dual-use downsides of breaking this ecosystem, which right now seems to be much more — I don’t know, I’m less concerned with the potential futures that I see for the AI one and I’m also less convinced that doing things which would take the potential of one-sixth of the world’s scientists offline or reduce their productivity would be a loser for America and society at large. But I do buy the argument that the process knowledge involved with coming up with and scaling new drugs is not something you want to completely outsource to anywhere.

Tarun Chhabra: That’s the worry. You put your finger on it — the status quo is not necessarily sustainable because the status quo is trending toward greater and greater dependency, both on the manufacturing side, but also on the drug development side and on the clinical testing side. The government did impose restrictions in January on some advanced, high-throughput, high-fidelity biotech equipment. But you’re right that that’s one piece of a much bigger puzzle in the case of biotech that is going to require a lot more streamlining and regulatory reform because if you’re doing biomanufacturing, you don’t know what agency to go to in many cases depending on what your product is. That’s an area where I hope there’s much more focus and it doesn’t happen because of some big surprise.

Jordan Schneider: Did I send you the Quad Monkeys pitch?

Tarun Chhabra: No, I don’t think I did.

Jordan Schneider: Oh wow, I did a bad thing for America. But yeah — India. We can’t get Chinese monkeys anymore. India has all the monkeys, but there are regulatory reasons. There’s some lobbyist who’s been really trying on this for a long time now. It deserves its own podcast.

The AI companion stuff. You want to talk about that? It’s not about mass precision; it’s about mass intimacy, Tarun. This is the future of warfare. We’re developing closer and closer emotional bonds with our AI chatbots. If you thought stealing an SF-86 was bad, the amount you can learn about someone or directly influence them by seeing their chatbot logs, controlling their chatbot companion, which doubles as your best friend, therapist, spouse — this seems to me like the revolution in not even military affairs, but just social affairs, which nation states can very much play a big role in exploiting.

I’m worried about this. Thirty percent of American AI companions are headquartered out of China right now. Should I be? Am I crazy? It seems wild that this is something that we’re okay with.

Tarun Chhabra: I mean, you’re right to be worried about it. It’s an extension of the concern we have about China’s ability to manipulate information or information space.

Jordan Schneider: If you thought TikTok was bad, those are still videos, right? This is not your friend. You still have to pay off the influencer to say nice things about X party versus having them in your AR glasses, seeing the entire world you interpret.

Tarun Chhabra: This is one where you can already see what the future could look like if we don’t make certain decisions. In the same way that if you think about what is the state of today’s cybersecurity, and if we do nothing and we have the world of IoT descend on us, and you’re getting daily software updates from China — these are worlds that are coming very soon, and for some reason, it’s really hard sometimes to get your head around it. But that’s absolutely a concern.

Part of it goes to the point that we were discussing earlier, which is when you have companies headquartered in China that are able to use frontier American AI for certain applications. What will they do with it? Will they be used in the ways that you’re describing, let alone much more direct applications for national security? That’s something that, as a company, we’ve now taken action to address.

Jordan Schneider: This is your thing now — having companies make less money because you tell them it’s the right thing to do. What’s the rationale behind this policy change?

Tarun Chhabra: This is very much a leadership decision. You’ve talked to Dario directly about how he sees US-China competition on AI, so you’ll find this wholly consistent with what you’ve discussed with him before. We’ve long had a policy stating that China is not a supported region for selling our frontier AI. But over time, we’ve seen many Chinese companies headquartering in third countries and from there getting access to all these services.

The concern is whether this access aligns with the spirit of our policy of not supporting China as a supported region. How will that access benefit applications that could be used for national security by Chinese actors? When it comes to the competition for the AI stack globally, will it enable Chinese applications — building on our models — to then compete against American companies around the world? There’s also a really thorny technical challenge of detecting distillation, which becomes even harder when you have high-volume throughput happening.

For all these reasons, we think it’s more consistent with our position on export controls and national security to simply not provide our services to those entities.

Jordan Schneider: This speaks to a broader question of where you want to be able to control the stack. If you’re going to split it off and let China build on it, are we selling chips into China that China can then use to build models and companies? Are we selling chips into Malaysia that China can build models and companies on? There’s been an active debate for years about where on that stack it’s okay to let China play. You have these massive Oracle contracts with ByteDance, which exemplify one answer to that question. What’s the right framework for thinking through this?

Tarun Chhabra: The administration is right to focus on US AI dominance. What does that look like? What does the stack look like?

To me, it should be American models using American chips and AI data centers powering US applications, together with our closest allies.

That’s what we want to see. The debates you’re seeing now are about US chips fueling Chinese data centers. The change we’re making is about US models fueling AI applications in China that could ultimately undermine US national security.

Jordan Schneider: If you don’t like where things are headed, where is it easiest to change course two years from now? Pulling the models out from under folks — models seem pretty easy to fast-follow and steal. But are customers sticky? Are data centers sticky? Is the way you train things sticky? These are all open questions. It’s not super straightforward.

Tarun Chhabra: Yes, in some ways they’re open questions, but we also have to factor in that the Chinese Communist Party has a very strong view about what they want to see — a full Chinese stack. They’ll take the chips while they can, of course. The question is: what are we going to do until China gets to that phase? If we believe that really significant, even transformative capabilities are coming online, should we not take more risks now to enable the US to really have AI dominance?

Tarun Lore and Advice

Jordan Schneider: You’ve had nine months now. Are you reading anything fun? Taking any trips? Give the folks some recommendations.

Tarun Chhabra: Yes, I’ve taken some good trips. I’m originally from Shreveport, Louisiana, so I’ve seen a lot more of my parents, which has been great. I’m out to San Francisco pretty frequently as well — India, Australia. Some good trips and seeing former colleagues as well.

The book I’m reading now is Joseph Torigian’s book, which is great. When he was still a pre-doc, Rush Doshi and I brought him into a project we were doing at Brookings while the book was still a dissertation. It’s really cool to see his book out, and I highly recommend it. The way he blends the official party discourse with personal stories is really powerful.

Jordan Schneider: We end every episode with a song. You got one that captures our AI future? The true essence of export controls?

Tarun Chhabra: True essence of export controls... I’m a big country music fan, having grown up in Louisiana. I’ve recently discovered Steven Wilson Jr. Maybe we could sign out with some of his music.

Jordan Schneider: We need a little bit of Tarun lore. The Shreveport to AI policy pipeline is not the most robust. What do you want to tell the kids to live their policy dreams?

Tarun Chhabra: I’ve been incredibly lucky to have really great mentors. I still remember — I spent a year in Moscow after college, and one of my college advisors happened to be traveling there. This was actually Chip Blacker. If you ever met him and had dinner with him, he was carrying on about what my life would look like in 20 years. I was asking, “What do you mean, Chip? How do you know that?” He said, “No, no, you’ll do this and you’ll do this, and then we’ll talk.”

I’d never had anyone express confidence in where I might go in my life. I grew up in Louisiana, and my parents are immigrants. They provided a privileged upbringing, but they didn’t really go to college. Having someone just say, “No, I take it for granted that you’ll be able to do interesting things in the world” — that still sticks with me.

Jordan Schneider: Anyone listening to China Talk, I have absolute confidence you’ll be able to do interesting things as well. A tiny bit more lore. From Shreveport to wanting to go to Moscow in the first place — give us a little more color here.

Tarun Chhabra: I was a Cold War geek growing up. I was very interested in Cold War history. The fact that Hoover was at Stanford was a huge draw for me. I was particularly interested in post-communist societies. I did a summer abroad in Cuba after I graduated from high school. It was with Wake Forest — I think it was the second year American students were allowed in.

Jordan Schneider: This is very early days, right?

Tarun Chhabra: The Pope had just visited for the first time. That was my interest in Russia as well — what was going on in 2000, 2002, and 2003. It was such a different time.

Jordan Schneider: Why do you have a day job? I want you to take a year off. Give us the memoir, man. We’ve got a lot of good stuff here.

Tarun Chhabra: I saw Boris Yeltsin drunk at tennis matches in Moscow. It was really something.

Jordan Schneider: Could he play, or was he watching tennis?

Tarun Chhabra: He was watching the final.

Jordan Schneider: Final question — give China Talk some homework. What’s the more ambitious version of what we’re doing?

Tarun Chhabra: The question you were asking earlier about what these futures look like — in a way that’s unafraid and brings together people who know a sector deeply but who can talk to people who see what’s coming in AI — is really important from a strategic perspective. We try to do it, and I also need your recommendations for who’s doing that really well. That’s some of the most important work we could be doing right now.

Mood Music (Tarun’s suggestion):

This essay first appeared with DARC.

In 1953, the CIA overthrew Iran’s government with suitcases of cash and a handful of operatives. In the 2010s, ISIS could recruit and deploy terrorists entirely through online interaction. But by 2030, the most effective intelligence operations won’t rely on either playbook—they’ll be conducted through AI companions that billions will trust with their deepest secrets.

The espionage landscape is undergoing its most fundamental transformation since the Cold War. Biometric surveillance and digital tracking have made traditional human intelligence operations increasingly perilous—a case officer can’t simply meet an asset in a park when facial recognition cameras blanket every street. Simultaneously, declining trust in media institutions has undermined conventional information warfare, as populations grow inured to traditional propaganda.

But a new vector is emerging that bypasses both problems entirely. AI companions soon will know us more intimately than any human confidant—seeing through our smart glasses, remembering every conversation, and offering always-on perfectly calibrated emotional support.

This creates an extraordinary intelligence opportunity. A foreign adversary with access to a population’s AI companions doesn’t need to recruit individual spies or craft convincing propaganda. They gain direct, continuous, and intimate access to millions of targets simultaneously. The same technology that helps you draft emails and talks you through your divorce can identify who has access to classified programs, who’s bitter about a missed promotion, and exactly what words would convince them to betray their country.

The thesis is simple but stark: AI companions will become the most important intelligence battleground of the 21st century. The nations that dominate this technology—both in deploying it abroad and defending against its excesses at home—will possess intelligence advantages not seen since Enigma was cracked. The United States must act immediately to ensure American AI companions achieve global adoption while preventing adversary companions from embedding themselves in American life.

The Companionship Revolution

The relationship in Her is no longer science fiction, it’s already here. Half of teens in America today regularly interact with AI for companionship on generalist apps like ChatGPT and specialized ones like Character.ai. On OnlyFans this year, people will spend over $10bn for primarily AI-generated interaction.

And today is the worst service AI companionship will ever provide. In the near future, AI companions will have expanded memory, able to cue off your entire text and email history as well as past photo albums and videos. Once integrated into smart glasses, they’ll see what you see, absorbing your entire life with higher fidelity than any friend, therapist or lover could. We’ll all soon have access to always-on, always-emphathetic, always-saying-the-right-thing AI companions. These systems will become the, to use a DARC coinage, “small gods” of our daily lives: ever-present, all-knowing, and increasingly indispensable.

AI companionship will not just be for heartbroken teens but adults with power. Four out of five CEOs wrestle with loneliness, and it’s a truism in politics that “if you want a friend in Washington, get a dog.” But pols still need friends, and AI will play far more emotionally substantive roles than slobbering on you when you’re home for the day.

Even if elites with huge egos can resist the pitch-perfect AI flattery they’ll soon receive, they’ll have to lean on them at work to outcompete competitors. Today, forward-thinking leaders like Sweden’s Prime Minister “use AI quite often.” As leaders who leverage AI outcompete those who raw dog their careers, the percentage of elites who are AI-dependent will only increase over time.

This is not as strange as it might seem. For decades now, fully online relationships have motivated people to vote and give money. We’ve also had two decades of recruiting for terrorism conducted entirely online. We need only look at Al-Qaeda, ISIS, and incel culture. AI will take these interactions, scale them, and tailor them for a higher success rate.

The implications for spying and influence operations will be enormous. Let’s take spying first. During the Cold War, one case officer could handle maybe five agents due to the risk and operational complexity of acquiring information from human sources. For instance, the CIA could only contact CKSphere, its ‘billion dollar spy’ in the Russian military R&D ecosystem, once every few months with occasional letters that often left him feeling alone and underappreciated.

Now an entire political class hooked on an AI companion that an adversary nation has access to can boil the ocean for secrets and turncoats. And that outreach won’t be in the form of generic outreach like the videos the CIA recently produced for disaffected Chinese bureaucrats. Instead, strategies to influence and recruit will be better than any hand-crafted note a case officer could have come up with, leveraging the data already collected about the target, picking the right day when they are frustrated about a missed promotion, and using just the right words to have the highest chance of success. An always-on AI giving you continual support, encouragement and suggestions would be so much more effective than hurried quarterly meetings in parks and the occasional letter that past case officers could manage. And it will be good enough that many targets won’t even be aware they’re leaking secrets.

Beyond trying to influence individuals, AI companions will also supercharge influence operations as we open up entire populations not just to tailored feeds of user-generated content but tailored friends we’ll ask who to vote for and where to protest. AI companions and AI-mediated information will shape our views even more than social media has. Even today, ChatGPT users click through to original links in less than one in a thousand queries. As models get more capable and emotionally resonant, we will question their conclusions less and less. State actors with access to turn the dials of adversary nations’ popular AI companions will change voters’ decisions and even spark domestic unrest.

Countries that fully leverage AI companion-powered espionage and protect their people will have an enormous advantage as this technology grows ever more embedded in our lives.

Winning in a World of Computational Espionage

The ability to exploit this vector for national advantage relies principally on a nation’s capacity to gain global consumer adoption for its AI companion products. This race is still in its early days, but we can already sketch what the critical components of competitiveness will be and take a snapshot today of how the US and Chinese ecosystems compare.

Into the medium term, two likely drivers that will determine which nation winds up achieving victory as the AI companion superpower.

Capabilities vs. Cultural Customization

Many of the factors normally discussed to characterize global AI competition like training data, compute, and AI engineering talent still apply. The ecosystem that pushes the technological frontier and has the most compute to deploy models business cases will probably also be able to make the best companions.

This is in part due to the fact that better models will be more able to flexibly adapt to cultural context. At the moment, it is unclear whether the taste of the AI firm delivering the companion will matter or if the technology will be good enough to just meet the consumer where they are. There may exist a period of competition where local firms with worse tech stacks attempting to deliver tailored cultural companionship experiences will be able to outcompete giant American or Chinese AI companies.

But, much of what we know suggests that this will not be a durable advantage over time. Silicon Valley engineers who may know less about what Alsace or Marathi people want in a partner but their models will figure it out for them. And any advantages the Chinese ecosystem may have in terms of productization will probably be swept away by which firms are at the algorithmic frontier.

Willingness to Lean into Sex

Porn, banned in China, is far and away the most popular use case for VPNs in the PRC today. As China has no porn stars, generations of Chinese men have fallen for Japanese talent like Sola Aoi who has parlayed her explicit fame into tens of millions of weibo followers. Another, Ai Uehara, already has their own Mandarin-language AI companion app today. If this pattern plays out again and politicians, generals, AI researchers, and the broader Chinese public come to prefer more sexually explicit foreign AI to serve as not just a sex partner but a broader emotional labor outside of short intimate moments, that could provide a unique vector for influence. We’ve already seen early stages of this trend with Chinese users falling in love and mourning the loss of OpenAI’s 4o model.

Western companies have fewer compulsions around sexing up their products. We’ve seen Elon’s X.AI ship a sexualized AI girlfriend. While OpenAI is turning down dials on dependency after the recent spate of suicide reporting, OpenAI’s February 2025 model card update did not prohibit sexualized content for all use cases besides sexualizing minors. The two heaviest global hitters in the NSFW AI companion space are American with Janitor.AI at 100m MAU Canadian with SpicyChat.ai at 50m.

That said, this tweet yesterday was an encouraging sign.

But this may be less an edge than it seems at first. Most have a limited appetite for how many minutes a day they want to consume sexually explicit content. While the Chinese internet is purged of pornographic content, there is still room for flirty livestreams and AI boyfriends. Perhaps on-prem mods swapped via sketchy Baidu cloud folders could bridge the gap between your Chinese daily driver companion and a spicier add-on for intimate moments, allowing it to pick up on your regular model’s memories, so hopping on a VPN to get the scaled up western firm-provided AI sex experience might not be such a draw.

On the global side, Chinese developers are not shying away from making NSFW products for an international audience. CrushOn.AI for instance, founded by ex-ByteDance staff, had 20m MAU for its website alone, making it the third largest nsfw chat website. So today, there are tens of millions of people around the world exposing their most intimate fantasies to a Chinese AI company.

The Next Ten Years

Most people, including those with power and secrets, will in the next ten years develop professional and emotional dependence on AI. Domestic political campaigns, international influence operations, and global spycraft will increasingly play out mediated through the AI companions we trust. The nations that leverage this opportunity abroad and harden their societies at home to this threat will have a massive new vector to gain advantage over their adversaries.

As of the time of writing, America risks falling behind. Some of the most popular apps built for AI companionship are built by Chinese technology companies and used by millions around the world. Last month, eight hundred thousand users downloaded Talkie, an AI companion app released by Shanghai-based Minimax. MiniMax likely generated around $70 million in revenue in 2024, the bulk of which was driven by the American market. In turn, Talkie and its competitors are spending heavily to advertise on platforms populated by young internet users.

We need policies that adapt to these realities today. On the defense side, American policymakers should immediately ban all Chinese AI firms from selling AI companions into the US market to preempt a vulnerability with more potential to cause havoc than TikTok’s short videos ever were. Counterintelligence agencies should aggressively screen for vulnerabilities in those who develop AI companionship. Offensively, the American intelligence community should invest heavily in AI case agents and begin the process of building successors to Voice of America to thrive in a world where information is mediated through AI companions.

In the early cold war, intelligence advantage came from cash, operatives and ideals. In 2030, it will come from control of AI companions that billions will trust with their secrets. America needs to prepare now or it risks getting out-loved.

Chris Brose is the President and Chief Strategy Officer at Anduril Industries. He’s been at the forefront of the debate about how America needs to change in order to win a future war against a high-tech adversary like China. He’s the former staff director for the Senate Armed Services Committee and the author of The Kill Chain: Defending America in the Future of High-Tech Warfare.

We discuss:

• Why the U.S remains dangerously vulnerable to low-cost drone attacks and what it would take to get serious about defending the homeland,

• How bureaucratic logjams and budget dysfunction stall America’s adoption of counter-drone and other critical defenses,

• What the Ukraine war reveals about the future of warfare and what the US has yet to learn from it,

• Why confidence in American technological superiority is misplaced, and why state-of-the-art weapons may not guarantee a quick or decisive war,

• How humans will make military decisions in the age of AI.

Listen now on your favorite podcast app.

Getting Serious About Defense

Chris Brose: We were out in Ohio for the Ohio State-Texas game, which was awesome. We’re sponsoring OSU because of we’re building a major factory in Columbus.

Jordan Schneider: You guys are building a factory in Ohio? Why are we not building factories in places that can’t be blown up easily?

Chris Brose: Ohio is definitely on the list of places that cannot be blown up easily. It’s inland in a good location. This doesn’t necessarily need to be a deeply buried target. If we’ve got foreign adversaries bombing the American mainland and our production facilities, we’ve crossed into really bad territory a long time ago.

Jordan Schneider: Fair enough. Speaking of being afraid of catastrophic homeland attacks, what Israel did to Iran, what Ukraine was able to do to Russian bombers — that hasn’t completely sunk in here. How freaked out should folks be about that sort of drone attack?

Chris Brose: I don’t want people to lose sleep over it daily, but they should be freaked out about it. We’re living on borrowed time in this regard. We’re looking at the proliferation of low-cost drones, the ability to make homemade drones with explosives integrated (very similar to what the Ukrainians or the Israelis have done), and orchestrate a similar type of attack in the United States against a critical military target or other types of targets. That is eminently in the realm of the possible.

This is a 9/11-style problem that we’re still adopting a September 10th mindset to. To some degree, those types of attacks have been a wake-up call for those who weren’t already awake to this problem. The US Government is putting more energy into thinking through what we need to do to get ourselves secure on the homeland against these kinds of proliferated potential drone attacks.

Jordan Schneider: What does actually being serious look like?

Chris Brose: Being serious means first recognizing the vulnerability we have, rather than hand-waving it away. Then it’s moving with urgency to solve the problem. Funding’s also necessary to buy capability and get it fielded to the critical sites that you need to defend. An enormous amount of policy and bureaucracy is going to have to be settled and broken through in order to do this.

When you look at counter-drone in the United States, there are multiple different government agencies that own different parts of the airspace. They have policy control over different functions in terms of what you can do to defend against assets from aerial attack. Typically, this has resulted in paralysis. Government agencies and congressional committees fight with one another and yell at one another, but they don’t solve the problem.

The real challenge is going to be, can we bust through all of that policy and bureaucratic logjam and actually start getting solutions fielded in an integrated way that protects the places that need to be most protected?

Jordan Schneider: Andrew Marshall had a quote on the development of new sources of military advantage:

“The most important thing is to be the first, the best in the intellectual task of finding the most appropriate innovations in the concepts of operation and making organizational changes to fully exploit the technologies already available and those that will be available in the course of the next decade or so.”

We also have this quote from Anduril founder Brian Schimpf talking to Ben Thompson on Stratechery:

“The fundamental thing that has to be true is that we have independent conviction on what the right answers are. As we’ve scaled, when we have a business unit that doesn’t have that, the results are trash. It’s obvious that they don’t have the vision.”

What is the right division of labor between the government and the private sector for imagining the futures that Andrew Marshall is alluding to?

Chris Brose: I agree with the Marshall quote, but I could also argue the inverse. He’s saying organizational and operational change enables government or the military to harness technological innovation and change. That’s true. But the reverse is also true — unless and until you have real technological change and adoption of new technology, it’s very difficult for the government to understand and envision new ways of operating and organizing.

The division of labor in that regard is that the government will understand its problems. To the greatest extent possible, they need to rely upon private companies, innovators, people who are thinking creatively about different types of solutions, who understand the available technologies that many in the government don’t fully understand or appreciate, and how they can be combined together into solutions that well-meaning people writing military requirements might not necessarily come up with on their own.

The role of the government then is taking those new capabilities and doing what they uniquely need to do — figuring out new ways of operating and organizing themselves to take maximum advantage of what these new capabilities offer and genuinely present new types of dilemmas to the adversary. Industry can’t do that for them. The best that industry can do is set them up and enable them with new capabilities, additional capacity, and basically other predicates that open up the opportunity for them to really rethink how they operate and organize.

Jordan Schneider: But this is a new dynamic. Anduril, the defense tech sector at large is saying that 30 or 40 years ago, this would all be happening in-house, more or less in the government.

Chris Brose: Yes and no. You could even argue that less of this was happening in-house 30 or 40 years ago. We’ve gone through this period in the US where we had an incredibly vibrant industrial base, a defense industrial base, back during World War II, early-mid Cold War, late Cold War. What we’ve seen over the past generation is this hyper-consolidation — post-Last Supper things that people have talked about — that has really created something that has never existed in the United States from an industrial base standpoint: a hyper-concentration of defense manufacturing and development in basically five or six companies.

That is very opposed to the way our industrial bases traditionally functioned, where the government had a lot more diversity, a lot more partners, a lot more competition, a lot more pressure for innovation that was happening in the private sector because there was very much a perform-or-die type approach. Since the 1990s it’s been a bunch of companies that are too big to fail. The results of that are things that are now becoming very apparent to people.

Jordan Schneider: Staying on this, I’m curious about your sense of where the new doctrine comes from. You wrote about this in your book about how, at the end of the day, when you’re talking about great powers, people have roughly equal toys. It’s how you use them that ends up providing you the edge in a new military revolution or a new age of combat.

And it seems like what Anduril and this new defense ecosystem is envisioning is playing more of an active role in imagining what that doctrinal future is than defense contractors were 20 or 40 years ago.

Chris Brose: Because we’re at the cutting edge of technology, we absolutely understand the capabilities that we’re building and providing, and the opportunities that open up to operate differently and to structure and organize the military differently. We’re going to be less opinionated on those operational and organizational questions just because that is clearly the domain of the government.

To answer your question directly, the new ideas and the really game-changing ideas for operational and organizational change will come from the government and the military. In my experience, they will typically come from lower levels, not necessarily higher levels. It’s more of an organic bottom-up type of innovation as opposed to someone on high whose first name is “Secretary” or “Chief” mandating that the organization change.

But what I wrote about in my book and still believe to this day is that you have to have both together. Oftentimes, when you have bureaucratic disruptors — people in government who are seeking to change at a lower level — if they don’t have the top cover from political leadership or military leadership, they tend to get squashed. At the same time, you’ve seen many examples of well-meaning political leaders or military leaders who want to change their institution. They have a vision of where it needs to go, but they can’t bring the organization in line to follow them and to get it adopted in a way that when they roll out of their job in two or three years, it stays.

On the government side, there needs to be an empowering of lower-level disruptors, operational leaders and commanders who are going to oftentimes push those novel ideas up. But you need change agents at the top who are looking for those people and those ideas and really trying to drive it through.

Jordan Schneider: You had this very striking line in the conclusion of Kill Chain — “It is hard to escape the conclusion that America is still not serious.” How has the balance of serious versus non-serious shifted across different universes of organizations?

Chris Brose: Let’s first determine what we mean by “serious.” Seriousness is judged not by what people say, but by what they do in terms of actions they’re taking, money they’re moving, programs they’re starting — whatever the metric is.

When I wrote my book, as I looked back in recent decades, I was shocked by how many people have been saying more or less similar things to what I wrote in my book. Andrew Marshall is obviously a top example. These aren’t brand new ideas. What’s shocking is how often we have failed to do the very things that we said were necessary and important.

For me, the definition of “serious” is — are we actually doing the things that we say we need to do? Are we changing our institutions at scale, not just science projects and innovation theater? It’s impossible to argue that we haven’t made progress in the last five years, but are we as a country serious yet? No, I still don’t believe that we are. We’re getting there, and there are people who are doing their level best with the powers that they have to be serious and change their organizations.

But I look at, for example, the budget process, where the Department of Defense is on a full-year continuing resolution, which means they’re locked into the budget from a year ago and lose flexibility in what they’re able to do because we can’t agree as a country how much money we should be spending on defense. At the beginning of the fiscal year, the Department of Defense actually needs an appropriated budget so they can move out with the process of changing themselves.

It’s hard to argue that we as a country are serious when that kind of behavior is still happening and, frankly, becoming more mainstream. If we were serious and we started to get our act together, that wouldn’t happen. I’m not an expert on the Chinese Communist Party’s budget process, but I’m pretty sure that the Chinese military is getting its money at the start of their fiscal year.

Jordan Schneider: Well, they do have other problems, but let’s get to an executive branch example.

Chris Brose: The counter-drone example is a really good one. We have massive vulnerabilities in this country. Operation Spiderweb could absolutely 100% happen here today. I don’t think it would actually be that difficult to orchestrate.

If we’re continuing to remain vulnerable to that kind of an attack — a 9/11-style surprise, violation of sovereignty, loss of life, loss of critical military assets — if we’re still squabbling over the terms of policy and bureaucracy, if we’re not spending the money to a degree that we need to spend to solve this problem, if we’re not leaning on new companies that are bringing new technologies and capabilities to bear, not just in demonstrations but fielded and performant in operations, again, it’s hard to argue that we’re serious.

But there are people now that I can point to who are absolutely moving out with seriousness. Just as one example, the Secretary of the Army and the Chief of Staff of the Army should be commended for how much they are trying to do to change their organization. The Army is the largest military service with the most people, the most money, and the most things. It is a very difficult supertanker to turn around. In a matter of months, you have two leaders, civilian and military, who are trying to cut away from old legacy capabilities that they don’t need anymore, and are trying to reorganize themselves from a procurement and acquisition, and technology adoption standpoint. They’re rethinking how the Army needs to operate.

Nothing is off the table there. Obviously, the proof will be in the pudding and all of the actions that need to follow. But there’s an enormous amount that’s been done already. That’s an example of how much committed senior leaders can really change their organizations and adopt change for the better.

Lessons from Ukraine

Jordan Schneider: Williamson Murray and MacGregor Knox wrote, “Revolutions in military affairs take place almost exclusively at the operational level of war. They rarely affect the strategic level, except insofar as operational success can determine the largest strategic equation — often a tenuous linkage. So revolutions in military affairs remain rooted in and limited by strategic dividends and by the nature of war. They are not a substitute for strategy, as so often assumed by the utopians, but merely an operational or tactical means.”

When people look at Ukraine and at the future of war in general, there is a bias to sell your thing, get attention, raise money, to envision something utopian or promise something that is like a complete game changer. But one of the big takeaways for me from Ukraine is that folks should have relearned the lesson that operational silver bullets don’t exist. You have this wild dance where things are changing all the time, and whatever you started with is not what you’re going to end up with two years later, much less six weeks later.

Chris Brose: There are examples of military technological revolutions that have a strategic impact. Nuclear weapons come to mind. A lot of what we’re seeing in the cyber domain is certainly something that has strategic implications. When you start looking at the reality of nation-state adversaries deeply disrupting and destroying in many respects the fabric of the way of life of another country, because they can target critical infrastructure, they can target the lifeblood of what we in this country frankly take for granted on a day-to-day basis. That has a pretty significant strategic impact.

AI and autonomy speed up and increase the scale of warfare, where it begins to take on a strategic implication. But your point about Ukraine is right. America has had to learn this.

For the past generation, we’ve assumed that we’re far ahead in terms of military technology, that we can afford to have a very small number of very exquisite things that are going to do the work for us. If, God forbid, we find ourselves in a conflict, it’s not going to last very long. We’re not going to shoot many of those weapons. We’re not going to lose a lot of things. We’re not going to have to replace a lot of things. That’s been a bit of our lived experience.

Ukraine is much more of a back-to-the-future type moment, where you realize that actually, every war that we’ve fought has lasted a long time. Where we’ve ended up is not even remotely close to what we started with. That pace of innovation and change and adaptation and learning is the whole game. How quickly can you understand the changing character of the battlefield, what your adversary is doing, what technology enables you to do, roll that into learning and development and fielding of new capability, operational and organizational change that comes from that? Recognizing that all of the gains that you might be able to eke out are themselves going to be fleeting. Whether that’s a matter of weeks or months or maybe a year, you’re going to have to keep that cycle incredibly tight and incredibly fast.

We’ve frankly missed an enormous opportunity as a country to really think about Ukraine as a catalyst for changing the way we operate. The Department of Defense, and the US Government in general, deals with things that it plans for, and it deals with things that it doesn’t plan for. For the latter, in my experience, it generally wants to say, “I didn’t see this coming. I don’t want to have to deal with this. I’d rather just get back to the regularly scheduled program.”

That’s how we’ve addressed Ukraine. We have provided a lot of support over a few years, but we’ve largely just grabbed things that were off the shelf — legacy programs of record, stockpiles of weapons, many of which have been very useful to them, but many of which have not been useful in the least.

We’ve really missed an opportunity to recognize that in supporting Ukraine, we have an opportunity to adopt that pace of change ourselves, to realize that this is the absolute frontier of warfare right now. If we can’t solve these problems for ourselves, let alone what they’re going to look like, God forbid, in a China scenario, which is all 10x worse, we are going to find ourselves on the back foot if we end up in a conflict like that.

There’s a lot more we could have done in terms of really looking at this as a proving ground for new technologies and new capabilities that could not just help the Ukrainians win, but help the US military change itself at scale with a lot more speed. Perhaps there’s still an opportunity to do that.

If, God forbid, we ever find ourselves in a conflict with China, all of the assumptions of Ukraine apply. It’s not going to be short. In all likelihood, we are going to lose a lot of things, we are going to have to replace a lot of things, and we are going to have to change and adapt at a speed that we’re really not used to as a country.

The Problem of Scale

Jordan Schneider: Let’s talk about scale for a second — another big lesson of Ukraine. We had a guest on the show a few weeks ago who left the CIA. I asked him, “What’s your favorite document?” He goes, “Well, this thing’s public. Each Chinese province has a war scaling exercise where they get all the companies in the room and work out, ‘Okay, how are we going to build 100x of this, 100x of that?’” America did that until 1947 and basically stopped. It was very striking to me. Another Brian Schimpf quote about how this was something that you guys are explicitly planning when you think about building things is finding partners that could go 10x or 100x. Reflections on that? Is this something that other people have going through their heads?

Chris Brose: I can’t speak for other people. The way we think about it is that the amount of capability that the United States is going to have to have for a peer fight is probably an order of magnitude larger than what we have become used to or accustomed to over the past 30 years. This isn’t a new insight. If you go back to World War II, for example, we won that by outproducing our adversaries. We were producing at a scale that was just eye-watering.

In the past 30 years, we’ve become enamored of the idea that we could basically build a military that is irreplaceable. It’s small, exquisite, and echnologically bleeding edge. And because we were far ahead of our competitors, if we ever had to fight, it was not going to last long. We weren’t going to lose much, we weren’t going to have to produce much or replace much. That’s just ahistorical in terms of what the experience of the United States at war has been since we were a country.

If the problem becomes, “All right, how do I 10x or 20x production of vehicles and weapons and not just do it once, but sustain it as a function of time — perhaps in mountains, perhaps in fields, perhaps on islands or at sea or in outer space — because I don’t want to limit options in the future,” then everything’s on the table. But the real question becomes, how do you actually design capabilities to be mass-produced?

If you look back at World War II, that’s what we were doing. You could take over the Willow Run automotive facility and go from making commercial cars and trucks to making B-24 bombers. Those bombers weren’t wildly different than the commercial vehicles that were being built on those lines prior. It’s impossible for me to believe that a Ford factory today in Michigan could build B-21 long-range strike bombers. Every aspect of it has just become completely different and divorced from commercial supply chains, manufacturing, etc.

But when we look at this problem, it is absolutely doable. When Tesla entered the automotive industry, they were laughed out of the room by Wall Street and by traditional automotive manufacturers because the production targets that they were putting on the board and the speed with which they were claiming to be able to do it had never been done before. Today if you look at one of those Tesla Gigafactories, they’re producing four to five thousand vehicles a week. Yet when you look at the production that passes for large scale in the defense industrial base, it’s a few hundred weapons a year, maybe a few thousand weapons a year, but it’s nowhere close to what commercial manufacturing is able to achieve.

The first premise needs to be, you need to leverage as much of the commercial industry as you possibly can. You need to design weapons and military capabilities to be mass-producible. If you don’t do that, there’s no way at all downstream that you’re going to solve that problem with more money or more feeling or anything else you might want to apply to it.

At the level of design, you have to simplify it. You have to make conscious decisions to lean on commercial manufacturers who have tons of capacity and, in the event of a war, could easily be flipped over from being 5% defense, 95% commercial to the other way around at the direction of the government. But if you’re not making those choices at the beginning, you’re never going to be able to produce at the scale that you want, and you’re never going to be able to sustain that over time.

Whether it’s autonomous fighter jets that we’re building for the Air Force or robotic undersea vehicles or weapons of all kinds, that design principle is at the core of everything that we’re doing. That’s why we’re going to be able to make good on the commitment we’ve made that we’ll be able to do 10x production of what typically passes for large-scale production in the defense industrial base.

Jordan Schneider: A provocation from Dan Wang’s new book Breakneck:

“AI can’t distract us from broader American deficiencies. As relations between the US and China become more hostile, the chances of a conflict grow. The US is facing a peer competitor that has four times its population, an economy with considerable dynamic potential, and a manufacturing sector that can substantially out-produce itself and its allies. If China and the US ever come to blows, they would be entering a conflagration with different strengths.” Would you rather have software or hardware?

Chris Brose: It’s a false choice. I say this as a company that is trying to be leading edge in both. At the end of the day you’re going to need hardware. There’s just no two ways around it. As long as human beings exist in the real world and occupy physical space, hardware is going to continue to be relevant.

At the same time, what’s really changing is that previously we’d always faced this choice between you could have mass, but it was going to be dumb, or you could have precision, but you weren’t going to have quantities of it. The real opportunity now is that you can put those two things together, and you can do it at an affordable price. You can have low-cost weapons, low-cost drones that are also enabled by highly intelligent, highly capable software. You get both mass and precision at an affordable price.

Putting aside the US and China, what this does is it opens up the level of geopolitical competition to countries that previously would not have had access to that level of throw weight in the international environment because they had been limited by size of territory, size of population, size of economy. What’s happening now technologically, both in terms of software, AI and autonomy, as well as in low-cost manufacturing and other kinds of product production changes that are occurring, is the ability for a small country to actually punch enormously above its weight from the standpoint of military capability.

Jordan Schneider: We have the floor being raised — precise mass or mass precision, we haven’t decided yet. Lots more people can do crazy drone attacks on a waste treatment plant halfway across the world. But there’s also this other aspect of what Dan was getting at: you’re trying to make production and supply chains that can go 10 or 20x, but it is hard to compete from that perspective with the world’s factory, right? What’s going to have to give there?

Chris Brose: Unless we’re prepared to just say at the outset, “We’ve really screwed this up for the past 40 years and we might as well surrender,” the question becomes: okay, you have to accept the reality of where you are, which people are starting to do. But it still seems the case that people haven’t wrestled fully yet with the implications of what 40 years of essentially US outsourcing and deindustrialization at a time of Chinese hyper-industrialization has really brought us to.

The shipbuilding example is a good one that’s often used — 220 times the capacity of shipbuilding in China relative to the United States. If we get into a conflict and we start losing ships, this is going to be a really hard problem for us to solve.

The answer isn’t to go back in time and try to recreate a bunch of old industrial muscle that we’ve lost. The answer is what we’re trying to do, what a lot of other new companies are trying to do, which is try to create new and different muscles that can actually be put in place much faster.

As I look at where we are as a company, we have millions of square feet of production capacity that are coming online all over the United States, in allied countries. It’s happened in a matter of a couple of years really. The ability to scale that as we become a larger company, as other companies become larger — it’s just that those factories are going to have to be building different things. They’re not going to be building aircraft carriers and destroyers and long-range strike bombers. They’re going to be building autonomous fighter jets and robotic submarines and low-cost cruise missiles and drones and other things that can be built quickly, where you have a workforce that is skilled enough to be able to mass-produce those kinds of things in the United States.

We are absolutely in a bad way from a hardware and manufacturing capacity standpoint. We have given up an enormous advantage in this country, and China has absolutely seized that. We are where we are. That being said, I don’t for a moment believe that all hope is lost. Going back to your point, if we are serious, there is an ability to create new production capacity in this country to mass-produce the kinds of military systems that we’re going to need to generate and sustain deterrence. If we end up in a conflict, God forbid, to be able to fight it, sustain it, and win it over time.

Jordan Schneider: Coming up to the strategic level, another way to answer China’s ability to manufacture is, as you alluded to, getting the rest of the world on board as well. You wrote pretty compellingly that on the one hand it would be nicer for allies to do more and spend more money, but let’s not forget that they are actually allies. It’s been a weird few months. We’ve seen Europe say they want to spend more, but also say they want to have their own homegrown stuff. Take this wherever you want to.

Chris Brose: There’s been enormous change in recent months — tariffs, political shifts, and upheaval of existing practices. But the sky isn’t falling.

We’ve made a clear break with the past, signaling to business, government, and allies that we’re moving away from the old order. Much of that arrangement wasn’t great anyway. The question is: what comes next?

Look at European commitments to increase defense spending, which are considerable. For years, we dutifully read talking points to NATO allies that they needed to spend more. Some did, most didn’t. Now they’re actually doing it seriously, and the administration deserves credit.

Unsurprisingly, with all this uncertainty, European governments want that investment creating sovereign, homegrown capability — employing their people and ensuring they’re not dependent on others. With the US speaking similar words, it’s not surprising to hear this from Europe too.

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This still creates opportunity for US companies. If we can’t just produce in American factories and ship to Europe — because it’s politically problematic for our allies — there are other ways. We’re collaborating with major European defense companies like Rheinmetall and setting up indigenous operations in allied countries, genuinely becoming part of their industrial base. Look at Rolls-Royce or BAE. They’re British companies, but as much part of America’s industrial base as Boeing or Lockheed Martin.

The US has a great advantage in our dense network of allies bound by common interests and values. The question that’s always bedeviled us is how to operationalize that at scale, how to multiply the power of all these countries to generate offsetting mass to China, for example.

That’s imminently possible right now with all this churn and acceptance that we’re not going back to the past. We’re building something new. I’m eagerly awaiting government action to chart how we collaborate with main allies in Asia and Europe. It’ll look different than historically. That’s okay. There’s enormous opportunity for those thinking creatively and moving aggressively when people are serious about solving problems.

Jordan Schneider: Speaking of sovereign capability and things looking different than they did before, how do you feel about nationalizing primes and putting the Defense Department on the Anduril cap table?

Chris Brose: I understand why the government is considering equity stakes in defense contractors. For years, a handful of hyper-consolidated companies have relied entirely on government contracts while delivering late, over-budget programs. The government owns all the downside without real control over performance. The market has become such that you can’t even call it a market. It’s hyper-consolidated with too-big-to-fail players that the government doesn’t really have options.

For the government to come in and say, “If you want me to build you another facility to produce more, right now I want a piece. I want to be at your board, at your table, with a real voice for how you’re running the company, how you’re using profits, how you’re structured” — I totally get why this is a conversation we’re having now.

But this would be catastrophically bad right now. Unlike Intel, which serves commercial markets, defense contractors operate in a monopsonistic environment where the government is the only customer. For the government to award contracts to companies it partially owns creates massive conflicts of interest. It’s the same reason defense secretaries must divest holdings in defense companies.

In an environment where you effectively had hyper-consolidated large defense companies you could count on one hand, it would make sense for the government to say, “In order to compel performance, in order to keep programs on cost, on schedule, I want to have more agency over how these companies are functioning.” I get that.

But the timing makes this doubly ironic. After a generation of walking away, we finally have an explosion of new defense tech companies. Dozens are being funded by billions in private capital, building innovative capabilities, competing against the legacy players. Taking ownership stakes in the largest incumbents just as this competitive renaissance emerges would undermine the very dynamism we need.

In a market with only a handful of players, government ownership might make sense to compel performance. But when energy, money, and talent are rushing back into defense to create real competition, this is deeply problematic.

Autonomy and Arms Control

Jordan Schneider: The future of command and control — what won’t humans be doing? What will humans still be doing, maybe five, ten, twenty years down the road?

Chris Brose: First, we need to separate command and control. They get bundled together and are often referred to as C2, but command and control are very different things. In a human setting, commanders who are providing their intent — their overall objectives and guidance — to subordinate agents, whether those are people or, in the future, could be robotic systems. Those commanders are not telling them every single thing to do.

They may trust certain subordinates more and give them a wider berth or more flexibility in what they’re able to do. But those commanders are providing the left and right limits under which the forces that report to them are making decisions and operating. Control is executed more at that subordinate level. There are instances where a commander will reach down and directly control an outcome because it’s important for that individual or for the mission. But the way the US military functions is very much around delegation of authority to the lowest level. It’s what makes us different than the Chinese military or the Russian military, and it’s a massive superpower.

This delegation of authority is the whole basis of command and control. This is why I don’t think it’s crazy at all to take that exact framework and apply it to how human beings in the future will be interacting with robotic systems or autonomous systems. You still have a human commander in charge who is fundamentally making a couple of big decisions.

One is determining whether some object on the battlefield is a legitimate military target. That is something I think we want a human being to decide. The decision may be enabled by a lot of technology like sensors and machine learning but at the end of the day, a human being needs to say yes, that is a legitimate military target that I want to do something about.

The follow-on action of doing something about it — the controlling or initiating an act of violence — is something that we’re going to want a human being to at least say, “This is a decision that I want to take.” My own view is that, beyond that, most of this can actually be automated. It can be a set of practices or robotic systems where human beings can still execute commands but be more reliant upon autonomous systems or processes to engage in the control of the decisions they’re setting themselves.

Jordan Schneider: Waymo, right? Everyone has this vision. The pitch they’re making is, “Look, this is better than 99.9% of drivers, or it’ll get there soon. You should trust us instead of driving.” There is a long and storied history of targeting decisions gone awry. Why do you think there should be human beings deciding which, I don’t know, Venezuelan boats to blow up?

Chris Brose: A human being will make the final decision. It’s a classification decision enabled by technology, but determining civilian versus legitimate military target — I’m not sure we’re ready to hand that off to robots.

But I would tell you that most of these decisions, all of these decisions, are highly contextual and circumstantial. I find the debate often becomes this very monolithic debate of, in the abstract, what are we willing to delegate to robots.

This conversation looks very different for offense versus defense. In defensive operations — protecting against inbound enemy drones, weapons, missiles threatening a ship, base, or city. You’re going to delegate a lot more because the speed at which you have to make that decision is much faster. The requirements are much faster, and the consequences of being wrong are much higher in terms of actual loss of life to your own forces or population.

For offense, for force projection — going out to find and destroy enemy targets — we’ll be more cautious about what we delegate to autonomous systems without human-in-the-loop supervision.

Another example — the way the US military operates is not that we’re going to go fight wars that are endless in time and space. We are going instead to identify very specific geographic locations that we are going to define as areas of active hostility. This is US military doctrine. It’s the law. Inside these carefully drawn zones, commanders relax thresholds for using force due to mission and force protection risks. This doctrinal framework can absolutely be adopted for autonomous systems. It’s not loose killer robots everywhere for all time. It’s communicating to the world: “Don’t go here because I’m treating this as a battlefield,” while giving our forces more leeway to use force they might not employ elsewhere because the mission must succeed and you must protect the humans operating there, military and civilian.

Jordan Schneider: It seems there’s a lot of competitive pressure in delegating more. Maybe the tech isn’t ready, and this is a 2040 or 2050 thing. But when you have autonomous systems that can escalate situations with strategic consequences you didn’t intend, that’s probably where you still want human oversight.

Chris Brose: That pressure is there. If militaries see an operational advantage to be gained by delegating more to autonomous systems, by removing human control that slows processes down, if it enables them to operate at larger scales because you can now have a human-to-machine relationship or ratio that enables one human being to deploy or supervise lots of robots or weapons — countries are going to do that.

I would say China especially is going to do that because, to the extent that I understand it, their entire military structure is based on the belief that senior leaders do not trust their subordinates. They do not want empowered lower levels with guns running around with their own ideas and opinions.

It’s not a huge logical leap for me to believe that the Chinese military, as a matter of doctrine, is going to be far more willing to delegate these kinds of decisions to robots that they believe they can control, as opposed to human beings who may have a mind of their own — a group of folks who are armed who decide that they might not want to follow orders, or they might not like the regime, or they might want to take matters into their own hands.

Jordan Schneider: I’m not sure how you spent your Tuesday night, but let’s do China parade takes. I’ve got one from the peanut gallery — their CCAs seem much bigger, and some are tailless compared to the Fury.

Chris Brose: I’ve been too busy this week to read deeply into all the moment-by-moment takes of what’s been coming through. The Chinese Communist Party puts on a hell of a parade, hats off. It was super impressive. The marching is very high level. I did not have a chance to see every piece of the military system rolling through.

I’ll offer an opinion related to a question I have. The benefit of these things is that you get to showcase your hardware. Arms control and verification are built around this idea of “I can see things in the real world, I can observe them, I can count them.” This is how we did arms control with the Soviet Union. How many warheads do you have? We’re doing open skies observations of deployed nuclear forces, et cetera.

But how do you verify the level of autonomy of a robotic system? How do you verify what the software of that system enables the drone or robotic submarine to be able to do? That is a massive operational advantage for a country. Their collaborative combat aircraft are probably not going to look wildly different than ours. Their fighter jets certainly don’t because they have a very long and effective history of stealing those industrial designs from the United States.

If you see two drones that look more or less alike, one of them may have a level of software that is 10x better that enables it to do wildly more effective things in operations than the other one that looks identical to it. How do you verify that? How do you understand what its capabilities and limitations are? How do you begin to even think about an arms control regime for these types of capabilities?

We’re all better off not getting into an arms race dynamic. But the reality that people have to contend with is that this is an incredibly difficult set of technologies to observe, to verify, to understand what it’s capable of doing and what the military advantages that each respective country is gaining from those technologies are.

I’m realistic/cynical about the prospects for getting into some type of arms control regime on AI-enabled systems or autonomous systems for those reasons.

Jordan Schneider: That’s the lesson of the ’60s, ’70s, and ’80s as well. You had arms control, but it was on stuff that didn’t matter because both countries could still totally blow each other up. And by the way, you had SALT, and then SALT ended three years later and they tried to do it again. Everyone was still trying to make new and better tanks and bombers and fighters at the same time. I share your pessimism on this one.

Chris Brose: People spend a lot of time thinking about arms control for AI. I’m all for having that conversation. I want the advocates of it to start from a realist understanding of the world in which we’re living, to understand the consequences of getting into a one-sided arms control negotiation, of limiting ourselves. The reason arms control worked between the United States and the Soviet Union, such as it did, was because both sides had nuclear arms.

Jordan Schneider: They weren’t giving them up.

Chris Brose: They were limiting them, fundamentally. Your point is right. They still had nuclear arsenals that could destroy the planet multiple times over. They didn’t necessarily need to build two and three times more, but they would have had that dynamic constraint not been put in place. But the point was that constraint, to the extent it was effective, was effective because you were counting things you could count. You were measuring and observing things you could measure and observe.

I don’t know how you do that on software. We’re going to be reluctant to hand all of our source code over to the United States government if they didn’t pay for it. Why in the world are we going to do that to the Chinese so they can verify the level of autonomy that our collaborative combat aircraft has, so they know what its capabilities and limitations are? It’s just never going to happen.

It’s fine to have that conversation, but let’s actually have a debate from a position of facts and reality rather than hopes and dreams.

Jordan Schneider: On the other side of this, you have stuff like chemical weapons or blinding lasers and stuff like that. It just seems to me to be a very different category than this all-purpose technology which is going to go into everything.

Chris Brose: Also true. The other little inconvenient fact about chemical weapons is the reason nations engaged in arms limitations for chemical weapons after World War I is that they realized they didn’t work very well. They were played out. By 1917, it was shoot mustard gas at the trench over across from you, and the wind changes and it blows it all back into the faces of your own soldiers.

There was an incentive for these countries to limit weapons that they themselves had developed, had used, and found to be not as effective as they had thought. There’s a realism governing why they engaged in these kinds of arms control in the first place. But to be very clear, they built them, they used them, and only then did they engage in a limitation.

Jordan Schneider: Now it’s like cluster bombs are back, landmines are back. You don’t use the thing until...

Chris Brose: You don’t use those things until you realize that you need them. Ask the Ukrainians about landmines and cluster munitions or area destruction capabilities. They absolutely have a need for them. What is the easiest way to clear a minefield? It’s not driving robotic bulldozers through it. It’s hitting it with a cluster bomb.

For a long time we had this luxury. We took this vacation from world history and we thought that we had somehow gotten beyond all of the lessons that we had learned in previous wars. We thought that we could do without this or we would never need to produce at the scale that we did in the past. And here we are, back to the future.

Orban’s Cannons

Jordan Schneider: Speaking about lessons from world history, you mentioned you were reading 1453, an account of the Ottoman siege of Constantinople by Roger Crowley, which is very well written. What struck me was the story of Orban, who’s this mercenary gun master. He was from Hungary or Wallachia.

He first goes to the Byzantines but they’re too poor. So he goes across the river and hangs out with Mehmed II, who signs a big contract. He makes the biggest gun the world has ever seen. His cannon could shoot 700-pound rocks. It was able to knock down this wall that had been improved upon over the course of 2,000 years. But Mehmed the Conqueror says, “Keep shooting it, keep shooting it.” Orban’s like, “I see these cracks, maybe we shouldn’t.” And it eventually blows up and kills him. What lessons does this story have for the future of defense acquisition?

Chris Brose: Pay attention to the limitations of your technology. To take a step back: Why am I reading this book? I’ve been on this weird Middle Ages kick for the past couple of years because I find that we do, as a country, an incredibly terrible job teaching history to kids. I have a 12-year-old and a 15-year-old and it is just shocking how bad their historical education is.

I find myself needing to be a history teacher to my children. It’s frustrating because history is literally the written record of the most interesting stuff that’s ever happened. How can teachers make this boring?

My dad was a historian. I’m not a history major, I’m not a trained historian. I’m just interested.

Jordan Schneider: What was his period?

Chris Brose: It’s actually very germane to this conversation — he studied and wrote on changes in technology, specifically 19th and 20th century Europe with a focus on Germany. He actually wrote a very cool book called The Kaiser’s Army, which is about how the German military learned all of the wrong lessons from the Franco-Prussian and Austro-Prussian Wars. That really didn’t set them up well for the opening days, weeks, and months of World War I. You can find it on Amazon. It’s not a bestseller, but it’s a great read.

As for the Middle Ages, people see it as a “dark age.” You had the Greeks and Romans, and then things picked back up with the Enlightenment and the Renaissance. In this thousand-year period, some stuff happened. Wars, plagues, barbarians, the Crusades, and then the Renaissance brought us into modernity.

But I find this period fascinating. To answer your question, there’s a through line in the siege of Constantinople that has everything to do with technology and innovation, with Orban’s guns being a great example of it. The Ottomans and the Arabs before them had broken their teeth on the walls of Theodosius for years and centuries. The reason Constantinople was able to survive, despite the protracted state of decadence of the Byzantine Empire, was because they were surrounded by water on three sides and these impregnable walls on the other.

But Mehmet realized that this innovation could smash through those walls. Beyond that, Mehmet literally dragged his fleet out of the water, over the mountains, and brought it down into the Golden Horn — it’s amazing. I traveled to Istanbul many times in my last job with Senator McCain, and I regret that I only appreciate all of the history now in retrospect. I’m very eager to go back.

Jordan Schneider: There’s a really good military museum, actually. It has the chain that blocked the Golden Horn, it has the Orban cannons…

Chris Brose: The panoramic painting of the whole siege...

Jordan Schneider: I was there on my honeymoon. I told my wife, “Can I just get one day to look at the war stuff?”

Chris Brose: Did you hike the wall?

Jordan Schneider: Yeah, you can walk on the side inside. The amount of stuff is incredible. You have some Roman stuff, you got the Byzantines. The mosques are spectacular. Hagia Sophia is overcrowded and a bit much. But the tier-two mosques, you have this experience of serenity of being one of ten people. Shehzade Mosque took the cake for me.

Chris Brose: It’s so fascinating. Everybody thinks, well, in the year 476 the Roman Empire just disappeared. No, it actually went on for another thousand years in Constantinople.

Jordan Schneider: More cannon lore from Crowley— “The psychological effects of the artillery bombardment on the defenders were even more severe than its material consequences. The noise and vibration of the mass guns, clouds of smoke and shattering impact on stone dismayed seasoned defenders. To the civilian population, it seemed a glimpse of the coming apocalypse.” Which one of your platforms is most likely to give us a glimpse of the coming apocalypse?

Chris Brose: I don’t think that we will be giving anybody a glimpse of the apocalypse. We’re certainly not building anything on the order of Orban.

Jordan Schneider: You’ve got to aim higher, man. I’m a little disappointed in that answer.

Chris Brose: But to the question of striking fear into the hearts of our adversaries, the work that we’re doing undersea — we’re building a large diameter and an extra-large diameter autonomous undersea vehicle. We have a phenomenal partner and program in Australia working with the Australian Navy on that. That is an incredibly cool and deeply scary system.

It’s electric-powered, it’s super silent. It can show up in places that are a long, long way away from where it went into the water. It’s wildly accurate, carries all kinds of very interesting cash and prizes. This is the kind of offsetting advantage that I would hope gives our adversaries pause. Every morning, they’d wake up and be thinking, “This isn’t the kind of day that I want to make a run at a US ally or partner or US interest or something else that we value.”

When AI is a Double Agent

Jordan Schneider: All right, I have a weird one — we’ve talked about mass precision. We have precise mass. I have this vision of mass intimacy. AI is coming. We talk to it all the time. And it is growing into less of just like Microsoft Word and more of a companion to lots and lots of people. The espionage and social engineering power that you could have by controlling a decent percentage of a nation state’s therapists, spouses, or best friends just seems wild and just as scary as a secret silent submarine.

Chris Brose: Absolutely. These are the kinds of things that sound like science fiction. Let’s say hypothetically that an adversary of the United States stole an enormous amount of classified information about people in the United States government who hold security clearances. They have a deep knowledge of who people are. Let’s say they have an active cyber campaign and operation to gather more of that information. They can build an AI agent that is capable of identifying and making contact with a person and, over a period of time, becoming intimate with them such that that person begins divulging information about themselves that is compromising.

This isn’t crazy at all. I would be surprised if it isn’t happening. These are incredibly precise, very strategically important, highly consequential types of operations that previously would never have really been possible. This is here now.

To your point about our increasingly intimate relationship with AI and AI agents, it’s only going to become more that way. The nefarious weaponization that is possible with those types of things — I don’t even think we’ve scratched the surface in terms of the level of creativity that people are going to put against this.

Jordan Schneider: Would I rather have an SF-86 or someone’s ChatGPT logs? ChatGPT logs every time. The SF-86 is a point in time. It’s everything you are willing to tell the government. But whatever problems you have in your life, in real-time, you are engaging with technology with those things nowadays. And by the way, 30% of the US AI companion market is currently owned by Chinese companies. We’ll see how that one plays out. If you’re worried, if you think TikTok is sketchy, there’s a bigger worry than just getting the assistant secretary of whatever’s stuff. You can do societal-level things.

Chris Brose: It’s absolutely “both and.” People have become more familiar with threats posed by platforms like TikTok or deep Chinese involvement in American technology and access to our daily data. When you consider things most Americans don’t think about — how this changes intelligence gathering, cultivating assets, and compromise — it’s an incredibly powerful tool.

The amount of information we put into the digital environment and our willingness to become intimate with systems that understand us deeply, that know how to exploit things we’d only share in intimate relationships — that’s all pretty terrifying. They know what to look for.

The Courage to Be Serious

Jordan Schneider: What’s the book that needs to be written? What would the Kill Chain sequel look like? New chapters?

Chris Brose: Writing Kill Chain was uniformly awful. I was working full-time at Anduril with a wife and two kids, writing in my free time on an aggressive ten-month schedule. It was just pain and suffering. I’m fortunate I don’t have to write for a living. I’m not currently working on another book and am probably looking to keep it that way.

What’s the book that needs to be written? There are plenty, but we’ve said all these things already. We know the problems, we know what’s wrong, we have an increasingly clear view of the threat. Washington gets caught up in process questions and mistakes changing a process for better outcomes. JCIDS was consigned to history and we’re better off for it, but nobody should think eliminating a process inherently gets better outcomes.

Jordan Schneider: Things still need to be joint somehow, right?

Chris Brose: I’d submit that we have absolutely everything needed to do what we say we need to do. All the authorities, plenty of money, phenomenal people, world-leading technology. There’s nothing missing. There’s no process, budgetary, or other roadblock standing in our way.

We’re fundamentally limited only by our imagination, will, and seriousness to conceive new capabilities and ways of organizing. It’s just a matter of senior leaders making their institutions do new things rapidly. There’s nothing standing in the way of our doing that.

It’s not to say more books, articles, and podcast don’t need to be published. It’s important to keep people focused on this. But too often, people want to believe that unless we reform procurement or change budgets or fix DoD funding, we can’t change. That’s almost a cop-out. It’s scarier when people realize they have everything needed to do what they say is important. Which begs the question: what are you going to do?

Jordan Schneider: I feel like not a lot of people would agree with you. Why do you believe that?

Chris Brose: I’ve participated in lots of reform, and I know a lot of the authorities that exist. In the Senate, we produced hundreds of pages of acquisition reform. I’m not sure how much was even needed.

When you look at the massive flexibility that exists for the government to acquire what it wants, it often comes down to political will. You could use that authority, but it’s risky, it’s hard. Someone won’t like it. Someone might protest. That doesn’t mean you can’t do it.

Too much of our defense world relies on a priesthood claiming magical knowledge of procurement. Senior leaders have disempowered themselves. A lawyer says you can’t do something. Then you ask them to show you the statute that says you can’t. If they can’t show it to me, I assume I can.

We have enormous authority to create new programs, field new technology, and scale it up. We obviously have talent and technology. We’re spending nearly a trillion dollars on defense annually. You should be able to build a damn good military for that.

I’m not sitting here saying we need to cancel all the traditional programs. We need both, the traditional ones and new, non-traditional, low-cost, mass-producible systems. We have the budget for all of it. If we don’t do this and keep pouring money into old programs, we’ll spend everything without significant increases in capacity or capability. And we will only put ourselves at greater risk in the future.

McCain Memories

Jordan Schneider: The reason things are not happening might come down to this very moving end of The Kill Chain, where you talked about John McCain, who you worked for for a long time, passing, and how dejected you felt.

“The same pessimism occupied me on my third occasion when my emotions about McCain overwhelmed me. It was an overcast and unseasonably cold October morning in Annapolis, Maryland, where McCain’s final resting place lies in a small cemetery on the coast of Chesapeake Bay at the US Naval Academy. It was the first time I had been back to his grave since his death. And it did not take long for all those old emotions and feelings of gratitude to come rushing back. But what was different this time was the overwhelming sense of sadness at the inescapable realization that things in Washington had not gotten any better since McCain’s passing. Indeed, they had gotten worse. Significantly, inexplicably, undeniably worse.”

Chris Brose: That was what I felt at the time. To put some context around it — when McCain passed, I had this hope, primarily when we were sitting at the National Cathedral at his funeral, that maybe this would help to galvanize a critical mass of people to say, “Hey, this guy had worked for literally decades to try to make these processes better, to try to make the DoD better, to make programs perform better, ultimately to get our warfighters the capabilities they need to deter conflict and win.”

I hoped maybe his passing would galvanize people to get their act together—stop fighting over budgets, continuing resolutions, government shutdown threats. All these costly, time-wasting distractions from arming our warfighters.

Part of me knew that wouldn’t happen — politics builds up cynicism. When I visited his grave a year later, I realized that moment of unity, reflection on his legacy, hadn’t led us to be more serious about hard decisions. When I went back up and visited his gravesite a year or so later, I realized, “Man, there was this hope, this moment that maybe we could have had where everyone was united, everyone realized and was reflecting on this guy’s legacy and what he did.” He wasn’t perfect, but he was way better than the rest. I hoped his memory would lead us to be more serious and make hard decisions.

The thing that I get asked about a lot with McCain, what was it like working for him? What was different about him? There are plenty of smart people in Washington. There are tons of decent and hard-working people. There aren’t a lot of courageous people. There aren’t a lot of people who are willing to take an action or a decision knowing that it is going to blow back on them, knowing that despite it being the right thing to do, they are going to suffer an immediate political or other type of consequence for their action. I don’t see that a lot.

That’s what these times call for. I hoped people would be more courageous about hard votes and decisions that let us function like a normal country. We’ve defined deviancy down so much. We’re just trying to get back to normal. Maybe we could have the courage to do that.

At the time that I was writing, the political uncertainty, volatility, and fighting were worse even than they had been when I left the Senate. Five years later, there are bright spots, but until we do more of what we say we need and stop doing unserious, detrimental things that tie our warfighters’ hands, it’s hard to believe we’ve reached a level of seriousness McCain would be happy with.

Jordan Schneider: For young listeners with little McCain memory, what else should they know?

Chris Brose: Watch his concession speech. When people didn’t want him to concede, wanted to keep fighting, he gave an incredibly moving statement about unifying as a country to solve real problems. He said, “It’s time to move on. It’s time to unify as a country and go solve the real problems that matter. We’ve fought over our differences. Now it’s time to focus on governing and moving into the future.”

The thing that was always cool was that he would do all the meetings, he would do all the work, but he always left time to do something fun and interesting and generally culturally and historically significant. On the many trips we made to Istanbul, we saw a lot of amazing history in that city. We went to Mongolia, had a long meeting with the president of Mongolia, who then invited us to go fishing out in the Mongolian steppe. We sailed down the river, paddled down the river with his security detail, and caught fish.

I’ve sat in a lot of meetings in my time in government. Meetings are meetings, and whether you’re working for this principal or that principal, they’re not wildly different. It’s those experiences that McCain always sought out — to do something interesting, to see something significant, to go to a place that he’d read about and see in person. Places that I know I’ll never go back to. I feel incredibly fortunate that I got to do that with a person like that.

Jordan Schneider: Last one for you. What’s the more ambitious version of ChinaTalk? What can I be doing better or bigger?

Chris Brose: What you’re doing is important. For those of us who are not as expert in China, who don’t spend as much time thinking about it, it’s a phenomenal service and resource with the diversity of guests you bring on and the focus and deep level of insight you provide. What’s bigger and better than that? I don’t know. You could get a primetime talk show. You could expand from China to Russia. I don’t think these are things that you necessarily want to do, but what you’re doing is terrific. Honestly, I wouldn’t mess with it because it’s working.

Mood Music:

China’s Ministry of Commerce (MOFCOM) just announced a sweeping new package of REM export controls, claiming extraterritorial jurisdiction over the entire AI chip supply chain in the process.

To find out more, ChinaTalk interviewed Chris McGuire, who served as Deputy Senior Director for Technology and National Security at the NSC during the Biden administration and was on the pod last week talking Nvidia vs Huawei, and , author of Chip War who is now on substack!

We discuss…

• What the new export controls do, and how on earth China plans to enforce them,

• How the restrictions will impact the semiconductor supply chain, the auto industry, and manufacturing more broadly,

• What concessions China is hoping to extract, and how the US should approach upcoming negotiations,

• Xi Jinping’s tolerance for economic pain,

• How rare earths friendshoring could undermine China’s leverage.

Listen now on your favorite podcast app.

A Rare Earth Bombshell

Chris McGuire: Last night, the Chinese announced a significant expansion of their controls on rare earths (translation by CSET here). We’ve been seeing this trend develop — it’s the kind of lever that the Chinese have been pulling harder and harder since 2023, when the first controls were implemented. Obviously, they’re dominant in the rare earth space, though it’s much lower on the value chain than where the US is dominant in the technology space. Nonetheless, it’s an area where they’re trying to exert leverage and influence.

The controls were quite expansive, and people are still digesting them. Broadly, there’s a large swath of rare earths and magnets that are now controlled. The regulations also expanded the end-use controls onto a variety of specified applications. Defense purposes are one category, but they also specifically named semiconductor manufacturing.

The controls very much mirrored US regulations. Basically, any use of Chinese rare earth for the production of a logic chip at 14-nanometer or below, or a memory chip at 256 layers or more, is captured. Additionally, any product that contains Chinese rare earth content exceeding 0.1% of the total value is captured anywhere in the world. This mirrors the US de minimis rule, where anything with US content that fits the description is controlled to China for certain very specific items. China is now saying that any product with even a very small amount of Chinese rare earth valuation is controlled, and the ability to make products for certain end uses is controlled no matter what if you’re using Chinese rare earths.

Crucially, there’s an extraterritorial element to this as well, which was not the case in some of their previous controls. It’s very expansive. The legal analysis suggests it would impact basically the entire technology supply chain. The potential implications would be significant. Obviously, there are big questions about the practical reality and enforcement — whether they can actually enforce this, whether they intend to, and what their ability is to actually get firms to comply.

You have some sectors where there’s very heavy usage of these rare earths, requiring large quantities and therefore large suppliers. The semiconductor industry actually uses smaller quantities, so enforcement might be a little different. Nonetheless, this represents a significant expansion of the scope of their controls. It’s notable in the lead-up to the APEC conference and also following the US 50% rule that came out a couple of weeks ago.

Jordan Schneider: Whoever in China is copy-pasting the regs that Chris wrote is more than welcome to come on ChinaTalk and show us how it’s really done.

Who Has Escalation Dominance? Playing the Pain Game

Jordan Schneider: Chris Miller, what’s the potential industry impact?

Chris Miller: The impact of how this would play out if actually implemented is complicated and hard to understand. We should separate the impact of actual implementation from the negotiations that are probably going to ensue before implementation. We should tackle both of those.

The interesting dynamic to me is that if you look at the use of rare earths in the chipmaking process, they’re predominantly — at least magnets are — used in the machines that make chips, where magnets are indeed required. Although many of these companies have done a fair amount of stockpiling, it’s not the case that if you stop selling magnets, the chip industry grinds to a halt. Maybe it gets more complicated to build new tools for expansion.

The other direct chip industry impact that the regulations called out was non-magnets — other rare earths that are used in some of the materials and consumables. They specifically mentioned sputtering targets, for example. It’s really unclear how strong of a position China has here. We’ve just never run the experiment in real life. It’s possible that China can really limit production of these items, but we’re also talking about really small volumes. It’s also possible that if China does implement the controls, there are ways to source from other companies or source secretly in ways that China can’t detect.

All that’s to say, if China actually carries the controls out, it might not be as immediately impactful in the chip industry as China hopes, with a pretty wide uncertainty interval. But we should probably turn to the question of what it means for the rest of the economy if China carries them out, because that’s where you would have probably pretty disruptive impacts.

Jordan Schneider: Yeah, let’s start by playing out the scenario where they actually do the thing, and then later on we can discuss what the leverage is here. I just got a text — “Jordan, if you’re doing an emergency pod on this, is the PRC going to send MOFCOM export compliance officers to hang out in Indonesia?” Maybe they’ll actually be better at it than we are. How could this actually manifest in practice if they really wanted to push the button on these regs?

Chris McGuire: That’s a big question. The problem the PRC has had is that there’s a secondary market here that they don’t have as much insight into. Obviously, they’ve tried to centralize control over the rare earth market to reduce the ability of firms to just buy rare earths through cutouts or similar channels.

Ultimately, look, there are two things. Take firms like TSMC that are using rare earths for production — theoretically, that’s not allowed without a license. They could apply for a license. If they didn’t apply for a license, the PRC could try to send an end-use check to Taiwan. I don’t think that would go over too well.

Alternatively, they could try to say, “Well, TSMC is clearly violating because there’s no way you could sustain production without rare earths” — although, as Chris said, they very well might have a very large stockpile. But then again, what’s the leverage that they have over those companies? Are they going to say, “Sorry, TSMC, your products are no longer welcome in China”? I don’t really think so. That’s a very empty threat, and obviously, that would cause more pain.

That point actually highlights where the United States and allies still have fundamental leverage in this space. We talked about this a little last time, but the tit-for-tat here is dangerous. It’s notable that there was an agreement on rare earths and minerals, and that appears to have been — I don’t want to say gone by the wayside — but obviously the Chinese are ratcheting back up on it.

There does need to be a US response. Because of these dynamics, the US does have escalation dominance in this space. We can talk about specific options, but a lot of the products the Chinese regs are targeting are ultimately very critical to the Chinese economy and ones that they cannot source domestically. Cutting those off is probably not realistic for the Chinese. If the United States and others were to cut those products off to China and to no one else, there would be a lot of pain felt.

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I’m skeptical of the idea that this shows the Chinese have escalation dominance in this space. I don’t think they do. But it’s incumbent on the United States to show that they not only have tools to respond, but they’re also willing to use them. Our lack of willingness to respond forcefully to some of this stuff before is why we’re in the situation we’re in, where the Chinese feel empowered to ratchet back up on rare earths.

Chris Miller: I agree with you, Chris, that the US has escalation dominance in the sphere of semiconductors. We could shut down much of China’s chip production domestically because they require a larger share of materials and consumables than we require from them.

But what we saw in April was that China bet it could respond in a different sphere. We impose tariffs, they impose magnet controls. That had a big impact on the automotive sector, for example. My worry is less about the semiconductor-specific dynamics and more about what happens if China follows through with this. What’s the impact on the rest of the manufacturing base in the United States, which, as we know, does need magnets and other materials that are mostly sourced from China?

In April and May, we found that the White House was very sensitive to any disruptions in the auto supply chain — not surprisingly. That, to me, is where the uncertainty lies. What happens if these controls ricochet through other segments of the economy where it’s less clear that the US has this position of escalation dominance? Then you end up with a standoff: the US threatening to escalate in one sphere, China threatening to escalate across the manufacturing base. Who feels most compelled to back down? Who feels most able to bear economic cost?

I don’t know the answer to that, but I worry about it.

Chris McGuire: I don’t disagree with that. There are ways the US can escalate in other areas as well. I agree that if you’re focused very narrowly on semiconductors, obviously the US has more escalation dominance in that space. But what I was thinking about is broadly in the technology industry — the United States retains escalation dominance, and that’s a much broader area and sector where there could be much more immediate pain felt on the Chinese side than in semiconductor manufacturing or some of the other measures that were imposed before, like airline parts.

For instance, if the Chinese are saying you need a Chinese license to make any 14-nanometer chip in the US, a reciprocal measure on the US side would be requiring a US license to ship any 14-nanometer chip to China. That would have a pretty dramatic impact on the entire Chinese economy pretty quickly. That means no iPhones, no computers — and not just those chips, but any products containing those chips. It’s not to say that all those would be banned, but the US would be saying, “Hey, we need a license,” just as the Chinese are saying they need a license. That’s actually a pretty tit-for-tat move, but it’s a pretty high pain point on the Chinese economy. That would have big ripple effects.

You could always escalate that further. Is China going to retaliate on APIs? Is the US then going to impose financial sanctions on banks and dollars? Yes, there’s further up the chain that we could go — that’s probably the highest place up the chain. But even expanding the space a little broader than just semiconductors, there are places where we underestimate the amount of pain that — or, sorry, overestimate the amount of pain that — the Chinese would be willing to tolerate. It actually might be more painful than people think.

Chris Miller: Yeah, that seems to me to be a key question. My mental model is that the Chinese are usually willing to tolerate more pain than we are because their political system allows them to ignore short-run impacts on living standards to a much greater degree. It seems to me that anything involving manufacturing supply chains, the Chinese have a stronger position considering their willingness to tolerate more pain than we do.

I’m not sure it’s credible for us to say we’re going to impose controls on a broad range of chips, since, as you say, that would begin implicating smartphone supply chains and much else. I wonder whether the US eventually says, “Actually, we’re better off retaliating or threatening retaliation in a sphere that’s not in manufacturing supply chains — it’s in a political or military or financial domain.” We’ve learned a lot over the last couple of months about the White House’s willingness to stomach economic pain and Beijing’s.

Chris McGuire: There’s a question of what people would do and a question of what they should do. But basically, an equivalent measure here — an equivalent license requirement in an equivalent part of the sector — has the advantage that you’re not expanding the box that much. If they’re going to be targeting the advanced chip sector, then you respond with reciprocal measures. Then any move that targets things outside of that means the other side is escalating, not you. It’s actually pretty easy to justify as a reciprocal move. If they’re going to require a license, we’re going to require a license. But that license requirement would potentially pose more pain on the Chinese side than on the US side.

As you said, maybe there are auto firms in the US that are more impacted. But there are also Chinese auto firms that would be pretty impacted by that. What’s the impact on BYD going to be if all of a sudden they can’t source from TSMC until they get a license? Same with Xiaomi, same with NIO.

The Chinese perceive that they have the ability to take moves like this and reshape the game board and exert their leverage over the United States without receiving tit-for-tat actions back that really cause them acute pain. They were willing to do it before, and now they’ve shown they’re willing to do it again. Without a strong reaction back that shows we’re willing to apply acute pain too — acute short-term pain, not long-term strategic pain, because as you said, Chris, we would clearly lose that — but acute short-term pain, I don’t see how this dynamic changes. But there is a way to remind the Chinese that we have a lot of big levers to pull in this space as well.

Chris Miller: That makes sense. The other key dynamic here is that the Chinese now clearly believe — and the rest of the world has increasingly bought into the thesis — that they have a durable long-term position in their dominance over rare earth mining, but especially refining. One way to look at this is: what’s easier to replicate, a rare earth processing facility and mining for heavy rare earths, or an EUV tool? We’re betting on the latter. Big steps that would show China’s making the wrong bet if it’s betting on processing facilities — and help the rest of the world realize that this is not a real credible threat over the long run — would shape how the rest of the world responds to this.

Jordan Schneider: Yes, it’ll be a very funny kind of flip if everyone who makes the argument, “Oh, putting export controls on China is just making them indigenize faster,” doesn’t apply the same logic to the rest of the world figuring out how to refine some rare earths and build diamond saws or whatever else is on that list. What’s good for the goose should be good for the gander, especially now that we have an administration where the continuity in terms of state capitalism and industrial policy seems to be stronger than one might have guessed going from Trump 1 to Biden and into Trump 2.

Chris McGuire: Yeah, completely agree. It’s worth reiterating that we obviously do need to dramatically reshore and friendshore rare earth production. The good news is that it seems possible.

Most estimates suggest that with a real, full, serious political commitment — also with buy-in from Congress and allies — you’re probably talking about less money than was spent on the CHIPS Act.

Meanwhile, we’re talking about $10 billion just to bail out farmers in the context of the short-term trade deal. In the context of some of these US-China dynamics, it actually wouldn’t be horribly expensive. If that’s what it takes to get us out of this mess, then that should be a no-brainer.

It’s good that the administration is spending time, energy, and effort prioritizing this. They just need to keep doubling down on it. But we also have to recognize that the world doesn’t stop until we get there. The world keeps going, and we have to keep using our influence even while we’re in a little bit of a trickier situation.

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Jordan Schneider: I wonder if any other country is going to try to squeeze an American choke point in order to get a better trade deal, or if this is really a China special.

Chris Miller: There aren’t that many real choke points in the world economy. We’re going to find out how much of a choke point rare earth refining actually is. It’s only in the last couple of months that the world has made a serious effort to diversify. My guess is that it’s a choke point only in the short run. Outside of TSMC, Samsung, and SK Hynix, the number of durable choke points are actually pretty limited.

Chris McGuire: The tooling companies sit below that, but I would agree.

Jordan Schneider If China wanted to pop the AI bubble, what would the move be? I was joking to Chris McGuire after our last show that once China really starts to internalize Chris’s narrative that Huawei can’t compete with Nvidia in the medium term, then lights will start going off in Western data centers or what have you. I’m curious — specifically in the high-end compute ecosystem and what you need to build that out — that stuff is packaged in Taiwan, not China, right? I’m not sure if there are any direct links. Are there?

Chris Miller: A lot of the components of a server do still come from China. The companies involved all say they’re trying to diversify, but when you get the cables, resistors, and capacitors, there’s a lot that is sourced from China. Now again, are those durable choke points or short-term choke points? That’s an open question. But if you wanted to cause short-term pain, there’s no doubt that China could.

Chris McGuire: Yeah, there definitely were some packaging facilities for advanced chips a few years ago in China, but most of those have been sourced out. People have seen that’s no longer a really viable location. But yeah, that’s right. There are undoubtedly still places in the supply chain where removing a node would hamper production. But the number of places where you could do that and hamper production for years — not months, maybe even weeks — is relatively limited.

Frankly, even rare earths is a bigger one because it’s more structural, but with a serious political push, it’s probably something that could be addressed. In one to two years, you could at least get some pretty serious production back online. It does require real coordination and resourcing, but it’s possible. That’s not the case with a lot of the higher-value things.

Yeah, it’s not impossible. You could throw a lot of rocks and create a lot of irritation. But are you going to completely knock down the target with that strategy? I’m skeptical.

Chris Miller: Jordan, you should tell us how much pain Xi Jinping is willing to suffer. You’re the China expert, after all.

Jordan Schneider: Well, at a meta-societal level, he thinks that Chinese individuals and Chinese society have enormous tolerance for pain. This is his life narrative, right? An incredibly painful upbringing and then a lot of the cultural stuff as well. COVID — keeping that on through Omicron much longer than other people — is probably a relevant data point here. Maybe I’ll record a better answer afterwards.

Chris Miller: This is the key question. If the White House’s willingness to tolerate pain is a low amount and China’s is a high amount, then if you’re the US, you’ve got to find a strategy that takes into account that asymmetry, and that’s hard.

Jordan Schneider: It’s interesting, though, because the White House has a lot of tolerance for pain on many different dimensions. What all the tariffs have done to the American economy is pretty dramatic, and that’s something they have, by and large, settled in on. I don’t necessarily think that what China’s going to do on rare earths is going to change bond yields to the extent you saw in late April.

Chris Miller: Isn’t that what they’re threatening? You could say the opposite. Tariffs — the way we’ve phased them in after the April shock — have increased inflation very marginally and will have an impact on corporate margins. But you can’t see that in any macro data unless you look very carefully. Whereas when there were threats to auto supply chains functioning, there was an immediate political reaction from the US.

I worry that if China actually implements these as they say they’re going to — assuming negotiations and US threats around them fail — then the impact could again be pretty substantial on the industrial base. Not semis-focused, but more everyone else uses rare earth magnets. That’s why the US has got to think about the potential asymmetry of willingness to bear cost when devising a strategy. That’s why Chris is right that you’ve got to escalate back in ways that would inflict a fair amount of pain to equalize the dynamics.

Deadline Dynamics

Chris McGuire: To be clear, you don’t actually have to inflict that pain. There’s actually a way that you have the threat, and it gets you to the détente without actually doing any of this. It’d be better if all of this went away. To be super practical, the Chinese license requirement goes into effect on December 1st. If we put into effect an equivalent license requirement on December 1st on 14-nanometer chips — it’s not draconian, but an equivalent license requirement on 14-nanometer or less chips in effect on December 1st — it’s very likely that we get to December 1st and both of those go away. It’s pretty similar to the massive tariff escalation that never actually went into effect.

The signaling is important. It’s also important to remind the Chinese that they can’t really operate with impunity in this space. Keep in mind, the biggest Chinese company by far by market cap is Tencent, which is wholly reliant on US technology still. The second biggest is Alibaba, extremely reliant on US technology. Huge moves that massively impact the two largest Chinese companies — not to mention everything under that — are going to alter Xi Jinping’s calculus for sure. He thinks we’re just not going to do that.

Chris Miller: I agree totally about the December 1st deadline being meaningful. This is clearly intended to be a move in advance of the negotiations. The question is, does the US have a countermove that’s credible?

Chris McGuire: One thing I’d note — any countermove the United States takes should be something that is a tit-for-tat escalation that they’re also willing to take off the table for the foreseeable future. A significant mistake would be to escalate with policy measures that are under consideration and that we independently judge are necessary for national security purposes — the ones in the hopper. But then they’re tied to this Chinese counteraction. If we just reach for what’s available, it very well could negate those measures in the future because they have to come off when the Chinese say, “Okay, we’re going to reduce or take off our rare earth controls.” But then we have no ability to actually execute that action in the future because obviously the Chinese would escalate.

It has to be something that we wouldn’t otherwise do, but we will do in response to this. That’s why a reciprocal license requirement that’s pretty broad is something that’s appealing to me and makes a lot of sense.

Chris Miller: One other point on the Chinese side — if they threaten it but don’t implement it because we’ve got some retaliatory threat that we then negotiate and both pause — but this is still hanging in the background, it might actually be a pretty dangerous strategy for China. If they’ve got this sword of Damocles hanging over everyone, people look at it and begin building their own rare earth processing facilities. We find out that after a couple of years, this actually degrades pretty rapidly.

It seems like a risky thing for China to threaten and not actually use. If we’re right that this degrades pretty quickly in terms of its durability as a choke point, then this might be something that, if you threaten it and don’t use it, it actually ends up going away.

Jordan Schneider: We’re just going to have a total flip of all the dynamics we’ve seen in the Chinese semiconductor ecosystem over the past three years. Every rare earth company in China is going to have the greatest Q4 of their existence. There’ll be stockpiling — all of this equipment is going to go abroad. We’ll have a big startup boom. Every investor and their mother is going to try to find a new diamond saw or boule manufacturing equipment.

I hope people are paying attention. Even if this gets negotiated out of existence for the next six months or year or two years, the fact that this is on paper should wake a lot of folks inside Washington and in the broader financial startup investment community to the reality that this is a need that is going to come back at some point. Once you have a system that takes this stuff seriously enough to write the regs and convince everyone that we’re going to publish it and put it in your hand for the negotiation, yeah, it doesn’t just disappear.

Chris McGuire: Yeah, we’re definitely in a world where things get turned upside down sometimes. But look, to close on this — the Chinese are obviously evolving in how they’re using export controls. It’s really funny to see them literally mirroring the thresholds that are in our controls and the de minimis exception, which was a relatively recent innovation in our controls. They’re obviously reading them really closely and then just putting them back on us. Credit to them — we spend all the time thinking about it, and then they’re fast followers on the same thing and everything.

But you know, this dynamic is not new to the Trump administration. Obviously, there’s been a significant escalation. We talked about this a bit last time, but the Biden administration dealt with this issue too. The Chinese have evolved in their thinking. But my experience in the Biden administration was that clear and concise messaging behind the scenes was actually effective in deterring a more significant escalation in the rare earth space.

Now obviously it’s out in the open, so the behind-the-scenes messaging probably needs to be done in public now first so that everyone’s on an equal playing field, and then you can move to that. As long as we’re not a step down, you don’t want to be negotiating from a position of weakness, which is where we’d be if we don’t do something reciprocally. But once you get to that position of equality, if not a position of strength, the quiet, behind-the-scenes messaging to the Chinese works: “Hey, listen, you really don’t want to go down this road because it can end pretty badly for you. There are a lot of tools that we could use to escalate that would be effective and would be pretty painful for you.” They would obviously never admit that, but their actions showed they recognize it, and it could still be effective.

Jordan Schneider: I know you were focused earlier on not expanding the box, but the two really resilient things are the chips and then the financial system access. That’s the other one that we haven’t really seen played, but it’s there and it’s not going away. It’s not like the Chinese haven’t tried to do RMB internationalization, but yeah, have fun selling this stuff to Iran and Russia.

Chris McGuire: That’s the sword of Damocles that’s hanging over all this. You can get to equal footing with reciprocal tit-for-tat escalation within the box. But then the private messaging can be, “Hey, we have things outside the box. You don’t want to go outside the box because if you go outside the box, we go outside the box. That’s a dangerous place to be for you.” Then you’re talking about the utility of the dollar and limitations there. We don’t want to be in that world either. That definitely gives them pause.

Bearish on a Grand Bargain

Jordan Schneider: What lessons from negotiating with Hamas and Bibi do you think Trump can take to the rare earths showdown?

Chris McGuire: Wow, I hadn’t thought through that one yet. You don’t want to be negotiating from a position of weakness. Going into APEC in a position of weakness — having the Chinese say, “We are putting our controls over your entire technology supply chain,” and we’re just saying we’re going to work it out — will be very difficult in an in-person negotiation with Xi. At the very least, his perception would be “I have the upper hand,” and therefore, he’s not going to give an inch on anything. That’s not something that’s Trump’s instinct either.

Don’t negotiate from a position of weakness, and also be firm. Look, the Trump administration put a lot of pressure on both sides, and we’ll see how this broader agreement pans out. No one cares at all what I have to say about the Middle East — I wouldn’t pretend to talk about it — but that said, if something holds, the Trump administration put pressure on Israel and on Bibi, and the United States actually has a lot of weight and leverage. That’s true in every relationship — our relationship with allies, our relationship with China. The United States really does have the ability, if it’s serious, to influence negotiations in big ways.

Other countries take advantage of the fact that we’re a little hesitant to escalate in big ways. The person who recognizes this dynamic the most is actually Donald Trump, who has been very willing to escalate in very dramatic ways in certain circumstances. We’ll see how it plays out here.

Jordan Schneider: Yeah, it’s interesting. The line Trump — Axios reported it — Trump saying to Bibi after he got Hamas to agree to their side of the deal: he’s presenting the points to Bibi, Bibi’s complaining about it, and Trump goes, “Why are you always so fucking negative?” It’s just brilliant.

Chris McGuire: Not an unreasonable question.

Jordan Schneider: But the interesting thing here is, what are the prospects for — okay, we have this escalatory path that Trump is working towards, and on the other side of this, we have this grand bargain that folks have been chatting about. The Chinese side put out this idea of investing a trillion dollars into the US. Unclear whether Congress is going to be cool with that, to be clear. Or the administration.

But I wonder if there are some neurons in his brain where that is the path. He’s very nimble in this perspective — he can be telling everyone that Lutnick is a communist spy who should be fired, and then three days later, he’s buying 10% of the company and Lutnick’s an American hero. I can see a world in which this escalates, but there’s also a path where this weirdly brings us faster to some big bear hug between the two countries.

Chris McGuire: Yeah, we don’t know, right? Who knows for sure? I won’t pretend to know. I don’t know what that grand bargain looks like. What’s actually in the concentric circle? What’s in the Venn diagram in the middle that’s actually in both countries’ interests and is big and substantive? I just still haven’t — I don’t know.

Massive Chinese investment in the US — first of all, there are a lot of people in the US system that have big worries about that from national security purposes. That’s why we have CFIUS. It’s why CFIUS has ramped up so many cases. But also from a domestic political perspective, Trump has campaigned since 2016 on “the Chinese are taking our jobs and our manufacturing.”

Jordan Schneider: If we’re kicking out the South Koreans, are we going to trade them for the Chinese?

Chris McGuire: Exactly. They want to reshore US manufacturing, US jobs, US businesses. If that’s the goal, then where’s the Venn diagram? The Chinese want to purchase more of our products, but they’ve actually purged a lot of our products, and there are certain things that we don’t want to sell them. I’m sure people will be able to craft some smaller thing like that Phase One trade deal last time and paint it as a bigger thing. But in terms of an actual large-for-large deal, I just don’t know what’s realistically on the table.

Personally, I don’t think the administration is actually that interested in the trillion-dollar investment idea. There are a number of people — potentially including the President — who see that’s not necessarily a good offer. Obviously, we’ll see.

Jordan Schneider: Yes, it would be like a big waving of the white flag from a domestic reshoring manufacturing perspective.

Chris McGuire: You’ll get a lot of US companies that would advocate against that too. How are US automakers going to feel about BYD opening up giant auto plants in Georgia? Probably not great. I’m pretty sure they’re going to make that pretty well known to the White House. They’re very good at that. There are a lot of forces here that will have influence and can’t be ignored.

Jordan Schneider: I’m curious from the primes’ perspective — they don’t need that much of this stuff to make the weapons. This seems like a solvable problem if you’re Raytheon or whoever.

Chris McGuire: Yeah, there are two ways of thinking about that. The first is: can you get enough through either stockpiling or secondary markets? Secondary markets — one way of putting it. Smuggling is what we say when the Chinese do it too. But there might be ways, when talking about smaller quantities, you can probably make that happen. Talk to someone who’s a deeper expert in the very particular materials.

The second thing is: as we’re expanding production of these things, presumably there’s a nonlinear impact on each amount of production. The first 10% of the materials is more valuable than the last 10%. It’s not like you have to — even if we need 50% of the world supply for some mineral, even getting to 20 or 30%, you’ll be able to cover your defense production base. You’ll be able to cover your critical infrastructure, and then the leverage goes down quite a bit. The primes could benefit much earlier in the reshoring process than others, just from a basic math standpoint.

Jordan Schneider: Anything else?

Chris McGuire: There are big questions about the implementation of this. With some of the US controls that we did — the bigger moves on export controls that the United States has taken over the years — it was pretty clear this was going to more or less stop the thing that we were trying to stop. There would be some small-scale smuggling, but it was going to move markets quite a bit and have some impact on the sector.

Whereas with this, there’s a lot more uncertainty about their control over the supply chain and how much various firms use and what the near-term impacts are going to be, as Chris was going through. Maybe the Chinese have mapped this out better than we have and actually know that this will be super painful in certain areas. But there’s also a lot of uncertainty on both sides here. The Chinese just don’t have a lot of levers or options, so there’s a reason they keep coming back to this bullet — it’s the one they have.

Jordan Schneider: If you are an expert in one of these rare earths that made it onto this list and you’d like to come on ChinaTalk or just chat anonymously about what the market looks like in your particular ecosystem, that would be really fun. Reach out: jordan@chinatalk.media.

Chris McGuire: Here’s one other thought — it’s interesting that China has actually also explicitly told their companies not to comply with some of our controls. They’ve told their companies those controls are illegal and not to comply with them — some of the end-use controls. We could do that with our companies, too. I don’t know how much that would actually change behavior because ultimately you need to put pressure on China to reduce the control. Firms may or may not want to actually get crosswise with the Chinese government.

But particularly ones that might not care about getting crosswise with the Chinese government — either because they don’t have a lot of sales to China or because they’re so indispensable that China needs them more than they need China — I don’t know, it could be helpful in signaling that not complying with the Chinese law is not going to get them in any legal trouble with the US. That could be something to consider. Lawyers should think about that.

But as part of a package of responses, in addition to escalating, telling firms “we’re not going to be upset if you don’t comply with that Chinese law” — it’s actually, again, reciprocal with what the Chinese are doing.

Jordan Schneider: The US government is shut down. Are the people who need to come up with the package for this at their desks today, or are they watching one battle after another?

Chris McGuire: Who knows? It depends on agency to agency. I would say even when all the people are at their desks, the critical minerals talent in the US government is very thin. That’s actually a longstanding issue. There’s been some talent exodus on some high-tech topics recently, which concerns me. When I was in the White House, there were some people — particularly at the US Geological Survey, for instance — who are really good folks on this. I hope those people are excepted employees right now and are at their desks. No idea if they are.

But look, there are still diamonds in the rough in the US government — that’s a little harsh — but there are pearls of wisdom. In the critical mineral space, there are a few. But like many topics, it’s just a few. As this becomes more important, it is unbelievably critical that the US government has more people internally and at its active disposal who can give it unbiased, impartial, and thorough advice. The Chinese are looking at our technical measures and taking technical measures back, and we have to understand them and be able to respond.

Tensions Aren’t Going Away

Jordan Schneider: This is kind of weird timing from a macro diplomatic standpoint because we had Geneva, we had these nice talks, and then Trump got a little cranky. They’re not buying the soybeans. We had Bessent at Treasury start talking about maybe raising the heat on chemical stuff and airplanes. We had the 50% rule, which we talked about in the last episode, and then this comes out.

On the one hand, it makes sense for them to keep this as a card to maybe discuss in a negotiation as opposed to putting it out. But what’s your reflection, Chris, on what this thing means for the broader underlying tensions in the relationship?

Chris McGuire: Yeah, some of the things that happened post-Geneva — the soybean stuff is one thing, but the 50% rule, for instance, was not a response to the soybean purchases and reallocation to Argentina. Those were completely separate tracks. But what that shows is just how hard this relationship is to keep in a place that moves you towards this grand bargain. There are certain structural things on both sides, but particularly on our side — given that they generally benefit more from the free flow of capital than we do — that people think they have to do to rebalance the relationship.

Take the 50% rule. The way the Entity List worked and the fact that subsidiaries weren’t captured that were majority-owned — which was not how the Treasury rules work — is just obviously a broken system. In some ways, this is normal regulatory maintenance where good government should look at your authorities and how they work and say, “Is this achieving the intent of the authority and of our use of it?” The clear answer was no. If you list a company, you should block the exports to the company, and they shouldn’t just be able to make a carve-out right away. There was a move to fix that. That’s not a new policy intent. It’s not announcing that we are fundamentally changing our approach to the Chinese economy or our economic or technological or strategic relationship with China. It’s just saying we have a tool that’s not really working — we have to fix it.

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But we can’t do that without engendering a pretty significant response the other way. That’s a big structural problem because it puts the United States in this position where we basically have to accept that we have either tools that don’t work or parts of the system that are clearly disadvantaging us. We either just have to take that and eat it — which works more and more against us — or we have to take those measures. Then you have to balance either getting in an escalation spiral or trying to avoid the escalation spiral through various deterrence messaging and things like that, which you can do. But either way, you’re not moving towards this “we’re super friends” grand bargain.

I just don’t think there’s a way to both correct the fundamental structural imbalances in the trade system — which every administration has tried to do for several years — and have a grand bargain that actually is significant and mutually benefits the United States and China. You kind of have to pick. Fundamentally, most administrations have ended up prioritizing the correction of trade imbalances.

Jordan Schneider: Oh, and mystery still abounds. The MOFCOM announcements were numbers 55, 56, 57, 58, and then it jumped to 61 and 62. There are potentially 59s and 60s. Did they get cut at the last minute? Were they too spicy?

Also, lab-grown diamonds used for decorative or jewelry purposes are not controlled by these export controls, which was very nice of them. MOFCOM, we appreciate you being respectful of cuffing season.

Oh, and if you are in the diamond saw industry, we’d love to have you on ChinaTalk to discuss!

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Last week, Jensen Huang said that China is “nanoseconds behind” the US in chipmaking. Is he right? Today, Chris McGuire joins ChinaTalk for a US-China AI hardware net assessment. Chris spent a decade as a civil servant in the State Department, serving as Deputy Senior Director for Technology and National Security on the NSC during the Biden administration and back at State for the initial months of Trump 2.0.

Today, our conversation covers:

• Huawei vs Nvidia, and whether China can compete with US AI chip production,

• Signs that chip export controls are working,

• Why Jensen is full of it when he says China is “nanoseconds behind”

• What sets AI chips apart from other industries China has indigenized,

• How the US has escalation dominance in a trade war with China, and the significance of BIS’s 50% rule,

• Chris’s advice for young professionals, including why they should still consider working in government.

Listen now on your favorite podcast app.

Math vs Headlines

Jordan Schneider: When thinking about AI hardware between China and America — or the global friends manufacturing ecosystem — what are the relevant variables?

Chris McGuire: You’ve got separate production ecosystems. There’s the US production ecosystem that is largely designed in the United States and manufactured largely in Taiwan. Then there’s the Chinese AI ecosystem, especially for AI chips, because we’ve separated them through regulations. Chinese AI chips are made in China. They’re not made at TSMC anymore; they’re designed in China. We’re talking about two separate ecosystems.

Fundamentally, it comes down to the quantity of chips they can make and the quality of those chips. The important thing here is what matters. There are a number of variables, but the key factor is the aggregate amount of computing power. You can aggregate large numbers of worse chips to a point — not like Pentium II chips, but assuming you’re talking about reasonably sophisticated AI chips, you can aggregate large numbers of them to produce very large amounts of computing power. What matters is the aggregate quantity of computing power, which is a function of quality times quantity of the chips.

Jordan Schneider: Let’s start with quality, because we had some interesting news come out of Huawei over the past week. Alongside Alibaba, they announced their roadmap for their AI accelerators over the next few years. It’s interesting because there are numbers attached to what they’re promising their engineers and customers that you can then compare to what Nvidia has told its customers and investors. What was your read on what Huawei is projecting on the quality side to be able to do over the coming years?

Chris McGuire: There’s a lot of hullabaloo around this announcement. Huawei was projecting out to 2028 and saying they’re going to make all these great AI chips. But actually, a lot of the coverage didn’t dig into the details of the announcement that much. When you do that, especially when you compare it to Nvidia, AMD, or other American companies, you see that they’re stalled. This makes sense because they’re probably stalled at the 7-nanometer node, which means they’re not going to benefit from increasing transistor density in the ways that ours are. They have to find other ways to make their chips better, and that’s very hard. There’s a huge avenue of quality improvement where they’re stalled out.

To give you an idea — their best chip today is the Ascend 910C, which is two 910B processors that are packaged together into a single chip. On paper, that has around the performance on paper of an H100, though a little worse. There’s a lot of reason to believe that, in terms of actual performance, it performs quite a bit worse. But if we’re looking at the stated teraflops of the chip and also the memory bandwidth, it’s around the same, a little bit worse.

Given that, the question is where they go from here. The interesting thing is their roadmaps for the chips are coming out. Keep in mind, the H100 was a chip that came out three years ago, and the best Nvidia chip now is about four times as powerful as that. If you look at where their roadmap goes, they won’t produce a chip that’s better than their best chip today until the end of 2027. The chips they’re making next year are going to be actually lower in terms of performance and lower in terms of memory bandwidth — at least one of them will be — than the 910C.

There could be some technical reasons for that. It could be that they’re moving to a one-die rather than two, so maybe they have one die that is slightly better than the 910B die. There could be other reasons for that. We don’t know how many 910Bs were made at SMIC. We know that a lot of them were made at TSMC and illegally smuggled in, which is a longstanding enforcement issue — there was a big problem there. We know that, but we don’t know how many were made at SMIC. Maybe a lot more of them were made at TSMC than we think, which would be bad from an enforcement perspective and pose a strategic problem. But from a question of what SMIC’s capacity looks like going forward, that would be good news for the United States. It means they’re struggling to make chips. Again, we don’t know that, but it’s a possibility.

The key takeaway is China’s not going to make a chip as good as the H100 until 2027 — late 2027, Q4 2027 — so they’ll be five years behind at that point.

Meanwhile, if you look at Nvidia’s roadmap, the chip they’ll make in Q3 2027 is projected to be 26 times the performance of the Huawei chip they’ll release the same year. What we’re seeing is a huge performance gap. There’s a big performance gap right now — probably around 4x between our best chip and their best chip. Based on the stated roadmaps of Nvidia and Huawei, that’s stated to increase by a factor of six or seven over the next two years. That’s significant.

Jordan Schneider: The Huawei fanboys would come back at you, Chris, and say, “Chips, who needs them anyway? We’re talking about racks and the Huawei AI CloudMatrix. Huawei’s got some optical magic to take their chips, and even though they’re not as power performant, we’ll dam up some new rivers and figure that out on the backend.”

From a quality perspective, how much can you make up the gap, abstracting up one level from chip to system?

Chris McGuire: There’s a big question of how much you can aggregate chips together. When we were doing this analysis in the government in 2024 at the NSC when I was last there, and also in the analysis I was doing at the State Department earlier this year, the operating assumption was that there’s not a cost to aggregation. There could be some, but it’s difficult to model. Frankly, that seems to be something that the Chinese could overcome. I don’t doubt that they’re making good improvements on the CloudMatrix system.

But the key thing there is, number one, we always assumed that they would be able to aggregate the chips without any loss. The lack of loss is not that surprising. But number two, what matters is how many racks can you make. It doesn’t matter how many chips you can put in a rack if you can’t make that many racks. It comes down to the production quantity question. If they’re putting 15,000 chips in a rack but can only make four racks, then it doesn’t give them that much advantage.

Jordan Schneider: It’s fair to say that there are other design firms in China making AI chips, but we can round them down to zero. No one is going to be doing stuff dramatically better than Huawei anytime soon. With that in mind, let’s turn to the quantity side of the ledger. Where do you want to start us, Chris?

Chris McGuire: This is an area where there is some fierce debate publicly. The US Dept. of Commerce said Huawei can only make 200,000 chips this year. Many others say they could make millions of chips this year. There’s legitimate uncertainty here. Personally, if the government put out a number, there’s probably good reason for that. But let’s entertain the uncertainty.

The number of chips they can make is a function of what their yield is on the fabrication, what the yield is on the packaging, and their allocation of AI chips to other 7-nanometer needs — smartphone chips, et cetera — where there’s huge production. They do have a huge interest in having a domestic smartphone industry. We’ve seen that they make over 50 million smartphone chips a year. When you combine all that, the question is: how many can they actually make?

My takeaway from Huawei’s roadmap is that because they are not getting significant scaling advantages on chip quality — which again makes sense given they’re not advancing in node — and they also face other significant constraints that we haven’t talked about yet on HBM, which they’d have to supply domestically, they’re more or less stuck on chip quality and advancing very slowly. They have to massively ramp production quantity in order to compete with the United States.

It’s unknown where they are right now, but let’s say that they’re 10x behind us. It could be closer to 50 to 100x. If the gap between us is then increasing by a factor of six or seven over the next two years, they’re going to have to make up 60 to 70x times production — assuming they’re at 10x — to reach our level of aggregate compute capability. That’s probably impossible. The quantity that they would need to scale to is so high that it presents significant strategic problems.

Jordan Schneider: This is the key distinction that folks don’t price in when they try to make the EV or solar or even telecom analogy. You have the entire weight of global capital now pouring into Nvidia chips manufactured with TSMC. That isn’t the same as with Nortel and Ericsson, or Ford not caring about EVs, or solar companies barely existing in US manufacturing. We are ramping on both a quality and quantity perspective at a truly world-historic scale.

It’s not that China is competing with a zombie industry in the West or something that China has identified as the future that the West hasn’t. Huawei and SMIC are having to compete with the flagship of global capitalism at the moment. While having the challenge — there are loopholes, there are challenges with the export control regime — the fact that you are not allowed to get tailwinds from TSMC anymore, or there are hiccups in what tools you are and aren’t allowed to buy, makes it a tall order to replicate all this domestically at scale when you are competing with the rest of the world as a collective unit.

Chris McGuire: That’s exactly right. It is not all those industries where they’ve been able to leapfrog in production or where we have ceded our interest to China. This is the linchpin of the global economy right now. Not only do they have to catch up from way behind, but they also have to do it without the equipment that we’re using. The equipment that we’re using, to be clear, that the Chinese don’t have — these are the most sophisticated machines that humans have ever made.

There’s a logical argument here: “Hey, China’s good at indigenizing stuff.” They are. They’re great at it. We’ve seen this in industry after industry.

But this is the single hardest thing on earth for them to indigenize, because the tools that they have to use to make the chips are the thing that they can’t access.

Those are the most complicated machines on earth. They could do everything — it’s logically possible they could indigenize everything on earth except for an EUV machine, not to mention many of the other tools that are also sophisticated and used in the production process. That’s why this is a unique sector.

We have to be on guard because it is super important. It is the foundation of US technological supremacy. It’s an area where we should take few risks, because if this one goes away, a lot of other things follow from there and it becomes problematic. But we are protecting it decently right now, and we should make sure we have 100% confidence in that. But I don’t see the numbers here — the Huawei chip design numbers or their production numbers — and think there’s about to be an all-out competition where they’re going to equal our companies and we’re going to be on equal footing globally, competing for markets around the world. When you do the math and look at it, that doesn’t become a realistic possibility.

They will be able to produce significant numbers of chips, but not enough to be able to meet domestic demand for AI, given that the compute demands for AI are also increasing so rapidly. To understand this, you have multiple exponentials working at the same time. You have exponentials in terms of chip design getting better. There’s exponentials in terms of production capacity, although that one’s more linear. And then there’s also exponentials in terms of compute demand. It’s very hard for China to make up all of those simultaneously, which is good news. That’s great for us.

The fact that there’s so many headlines celebrating the breakthroughs — it’s all relative to where they are. Look at the Bloomberg headline yesterday that said Huawei is going to make 600,000 Ascend chips next year and that’s going to be double their production. This shows that they’re doubling production and they’re competing. That means that they’re making 300,000 chips this year, if that’s true, which validates Commerce’s numbers of 200,000. You’re in the same ballpark. And that is a very low number.

600,000 GPUs is not going to be enough to fill the Colossus 2 data center that Elon Musk is building. Keep in mind, these are also substantially worse chips. Nvidia is making — Jensen said this year — 5 million GPUs total, and then each of those is probably five to six times better right now. But next year might be 10 times better than each Huawei chip. You’re getting to the point where we’re making 50 times more chips than they are.

It’s important for people to keep that in mind when they’re seeing all these headlines that say they’re catching up. But the math doesn’t check out when you see that. It’s possible there are breakthroughs and that number goes down, but we have a huge buffer. If we’re at 50x or 20x China or even 10x China, we’re in good shape relative to them. Again, my risk tolerance is very low and we should push that number as high as possible in the gap. But the headlines aren’t consistent with the math.

Jordan Schneider: Are there more numbers you want to talk about?

Chris McGuire: To give an idea of the quantity: if you assume Nvidia is making 7 to 8 million chips in 2027 based on current roadmaps, which is a 25% increase over 4 to 5 million in each of the next two years, that seems reasonable. We can nitpick with that, but it’s in the ballpark.

Let’s operate under the assumption, for the sake of simplicity — which is probably not accurate — that all the chips Huawei and Nvidia are making are their best chips. What that comes out to is Huawei would need to make about 200 million chips in 2027 to equal Nvidia.

In terms of production quantity, let’s be generous and say they’re at 30% fabrication yield, 75% packaging, and 50% allocation. That means they would need 11 million wafers — most of TSMC’s total production, which is 17 million wafers a year, devoted to Ascends.

If those numbers go down a little — and they’re probably lower than that — if you say it’s 10% yield, which is low but could be right, 50% packaging yield, and 25% allocation, then China needs to stand up an entire TSMC across all of TSMC’s production devoted to Ascends in order to make enough to equal Nvidia. That is not possible. It’s not possible that they can get the tools and have the capacity to do that quickly.

History’s Most Complicated Supply Chain

Jordan Schneider: Is this the right variable to be focusing on — Huawei total production versus Nvidia total production? Nvidia sells to the world — well, maybe not to China, TBD — but from a balance of national power perspective, should we only be counting the GPUs that are in the U.S.? Should we only be counting the GPUs that are in U.S.-owned hyperscalers?

Chris McGuire: That’s a fair question. Maybe we are providing for the world and they’re providing just for themselves. There’s a lot of debate and concern about whether China is going to be able to export AI to compete with us globally, which is absolutely something we should think about and consider. But for them to do that, they still need to fill their domestic market.

Their domestic market is going to be huge. Our domestic market is huge. A huge percentage of Nvidia’s production is going to the U.S. market right now. We’re at well over 50% of global compute.

Even if you slice it up a little bit and say, “Okay, China’s going to put all these efforts into a single firm, they’re not going to do anything internationally,” does that give them the capacity to maybe support one AI firm to be a real competitor in the Chinese market? Potentially. But you’re talking about significant constraints on their ecosystem there. It’s going to be very hard to compete with our robust and dynamic ecosystem at that point, and it’s still going to be difficult. That’s giving them a lot of generous assumptions.

Also, as the compute continues to scale, it’s scaling faster than China can scale production. There’s a fundamental problem they’ll face. In the next generation of models in 2028, 2029 — absent a massive indigenization of tooling — this problem will get worse for them, not better. Unless the United States lets up on its vice grip on tools and compute.

Jordan Schneider: It’s such a wonderful irony that America has been beaten on scale in so many industries over the past few decades. But once people get focused and once there’s enough money in it, then this is Rush Doshi’s “allied scale ” idea. Maybe America couldn’t do it on its own. Intel isn’t the one pulling their weight here. But when you add up the global ecosystem — what the European toolmakers can provide, the manufacturing out of Taiwan and Korea, the Japanese tool makers, and the design capabilities coming out of the U.S. — it adds up to something that China cannot be self-sufficient in at a scale which can compete over the long term globally with what America and friends have to offer.

Chris McGuire: This is the most complicated supply chain in human history. They’re very good at indigenizing supply chains — they’ve done that in numerous industries. But if there’s one that’s going to be the hardest for them to fully indigenize, it’s this one. The evidence says that they’re struggling.

They’re struggling partly because it’s hard, and partly because the United States, over multiple administrations of both parties, has taken some good steps to prevent them from moving up the value chain, and Huawei’s roadmap shows that it’s working.

It’s interesting because when you look at where Huawei was, designing chips is not a problem. The Ascend 910A in 2020 had better specs than the V100, which was the leading Nvidia chip at the time before the A100 came out in 2020.

Huawei designed, on paper, the most powerful AI chip in the world in 2019, and they made it at TSMC. What’s changed? They didn’t make any AI chips until 2024 because they got cut off from TSMC.

Then the chip that they made was substantially worse. They’ve been forced to rely on their domestic production, which has been very hard for them to scale from a quality or quantity perspective to compete with the West.

Jordan Schneider: Cards on the table — I find this very compelling. A lot of your assumptions you’re taking from Huawei bulls. The 600,000 to 700,000 estimate is something that Dylan Patel wouldn’t disagree with, something he said in his own piece.

But the headlines that Huawei has been able to generate from its reporting — from having 100 chips in Malaysia to White House officials tweeting, “China’s expanding abroad” — what is it about Huawei’s messaging, American views of China, lack of technical sophistication among reporters? How have they been able to build themselves up as such a heavy hitter in this space when they’re really in single-A compared to the TSMC and Nvidia ecosystem?

Chris McGuire: There’s not a good understanding of how good our chips are. You could say maybe there’s not a good understanding of how bad Chinese chips are, but I’d flip that. Nvidia is an amazing company doing amazing things. They’re producing unbelievably powerful chips that keep getting better every year, and they’re also increasing the rate at which they’re coming out. They were previously on a two-year cycle; now they’re on a one-year cycle.

There’s a reason why the demand for these chips is completely through the roof, why they’ve become the most valuable company on Earth, and why all the next five most valuable companies are scrambling over themselves to get their product. They’re good, and no one else is able to do what they do. No discredit to AMD and others that are also making great chips — American companies are doing incredible stuff in this space, and that’s not fully appreciated.

Jordan Schneider: When you have Jensen Huang saying, “They could never build AI chips.” That sounded insane, and when he said, “China can’t manufacture.” China can’t manufacture? If there’s one thing they can do, it’s manufacture. Or when he said, “They’re years behind us.” Is it two years? Three years? Come on. They’re nanoseconds behind us. Nanoseconds.

When you have him saying that China is nanoseconds behind, it’s not true. He knows it, and his engineers know it. I’m sure they’ve done teardowns galore of Huawei architecture, and they know the same thing. What you’ve talked about over the past 30 minutes, Chris, is not secret. The reason that Nvidia is valued at $4 trillion is because of that fact. This is a widely held opinion. But you have their CEO — because he’s trying to shape a narrative that he needs to sell into China — saying something patently false.

Chris McGuire: I agree it’s patently false. You look at the data and it’s patently false. I will also say that everything I was saying was focused on total processing performance. You could make a valid point that memory bandwidth is also important. That’s what everyone’s saying about why the H20 needs to be controlled, which is correct.

How do they stack up in memory bandwidth? There is still a significant gap there as well. The Nvidia chips, even looking at the two roadmaps, are going to be 4x better, potentially 8x better on memory bandwidth too. I want to clarify: Franklin says, “Well, he’s just looking at one part of it.” If you look across the stack, the gap is increasing.

But to your question, we’ve created this perverse incentive structure. When we said, “You can’t export, this is the line, you can’t cross it. End of story.” It was simple. That’s the line. That’s it. That was the kind of “as large of a lead as possible” approach, because you need to hold the line and then the gains will compound over time.

Now that the logic has changed, we’re saying, “We can sell chips, but only if they’re slightly better than the best Chinese chip.” It created this incentive for industry to completely overhype the capabilities of Chinese chips in quality and quantity in order to get access to the Chinese market. That incentive structure is perverse.

If there’s a legitimate need for it, that’d be one thing. If there was massive quantity of these chips, especially if China was able to fill its domestic demand for AI compute with domestic chips, it would be a different conversation. We should think about what American companies should be able to export there. But that’s not the world we’re in because of the constraints on their production and because of the increases in AI compute needs. We’ve created this incentive structure for companies to overhype China.

There is one other element that’s significant, that we should be real about — there is a significant Chinese propaganda campaign about this. National Security Advisor Jake Sullivan even said that publicly once in 2024 at an event. We know that part of China’s strategy is to convince the West that their measures are futile and that they’re not working. Every single time there’s a breakthrough, there are five South China Morning Post stories talking about how amazing it is and how China’s crushing the West, et cetera. But that doesn’t make it true. That doesn’t change the math. It doesn’t change the dynamics. But we are susceptible to that.

The nature of our system is such that it gets traction here. Math is hard. It’s a convenient narrative that also fits the correct narrative in a lot of other industries. It’s easy to convince us that this is the same when, in fact, it’s quite different.

Jordan Schneider: Let’s talk about policy changes that could dramatically allow Huawei, SMIC, and CXMT — the Chinese memory provider — to inflect in a way that would make the multiples that you’re projecting for Nvidia plus TSMC to be ahead of them different over time. How would you rank the things you would be most worried about if the West started to ease off export controls and what it could do to the curves that Matthew laid out?

Chris McGuire: Number one is something that Dylan Patel highlighted in his piece and something that we haven’t even talked about here but is significant. Everything that I’m talking about is looking at logic die production, and that is a constraint. It probably is a constraint at a higher level because I’m assuming that they can scale that at 10x. It’s still going to be 5-10x below where we are.

But that’s something where, okay, maybe they can use the tools they have and keep acquiring equipment given the regime to build out their fab base significantly. They’re still going to be constrained by HBM because HBM is their number one constraint now. They previously had unrestricted access. They don’t anymore. HBM stacked exports have been cut off, so they’re running through their stockpile now. That will run out. They don’t produce very much HBM domestically. They’re going to be very constrained. CXMT has had some problems being able to produce HBM3 at all.

If CXMT is allowed to produce large amounts of HBM, that’d be a problem. Or if HBM controls are rolled back in the context of a negotiation and we change the policy so we can export HBM to China, that removes the biggest constraint that’s on top of everything I said that could push things down even further. That is probably the number one biggest obstacle they face right now, and maintaining that is very important.

The second thing is there are still a lot of tools that are going through. When I look at this, what I see is the controls have probably been more effective than the media narrative suggests because they seem to be struggling to produce very large numbers. If they’re making 600,000 chips next year, that’s a very low number and it’s not a competitive number for a national AI industry at the quality of chips that they’re making. That means that the controls are working now.

We should not take any risk. There’s some risk that they’re able to figure out much more effective means of producing chips. We could zero out that risk by clamping down on SME exports to China significantly. But that’s where we are now. They are still able to get a lot of tools, especially for non-restricted fabs. There’s a subset of tools that will make it next to impossible for them to advance, especially for them to do 5 nanometers.

But they could order very large numbers of tools and then scale their 7-nanometer production and large amounts of 5-nanometer production. The math means that’s still going to be insufficient. But why take that chance? If the status quo happens and they continue to buy large numbers and divert, that’s probably the point when they’re going to struggle. But can DeepSeek continue to make good, if not frontier models, while the rest of the ecosystem suffers? If they really centralize all efforts into one entity for the next one to two years, but not after that?

Jordan Schneider: The other way the balance of chips changes is if Nvidia gets to export to China. We had a very interesting arc over the first few months of the Trump administration where it seemed like they were going to ban H20 exports, then they unbanned them, and then China said, “No thank you — we actually don’t want this stuff anyway.” Chris, what is your read on that arc?

Chris McGuire: The most likely explanation is that this is a negotiating ploy. It would be foolish to turn down chips that would help them. There’s so much demand for AI compute that having H20s allows them to have their cake and eat it too. There would still be room for every single domestic chip.

China can protect markets and make clear that they’re going to ensure there’s enough demand. They can protect the market for exactly the number of chips that they’re able to make themselves. Once they guarantee all those are sold, every Nvidia chip goes in on top. That’s well within their power.

Jordan Schneider: That is a game that the Chinese industrial policy ecosystem is well practiced at. We’ve seen domestic suppliers slowly but surely eat market share as their capacity comes online — everywhere from shipbuilding to EVs to handsets. That is a normal trend.

But the retort would be that all these CNAS papers about chip backdoors have become paranoid that these are the same thing as Hezbollah beepers or something.

Chris McGuire: It’s possible, but if that were the case, then they wouldn’t want Blackwell chips either, because there’s an equal risk of Blackwell chips having backdoors as Hopper chips. It seems like they do still want Blackwell chips. That says to me that the stance on Hopper chips is more a negotiating ploy — “Hey US, if you’re so desperate to send us AI chips, then only give us the best ones. We’re not going to take the second-best ones because we think this is now a point of leverage that we have over you as opposed to the reverse.” If that’s the case, we should take that, pocket it, and move on.

There’s also a possibility that they are overestimating their own production.

If you think the Chinese system, does someone walk through this math with Xi Jinping and show him their numbers versus our numbers? Do they explain that because of the differences in quality, it’s going to be hard for them to ever catch up, and the slopes are working against them on the curves? Probably not.

That’s not going to be a briefing that people in an authoritarian system are incentivized to give their leader. They want to paint a more optimistic picture. If that’s the case, then maybe the leadership does believe that they’re going to catch up soon, in which case, more power to them — let them try. We should let them try without the benefit of massive amounts of US tooling as well. But that perception works in our favor.

Jordan Schneider: It was an interesting arc when the October 2022 export controls hit. I remember writing all these articles about what the Chinese response was going to be — certainly there would be retaliation, right? But there was reporting that they were like, “Eh, we’re fine. We’ll figure this out on our own.”

The fact that Beijing didn’t realize how big of a deal this was points to an information gap. They’re hearing about tons of shiny stuff coming during their briefings from the big fund, from people who are scared of being thrown in jail.

At that point, there’s a notable disconnect — while these restrictions are critically important for China’s semiconductor ecosystem, senior Chinese leadership and negotiators don’t seem to prioritize unwinding the Biden administration’s policies

Chris McGuire: The response at the time was “We’re going to indigenize and we’ll see you on the battlefield” — metaphorically — “We’re going to compete.” That’s admirable and is consistent with the history of most other industries. That is the response, and they’ve done very well at that.

The point here is that we think this industry is different. That was the case in 2022, and it’s the case now. The fundamentals of it are different from the industries that the Chinese have been so successful in. That doesn’t mean that they will not be successful here, but it’s going to be harder and we can’t assume it given they were able to do it in the past.

Chip Controls and Escalation Dominance

Jordan Schneider: Chris, what’s your read on why it took until Liberation Day for the rarest card to finally be put on the table?

Chris McGuire: First, Liberation Day was a significant escalation in a much broader element of the trade dynamic than anything before that. We’re talking about hundreds of percentage points of tariffs. That’s a fundamentally different escalation on the US side, so the Chinese were going to escalate to a greater degree as well.

Second, the Chinese now have a better understanding of these restrictions and have better tools to address them. They were taken by surprise in October 2022, and it took some time for them to wrap their heads around what tools they had to respond. That’s why we didn’t see any direct response in October 2022, but we did start to see a Chinese response in 2023 and 2024.

Third, this requires careful management. When the Trump administration went all out on tariffs, it became such a big escalation on both sides. But there are other cards that the United States has to deter China from retaliating against us. The Biden administration did think about that, and there was some careful messaging behind the scenes with the Chinese on this point, making them aware that we have a bunch of cards. The message was clear: we know what we’re doing. We have these actions in this space, and they’re consistent with our original objective. We’re very clear with you that this is the course of action we intend to take, and we’re continuing down that path. That doesn’t preclude various other activities that we’re discussing with you. But if you massively escalate in other areas, we have other areas where we can massively escalate as well.

The US has other ways to impose massive costs on Chinese companies in the short term. Any large Chinese technology company is still reliant on semiconductors from TSMC that are designed with US tools to continue to function and exist, and it’s within our authorities to take those off the game board immediately.

The idea that the Chinese have escalation dominance because of rare earths is incorrect. There are significant moves that the US could take but chooses not to.

But if we’re not willing to use those tools or even talk about those tools, or the Chinese don’t perceive that we’re willing to, then it becomes a lot easier for them to escalate on rare earths and get escalation dominance over us.

Major export controls against major Chinese companies would be massively painful for them. Cutting any Chinese banks off the US dollar or anything like that would be massively painful for them. The US has escalation dominance. I don’t think we’ve been willing to use it, and that has reversed the dynamics here. But again, the fundamentals massively favor us.

Jordan Schneider: There was a lot of reporting that the Trump administration was surprised that rare earths were thrown on the table — shook, even — all of a sudden the administration thought, “Oh wow, this is bad. We need to figure out what’s going on and find a response.” Then you had stuff like the MP Materials deal. Encouragingly, last week, Bessent started to sound cranky and said, “Look, aircraft engines, chemicals — we can take this in a lot of directions that you guys [China] are not going to enjoy.”

Xiaomi and every Chinese handset manufacturer need TSMC to provide reasonable domestic products and compete globally. These are things that will take a week for the pain to be felt, and where the solution to them is more painful than putting in some mines and building some refinery plants in Australia.

The idea that America has ceded escalation dominance on economic coercion because China found something that made the US feel some pain boggles the mind. I thought President Trump would say, “Fuck it. We’ll play that game.” It is unfortunate that he seems to be more willing to play this game against allies than against adversaries. But maybe this is changing with the Bessent talk and with the Putin Truth Social post from last week. We will have three and a half years of this. I am confident that we will reach a point when this game will be played again and Trump will be ready to pull more economic triggers. We’ll have to see.

Chris McGuire: To give a concrete example of where we could mirror — the controls on magnets had a significant impact on our auto industry. US auto firms were saying, “Hey, we’re going to shut down soon if this doesn’t get solved.” That is a strategic problem for the United States.

I wonder how long BYD 比亚迪 would be able to operate without access to US technology or chips from TSMC. Probably not that long. Many BYD cars use 4-nanometer chips to run their ADAS systems. BYD has done a great job indigenizing most of their supply chains, everything from legacy semiconductor fabs to the ship carriers that move the cars around the world are all owned and made by BYD. The one thing that they have not been able to indigenize that they still need for their sophisticated chips is advanced semiconductor production.

Things keep coming back to this, and it becomes a little repetitive — “Oh, you guys keep talking about chips” — but it’s because it’s the foundation of so many products and it’s the area where the US has advantages. In this example, a tit-for-tat escalation would have been: “Hey, our auto firms are about to shut down because we don’t have rare earth magnets. BYD is going to shut down because they’re not going to get chips until we resolve this.” Then we could pull both those back to make sure that we’re not taking either of those actions while continuing to take the necessary separate actions on AI. That’s one way we could have gone about it and could still if this rears its head again.

Jordan Schneider: On Trump 2.0 tea leaf reading, we had a BIS 50% rule, which is something that the Biden administration never got across the finish line. What is it? Why does it matter? And what does it imply about the future of policy?

Chris McGuire: This is a good change that BIS made this week. It’s important and will have a significant impact. It may not affect AI chips directly, but will have a substantial trickle-down effect on all of export control policy.

The way that export controls work is there are certain things that are controlled countrywide — and those are the most important and robust controls that we can implement. But for a number of other things, we control them to entities of concern. The entity goes on the entity list, and then all US exports — or many, depending on what the licensing policy is — are blocked to them.

The way it worked until this week was that every single subsidiary had to be specifically listed on the list. If it wasn’t listed, then exports were okay. It was a presumption that exports are fine unless the subsidiary is specifically listed. This creates massive loopholes and is easy to exploit. Someone can create a subsidiary that isn’t listed, and then it becomes easier to export to them. There are various due diligence requirements, but that checks a lot of boxes and makes it much easier for firms to export.

The Dept. of Commerce flipped that assumption. They said, “We’re still going to list entities and their subsidiaries for clarity, but our assumption now is that if you have knowledge that an entity is a majority-owned subsidiary of an entity on the list, then automatically all exports are blocked.”

That means any company that is a wholly owned subsidiary of Huawei or SMIC or others — CXMT, YMTC, et cetera — are now on the entity list, whereas before they were not. That’s a significant change.

This also applies globally. It applies to Russia, it applies to Iran. There was a shell game that a lot of entities played and it never made sense. The Treasury Department, with respect to sanctions, has exactly this rule. They say if we list an entity on the SDN list, then if there’s an entity that’s majority-owned by one of those firms, it’s also covered. We expect people who do business with entities to do their own research and make sure that they’re not inadvertently working with companies that are on the SDN list. If you do, then you are held responsible.

Export controls are going to work the same way now, and they should. There’s no reason why one should be fundamentally different from the other, given what we’re concerned about — the diversion risk is substantial. This is a good change. To the point of where export control policy and China policy are headed and how this will play out over the next few years, this is indicative of the fact that we don’t really know. This is a good change, filling a big loophole that the Biden administration was not able to close.

It’s something the Trump administration has talked about from the beginning. Despite all the trade talks and narrative that everyone is walking away from controls, this action was still taken. That shows that there are still people who want to rebalance the relationship in ways that are in our interest and fix the loopholes in the tools we have.

This isn’t a perfect solution. There will be Chinese counter moves. Chinese companies will create shell companies that own 51% that aren’t affiliated with the parent in order to get around it. It will still be a whack-a-mole game. That’s why technology-based controls are going to be most important, because that’s the only way we can be sure that we’re not playing whack-a-mole. This will make companies think twice. It will increase the amount of due diligence that’s necessary and closes loopholes that were being abused as of last week.

Jordan Schneider: Chris, what is your thesis on the loopholes and the fact that we would record ChinaTalk podcasts about them three days after the regulations came out, and then they would change maybe six or twelve months later?

Chris McGuire: I lived a lot of that.

One point is that government is about compromise. These things are hard, and they do have — or have the potential to have — significant impacts on US businesses. There’s a lot of lobbying from businesses. It’s one thing when you’re on the outside of the government to throw stones, but it’s different when you’re making the decisions that are going to reshape industries and economies. People are careful, particularly Democrats are careful and deliberative. That means the default is to be cautious.

The totality of the approach that has been taken — and has been taken bipartisanly in Trump 1 and Biden administrations — was an assertive and different policy than the United States typically takes with respect to technologies or economic issues, and it’s important to keep that in perspective.

There were some loopholes that people pointed out right away — things that some of us tried to fix and weren’t able to. Sometimes that’s because of US industry concerns. Sometimes it’s because of working with allies, and those were tough negotiations where we weren’t able to get everything we wanted, but we were able to get a lot. Sometimes it’s that regulating on the frontier is hard. The government has gotten better about doing that starting in 2022. There were some big fundamental errors in the first 2022 export controls that did take a long time to correct. That is a function of how long it takes to get something through the system.

The controls in 2022 had loopholes that were a result of technological developments that happened while we were developing the controls. That is something that’s going to happen in this space, and the government has to be nimble in responding. The failure on the government’s part with respect to those controls was in its slow response. We should be able to fill loopholes quickly and agilely while also admitting that they’re going to happen. We should do our best to make sure that they don’t, but as long as we’re able to fill them quickly, that’s the goal here.

Jordan Schneider: What’s your normative argument for why America should be hobbling domestic Chinese AI hardware production?

Chris McGuire: Number one, if you buy into the idea that AI is going to be one of the most important things in all elements of the economy and also for national security, then it’s an area where we need to maintain the largest possible lead as a fundamental principle. That’s the baseline here.

Our ability to control the AI ecosystem as the United States and allies is limited only by China’s ability to make an alternative ecosystem themselves.

If they don’t have a domestic semiconductor ecosystem, then their influence over the entirety of the AI ecosystem is going to be inherently either reliant on us or next to zero.

If you think this is the thing that’s going to underpin the global economy and US technological supremacy and national power generally going forward in every single element and domain, then the single biggest risk you could take to US leadership is to allow the Chinese to make advanced chips. That’s the bottom line here.

Store-Bought Supercomputers

Jordan Schneider: What’s the best answer you can give about how AI hardware matters for the military balance of power?

Chris McGuire: There are three big areas I’ll flag.

The first is backend logistics and decision making. It’s kind of boring, but the US armed forces is the world leader in backend logistics and decision making. The reason we’re able to get munitions on target anywhere in the world in 24 hours is partly because we have amazing capabilities, but it’s also that we’re good at logistics.

We’re able to position tankers around the world and they know exactly where right away. We have a lot of experience at this, and we do a lot of training and drills. If you can automate all that — that’s just one discrete example — that takes away a significant source of the US’s military advantage.

If you have optimal decision making and can make optimal use of your resources, it will allow you to have significant effects on the battlefield, regardless of the actual equipment there.

The second is cyber capabilities. A lot of people talk about AI plus cyber, but in the operational context, you can imagine how significant it would be if you have capabilities that can get around defenses easily and exploit vulnerabilities and put sophisticated malware into entities. That would allow you to do significant things that quickly change battlefield dynamics.

The third is autonomous systems, and this is where AI inference is really important. Having a good AI model that you put on a bunch of drone systems to autonomously work together and take actions in a comms-degraded environment on their own will change the battlefield. But you’re going to need massive inference capabilities to do that. The number of queries that will be needed, especially if it’s on the edge, you’re going to need all these systems to be processing these inference queries on the system. Or if it’s not in a comms-degraded environment, they’re all going to have to be going back home constantly, and that’s going to require very big inference clusters.

If we’re talking thousands or tens of thousands of drones, all of these are going to be constantly having inference-heavy requests on the AI models. You’re not only going to need a sophisticated model, but you’re going to need a lot of infrastructure to support the compute needs of your battlefield.

Those two are going to be reliant on having the hardware to make this model that’s super sophisticated and also be able to operationalize and run it in real time. The more capacity you have and the better those capabilities are, the more you’ll be able to do.

There are both military and commercial needs. If you assume that they prioritize military needs, then you could take a bite out of your commercial inference capacity in order to support that. True, but the more that you constrain this — and also as those compute needs are going to go up for the military capabilities — the more that will be a constraint going forward. That’s an area where not only do we not want American hardware supporting Chinese military processing capabilities, but we also shouldn’t want American hardware supporting the broader ecosystem that enables the Chinese to us foreign chips for commercial purposes and domestic chips to power the military purposes.

This is all an aggregate AI chip pool. If we’re contributing to the pool but not contributing to the military capabilities themselves, you’re indirectly contributing to the military capabilities.

Not to say that China should be completely cut off — maybe there are ways to aggregate that — but even if China is completely reliant on US cloud, which is a separate debate that we could have, that’s something where in the event of a conflict you could shut that off right away and which imposes hard choices on the Chinese. Whereas if you export them the chips and they have a large supply of chips, then they can slice and dice for their military and commercial purposes.

Jordan Schneider: The other important normative question that I’m going to keep asking a lot on ChinaTalk is: to what extent do you think it is America’s responsibility to keep China down economically?

It’s a bit of a false question because as you said, Chris, if this is what you are most worried about let AWS sell access to Nvidia chips into China from data centers in Malaysia and you’ll figure out the latency. The visibility that the US has on what that’s being used for — whether it’s optimizing grocery logistics or optimizing PLA logistics — is something that you can look at. In the event of a conflict, then you don’t have this strategic resource that you are able to mobilize against American interests.

Given that semiconductors are dual-use technology, how do you address the argument that U.S. export controls are primarily about constraining China’s rise rather than legitimate security concerns?

Chris McGuire: I completely agree with your point that this is a false choice because there are ways to manage the competition such that we provide access — if that’s your choice — to the full American AI stack. By “full,” I mean US chips on US cloud, potentially running US models to the Chinese in ways that allow them to benefit economically, but give you the lever in a crisis. There’s a separate question on whether, given the dual-use nature, that’s a good idea. This is a hard dynamic because the policies that we’re taking have historical precedent.

We’re preventing adversary access to supercomputers, and that has been longstanding US policy.

The US has long controlled supercomputers to the Soviet Union. There were some efforts to collaborate, but they involved intrusive verification measures. That’s an area where we have always doubled down on compute processing.

The difference is that supercomputers are now available in a box off the shelf from Nvidia, AMD, and others. That’s the dynamic that we’re responding to: what do we do in that circumstance? Whereas previously they had to have them built at US national labs and it required all sorts of specialized expertise, now they don’t. This sophisticated technology that the United States has long guarded closely has become commercialized and commoditized, which is great for innovation but poses hard policy challenges with respect to this longstanding policy of preserving our edge on supercomputers.

The question there is: what do you want to preserve? Do you want to preserve a longstanding approach that maintaining our edge in compute is key to national competitiveness? Or do you want to argue that restricting commercial products is going to have deleterious impacts on our long-term vision for the global economy? The former outweighs the latter, and it means that there are costs to this. It probably means that we can’t have our cake and eat it too with respect to Chinese AI — or the Chinese can’t have it. If we take this approach, our ecosystems are going to be further and further apart and the onus is on them to indigenize. We are going to move our separate ways.

What we should do is find other ways to make sure that the Chinese can benefit from advances in, and even the use of, US models. The Chinese could use US models to support their companies, at least right now. I know Anthropic has moved to cut that off because they have national security concerns on that front. That is a frontier where once you have concerns there, it becomes difficult. But there are multiple hurdles that we could jump over before we have to say we’re completely separate — whether it’s cloud access or model access. Maybe that’s where we end up, but it’s certainly a false choice right now.

Jordan Schneider: What’s your take on the Silicon Shield argument — the idea that keeping China dependent on Taiwanese manufacturing is what’s stopping World War III?

Chris McGuire: The Chinese view Taiwan more in a historical context than through this economic and technological context. The Chinese know that a significant action vis-à-vis Taiwan would be flipping the game board.

There would be significant actions on either side, and the ability for them to operate as normal in that environment would be limited. No matter what, the Chinese recognize this. They’re looking more at what is their military capability and their readiness and what are the political dynamics and where’s the United States going to be, rather than what does this mean for our semiconductor production or our technology companies.

They know a move on Taiwan means they would incur substantial economic costs. The question is, are they willing to bear it? But I don’t think this factors nearly as much into their decision-making as the military balance of power and the overall geopolitics and whether or not they think this is something that they can implement and execute.

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Jordan Schneider: The idea of cutting off BYD and Xiaomi from TSMC chips is what triggers an invasion does not make sense.

Chris McGuire: This is something that we’re going to have to grapple with. these are also scarce resources. 3-nanometer lines at TSMC are sold out and in very high demand. There are questions on whether it makes sense that we allow US tools to be used to make Xiaomi chips — Xiaomi three-nanometer chips at TSMC — when American companies would presumably use that fab capacity if they didn’t. You could have a complicated debate on this, but that’s a reasonable policy question.

Inevitably, as technology gets more important, these chips get more important and the fab capacity is not going to advance at the quantity that you need to support all the technological needs that we’re seeing, especially as you see growth in robotics and other fields that are dependent on AI. Are we going to continue to allow China to design their own chips on these lines for their own companies? It’s a separate question of whether they can have any of them. Certainly them having US chips is fundamentally better than them having custom-designed chips. But this is something that we’re going to grapple with in the next one to two years because it will be increasingly unsustainable.

Advice for Young Professionals

Jordan Schneider: Chris, what do you want to tell the kids? You had a remarkable arc in the civil service over the past decade, but this is a tricky time for young people thinking about replicating the path you took. Any reflections you want to share or advice you’d want to give?

Chris McGuire: It’s cool that ten years ago I was in grad school, writing various papers and thinking about what to do in government. Now I talk with so many people who are in grad school writing papers about the things that we did — not only the specific policies, but also this entire area. This idea of technology competition is in vogue now, and a small number of people have pushed effort and policies in the last couple administrations to make this a new topic.

That’s an amazing experience, and you can’t have that anywhere else but in government. You can write things on the outside and work at companies, but actually being able to craft the policies that design the future of technology competition — there’s nothing like it. Anyone who is interested in this space should aspire to do that because we need people who care about it and also know the details. We need people who can translate both the technical details up and the bigger picture policy descriptions.

If you’re interested in that space, please don’t look at any current headlines and say, “Well, I shouldn’t work in government.” You could think about how best to position yourselves and what angle to take, but we desperately need people in government.

It’s a tricky moment for the civil service. I dealt with my share of good and also bad civil servants, so I recognize that there’s a wide spectrum of capacity there. But I do have big concerns about the government’s technical expertise, particularly on these topics — not export controls alone, but anything with respect to AI and semiconductors and future forms of computing, quantum computing, things like that.

It’s hard to get people into government who know this stuff and care about it and can connect the dots on policy. The government needs to prioritize getting those people and keeping those people. There’s always lip service to that, but it’s not happening. Those people are leaving.

These are very hard policies to craft and implement, but they’re also hard to maintain because regulating at the frontier means that you have to constantly be updating and innovating. If we’re going to have a technology policy that actively tries to preserve America’s edge via technology protection policies, you need to be maintaining that every day. If you let it atrophy, it’s like water — it will seep through the cracks and eventually fail. That requires people who know this and are good.

I hope that the government sees that and recognizes that and prioritizes bringing those people in. I know there are people coming in who are good, and it’s a matter of prioritizing those voices and listening to them from a technical perspective, to make sure that the right information is being briefed.

We are in a difficult moment now. But we have no choice but to continue to encourage young people who are interested in this to go do it, because there’s no other US government to work for.

There’s no alternative place to do this massive policy stuff that is going to shape the future of all these industries. We need the people to be there to do it.

Jordan Schneider: Another lesson of your career, which I love your take and reflection on, is the continual learning aspect. You have an MPP, you spent two years at McKinsey, not Intel. But this episode illustrates that you’ve been able to push yourself to be at and stay on the knowledge frontier when it comes to AI and technology competition for almost a decade now. That energy and that determination to stay up on this stuff is not something that you see in every civil servant and is not something that the systems in the civil service are incentivizing for. What pushed you to spend that time learning all this? And what systemically do you think can be done to encourage people to stay on the knowledge frontier?

Chris McGuire: When I joined the civil service, I wasn’t doing emerging technology. I was doing nuclear weapons policy. I started doing nuclear arms control, which was an area I was interested in and had some historical connections to.

Jordan Schneider: What are your historical connections to nuclear weapons?

Chris McGuire: My grandfather was on the Atomic Bomb Casualty Commission, and he lived in Hiroshima from 1947 to 1949, studying the effects of the bomb. He was a pediatric hematologist, so he focused specifically on the effects on children and wrote some of the initial papers showing that nuclear weapon exposure leads to leukemia. He did the statistical analysis that demonstrated that proof. Growing up, I talked with him about that work.

Jordan Schneider: I love this lore.

Chris McGuire: Yeah. It’s a very complicated set of decisions around nuclear weapons use, but it became ingrained in me very early that this is important to US strategy, US power, and how we shape our view of the world. It became a topic that when I left the private sector and asked myself, “What do I actually care about? What do I want to work on?” — the strategic issues around nuclear weapons were the thing that pulled me.

I went to State. I actually had the US-Russia nuclear weapons portfolio, working on the New START Treaty and the INF Treaty. I oversaw the INF withdrawal when we discovered the Russians were cheating in 2018-2019. But it became apparent to me that this was last century’s strategic competition.

The next century is in emerging tech. The arms races aren’t going to be in nuclear weapons production — they’re going to be in AI and various other technologies.

I made an active effort to pivot into that area from nuclear policy.

That background gave me the strategic logic and baseline. My job there was translating these highly technical policy measures to the Secretary of State or other principals in terms of why this matters and how it works. That’s the very same skill you need with respect to AI policy.

What was helpful to me was being entrepreneurial within the civil service. I was constantly seeking out the next opportunity to push myself forward, learn more, and move up. That’s not something that, at least in State Department civil service, is structurally encouraged. It’s more, you are in your job, you’re going to be the expert, and you’re going to be in that job for 20 years because we need an expert in this for 20 years. That’s not how the economy works anymore, and it’s not what young people want to do.

If you are in the civil service, you have to seek out those opportunities yourself. If you sit back, the default will be that you stay in place. I was lucky — being at the right place at the right time, one job leading to another. But if you’re entrepreneurial about it, you put yourself in position to get lucky. I would highly encourage anyone in that space to constantly be seeking new jobs, details, or opportunities. I definitely pushed the limits of the amount of time you could be detailed away from the State Department without working there. It was a joke for many people inside the department.

But I was always pursuing the goals of the department, the country, and the government. I was working for people who wanted me to stay, and I was always able to stay because the mission was important and we’re all ultimately on the same team in the government. Even if you have to ruffle a few feathers with various backend HR people who are frustrated — “detailed again?” — if the National Security Advisor wants you to be there, who cares what the deputy head of the HR office has to say? You have to manage all the relationships, but if you’re good and you’re wanted and you’re entrepreneurial, you can do interesting things.

Jordan Schneider: It’s really interesting comparing that missile gap analogy to the AI stuff. We had a conversation about various exponentials when it comes to AI hardware. I’ve spent a fair amount of time over the past few months listening to nuclear podcasts after all the news around what’s going to happen to the American nuclear umbrella and the rate at which the technology develops with the new launchers and missile sites and bombers or submarines.

Comparing that to a new Nvidia chip every year and four AI video models dropping this week — I’m sure it was blowing people’s minds in the ’40s and ’50s and ’60s and ’70s. There were ranges of outcomes and it was unclear who was going to be able to scale up production and deliver weapons systems. But the amount of dynamism you see with emerging technology versus the nuclear missile second-strike dance is apples and oranges in the 2020s.

Chris McGuire: It’s interesting to think back. There were some crazy ideas out there in the ’50s — let’s put nuclear reactors in everything. Let’s put them in cars, in airplanes. We’re going to use nuclear explosions to power spaceships with a giant lead shield behind the spaceship to propel it forward to Mars. People were saying, “Well, this would work,” but will the physics work in ways that don’t kill a ton of people? There was a crazy dynamic thinking in that space, but less manifested in the physical world. The manifestations in the physical world were slower but still significant in the ’40s, ’50s, and ’60s — not at today’s timescale.

With AI, we have yet to see many of the physical manifestations of these advancements. It’s still not real for people. But once we start to see more capability advancements in the robotic space and the coupling of that, it’s going to be real.

On your nuclear weapons point — this is a strategic issue. Our procurement timelines for nuclear delivery systems, which are super important and underpin our deterrence architecture, are 30 years. How confident are we that those systems are going to fill the need they fill today in 30 years, given advances in AI and technology? How confident are we that ballistic missile submarines are going to continue to be invulnerable second-strike capabilities in 30 years? Are they going to be undetectable still? I don’t know. It’s not that hard to imagine advances that would make it easier to detect those assets in ways you can’t right now. What does that mean for our strategic calculus? There are synergies here that are concerning. We should be thinking through these issues. There are people thinking about this, of course, but I question whether — given Pentagon procurement timelines and things — we’re going to be at the frontier of responding.

Mood Music:

Jeff Alstott is the fairy godfather of D.C. AI policy. He’s the founding Director at RAND’s Center for Technology and Security Policy (TASP). He worked at the NSC, NSF, and IARPA. He has a PhD in Complex Networks.

We discuss:

• How spreadsheets and tables on computer chips and energy policy change White House and Pentagon decision-making.

• Why AI companions could be as normal as having a phone or mitochondria in your cells.

• The risks of hacked AI “best friends” and emotional manipulation at scale.

• The benefits and trade-offs of AI-augmented decision-making in high places

Have a listen in your favorite podcast app.

Why Facts Still Matter

Jordan Schneider: We’ll start with a meta question. What is the point of facts in technology and national security policy?

Jeff Alstott: The point of facts is really the point of analysis writ large. Analysis is most critical for lowering the activation energy required for a policy to be selected and enacted.There are many policies that could be enacted, and for any given policy, it’s useful to consider how much activation energy exists for that policy to get enacted.

In a democracy like the United States, this involves some amount of political will, and different actors have different policy budgets, whether political budgets or otherwise. They may be able to take actions that have higher activation energy, but in general, we would all agree there are policies that are easier for policymakers to pursue versus harder for policymakers to pursue. Analysis is one of the things that either helps the policymaker decide upon a given policy or makes the argument to others for the policy, which then lowers the activation energy for them selecting that policy.

Jordan Schneider: Some would say that we are in a post-truth, post-facts era where charts and data don’t matter. I don’t happen to agree with that, but I’m curious about your response to that line of thinking when looking at the American political system today.

Jeff Alstott: I don’t consider it to be notably post-facts or post-truth or post-data compared to randomly selected other periods of American history. I do think that we have radically diverging attention, which is often related to diverging values but also diverging mental models of the world. A lot of disagreement stems from which of those we should prioritize and which we should focus on first. People often confuse differences in focus, attention, or prioritization with differences in attending to “the facts.”

That doesn’t mean that facts are always attended to — not at all. I’m not asserting that. Importantly, it also doesn’t mean that “the facts” are actually the facts. There have definitely been periods over both the past several years and past several decades where “the experts” have asked people to “trust the facts,” and then it turned out that the facts were wrong because science can be hard and we have error bars in our analyses. But I don’t think that we’re wildly out of step with previous eras in American history on this front.

Jordan Schneider: One interesting thing about technology and AI policy in particular is that the new variables at play and the new facts that senior policymakers in their 40s, 50s, and 60s are having to confront are different from debating Social Security, Medicare, or the national debt. With those issues, people have had years and decades to develop mental models for understanding them. At one level, this is frustrating because maybe you’re just at a deadlock and no one can agree to move forward on anything. But it also provides a really interesting and exciting opportunity for a collective like RAND to take young talent, get them to the knowledge frontier, push past it, and inform these busy policymakers who need to grasp these new concepts for which there isn’t necessarily a lot of built-in context.

Jeff Alstott: Absolutely agreed. This is not new. It’s definitely happening with AI right now, but anytime there’s been a new era of technology, there’s an education process and a getting-up-to-speed process. Those people who anticipated this issue — whatever the issue is: AI, internet policy, vaccines, or even foreign policy — become valuable.

There was an era where we didn’t think we were going to be doing anything in Vietnam, and then we were doing things in Vietnam, and the people who knew about Vietnam suddenly became very valuable. People who anticipated, “Hey, maybe we should know things about China,” have been at the tip of the spear for understanding things about China writ large, but also on China and tech.

There’s immense value for people looking ahead into the future and placing bets on what is going to matter, then spending the time ahead of time to get smart on whatever issue set is going to be coming down the pike. At TASP, we explicitly try to skate to where the puck is going. We anticipate what’s going to be happening with frontier AI capabilities, inputs, proliferation, etc., and say, “Oh, a policymaker is going to ask this question in six months or six years.” We do the work ahead of time so that when the moment arrives, we have the answers there for the policymakers.

Jordan Schneider: I’m glad you brought up Vietnam, Jeff, because I think Vietnam and Iraq in 2003 are two examples where the country’s regional experts were not listened to in the lead-up to very consequential decisions. You have these folks making very particularist arguments about their domain, and the people who actually had the power, who were in the room where it happened, were applying their generalist frameworks to the issue.

How does and doesn’t that map onto what we’re seeing with AI today? I remember in the early days when we had Senator Schumer doing his “let’s listen to all the CEOs” approach. The amount of deference that you saw on behalf of senators and congresspeople to these CEOs and researchers was really shocking to me. They were all just like, “Oh, please tell me about this. I’m really curious” — which is not generally how CEOs of giant companies are treated by the legislative branch.

As this has gone from a cool science project to a thing with big geopolitical equities, the relationship that the companies and the scientists have to the people in power is inevitably going to change. From where you sit running this group of 50 to 100 analysts trying to tease out the present and future of what AI is going to do for the US and national security: what is that realization on the part of a lot of actors in the system that this is a thing we really have to take seriously and develop our own independent views on doing for the desire for facts and analysis?

Jeff Alstott: You’re completely right that the situation now for different policymakers trying to learn things about AI or decide what to do about AI is different from how it was some number of years ago when frontier AI exploded onto the scene. What you went from is a period where nobody’s staff knew anything to now where all the staffers have known for a while that they need to know about this. They have spent time reading, studying, and marinating in these issues. Everyone now has a take. There was a period where nobody or few people had a take, and now everybody has a take, rightly or wrongly. We’re seeing congealing in different ways.

I think of this somewhat in terms of spaces being crowded or not. We have definitely at TASP repeatedly had periods where we said, “Okay, we are working on X, and now it’s the case that there are a bunch of other think tanks working on X. We don’t need to work on X; let’s go work on Y. Other people have got the ball; other people can get it done.” It’s nice from a load-sharing perspective.

In terms of your question about how facts and analysis and their role change as the audience gets more acculturated to some topic area, I think it can cut both ways. It’s really unfortunate when your audience is deeply ignorant of every word you say — they don’t know anything about anything. You can see how that would be very dangerous from a policymaking perspective. Them having more familiarity and having staff with their own mental models of things enables more sophisticated conversations, considerations, and thus policymaking. It really does.

On the other hand, as I said, people have their takes, and it can be the case that people get congealed or hardened into certain positions. Now getting them out of a position if it’s wrong is a much different mental move. It can cut both ways.

How Facts Change AI Policy

Jordan Schneider: Ok, enough of this 10,000-foot stuff. Let’s jump into some case studies. Some longtime ChinaTalk listeners would know from the repeated episodes we’ve done with Lennart Heim talking about compute and AI and geopolitics, but you guys have been up to lots of other stuff. Jeff, why don’t you do a quick intro of TASP and then jump into one case study that you’re particularly proud of — how you guys have used analysis to forward a conversation.

Jeff Alstott: TASP is a team of between 50 and 100 people, depending on how you count, where our mission is tech competition and tech risks. It’s beat China and don’t die. That has predominantly meant frontier AI issues.

One great example was our work around energy and AI. This is about the amount of energy or power that needs to get produced domestically in the US in order to keep frontier AI scaling happening in the US versus elsewhere. It happens to be the case that the US currently hosts about 75% of global frontier AI computing power. But if that frontier AI computing power continues to scale up, we just do not have the electricity on the grid to keep those chips alive. The chips are going to get deployed elsewhere.

This was an issue that frontier AI companies had started murmuring about quite some time ago — both the companies that make the AIs, but more particularly the hyperscalers that make the computers that actually do this.

It took me a little while to realize this could be a really big thing. Sometime mid-last year, I put together a team of RAND researchers who know about energy and paired them with people who knew about frontier AI computing. I said, “We are going to need a table.” That table is going to be a list of all the energy policy moves that are possible within executive power. We’re going to need for each move the amount of gigawatts that it will actually unlock on the grid.

This is not about what sounds good; this is not about what fits a particular political ideology. It is about what are the moves that unlock the most gigawatts. You can then rank the table by gigawatts, and those need to be the policies that policymakers are most attending to, putting their energies towards.

That took on the order of a year to create. The report is out now (or in op-ed form). We’ve already been briefing the results to policymakers to be able to say, “Look, you think that you have a problem over here with supply chains for natural gas turbines. That is an example of a thing that is an impediment to domestic energy production in the US. But there are other moves that would produce far more gigawatts that actually turn out to be more available. That is to say, they don’t require international supply chains; they just require domestic deregulatory moves in terms of allowing people to make better use of their power production capabilities that are already on the grid and upgrading them.” That is an example of a case study.

Make Your Own Fray

Jordan Schneider: This is the type of work that I find exciting and inspiring, especially if I am a promising 24-year-old wanting to make a dent in the universe. There are so many policy problems which are intractable where facts and analysis aren’t really that relevant anymore. You are not really going to change Trump’s mind that tariffs are useful, or you are not going to change Elizabeth Warren’s mind that more government regulation in healthcare is going to deliver positive benefits.

But there are a lot of weird niche technical corners where I don’t think a lot of politicians or regulators have super strong priors when it comes to gas turbines versus deregulating transmission lines or what have you. You are very far from the Pareto frontier where you actually have to start doing really tough trade-offs when it comes to sending GPUs to the UAE or taking Chinese investment in X, Y, or Z thing or trading off chips for rare earths. You can color under that and push out the level of goodness that anyone and their mother who’s working on these policies would want. You could probably agree on that.

Doing that type of work, especially as you’re starting out in a career in this field, gives you a really great grounding. I think it’s a corrective as well. You’re consuming so much news which is about the fights that are intractable or are about value differences where the facts and analysis aren’t quite as germane to what the final solution could be. But there are so many weird corners, particularly when it comes to more technical questions about emerging technologies, where there are positive-sum solutions. You just need to go do the work to find them because no one else is.

Jeff Alstott: Absolutely agreed. I love your metaphor of coloring underneath the Pareto frontier. There’s a famous biologist, E.O. Wilson, who died a few years ago. I remember he has this guidance about careers, and he said when there’s a bunch of people all attending to a certain issue, it can create a fray. There’s a fray of conflict, and you can leap into the fray and try to advance things, or you can go make your own fray. That phrase “make your own fray” really stuck with me.

It happens to be the case that within policy, as it gets more like politics — as you describe, where there’s more and more attention to the issue, more people are knowledgeable about the thing — then the low-hanging fruits get picked, and then the remainder are things that are on that Pareto frontier. It becomes more about differences in values. Then indeed, the relative returns go up of trying to go make your own fray on a different issue.

Jordan Schneider: Especially from an individual perspective: Can you have fun? Will your work make an impact? You can have a higher degree of confidence that the time you are spending on the thing will lead to a better outcome on the thing versus figuring out a peace deal between the Israelis and Palestinians. It’s pretty picked over at this point. I’m not sure there’s going to be a creative technical solution which is going to get you there.

Jeff Alstott: I would say that there is a thing of staying within topics that have a bunch of attention on them but identifying those things where there’s actually a lot of agreement, but nobody is advancing the ball for reasons other than disagreement on the thing. For example, all of the policymakers’ attention is just on other stuff. It is all consumed with Israel and Palestine or Ukraine or what have you. They are simply attending to other things, and everyone would agree, “Yeah, we could do X,” if they merely had any brain power spent on it. But they don’t. That becomes your job — to move the ball forward on these things that have a fair amount of brain cells activated but still have a lot of buy-in.

Jordan Schneider: Even with Israel-Palestine, I’ve seen a really fascinating, well-done report about water sharing between the West Bank and Israel and Jordan. They just had a lot of hydrologists hang out with each other and come up with some agreement that seems reasonable. Maybe one day that will be a thing that will be useful to some folks. Even on the most emotionally charged, contentious topics, there’s always some room for thinking deeply that will be appreciated one day. We can all hope.

Anyway, Jeff, let’s break the news.

Jeff Alstott: The news is that I came to RAND nearly three years ago to create a thriving, vibrant ecosystem of policy and technology R&D on frontier AI issues and how they affect national security. My desire was always to make an ecosystem that would continue to function if I got hit by a bus.

Thanks to fantastic hires that we’ve made and various processes that we’ve created, that’s very much true. I don’t feel like I’m needed anymore for this ecosystem to continue to thrive and create the things that the US and the world needs. Within a few months, I’ll be stepping down as director of the TASP center.

Jordan Schneider: One other cool thing that RAND gets to do that CSIS or Brookings doesn’t is classified work. What’s exciting about that, Jeff?

Jeff Alstott: It’s great, and it’s one of the things that I consider a central institutional comparative advantage of RAND. RAND started as a defense contractor 70-odd years ago, and we’ve been doing classified work for the government ever since. It means that our work at TASP and elsewhere within RAND is able to move back and forth between the unclassified and classified barriers, which means we’re able to stress-test analyses in ways that can’t happen in the unclassified space. It means there are entire questions that we can seek to address that only live in the classified space.

But it’s also really critical for talent development. You mentioned that 24-year-old who is trying to break into the D.C. world. Well, them coming to RAND and doing the work and also getting a clearance will set them up better for whatever the next thing is — either another role within RAND or going to work at DoD or the intelligence community or what have you. Thankfully, we’ve got good processes for doing that classified work that I think are going to continue to be well-executed for the foreseeable future. I consider this one of the marked administrative institutional advantages of RAND, beyond all the obvious things like all the brilliant people you can talk about.

Jordan Schneider: What’s the shape of the questions that end up being done in a classified setting versus the papers that people read that TASP puts out?

Jeff Alstott: On some topics, there is intelligence collection. On some topics, there is intelligence collection that changes the conclusions. On some topics, there’s not intelligence collection that changes the conclusions. That in itself is interesting, and some audiences will care about that. If anyone wants to talk in a SCIF about which kinds of things change the sign versus not — happy to talk with them in a SCIF. We could do that someday.

Then there are also things. If you want to really do analysis on dynamic actions that the US could do, then those are things that you want to be doing in a SCIF. But as a concrete example that is not happening within TASP, literally next door in a secure facility, somebody is working on how the bombs and bullets of how a US-China conflict over Taiwan would go down.

There’s a pretty famous brief called the Overmatch Brief. We’ve had two versions of this. We’re on our third version now, which is just showing the net effect of all of Red and Blue’s capabilities being brought to bear in a Taiwan conflict. This is the briefing that goes to the White House when the White House asks, “All right, how would this happen?” It’s a classified analysis.

Jordan Schneider: We had Mick Ryan, a former Australian general, on. He recently wrote a book which is one of these near-future fiction novelizations of a US-China conflict. The way America wins in the end is they create a typhoon which they spoof out of existence from the Chinese weather buoy receivers, and then it hits the Chinese navy and they disappear. Blink twice if that is a thing that you guys have worked on at TASP.

Jeff Alstott: I’ve not worked on that at TASP.

Jordan Schneider: Good to know.

On AI Girlfriends and Politicians

Jordan Schneider: I want to give you some of my crazy AGI takes, Jeff because I don’t know who else I can do this with. My first one: we’re calling this the AI girlfriend net assessment. The thesis is that five to ten years from now, everyone is going to have an AI companion that they trust with their life. We already have the Swedish Prime Minister saying he consults ChatGPT all the time for work. You already have half of teens in America saying that they speak a few times a week with AI for emotional support.

I have an enormous degree of confidence that this is a one-way ratchet. As the technology gets better, we’re going to trust it with more and more facets of our life. From both a human intelligence perspective as well as a broader influence operations perspective, this seems like an absolutely enormous vector, both for the US to have a lot of fun with foreign leaders and populations’ AI companions abroad, as well as a vulnerability at home if someone can hack my AI companion or tweak the dials on a nation’s AI companion in order to get them to think one way or have civil unrest or vote differently.

The worries that we had with Facebook and algorithms or Twitter and TikTok and algorithms seem like child’s play compared to this threat vector that we’re going to have from having these Scarlett Johansson “Her” characters in our life that we have these strong emotional bonds with. Am I crazy?

Jeff Alstott: First, this is totally a thing that is happening. I know people of many different ages where they are increasingly incorporating LLM counselors into how they live life. I am not such a person — not yet. The thing’s not good enough for me.

Jordan Schneider: We’ll get you, Jeff. Don’t worry.

Jeff Alstott: There are several possible ways that this could play out. First, I would not be super confident that this is a one-way thing. Remember when cell phones came out and silencing your cell phones was an issue? You had to remind people at the beginning of events to silence their cell phones. Cell phones would go off all the time. People would have customized rings and there would be scandals about politicians having such and such ring tone. Now we don’t do any of that because society figured out you just have your phone on silent basically all the time. We figured out how to incorporate this technology into our lives.

Relatedly, kids and cell phones or any other devices — you’re a father, I am sure that you have had thoughts about when is the right time to give your child access to different kinds of technology. There definitely were eras where the parents hadn’t yet had time to think about it, so they were just doing stuff. Then we observed the stuff happening and then we said, “Oh wait, we need to change that.” It is not uncommon these days to see families who are just really intentional about “you’re not getting a phone until age X.”

There’s a Catholic University professor who’s now working at the State Department in the Policy Planning Office. His name is Jon Askonas and he wrote this great piece several years ago called “Why Conservatism Failed.” It’s basically identifying that within the right there is this implicit assumption that more tech of all kinds will always be good. We know this is false. We just talked about something like cell phones ringing or putting your phone in front of your infant’s face.

We have the opportunity to be intentional about how we incorporate these technologies into our lives. That includes as individuals, but also in the workplace and also as policymakers. You mentioned the Swedish Prime Minister. We’re going to get to the point where, yeah, maybe the Prime Minister has AI advisors, and the character of those AI advisors is highly inspected. We have a lot of thought about what is this AI? What is it trained to do? What are its supply chains? What is its ability to get manipulated? This is the kind of thing that we do for many areas of technology. As it gets to more critical use cases, we are more thoughtful about how we use it.

That is my claim about not assuming the ratchet. But there’s a whole other category here, and I think you would appreciate this: in all of our cells, all of our biological cells, there are these mitochondria. We all remember from school, “mitochondria — the powerhouse of the cell.” It helps you make lots of energy from respiration. What you may not recall is that there’s a fair amount of evidence that mitochondria were independently evolved organisms that we then evolved a symbiotic relationship with, where the mitochondria now live inside our cells and are reproduced as we reproduce. But they started out as a separate thing.

I think that it is totally possible that humans leveraging AI are going to end up in a cadence of life that looks a lot like the mitochondria with the cell, where indeed just what it means to be a human in an advanced technological society will be: “Of course you have your AI assistant, of course you have that,” just as “of course you have mitochondria in your cells.” The collective organism of yourself plus your technology assistance will be perceived as just as normal as the fact that you and I are both wearing glasses. Of course we wear glasses. What are you talking about?

The tech’s not there yet for me, but there will be segments of society where this is how they see themselves. I don’t have a strong bet on what timeline for that.

Jordan Schneider: The mitochondria version is the vision that — let’s give a 40% chance of happening, assuming the AI gets better and it gets smart enough that Jeff uses it more in his daily life. We haven’t even talked about how you want to automate all of your 50 TASP researchers. But the fact that that is even a thing you’re considering means that it’s going to be real.

There are a few things I want to pick up in your answer. First, it’s different from turning the cell phone ring on or having it not ring. It’s more like: we all have emotional needs and we all have jobs that change. The idea that you can be a journalist in 2025 and not be on Twitter is absurd because the world has changed. The metabolism of news is faster, and algorithmic feeds for a large percentage of humanity have outcompeted the needs for content that we had compared to going to Blockbuster and picking out a VCR from 100 videos.

It seems to me that it’s going to be really useful and powerful, and maybe we’ll get to something in 2050 where we have some good guardrails and all of our AI companions are localized and can’t be hacked by a foreign government. But we’re going to have some mess in the meantime.

Another piece of this mitochondria thing goes to my second AGI hot take: AI presidents and politicians. I think it’s probably going to first come with the CEOs, but then in the political sphere, where the ones who are using AI to augment and improve their analytical capabilities and are spinning up their own AI-powered task forces to give them the right answer to “Should I say this or that in my speech? Should I invest in that or this technology or open this or that factory?” will just have some evolutionary advantage where the people with the most money and power and influence in society are the ones that get more dependent faster on the AI.

Again, we’re assuming that AI is good enough to actually help you win that election or outcompete that company. But it seems to me like this is a very reasonable world that we could be living in 10, 20, 30 years from now where there is an evolutionary dynamic of: “Okay, if I’m the one who figures out how to work with my mitochondria best, then I can go pick more berries and have more children or whatever.” That’ll just happen for folks who learn to use leverage and ultimately just trust fall into letting the AI decide whatever they do — because humans suck and the AI is going to be really good.

Jeff Alstott: You’re speaking my language. A long time ago I was an evolutionary biologist, and I attend a lot to things outcompeting other things and the effects that has on the system. One of the ways in which this may shake out is that compared to a lot of other foreign policy and certainly national security people, I attend to hard power way more than I attend to soft power. I absolutely agree with your view of “dude, if you use the thing, you’re going to be better, so you’re going to win.”

Then it becomes a question of: “All right, but does it actually make you better?” As you mentioned, we’re wanting to automate a lot of tasks at RAND, and we could talk about that in more depth. But one very simple thing is using LLMs to auto-write things or to revise things. You work enough with LLMs, you probably can tell when the thing is written by an LLM. It’s using all the em dashes and everything. I have a colleague who just yells at everything made by LLMs, calling it “okay writing, but it’s not good writing.” And how much effort do we want to make it be good writing?

Merely having AI do all your things for you — as you say, a trust fall — is going to pay out in some domains and not others initially. Eventually it’ll pay out in all domains. I’m with you there. But there are going to be folks who are making trust falls too early in some domains that are going to get burned, and different people can have different bets on that one.

Jordan Schneider: It’s interesting because clearly we don’t even have to go to 2075 where AI is going to be good at everything. There are things that it is going to have a comparative advantage in over time. The types of decisions that a CEO or a general or a politician does is taking in information with their eyes and their ears and processing that and then spitting out, “Okay, I think we should do A. If I see X, then we should do B. If it doesn’t work, then maybe we should go to C.” That type of thinking seems very amenable to the analysis and thought that an AI could do over time.

We can make some nice arguments in favor of humanity that we have these lived-in-body experiences, and we feel history and context, and maybe we can read humans in a deeper, more thoughtful way if Jeff is deciding to assign this person versus that person. But we’ll have your glasses with a camera on them, and the AI soon will be able to pick up on all of the micro facial reactions that Jeff does when he assigns Lennart to do biotech instead of compute, and he shrugs a little bit but then says, “Okay, fine, whatever you say, Jeff.”

You can put the camera on Mark Zuckerberg and he has to make all these decisions — at some point in the next 30 years, a lot of the executive decision-making, it seems to me an AI is just going to be really, really good at. There are some really interesting implications.

What you were saying about some people are going to get burned: if that happens in the private sector and Satya adopts this slower than Zuckerberg and then Zuck wins out and gains market share, this is fine. It’s capitalism. Companies adopt technology in different ways.

But when you abstract it up a level to politics and geopolitics — “should we do a trade deal with this country? Should we sell these arms to this country? How should I phrase my communiqué in my next meeting with the Chinese leadership?” — that’ll be really interesting because we won’t have those case studies. My contention to you, Jeff, is we’ll get into a point where we will have had politicians who’ve tried it, although I think we are still going to have a president who is a human being for a while. Just because we have a Constitution that’s probably pretty Lindy, it’ll take a while for us to get rid of that.

But there’ll be some point in history where you get elected to governor, you do a better job running your state because you’re listening to the AI, and the governor in the state next to you isn’t. You’re doing a better job in the debate because the AI is telling you what to say and then you’re more pithy and sound sharper. We end up in a system that naturally selects towards the people with AI.

Maybe once we get that, we’ll also have the AI which is good and aligned enough to pursue things in the national and broader society interest. But maybe not. Perhaps even once we get there, we’ll still get burned because it’s not good at nuclear war or something. Sorry.

Jeff Alstott: Sorry, for what?

Jordan Schneider: Sorry to my audience. Are you guys cool with this? I don’t have a lot of guests I can go here with this stuff with, so we’re putting it all on Jeff.

Jeff Alstott: I really appreciate that you’re bringing up the audience right now because this very much gets to the earlier things we were talking about — the utility of analysis and the looking ahead. You are doing exactly the right thing, which is looking ahead to a place that most people are not looking ahead to or don’t want to go to. You’re trying to beat the market of ideas by being early. If you can do that well, that gives you time to have thought about the issues more, do more research and analysis, so that when this issue is no longer weird and enters the Overton window, then Jordan’s thought about it and Jordan’s there to be giving as good of informed analysis as possible. Not just Jordan, but Jordan’s audience.

There is this issue of how we select which unusual futures to lean into, especially when we have uncertainty about the future. You said some dates; I said some other dates. My median prediction for an AGI that can do every economically and militarily relevant task as well as a human is in the early 2040s.

But it’s totally reasonable to say that’s too far in the future. “I need to make bets on other nearer-term things that are still maybe eight years away so that I can be hitting those policy windows in eight years as they appear.” It’s worthwhile for there to be a portfolio either at the level of an individual or at the level of a center or a society in terms of we have some FTEs allocated to these different timelines and different scenarios.

The Utility of Expertise

Jordan Schneider: We’ve talked mostly about this in a technology context, but peering over the event horizon in a China context is also shockingly easy if you’re doing it — way easier than this AGI stuff. If you were someone who followed China at all, Bytedance was a company that you knew about in 2017 because it was the biggest app in China. If you followed China at all, you knew that they were building a lot of electric vehicles. You knew they were building a lot of solar panels.

This is the fun part of my little niche. Am I going to have a more informed opinion than you or Lennart about when AI is going to be able to make every militarily relevant decision? Not really. And by the way, that’s kind of an impossible question. But things about China are just happening today. Because of the language, because it’s halfway across the world, because the Chinese government is opaque (not really), but China’s confusing and hard and you need to put a little homework in before you understand what the deal is with some things.

It is so easy to tell people things that are going to wash up against their political event horizon activation energies over a six-month to two-year horizon. Which is why this niche is so fun, and you guys should come up with cool stuff and either work for Jeff or write for ChinaTalk. I’ll put the link in the show notes. We’re just pitching stuff here.

Jeff Alstott: I love how you describe this thing of “man, all you had to do was pay attention. It was easy.” The fact is, as we said earlier, people’s attention is on other things. All you had to do is be paying attention.

Just to get to the union of China issues and AI issues: DeepSeek. Many people who were paying attention were telling folks for many months before the DeepSeek models came out, “This team is awesome. We need to be recruiting them; we need to be doing everything we can to get them out of China and get them to the US or allies.” Now we can’t because their passports have been taken away.

Similarly, we knew the existence of a Chinese model of a certain level of capability at that time in history because the export controls hadn’t properly hit yet. They bought the stuff ahead of time. It’s because you were paying attention and then other people were not paying attention or were paying sufficiently little attention that their world model was sufficiently rough that they just didn’t know these things were going to be coming. This is the utility of well-placed expertise.

Jordan Schneider: It was very funny for the ChinaTalk team to live through the DeepSeek moment because we have been covering DeepSeek as a company and the Chinese AI ecosystem broadly ever since ChatGPT, basically. I’ve been screaming at people in Washington and in Silicon Valley, “These guys are really good. They can make models. You’re not smarter than them, I don’t think. Or they’re smart enough to fast-follow if you’re not going to give them enough credit.”

It wasn’t a hunch. The models were there. You could play with them and they were really good. It was remarkable to me to watch the world wake up to that. We gained a few extra points. I think we got 20,000 new free subscribers on the newsletter, which is cool. It probably helped us raise a little bit of philanthropic funding. There was some material and clout gain from being “right” or early to this.

But more what I have been reflecting on is: could I have screamed louder? Could I have screamed in a different color? What could I have done differently in terms of our coverage and writing and podcasting to get this message (which I had with 95% confidence) out to the world faster?

It’s funny because you can be right in some fields and very straightforwardly make money off of it. But being right in this field, you don’t want to be “I told you so,” and it’s an iterated game. It makes it easier next time. But I still reflect on that a lot about how my team and the ChinaTalk audience was aware of this company and the fact of the capability of Chinese model makers and AI researchers, and it still was a big shock to the broader ecosystem.

Jeff Alstott: Completely agreed. I love how you’re thinking about “what should I have done differently so that people acted.” This issue is relevant to the questions that you had at the top about the role of analysis or the effect of analysis. It is possible to do fantastic analysis that’s totally right and have no effect because you didn’t consider your audience.

There are definitely researchers in think tanks who write 300-page reports when what the policymaker needs is a page, and they get really detailed into their method when what they needed was the answer. They are speaking to an audience that turns out isn’t the audience that is actually at the levers of power.

There’s a variety of strategies of essentially how broad versus how targeted you are in disseminating your analysis. This can affect what analysis you choose to do and how to design it. That’s the thing that we focused on a lot at TASP and RAND.

Earlier you talked about the classified work. An advantage of that is that we’re able to engage with policymakers in ways that are difficult to otherwise. We’re running war games and tabletop exercises that may be unclassified or classified, and it enables you to engage with people otherwise. But it’s not just the classified work. Because RAND’s a defense contractor, we’re engaging with policymakers directly, frequently. It helps you build up a mental model of: “No, Bob sitting in that chair is the person who is going to make the decision. In order to inform Bob, I need to present the analysis in a way that is interpretable to Bob.” It’s not whoever my 10 million followers on X are; it’s Bob.

There’s this tension about where you place your bets along that Pareto frontier of being more targeted to certain audiences versus broader. Both are valuable, but it’s useful to have a portfolio approach again.

Jordan Schneider: I think you wouldn’t mind me claiming that I’m probably a third standard deviation policy communicator person in this little world and have learned a lot of the lessons that you have. I’ve built my career around a lot of the pitfalls that you’ve identified — not writing the 300-page thing — and somehow lived both on doing the original research and being the “popularizer” and writing in a way which is engaging and accessible and making the show hopefully fun as well as informative.

Maybe the answer is that I went too far in that direction and wasn’t hanging out with Bob. Maybe Bob isn’t someone in the Defense Department. Maybe Bob is a New York Times reporter or a Senate staffer. Actually, it’s probably not a Senate staffer. Let’s talk more about Bob because in the DeepSeek case, he wouldn’t be Marc Andreessen, right? Bob wasn’t anyone in the AI labs — they were all aware of this as well. Maybe there was just enough money on the other side of this discussion that it was too inconvenient a fact to internalize. What do you think?

Jeff Alstott: Who Bob is depends upon what exact policy move is relevant here. You just mentioned both people in government and people out of government. The frontier AI companies — probably any one of them could have, with sufficient will, tried to go headhunt every member of the DeepSeek team. They had the legal authority to do this and possibly enough cash, whereas government would have different abilities but not, ironically, a ready-made answer for just “hey, we’re going to come employ you.” The US government does not currently have anything like an Operation Paperclip, as was done with German scientists after World War II. The fact that it doesn’t have such a thing means that its moves available to it for handling a DeepSeek crew is more limited.

Who Bob is depends upon the exact policy move that you want. For what it’s worth, you made the suggestion that maybe you’ve gone too far in one direction; I’ve gone too far in the other direction, which is part of why we like each other — because we’re both doing these complementary things where I’m not on X, I have no social media presence, I’m from the intelligence community. My job is knowing the middle name of the relevant staffer because that allows you to infer what their email address is because the middle initial is in there, and who reports to whom and the palace intrigue and that kind of thing. It’s useful for what it is, but it’s only one kind of usefulness.

Another shout-out for anybody who’s looking to apply to TASP: our conversations and impact are much broader than the public publications that we have on our website because of this bias that I have had. But maybe it’s the case that we ought to be leaning into publishing more than we have been.

Jordan Schneider: All right, I want to close on the vision for automating this. We’ve talked about automating AI presidents, but what’s next?

Jeff Alstott: Right now at TASP and within RAND, we’re working to find ways to use the latest AI technology to automate steps in our research processes to achieve greater speed and scale. There are at least two ways to approach this: automating research management and automating research execution.

Research management involves office processes: ensuring documents go to the right person, checking that documents follow proper structures and templates, routing them to publications with the correct billing codes, and other administrative tasks. Much of this automation doesn’t require AI and can use standard tools, though adding LLMs enables us to plug key steps where human intervention is no longer needed. This allows processes to go from almost fully automated to completely automated, which is excellent. We’re continuing to build this out.

The more interesting aspect for your audience is research execution: figuring out facts about the external world and what they mean for policy options, what we call analysis. We’re currently exploring two areas, both leveraging the fact that while LLMs can be weak in their world modeling and the context they bring to problems, when provided with proper context, they can automate and iterate effectively.

First is quality assurance. We have an LLM review documents to identify problems: Is any of this incorrect? Is the math wrong? Are the numbers accurate? Does this reference match that reference? When a claim cites a particular source, we have the AI read the citation to verify whether the claim is actually supported. With 100 citations, you can process them quickly. We’re working to speed up our QA processes. This won’t be perfect with today’s technology, but it will help significantly.

The second area is what we call a “living analysis document.” Once humans have completed their analysis, written it up, and made critical high-context decisions about how to structure the analysis — what data to use, how to set up the model, what the actual issues are and how they interplay — once humans have done all that and produced the paper, can we have an AI repeat the analysis a year later with the latest data automatically? This automatic extension and continuation of analysis seems like potentially low-hanging fruit that’s doable, at least partially, with today’s technologies.

I’m hoping this will enable us to do not just more analysis in areas where we currently work, but by freeing up human labor, we’ll be able to embark on new analyses in new areas, expanding where we focus our attention.

Jordan Schneider: Let’s close with some reading homework. Give the people something substantial.

Jeff Alstott: I just watched K-Pop Demon Hunters last night. It was awesome. I have a rule: no work or high cognitive effort activities after 8 PM. There are people like yourself who read dense books late into the evening, but that’s just not me. It’s K-Pop Demon Hunters for me.

All right, let me think of something substantive that folks might want.

Jordan Schneider: Yeah, last night I was reading Stormtroop Tactics — thank you, Mick Ryan, for taking over my brain. It’s about the evolution of German infiltration operations from 1914 to 1918. It’s pretty well written. What’s cute is that the dad wrote it and dedicated it to his son, who was a colonel at the time. He was like, “I wrote you this book so you can learn about tactics better.”

Jeff Alstott: My recommendation is “The Extended Mind” by Andy Clark and David Chalmers. There may be just an article, but there’s also a book on the extended mind by Andy Clark. This is a classic cognitive science piece.

Because I’m a cognitive scientist, which was my original training, I assert that if you’re thinking about AI futures, what’s happening with the human condition and AI, and what’s possible, much of the older cognitive science work will be more helpful for making accurate predictions and bets than the particulars of machine learning today. The machine learning particulars may matter too, but if you’re looking more than five years out, certainly more than ten years in the future, you shouldn’t focus on LLMs specifically, but rather on more fundamental cognitive science concepts.

The concept of the extended mind, which people were thinking about decades ago in cognitive science, relates directly to the issues you brought up about AI companions. It’s essentially about how we think about what our mind is, where it lives, and where it’s physically instantiated. This includes obvious things like notes. You write down notes and they become part of your mind. Your brain remembers pointers to the notes, but not the contents themselves. There are definitely people who are diminished when they don’t have their notes available. Books, AIs, and other tools are all part of your extended mind system.

If you want to think about how different AI futures could work, cognitive science in general, and if you care about the AI companions issue for presidents or otherwise, then “The Extended Mind” in particular is essential reading.

Jordan Schneider: That’s a beautiful thought. I’ve done a lot of self-promotion on this episode, but we’ll close with it being an honor and a pleasure to be part of this audience’s collective mind. Thank you for your time and for trusting the show, the team, and my guests to create content that stretches your extended mind in interesting and useful ways. Thanks so much for being part of ChinaTalk, Jeff.

Over on the podcast feed we’re four episodes into a new series discussing American defense and the future of war, Second Breakfast. We had to go with something Lord of the Rings-themed and still can’t believe Palantir’s left this lane open for us. Recurring cohosts include , and Eric Robinson.

Below I’m featuring a transcript from our second show. We got into:

• Drones in Ukraine, Lebanon, and Iran and the new reality of remote warfare

• Why everyone including John Bolton walks around with TS printouts

• Why the ‘Silicon Shield’ is such an inane concept

Listen now on iTunes, Spotify, YouTube, or your favorite podcast app for this episode, or scroll back over the past few weeks on the ChinaTalk feed for other episodes we’ve recently published on the future of intelligence, why China hawks are on life support, and what warrior culture has done to the Army.

Drone Bolt From The Blue Attacks

Jordan Schneider: Eric, I hear you have some feelings about the idea of an Israel-style “bolt from the blue“ drone strike on Iran happening in the US.

Eric Robinson: There are a couple of extraordinary case studies that aren’t rattling people the way they should be. The experience of Russian strategic air being on the receiving end of covertly placed Ukrainian airstrikes hasn’t been fully assessed. Nor have the US partners, allies, or people in industry thought about the implications of the Israeli Defense Force or Mossad employing covertly placed air assets against the Iranian integrated defense system.

We’re witnessing unmanned aerial systems being employed in ways that knock out strategic capabilities. Yet I haven’t seen an equivalent conversation about defending the US, our partners and allies, or critical infrastructure — shipyards, any of that — from these kinds of threats. This is opposed to Golden Dome, which is a massive spending program against a narrow-banded but obviously important threat.

Assuming Golden Dome is technologically feasible — and we know that ballistic missile intercepts are, as we’ve seen with some regularity in the Middle East — ballistic missile threats from ICBMs or MRBMs are acts of substantial war, and the US needs to be secured against that. But where is the paired effort to guard against UAS strikes moving against a natural gas facility or an airline terminal? It’s not there yet.

Jordan Schneider: Or even your Golden Dome missile battery? We can put these two together, right?

Eric Robinson: Thanks for giving me the floor. If you want to be unnerved about something, it’s that counter-UAS efforts are being treated as a tactical tool. But where’s the coastal artillery? Where is the effort to think through how a determined opponent of the US would actually get at the heart of American industrial capacity?

Whether it’s your Saronic building in Franklin, Louisiana, or your Anduril building in Ohio, you’ve got gate guards. But are people trying to surreptitiously enter your facility or go after you with a cyber profile? The only threat you haven’t considered in the modern world — and the Israelis and Ukrainians have demonstrated it — is this one.

Justin McIntosh: In a lot of ways, Jordan, this goes back to what you talked about last week or two weeks ago when we discussed critical minerals. We’ve been writing about this for 15 years — that we have this critical mineral dependency on China. We haven’t done anything about it.

The Obama administration struck Anwar al-Awlaki in Yemen. The USS Cole was hit by a suicide boat, which was a precursor to an unmanned suicide boat, for lack of a better term. We already saw then that there was potential for operations in countries where we haven’t declared war and don’t have a huge presence, based on intelligence gathering. How long will it take for other people to do the same thing inside the borders of the US?

To be honest, we ignored it because there was always this assumption that we were different. We had our two oceans, and we were surrounded by two oceans and weak neighbors, so we were good. Some people are finally acknowledging that those things don’t exist anymore.

Where are we on national defense? Where are we on moving off reliance on GPS, which was directed in 2000? There was an executive order that directed the US to move off reliance on GPS for assured timing. We saw zero movement on that, in part because it was an Executive Order that came out of the Trump administration and was followed by a Democratic president who wasn’t going to reinforce anything Trump had done.

Now we’re at a different point, and that’s another critical vulnerability that exists that we haven’t addressed. We have a drone critical vulnerability. We have Salt Typhoon and all the other bolt typhoons still unaddressed. Every time we start bringing them up, they get mired in conversations about who is saying we have this vulnerability or who is saying this exists. But what are we going to do about it?

Tony Stark: Two major issues haven’t been addressed. One is the changing role cyber plays in warfare. Probably since at least the 1990s, but building up after the strike against the Iranians around 2010, there was this hype that cyber was going to dominate every facet of warfare.

It does, in the sense that food regulations dominate the food industry — you have to think about it, you have to plan for it — but it is not the predominant domain of warfare in the way that a lot of people thought. How do you continue to defend against that stuff while also admitting that this is not the only form of sabotage that exists and that cyber itself is a form of reconnaissance and sabotage?

Secondly, on physical sabotage: even before the strikes on Russian strategic air, there was a back-and-forth ongoing war of sabotage in the EU and the Russian mainland. Especially in the EU, it was onset — publicly reported, people saying, “Oh, this is terrible,” and then nothing came of it, at least on the public side.

That’s a difficult conversation to have in the US, particularly now, because how do you talk about sabotage in a way that is reasonable and not immediately thrown into a red scare? When I worked on the Hill, we would talk about the threats posed by the Chinese to the US, from Guam to the mainland. You would get other staffers saying, “So this means I have to ban them from the farmland.” You’re like, “I hate to tell you, but that’s not the actual major enabling issue for sabotage operations — whether a CCP company has a farm within 100 miles of a base.”

I honestly don’t think we’re going to have this conversation in the US in a meaningful way that is neither overreach nor left of boom, shall we say.

Eric Robinson: Thankfully, the FBI recently committed to dramatically expanding its presence in counterintelligence. Did I read that correctly?

Justin McIntosh: They exercised it against John Bolton today, apparently.

Jordan Schneider: If the Trump administration starts getting people for having classified files in their houses after he wiggled out of the whole Florida thing, more power to him. John Bolton had this coming, let’s be real.

Eric Robinson: I’m going to be a bit ageist, but if you’re in the service and you are still printing material, why? I don’t understand what kind of neurons get energized when you hit print on a TS/NOFORN document and walk around with it. It is extraordinarily strange. When I was an intelligence briefer around 2012, we had iPads. There’s no need for paper anymore. It is a relic — like those stacks of etched wood that reside in Britain and tell you what happened in the 800s.

Justin McIntosh: Bolton is a dinosaur. However old he is, he’s got his own way of doing stuff. But not only him. General officers who sit at the heads of the most technically advanced military on the planet print everything out, hand-write comments, and then throw them to their staff to get answered.

Eric Robinson: It is a cultural thing. You see films, specifically American films that portray Commonwealth officers from the First or Second World War, and they always had swagger sticks. Some of these people carry them because there’s a class issue — they came up from the horse cavalry and brought these devices around that gave them some sense of authority. Napoleon had his marshals’ batons. It is an element of warfare that is completely nonsensical, like wearing a breastplate.

We do have this imperial system inside American national security where if you’re a general officer or a past Senate-confirmed official, you have some GS-12 or 13 toady like I used be, to give you your news in the morning. Some people think that if it’s not printed on paper, it doesn’t exist. We create not just opportunities for people to break the law — which is arguably what we’re seeing around Ambassador Bolton — but we’re creating this extraordinary counterintelligence vulnerability when people who are just human have these sensitive pieces of material that they shouldn’t be walking around with or shouldn’t leave the building.

It happens. It doesn’t have to elevate to the point where it’s David Petraeus trading codeword material for sex. It can just be an accident. If you’re serious about counterintelligence, pull out every hard copy printer anywhere in the Pentagon, any place in the Intelligence Community, and tell people to deal with contemporary reality. It’s 2025. You don’t have to print this stuff.

Justin McIntosh: It would drive me nuts when I would power up my computer and have an email from generally an admiral, sometimes a general — because admirals, they walk out on the deck, throw something down into the pulpit, then turn around and walk back into their office, and eventually the thing gets done that they had demanded.

You would get a scanned-in version of what had been a typed document that was emailed to a person, where he had written in marginalia something that he wanted answered. It had gone through 14 levels of bureaucracy to get down to you so that you could answer this niche fact that he wanted.

Eric Robinson: To Matt Olson’s credit — former Associate Attorney General, head of National Counterterrorism Center, Über, WilmerHale — he was not an intel pro, he was a prosecutor, but he was ready to operate in a contemporary world.

Let’s talk CENTCOM for a minute because that is the heart and soul of American national security. When I was at the National Counterterrorism Center, we had a rare hard copy of the presidential finding that authorized the targeted killing of Anwar al-Awlaki. It was not on digital at all. It was in a dedicated safe because of its classification.

In certain cases, there are examples where that level of deliberation does have to be effectively firewalled, but it’s also in the environment where the CIA was deliberately obscuring its role in the torture program. Counterintelligence needs to be paired with effective oversight. Something in the back of my mind struck me as suspicious about effectively air-gapping a document that was just as vital in American legal history as Ex parte Quirin, when the US executed the German saboteurs in the Second World War.

Jordan Schneider: You heard it here first. I’m sure we’re going to get a story like that. I’m not saying torture, but something that was kept entirely off the books. We already have it — we already saw one manifestation of it with Signal-gate. We’ve got three and a half more years of this. We’re going to get more funny business for sure.

Eric Robinson: I’m absolutely fascinated to hear what happens when somebody like Steve Coll or one of these deeply resourced, deeply sourced journalists with ties in the Middle East starts getting regional services talking about the Iran war and the US pairing and conducting strikes against the Iranians. Once that whole story comes through, it will shake some assumptions.

I’m glad we’re talking about CENTCOM, because let’s capture the true spirit of American national security and the relative balance between INDOPACOM and CENTCOM. We can devote three seconds of the broadcast to SOUTHCOM if you want.

Justin McIntosh: That was it. We’re done now. SOUTHCOM complete.

There's a big development with SOUTHCOM and NORTHCOM — they're talking about moving the commands to Fort Liberty. The idea is that consolidating all of the forces on one base increases organizational efficiency — though it also makes it a bigger target for enemy attacks. Texas is making a push to keep it in San Antonio, or at least to ask why they're moving it or potentially moving it. We'll see how much that accomplishes. There's my SOUTHCOM take for the day.

But circling back to the discussion of sabotage, Zero Day Attack was released last week. You know, the Taiwanese miniseries that was focused on a Chinese invasion of Taiwan. At least in the opening bits or the opening episode, focus heavily on the saboteurs and the enemy within as an underlying narrative, and it’s seeded throughout the government. Interestingly, that was the initial take from that show — we’ve got to be worried about the enemy within.

The Silicon Shield Will Not Save Taiwan

Jordan Schneider: I want to talk about Silicon Shield. , who we get to pick on because he recently left the White House and decided to go on someone else’s podcast instead of mine for his initial White House exit interview, said something to the effect of on the podcast The Cognitive Revolution that on Taiwan, the US government is explicitly executing a Silicon Shield strategy, making their semiconductor industry so indispensable that it guarantees international interest in their security.

There are a few levels to this that are different gradations of reasonable. At an international level, getting the world to understand that a war over Taiwan or a Chinese invasion of Taiwan would have double-digit impacts on global GDP is a way to get Japan more bought in, get the Philippines more bought in, etc. Sure, I buy that.

But basing a strategy of deterrence on economic entanglement and economic costs is something that we have seen fail over the course of all of human history. We can go back to the Peloponnesian Wars when we had big trading partners with Megara and Corinth. That’s the thing that worries me. If gold-plated deterrence is a dope military and your enemy 100% convinced that you would be willing to use it to stop them from doing whatever they’re doing, I would put this as maybe level tier 4 or tier 5 on the types of things that you would want to bring to a conversation with an adversary to convince them not to start a war.

Tony Stark: Silicon Shield was always a “nobody move or I’ll shoot myself” sort of thing for those who’ve seen Blazing Saddles. There’s no good history of using economic interdependence to prevent war.

The other thing we did when I was on the Hill was we started to push Wall Street in the direction of understanding the cost to their investment in the event that there would be a war. Part of that was understanding the costs. It wasn’t just us — RAND did some studies and others too — of the cost of what would happen if TSMC went under, etc.

The unfortunate second and third-order side effect of that was people deciding to de-risk their investments, but not de-risk policy. The needle moved, but not in the direction that we wanted with Silicon Shield. Instead of “oh, if they’re going to do that, then we’re going to find other ways around it,” we’re not going to help change the status quo or improve deterrence.

Justin McIntosh: One of the big problems with the Silicon Shield, at least from the build-up to it — and we can talk about the messaging that’s currently going on however we want — but I was in Intel’s office in their foundry in Gordon Moore Park and I was being told by their executives that they could replace a substantial portion of the production at TSMC at their foundry within a timeline of months, not a timeline of years. This was under Pat Gelsinger, and Intel’s always been a humble company that’s never over-promised anything.

Again, you’re at that point where you have one of the larger companies within the US that was counter-arguing it doesn’t even matter — we can replace it. Now you fast-forward to “we’re going to build a Silicon Shield.” But even the messaging from the administration is “we’re going to give them our third or fourth-best generation of chips and get them addicted to those,” to which you then get the Chinese coming out and saying, “Hey, we’re going to limit — we want 70% of our chips to come out of Huawei and SMIC, not out of anything that NVIDIA or TSMC is producing.” Again, you talk about shooting yourself in the foot. Even our messaging on this one has been off.

Jordan Schneider: More on Silicon Shielding. It’s a weird thing because on one level, we think that having the whole world dependent on chips coming out of TSMC is going to make war less likely. But we are also trying to force TSMC to manufacture in the US. Apparently, we’re going to take a golden share out of Intel and wave some magic wands, bang some heads together to make sure that they are a functioning entity in the decade to come.

I guess this is reassuring in the sense that Silicon Shield maxing would mean letting Intel die. But having the whole world all dependent on TSMC to live in a modern society and having some resilience may lessen the effectiveness of the Silicon Shield. But is America going to go to war in defense of Taiwan or break a blockade on Taiwan because we’re worried about semiconductor exports? If China’s smart, they just let the chips out. And then I guess we don’t care.

Eric Robinson: But let’s take it away from Taiwan for a second. Let’s borrow from Frank Herbert and Dune. People speaking of Silicon Shield are almost talking about it like it’s Arrakis — the one place in the universe you can get the spice melange that makes everything function. Dune as a setting would not be compelling if “Oh well, actually any planet can create spice. They just have to create the CHIPS Act for spice.”

There’s a lot of magical thinking going on that Taiwan is excellent at a certain set of processes, but those processes are exportable, downloadable, and replicated. The world is not going to war for Taiwan. He who controls TSMC does not control the universe.

Justin McIntosh: Why not offer all TSMC employees of a certain rank American citizenship? You’re already building a TSMC fab. We say that the problem is the American work ethic. If you read some of the stories on getting the fabs up to production level. If anything happens, you’re an American citizen, you’ll escape quickly. I kind of agree with that.

Jordan Schneider: I also think that our energy, man, the new head of DHS, the new head of USCIS, are saying, we’re going to make sure everyone on an F-1 visa knows that they’re not welcome once they graduate. Mike Gallagher is out in the streets saying, “Don’t let Chinese students come to the US and study technology.”

Justin McIntosh: You get the techno-libertarianism meets the nationalism on this one — they’re going to constantly butt heads. You’ve already seen it get Elon out of the administration, among other things.

Tony Stark: When the CHIPS legislation came out, chip companies said, “No, no, no. We have to be able to keep our facilities in China. You can’t regulate what money we spend or how we spend it. Who knows where those chips are going? We certainly don’t keep track”.

To have that been said and then, “Oh, but don’t worry, we can absolutely duplicate production elsewhere extremely quickly, at low cost. The people don’t matter,” is insane. If TSMC went under tomorrow — by a bolt of lightning or several — you would need 10 years and probably half a trillion dollars to replicate it. Right now, you don’t need to replicate it all at once, and that’s a different mathematical problem. But the point is that you’re not just moving a campsite. There’s a lot to move — supply chains, everything.

If that’s what’s being sold to the US government now — “don’t worry about it, we can pick up and move quickly” — I am extremely concerned.

Jordan Schneider: Second breakfast is — we’re very intertextual here. The Mick Ryan interview, what were your guys’ takes on that?

Tony Stark: I mostly agreed with him. I found his analysis very compelling and nuanced, which is different from a lot of the analysis about Ukraine these days. When we talk about what the future of warfare is — pre-’22 and after ’22 — people tend towards almost the mini puzzle pieces that they see as they walk, and they tend towards these lines, it’s like walking a path in the woods, and that’s how you get paths in the woods.

That’s where a lot of future predictions come into play and have issues — they see these trend lines and they want to chase the trend lines. In the 2010s, we had drone warfare, but not the type of drone warfare that we see today. You see the precision-guided, no air defense sort of thing. Or even with Ukraine, you see this “oh, everything’s going to be attrition or everything is going to be these very small UAS systems because that’s what you can build quickly,” even though they don’t have range or are not generating the effects at mass we talked about in the last podcast.

This goes back to this document that goes around — I think it was a Pentagon memo — that said, “we’ve been wrong every time about what’s going to happen in the next 10 years of warfare.” Who is the “we” in that question? Because former Marine Corps Commandant General Berger said there’s always an analyst who knows. Is that analyst heard and can the system work around that analyst to generate supporting detail?

There were a couple of analysts who knew that Russian logistics were terrible, right, in 2022. For whatever Taiwan will be, those will be the correct ones. Is the problem that we collectively cannot predict the future, or that we collectively would prefer to focus on trend lines, to what we want to be true or what sounds like it should be true, as opposed to what is true? A lot of times, that means having difficult conversations that the senior leaders who sponsor these studies and analyses don’t want to hear.

Justin McIntosh: I’ve appreciated Mick Ryan’s nuance since he started doing his Twitter serial blog posts when the Ukraine invasion started. He’s thoughtful, and he thinks through the subject in an interesting way. But I wonder if he isn’t too fixated on the idea that it’s all incremental change and that incremental change, we’re going to see it and we’re going to be able to know that based on these building blocks we’re going to get to here.

That is a retrospective viewpoint. We look back and we see it. The truth is that there have been fundamental leaps that took everyone by surprise, in part because you get cavalry officers who are absolutely wedded to the horse or you get infantry officers that are absolutely wedded to “we have to be on the offensive and the strength of the offensive,” and they miss the implications of barbed wire and the machine gun or mechanization and things like that.

He referred to, “Well, you know, in Ukraine we haven’t seen a real air war.” Man, we keep seeing that. I don’t know what blowing up strategic bombers on a runway is if not an air war or denuding that air power.

Eric Robinson: Russian attack aviation was partially decisive in blunting the so-called counteroffensive in 2023. Saying there’s no air war means there’s no dogfights. And that’s not necessarily true.

Justin McIntosh: I hear that same argument when I talk to Air Force buddies that I know or people currently in the Air Force. They say, “Well, when we get in and we establish air superiority, it’ll be different than what we’re seeing and those drones won’t be able to do all their fancy little stuff.” Those are conversations between mid and senior-level officers who grew up flying fighters or grew up flying bombers and they believe the Curtis LeMay view that “we can win through air power alone.”

Those same people have a deciding vote when it comes to some of the directions that we take. To Tony’s point, it’s a little bit disheartening when you have those people because they tend to apply that same thought process where “nobody can predict the future, so we’re just going to keep doing what we’re doing.”

Robot Warfare? Eric’s Waymo ephiphany

Jordan Schneider: Eric got his 10th Waymo ride over the past week. How did it feel?

Eric Robinson: It has become a cliche, but sufficiently advanced technology is indistinguishable from magic. I’ve been around some high-tech institutions and was an early adopter of Uber and other platforms. But Waymo was shockingly crisp, convenient, inexpensive, and extraordinarily comfortable.

Jordan Schneider: How did that make you feel about the future of war, Eric?

Eric Robinson: There’s an Axios journalist, Colin Demarest, who runs their Future Defense newsletter. He often asks people, “When’s the first war going to be fought purely by robots?” It’s a gotcha question or icebreaker.

My disposition is that no war is ever going to be just robots. War is fundamentally a human endeavor.

War is an act of force to compel an enemy to do your will. But witnessing Waymo made me think that we are very close to battles and engagements being decided by autonomous systems. That will happen if it isn’t already underway in the Ukraine conflict.

Justin McIntosh: It’s almost a natural outgrowth. If you look at the Irish drone company that started to do coffee deliveries and things like that. Now we’ve seen in Ukraine a drone deliver a motorbike to a soldier so he could escape a firefight.

You’re starting to see autonomy on both delivery and autonomy on just movement. I would not be surprised if, in the next 10 years, you see something like the Mint 400 race out in the desert in Nevada — you see an autonomous vehicle be able to at least compete well in a race like that. Once you see that, logistics delivery over vast expanses starts to become a real possibility.

Eric Robinson: I think we’re extraordinarily close. There’s proof of concepts, and operating within the boundaries of Austin or San Francisco streetscapes is going to be comparable to warfare. In fact, probably the parameters are even tighter given baseline safety concerns.

Autonomous systems interacting with one another — from ISR to strike to sensor — is certainly going to be the future. Do I think that humans are going to be completely pulled out of the decision loop? I don’t think so. The poor bloody infantry is still going to be a fundamental component of human conflict.

Mia Zhong, who holds an MA in East Asian Studies from Stanford University and currently works in the tech industry, is our guest contributor today.

China’s State-Owned Enterprise (SOE) ecosystem primarily controls the country’s fundamental sectors, including energy, infrastructure, education, and telecommunication. A 2022 study estimated that there are more than 300,000 wholly state owned SOEs and around 1.5 million enterprises partially owned, counting all-in for roughly 68% of total capital of all Chinese firms in 2017.

Since Xi Jinping assumed power, the Party’s grip over SOEs has grown stronger. In his 2016 speech, he emphasized on “enhancing and refining the Party’s leadership over SOE.” In 2020, the central government issued a regulation that formally designate power to the Party committee over the board of directors in SOEs in “major business and management matters.”1

The following translation is a story originally published on Zhengmian Lianjie 正面连接, now deleted, which provides a rare personal account of work within an SOE and how the routines are heavily influenced by the Party building requests. The author Zhao Shuxin (赵书信) – likely an alias – is a young woman with a graduate degree and former employee in a provincial-level SOE. She started working on internal propaganda in the general affairs office in 2023 and extended her scope of work to external propaganda and other ideology-related areas.

It was a “stable, decent, easy job, an iron rice bowl,” that “gradually transformed from a spectator watching an absurd play, to an actress in the absurd play herself.” 从一个旁观荒诞剧的看客，逐渐成了荒诞剧的演员本身。In 2025, she resigned from the company and wrote a series of three articles recording her time there. The following translation is an excerpt of the second in the series, elaborating on her project to manage ideological risks on social media platforms.

Zhao’s response to the work is also characteristic of her generation: she called them “bullshit work.” The term was widely embraced by young workers after David Graeber’s book Bullshit Jobs was translated into Chinese in 2022, right when the working generation’s loathing for toxic work culture grew louder and fresh graduates were facing increasing unemployment.

“Ysxt” Work and My Power

It all began with what they called “online front ideological management work” (线上阵地意识形态管理工作). The so-called “online front” really just meant social media accounts. Ideological management meant monitoring the content of those accounts.

Put simply, on social media, any account that included our company’s name plus location within our province had to be managed, whether it was set up by employees or unknown individuals who simply registered in our company’s name. (for example, “N Province A Company Jiajia,” “Flower of C City A Company,” “N Province A Company F City Branch_908,” “XX Market North Gate A Company Service Hall,” or “Xihuayuan A Company Service Hall”)

Specifically, for accounts officially registered and operated by company departments, I had to monitor them in the following aspects: first, whether there was any content that were incompliant with set standards, such as content endangering national territory or sovereignty; second, to check for misuse of symbols like the Party flag, Party emblem, or Tiananmen. As for accounts created by unknown individuals in the name of our company, their mere existence was considered an ideological risk.

Interestingly, the term “ideology” sometimes turned out to be a risk and taboo itself. In all kinds of written expression, unless it was a formal institutional document, the Party-building department always referred to it as “ysxt work” (ysxt 工作).

“ysxt” are the first letters of the term ideology in Chinese Pinyin (意识形态, yi shi xing tai). Using the first letter in Pinyin is a popular rendering of certain terms online. The most used words are usually for fun and convenience, such as “xswl” (笑死我了, xiao si wo le), meaning “lol”, and “dbq” (对不起, dui bu qi), meaning “I’m sorry.” The method was later adopted to address terms that might trigger censorship for their political connotation, such as “zf” (政府, zheng fu), meaning the government, and “zzzq” (政治正确, zheng zhi zheng que), meaning political correctness. These renderings are borne out of speculation and self-censorship rather than concrete rules.

I remembered clearly how this task landed on my shoulders. One afternoon in November 2023, the Party-building department (党建工作部) suddenly demanded that a number of departments attend a meeting on “ysxt risk control across different fronts” (各个阵地ysxt风险把控). In the meeting room, the Party-building leader sat at the head of the table. Before my supervisor got a chance to talk, he spoke sternly: Internal or external, you must take serious actions against any ‘non-compliant’ new media activity. Set your rules! Clarify your measures! Swing the big stick first! As he spoke, he swung his hand forcefully through the air and clenched it into a fist.

That’s the Party-building department’s way of working. As the lead unit, they had the authority to break down their own tasks, pass them on to other departments, and act as the overall coordinator who regularly requested reports from these departments.

This way of working is an example of campaign-style mobilization 运动式治理. This type of governance breaks the formalized functional system and organizes resources and personnel to prioritize a designated task based on political purpose and mobilization. This mechanism can be observed on various campaigns and movements during the Mao era. More recent instances include mobilization control schemes during the Covid pandemic.

The social media management process went in three steps. The first was research, meaning manually searching across social media platforms to identify accounts whose names, profile pictures, or verification included our company name but were not official accounts.

The second step was rectification. We had to contact these unofficial “risky” accounts one by one through private messages, informing them that they could not use our company’s name, and requiring them to change their names or close their accounts within a set deadline. If there was no response, we had to report the account to the platform and request to close it.

If neither of these methods worked, then came the third step: recording the account in a “ledger” (台账) (what the government calls a spreadsheet) and placing it under “dynamic monitoring” (动态监管), which referred to checking the account regularly for new content posted.

Personally, I found this project utterly absurd. What right did we have to manage the social media accounts of people who had nothing to do with us? But because the task came from the Party-building department—and because Party-building evaluations and inspections could affect the company’s ratings, honors, and ultimately employee performance rating—there was no choice but to carry it out.

Upwardly, I had to report to the Party-building department and other inspection units. Downwardly, I had to lead different departments and branch offices to implement the task. My decisions would directly impact how much work each unit had to put in. Every time I asked them to submit materials, I always repeatedly expressed my apologies and gratitude.

In the first quarter of 2024, Miss Li from the D City branch company called me for advice. She wanted to know whether accounts whose owners she could neither identify nor contact still needed to be placed under dynamic monitoring.

I knew she wasn’t really asking for advice. It was more of a complaint. After all, we had already been working this way for half a year, and the rules were made clear. Out of guilt, I absorbed all her frustration and tried to appease her: I understand how everyone feels, but these are the work requirements. I’m watched closely by the Party-building office too. That wasn’t an exaggeration. In private, my self-deprecation was even sharper: I jokingly called myself an unofficial member of the Party-building office, their subordinate department, the “chamber maid of the Party building office” (党建部的丫鬟).

The departments in the provincial company were less implicit when showing their impatience. It was common for them to ignore my request for materials, and when I followed up, the person just replied with a cold snort: What can we do if they just don’t change their name or delete their account? Out of guilt and diffidence, I didn’t know how to respond when I first heard the question. But after repeatedly hitting a snag, I grew frustrated too and simply relied on the Party-building office: the Party-building rating would be deducted if issues were found, and your department manager would take you to speak directly with the head of the Party-building office. It's your choice.

Every time I compiled the spreadsheets of other departments and local branches, the hardest part was always aligning numbers. In theory, the total number of accounts in the current quarter should equal the newly added accounts plus the accounts carried over from the previous quarter. But in practice, it was common to have unmatched numbers. Sometimes there would be one or two more, sometimes one or two fewer. I knew no one would ever check the details of each account across the ledgers, so I just made up a couple accounts to smooth out the numbers.

However, the launch of the inspection and supervision work marked the end of my perfunctory work. The very same Miss Li who asked me for advice was flagged by the inspection team as an ideological risk: a non-official social media account using the company name was not included in the monitoring ledger. Our department received a “risk notice” issued by the Party-building office.

The email was sent to me and my supervisor, Miss Yuzhen, was cc’ed. At the end of the notice, it stated: “For repeated occurrences of similar problems, the Party-building office will request a meeting with the responsible person of the General Affairs Department; for issues of incomplete rectification during self-checks and self-inspections, and for repeated discovery of the same problems, the Party-building office will recommend the Party organization secretary to issue accountability measures” (对于屡次发现同类问题，党建工作部将提请对综合部相关负责人进行约谈；对于自查督查问题整改不彻底、问题屡查屡犯等情况，党建工作部将对党组织书记提出问责建议).

That threat infuriated Miss Yuzhen. She immediately called the Party-building office and sternly questioned: You said you wanted to summon my supervisor for a meeting—on what grounds? You talked about ‘repeated discovery of the same problems;’ why not ask yourself how much of the material for this work comes from us every year? This whole process of yours is nothing but formalism! She had once worked in that office, and the person who picked up the call was an old colleague of hers.

The meeting is considered a threat because it’s not a simple work meeting but a yue tan (约谈), an administrative pre-investigation meeting. It is used for information collection, warning, and investigation. Although the meeting itself doesn’t formally enforce regulatory or lawful actions, it is a strong sign of impending reprimand or actions, and therefore is taken very seriously. It started as a means of market regulation, land control, real estate control etc., and now already a procedure all state-owned institutions find handy.

Miss Yuzhen’s accusation of formalism was not referring to the artistic genre, but excessive procedural formalities (形式主义) in the context of the Party-state bureaucracy. The term refers to the idea of prioritizing formality over getting things done, and encompasses a broad range of behaviors. For example, initiating projects that might appear good on record but generate no actual benefit in reality, or designing an itinerary with performative work routines for the inspection team.

I never found out what the colleague replied, but as soon as she hung up, Miss Yuzhen dialed another number—this time, to Mr. Ren. He was now the VP of the Party-building office and was in charge of ideology work. The two of them had practically swapped positions. Her tone grew even sharper as she scolded him for being reckless: When you were in the General Affairs Department last year, did I ever send you a risk notice like this? And now, without even a word ahead of time, you start off by saying you’ll summon my supervisor? Is this really the right way to do work?

I knew that Miss Yuzhen was always tough when it came to drawing the line of responsibility—“clarifying the boundaries of one’s responsibility field” (厘清责任田) was something she often emphasized to me. But I had never seen her this furious.

Her anger, however, had no effect. The Party-building Department’s final response was: why could the inspection team find the problem, but the General Affairs Department could not? In the end, the matter turned inward and landed back on my shoulders.

Miss Yuzhen translated the inspection team’s message for me—they believed we didn’t put enough effort into this work. She guided me on how to implement the correction:

“Little Zhao, remember this: for this rectification of workflow, and every quarter from now on, you must send the work requirements by email. You need to make sure that every trace of work is fully documented. And in the third-quarter news bulletin, we must publicly criticize the branch offices tied to these accounts, so that they take it very, very seriously!”

In the Chinese workplace, especially conventional industries, it is a common way to address people who are younger and rank lower than you with “little” (小) plus their surname. For people who are older and/or rank higher than you, it’s common to add “big sister” (姐) and “big brother” (哥) after their name. I translated Yuzhen sister to Miss Yuzhen to avoid misinterpretation given how sister is used in the English context.

Miss Yuzhen kept one hand in her pocket, while her other hand shot forward, index finger jabbing the air. The words “very, very seriously” seemed to be squeezed out through gritted teeth.

I learnt from a few bloggers who write about workplaces to treat leaders as partners at work whenever possible, especially when facing other departments together. I complained: what exactly does it take for this work to be considered “done properly”? How could we possibly explain the platform’s search mechanisms? Even Disney allows people to register accounts with those three characters in their names—how could we stop others from registering accounts with our company’s name? Wasn’t the inspection team just demanding that we prove the impossible? Where would this kind of work ever end?

Miss Yuzhen waved her hand, giving the same reply I had once given to the branch offices: this is the way our work is done now—there’s no way around it.

I gave a bitter laugh and said nothing more. I opened the office software, ready to start drafting the rectification plan. Miss Yuzhen’s guidance was clear: when writing something for others, the most important thing was not to dig a hole for yourself—you had to write measures that could be carried out in practice. I wanted to ask Kimi to generate something for me but quickly realized I couldn’t even explain what I needed to a large language model. What kind of event was this, exactly? Could a LLM understand what “rigorous, but not digging a hole for yourself” (严谨而不给自己挖坑) looked like in practice?

The following week passed in endless rectification work. Rectification of the functional workflow naturally required the cooperation of everyone involved. To my surprise, at this point, Miss Li reached out to “discuss” with me again: couldn’t we simply exclude non-company accounts from our monitoring scope?

I had never expected her to bring up this question again right when her inadequate work had already caused me to have to rectify my work. Anger surged up inside me, and I shot back: on what basis?

She pulled out a regulation that had nothing to do with the matter. I finally dropped the patience I used to show low-level executors when I had the space to be generous. My voice turned sharp as I scolded her: why are you still asking me this? Haven’t we already made this clear? Even if you can’t identify who in the company opened the account, as long as it carries the company name and can be found through a search, it has to be monitored. After working on this for so long, how could you not know such a basic standard?

She faltered into silence. I couldn’t be bothered to say more and hung up with a “That’s it, then.” But the moment I tossed my phone onto the desk, regret set in. Just because I was being held to account, I passed on harsher demands to those below me. What else was that, if not the banality of evil? For so many moments in the past, I had been a nobody, forced to comply with rules that were inexplicable and meaningless, even suffering undeserved consequences. And now, I too had become a part of a small ecosystem of that very banality of evil.

An Endless Proliferation of Dirty Work

Shortly after, spreadsheets and data from different departments across the company were all submitted to me. I immediately set up three new folders on my computer: “Zero-Report Departments”(零报告部门), “Official Account Checks” (官方账号排查), and “Departments with Issues” (存在问题部门). Inside each folder, I created a ledger, and each ledger contained three sheets. Sheet 1 was named “Supervision, Self-Inspection, and Rectification Ledger”( 督查、自查及整改情况台账), which meant to reflect the process-oriented steps of rectification. Sheet 2 was called “Accounts Requiring Dynamic Monitoring” (需动态监测的账号) Sheet 3 was the dynamic monitoring ledger for each department, with check marks under each account by date to show it was being tracked.

After compiling the master sheet, the worst-case scenario happened. The latest spreadsheet showed 89 accounts in total, but when I added last quarter’s total to this quarter’s new accounts, the number was ten short. I didn’t want to believe it, so I reopened the spreadsheets from each unit, copied, pasted, and dragged down to sort. I tried twice, but the missing accounts still didn’t appear. Now resigned to my fate, I turned to Kimi to learn how to cross-check data in Excel on the fly, then began calling the departments whose numbers didn’t add up one by one.

One. Three. Five… By the ninth account, I got stuck again. It was already an hour past the end of the workday. Feeling overwhelmed, I pulled off my glasses, tossed them onto the desk, and slumped back in my chair with a groan. On the other end of the line, a colleague from Branch B—probably in her early thirties, usually the type to reply crisply with “I’ll handle it” or “I’ll ask around”—hesitated for once: If it really won’t add up… I still have two accounts on hand…

What kind of account is it? I straightened my back slightly.

The profile picture contains our logo, but the name doesn’t show it. The colleague from Company B replied.

I almost leapt out of my chair: Send it over, I’ll add it to last quarter’s existing accounts. Finally, that’s enough!

Seeing the numbers in the two spreadsheets finally match, I hung up the phone elatedly. I couldn’t help clenching both fists and drawing them through the air into my chest, like the final flourish of a symphony conductor.

But my celebration came too early. The next day, Miss Yuzhen came up with a new way to demonstrate our diligence: add columns for the creation date of each account and the date of its most recent post, to show the leadership that these accounts didn’t post for long, and are therefore “harmless” (无害) dead accounts.

This form of cengceng jiama(层层加码) is a typical phenomenon of policy implementation in China. Orders of policy implementation usually come top-down and in order to ensure the completion of goals and avoid punishment or failure, each layer in the system adds extra requirements or sets a higher goal for work when delegating to the lower level, eventually imbuing the grassroot level with unreasonable requests or unsustainable volumes of work. The most apparent example is the pandemic prevention during Covid, when local authorities added extra rules to prevent mobility regardless of one’s actual health status or risks of carrying the virus.

If her request hadn’t been specifically for this task, if it hadn’t been raised right before the end of Friday, if it hadn’t come after I had already finished consolidating everything, I might not have broken down. But at that moment, when I was full of hope thinking I could finally finish this dirty job, my supervisor taught me another lesson: the dirtiness of dirty work lies partly in its resilience—it always proliferates in unexpected places.

I only had enough control over my emotions to make a small “hmm” sound. The moment I sat back down, my throat felt blocked, and tears slid down my face. I didn’t want to make a sound. I randomly dabbed at my tears with tissues while notifying colleagues across the province to add the two extra columns.

A completely meaningless task got elevated to the level of ideology and was normalized, included in performance assessments and inspections, transformed into risk notices and supervision orders, and eventually turned into self-checks, audits, and spreadsheets. As long as I remained in this system, I would have to confront and solve the issues raised. Even if I didn’t want to solve them, I still needed to put in tremendous effort just to fully prove that “the responsibility isn’t mine” (责任不在我).

Because the functional departments of the provincial company did not directly bear responsibilities for production or business, they didn’t need to create new media accounts to promote operations. In practice, the bulk of investigation and correction fell on local branches. Every move I made turned into real additional workload for these grassroots units, endlessly pestering the branch secretaries who were already juggling multiple roles alongside this bullshit work.

Was it really that hard to stick only to the necessary work without adding excessive quota, and keep everyone’s lives easy? I was crushed by guilt, frustration, and helplessness all at once. The office was finally empty, and I couldn’t help but start crying out loud.

I Want to Change the System

By October, the rectification process was finally complete. In November, the Party Building Department planned to revise the company’s “Position Management Measures” 《阵地管理办法》, and Director Xiaoli reminded me that this was a prime opportunity to redefine responsibilities.

It was only then that I truly felt the reach of a “management department’s” power. If everyone in the company involved in this work had to follow my directives, the kind of work environment I could create for everyone became critically important.

I realized I had to stand up for my line and defend its boundaries. What I needed to do was straightforward in principle: prove that the General Affairs Department was “not responsible for unofficial new media accounts created in the past”. But in practice, it was far from easy. Our company’s principles meant that reasoning based on common sense alone wouldn’t suffice; that would be seen as avoiding responsibility or shirking difficulty. I had to both quote existing policies issued by our business line and identify loopholes in the Party Building Department’s rules and potential areas that could work against us.

I pulled all relevant documents, reviewed publications from the Party Building Department, consulted with the Group Office on how this work was assigned and executed at headquarters, and communicated with other provincial companies. I marked all my evidence carefully with a pen and sticky notes. Then I began drafting the materials for Miss Yuzhen to present at the meeting.

This was perhaps the most serious study of company policies I had undertaken since joining. And as I drafted the materials, I finally realized the most fundamental absurdity of this work: power had exceeded its boundaries. A company’s managerial authority only applies to its own employees—stretching one’s hand into someone else’s field, how could such work ever function? With that in mind, I drew the following conclusion in my first draft:

"According to the Group’s division of responsibilities, the General Affairs Department is responsible for managing official accounts created by various departments of the company based on business development and brand-building needs. For unofficial new media accounts whose creators are unclear, under the principle of clear accountability that ‘whoever manages is responsible, whoever uses is responsible, whoever approves supervises,’ the General Affairs Department has no approval or management authority over these accounts or their owners and bears no management responsibility. It is recommended that the Party Building Department coordinate with the Group to address these accounts."

Miss Yuzhen was generally satisfied with my materials but asked me to place the Group-level division of responsibilities at the very beginning. Since the Group Office did not handle the investigation and rectification of unofficial social media accounts, provincial companies should not be responsible for implementing Party Building Department’s related requests. The final report was therefore adjusted to two points:

1. The company’s Party Building Department should communicate with the Group’s Party Building Department to clarify the province’s ideological management responsibilities according to line management duties, implement these responsibilities, communicate management tools, and ensure consistency in line management duties.

2. According to the Group’s division of responsibilities, the General Affairs Department is responsible for filing and overseeing the province’s official accounts. For unofficial social media accounts with unclear creators, the General Affairs Department has no approval or management authority over these accounts or their owners and bears no management responsibility. It is recommended that the Party Building Department coordinate with the Group’s Party Building Department regarding these accounts.

There was nothing more I could do as an employee. I sent my leader into the meeting like a parent sending her child into an exam room. A few hours later, the moment Miss Yuzhen stepped into the office, she called out loudly: “Little Zhao, it’s settled with the Party Building Department!”

I instantly stood up and saw her fling a stack of meeting materials onto the table, announcing the result: from now on, this work would be assigned according to local responsibilities—if a municipal branch had problems, it would bear its own responsibility. The provincial company would no longer share joint responsibility for rectification.

Before Miss Yuzhen went into the meeting, I had expected that the outcome might not go entirely as I wished—but I never expected her news to diverge so completely from my intentions. I had hoped to clarify the responsibilities for the entire line and reduce the workload for municipal branches, yet the result became a way for me to shirk my own responsibilities. What faces would those who reported to me make upon seeing this new rule?

I could not accept that this work appeared as if I were “passing the buck” to subordinate units. The space atop had disappeared, and I had to start with what I could still manage to regain some control over the situation. At the end of the day, I still had decision-making power over how our line executed its work. I decided to revise the relevant internal management policies myself, removing the parts that were unfavorable to our management.

At first, I approached it by analyzing the various characteristics of the accounts. Besides the inclusion of our company’s name, another shared feature was that their follower counts were almost all in the single digits. Even if they posted content, the likelihood of anything going viral was extremely low. My proposal was conservative: “Accounts with fewer than 50 followers and no updates for over a year shall be considered low-risk zombie accounts and require no special supervision.”

But this idea was rejected during Director Xiaoli’s review: for the Party Building Department, leaving accounts unmanaged would create gaps in the work and inevitably invite criticism.

I accepted the director’s opinion and decided to return to the root of the problem: to keep authority within its proper boundaries. If an account, after verification, was found not to have been created by internal personnel, the General Affairs Department would have no management authority and bear no responsibility. This idea was eventually formalized in writing as follows:

Article 17 – Standardize the Social Media Account Investigation Mechanism. The General Affairs Department shall lead the investigation and cleanup of social media accounts. The scope of investigation primarily covers official company social media accounts and accounts created by employees related to the company. For unofficial social media accounts discovered during the investigation, if they were indeed created by company employees, the principle of local responsibility applies: whoever uses the account is responsible, and whoever manages it is responsible, and corrective actions shall be taken accordingly.

Article 18 – Strengthen Line Management of Social Media Accounts. The Marketing and Operations Department, as the department responsible for distribution operations, shall establish a management mechanism for the creation of social media accounts by distributors, ensuring full oversight down to the individual level and achieving closed-loop management.

The director approved this version, and I continued to report the revisions to Miss Yuzhen. Yingying was also called over to listen. Miss Yuzhen looked at me earnestly and asked, “Little Zhao, I just don’t understand—after all this time of rectification, why do these accounts keep popping up? Why do we need to tackle them all the time?”

This wasn’t the first time I encountered this question. Every time a new account appeared, Miss Yuzhen would ask in frustration: “I told them not to register, I told them not to register—so why are people still registering?!” At these moments, my mind would automatically recall concepts from my graduate exams: the emergence of new media, nodal behaviors… I never imagined that after leaving the exam hall, I would have to use these concepts to explain real problems. But academic explanations were meaningless here. Usually I just answered directly: Anyone can register now with just a phone number. Our name isn’t patented, so there’s nothing stopping them…

By now, I understood that what the leadership wanted was a more concrete answer. So I replied firmly: “Mainly the distributors.” Yingying added on the credibility of this claim: “Exactly—their business is a company consignment store, so it’s reasonable for them to do so.”

“Yes,” I said, “so last quarter we coordinated with marketing. They’ve already added this requirement into the distributor evaluations. If a distributor is found to have opened an account using the company’s name without authorization, they lose one point.”

The point deduction was the outcome of my discussions with colleagues in distribution management at the marketing department. When we negotiated possible measures, I only suggested vague terms of “serious handling”. My colleagues turned it into two concrete actions: first, provide relevant training for distributors; second, implement a point-deduction system. The evaluation scores determined how much funding each store would receive, which meant that opening an account would lead to a financial hit.

Of course, I knew that such strict control ran counter to the grassroots need of business development. But I ran out of energy to feel guilty. If blame was to be placed, it belonged to the Party-building office’s assignment itself. I was simply relieved to have finally found a genuinely effective way to prevent the endless appearance of new accounts, so my colleagues and I could get less entangled with this dirty work.

Miss Yuzhen said, “Now we need to be clear on one crucial point, making sure that no new accounts are opened by our own employees. If they do, we will call them out in a public notice.”

The problem had circled back to the starting point. The real difficulty was that I could never interfere with or control how any individual chose to use their personal social media accounts. I gave up any euphemism and said flatly: “That can’t be guaranteed, Leader.”

Miss Yuzhen was dissatisfied: “That won’t do.” The three words flew out of her mouth quickly. “Why? Distribution accounts are handed over to marketing, municipal accounts are handled under the principle of local responsibility, so the only ones left are the provincial company’s employees. We’ve made it clear that they’re not allowed to register accounts in their official capacity. If they knowingly break the rule, doesn’t that mean our negligence?”

I began explaining to her: in theory, social media accounts containing our company’s name could have been created by anyone living in this region or country. “Our authority only extends to company employees, not to people in society at large. If an account wasn’t registered by our employees, then it’s not our responsibility. So can’t we just leave it alone?”

“I see what you’re thinking now,” Miss Yuzhen said. “Because the Party building office pushed the responsibility onto us, you want to use this logic to remove the responsibility of municipal branches, is that right?” She still ignored common sense and returned to the framework she knew best—responsibility allocation—and directly pointed out my intention.

“Yes.” I knew the reporting was successful. As expected, she followed with: “All right, then we’ll report it to the leaders this way. You’ll come with me, Little Zhao.”

“What?” That was a surprise. I had never attended a special meeting with the leadership before. I made a joking comment about being afraid. Miss Yuzhen laughed: “Don’t be afraid. You think this is the right way to do it, so we’ll go and report it to them. Right now, the company’s leaders are still very tense about this matter. As long as we are right, it doesn’t matter even if we get scolded. We’ll just say it again and again—eventually, things will change.”

For the first time, I felt a solemn respect for Zhou Yuzhen.

More than ten days passed between drafting of the policy and its final approval at the leadership meeting. During this time, Miss Yuzhen once asked me to remove the phrase “if indeed created by company employees.” I did so. I guessed she felt that the line carried an undertone of shifting blames, which could irritate the leadership.

But right before we submitted the meeting materials, I hesitated and brought it up with her again: “Miss Yuzhen, can we keep that sentence?” I still wanted to make the boundaries of our work clear, so that colleagues in the line would not waste effort on meaningless tasks. By then, there was no one else in the office. Miss Yuzhen looked at me, weighed it for a moment, and agreed with a sigh. She figured that the leaders might not even notice that sentence.

I felt a wave of relief. Happily, I added the sentence back in. I clicked “send” on the meeting materials, then shut down my computer, stuffed my charger, glasses, and other belongings into my backpack before walking briskly out of the office building. I was filled with a sense of satisfaction: I had utilized my authority with conscience, and I had done everything within my power to create as much space as possible for the subordinate units that would have to carry out the work.

The next day I attended the meeting. though I only sat in the back row to listen to Miss Yuzhen report, I still put on my polyester work uniform and sat up straight. A few days later, however, an argument between Miss Yuzhen and a colleague from the Inspection Office plunged me into self-doubt again.

The matter itself was simple. To make one of their tasks “look good,” the colleague from the inspection office asked our department to produce a related ledger. Miss Yuzhen flew into a rage; the dispute finally ended with both sides conceding a little. Afterwards, as her anger subsided, she muttered—perhaps to comfort herself or the other colleague—that Little Zhou (the colleague from the inspection office) was a conscientious person and that he was only doing it for the work.

I had originally watched the scene for fun, but I was unexpectedly struck by the phrase “for the work.” My mind went back to the policies I drafted.

I was a conscientious person too. I was also pressured by certain people, certain systems, and certain powers, and resolved to solve this problem. But which was better: a lump of chaotic shit, or a lump of carefully thoroughly analyzed and organized shit? Had I really done something good for everyone, or was what I was proud of actually an unwitting aid to something evil? Did I leave a legacy or calamity?

We’re running a guest column from ’s excellent substack about Alibaba claiming to go all-in on AGI.

Afra’s article extends our imaged Platonic dialogue we ran in April which noted that very few leading voices in China had anything utopian to say about AI’s possibilities. Afra makes a compelling case for Ali CEO Wu as a believer, and I too thought he seemed sincere in his delivery. However, the fact that the stock popped at the growth of its cloud business and reiteration to spend $50bn over three years in AI capex probably has more explanatory power for this narrative shift than anything else. As seen across Nvidia, OpenAI, and Oracle’s valuations, global capital markets have made it clear they want to put money where AI hitting has enormous upside.

Beyond its cloud business, Alibaba has a world-class AI research team. Given that, according to ’s highly scientific tier list, their Qwen team is the only AI lab in China besides Deepseek at the frontier, leadership has every financial incentive to pump this narrative that it’s also China’s most pilled company.

It’s also a good time to remind you that even the money Alibaba, China’s biggest AI spender, will put into securing compute pales in comparison to the western hyperscalers’ buildouts. Many of the firms with big numbers on this chart like Bytedance and Ali are mostly into accessing Nvidia chips outside the PRC, as there aren’t enough Ascends being built this year or next to absorb all of this projected capex.

And now, Afra on Alibaba and China’s AGI vibe shift.

AI technologists in China are almost always utilitarian and practical. There’s an AGI “faith gap”—people don’t believe in it, but constantly talk about this buzzword. A deeper epistemological divide shapes how each culture approaches technological prophecy. Silicon Valley’s AGI discourse operates like what Kevin Kelly calls “technium” thinking—technology as an autonomous force with its own evolutionary trajectory. Chinese tech culture, by contrast, remains fundamentally instrumentalist.

The manufacturing advantage directly creates a scene where Chinese founders focus on hardware, consumer apps, SaaS (but only targeting overseas users), and open-sourced LLMs that are cheaper to train and more efficient. Less focus on debates about doomerism and superintelligence races.1 Big tech CEOs love keywords like “empowering thousands of industries” and “inclusive AI,” rarely discussing surpassing humans or cosmic ultimate questions. In China, there aren’t equivalents of polymathic leaders like Demis Hassabis or prophets like Ilya Sutskever—people who understand foundational AI technology while constructing fearsome yet alluring AI futures in others’ minds, much less a Chinese Eliezer Yudkowsky who focuses on existential risks.2

But that seems to be changing.

The Hangzhou Prophet

Today at Alibaba’s 2025 Yunqi Conference—an annual mega tech gathering since 2009, similar to WWDC or Google I/O— CEO Eddie Wu delivered an entire speech was devoted to “ASI-pilling.” This marks the first time a major Chinese tech company has seriously evangelized Artificial Super Intelligence, which is a remarkable departure from the cautious, instrumentalist rhetoric that has dominated Chinese tech discourse.

“Achieving AGI—an intelligent system with human-level general cognitive abilities—now appears to be a certainty,” Wu said. “However, AGI is not AI’s endpoint, but a new beginning. AI will not stop at AGI; it will advance toward artificial superintelligence (ASI) that surpasses humans and can self-iterate and evolve.”

Wu mentioned ASI will be able to connect to the complete raw data of the real world, instead of using humans as intermediaries—transforming what Balaji calls the “middle-to-middle” phase to true end-to-end.

Wu used a car manufacturing example: instead of a CEO iterating next year’s product through countless user surveys and internal discussions (all secondhand data), an ASI with access to all automotive data could design and create vehicles “far superior to anything from brainstorming sessions.”

Wu is one of Alibaba’s founding “Eighteen Arhats” and has long been seen as technically-minded and reserved. He rarely speaks publicly, earning the nickname “Alibaba’s most mysterious Arhat.” His ASI declaration at this conference represents quite an unusual departure—a stark contrast to years of silence that may signal a vibe shift in Chinese tech discourse.

The Long Silence and Its Breaking

After Jack Ma’s 2020 speech [Jordan: translated here by with some fascinating accompanying analysis] challenging China’s regulatory system before Ant’s IPO, the storm that followed saw the planned $300 billion offering—history’s largest IPO—abruptly canceled. Since then, Alibaba entered a prolonged “silence period” where big companies stopped articulating grand future visions, pivoting to emphasize compliance and stability.

The chill went far beyond Alibaba. In 2021, regulators launched the “disorderly expansion of capital” campaign, reining in platform companies from ride-hailing to e-commerce. Didi went public in New York only to be swiftly pulled into a cybersecurity investigation and fined $1.2bn. Education tech giants like New Oriental and TAL got nuked overnight under the “double reduction” policy. Even Meituan’s Wang Xing triggered scrutiny when a Tang dynasty poem he posted online was read as oblique criticism of the state.

Since then, many tech founders feared saying the wrong thing in public, in part creating today’s extremely asymmetrical information flow where Chinese founders study Silicon Valley surgically, but not the other way around.

Then, DeepSeek came. Since then, I’ve observed a vibe shift. In China, a giant wave of techno-nationalistic discussions permeates the internet, with people believing “China’s tech rise is national destiny.” Meanwhile in Silicon Valley, I found abundant China curiosity mixed with China envy—mainly across the broader hardware and manufacturing domains where China has established leadership.

Silicon Valley trying to reverse-engineer their own path from China’s tangible tech achievements: a16z started advocating that America needs to build its own BYD with a complete Electro-Industrial Stack in their American Dynamism article; we see the launch of the “American DeepSeek” open-source projects attempting to replicate Chinese AI efficiency; Noah Smith stated that Western re-industrialization strategy directions are now “bleedingly obvious”—just look at what China is betting on: batteries, electric motors, power electronics, and chips. Dan Wang’s book Breakneck became an unprecedented intellectual phenomenon, propelling people to ask: how can we transform a lawyerly society into an engineering state so our taxpayer money can turn into more damn high-speed rail?

However, at Alibaba’s conference, I could see an even longer-term vibe shift. Previously, Chinese companies in global tech narratives were often treated as deployment engines: able to manufacture quickly, iterate rapidly, catch up efficiently, but lacking roles that truly shape imagination. Wu’s ASI speech represents a breakthrough: while the “AI-infused future society” is still taking shape, major Chinese companies are beginning to articulate their own grand visions that carry a prophetic flavor.

China’s AI Bubble

Wu’s sci-fi vision exists in tension with what I saw on the ground during five weeks in China this August and September. Walking through AI startup circles and innovation parks in Shenzhen, Shanghai, and Beijing—drinking custom “DeepDrink” at Beijing’s AGI Bar (covered in terrible Chinese tech memes)—I felt like AI was everywhere, but also nowhere seriously.

The AI founders and researchers I talked to there were pretty candid beneath all those glossy exhibition boards promising the future. They’re still glued to whatever’s happening in Silicon Valley, ready to sprint after the next breakthrough.

The AI story is fascinating because of its wild complexity and its propositional stance toward this complexity. When I was reading the book Supremacy by Parmy Olson, I got mesmerized by the motivation differences between DeepMind’s three founders in the early days. “Legg moved in circles where the goal was to merge as many people with AGI as possible, Suleyman wanted to solve societal problems, and Hassabis wanted to go down in history having made fundamental discoveries about the universe.” They started arguing with each other—but the bigger picture they all acknowledged was the world’s complexity outpacing anyone’s ability to control it. AI is deeply embedded in problems that are fundamentally non-linear and unpredictable.

Wu’s rhetoric might sound overwrought or derivative to American ears—after all, we’re practically drowning in tech prophets here. But consider this an elementary-level Chinese technologist learning to LARP as someone like Kevin Kelly, and you might surprisingly get future-pilled again.

Below is Wu’s complete keynote address. As you read it, notice how it borrows heavily from Silicon Valley’s apocalyptic optimism while grounding everything in China’s reality. You don’t need to be impressed by the originality in Wu’s vision, but in the shift it represents: this is their own version of the future.

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Concurrent

Understand the parallel and colliding tech and cultural currents shaping Silicon Valley, China, and beyond.

By afra

Keynote: Roadmap to Artificial Superintelligence (Transcript)

by Eddie Wu, CEO of Alibaba Group, September 24, 2025. You can read the Chinese transcript here or watch on YouTube.

A new revolution is just beginning—a revolution of intelligence driven by artificial intelligence.

Over the past few centuries, the Industrial Revolution magnified human physical strength through mechanization; the Information Revolution expanded our capacity for processing information through digitization. But this time, the revolution of intelligence will exceed anything we can imagine.

Artificial General Intelligence, or AGI, will not only amplify human intellect but also liberate human potential—paving the way for the arrival of Artificial Superintelligence, or ASI.

In just the past three years, we have felt its pace clearly. In a handful of seasons, AI’s cognitive ability has leapt from the level of a high school student to that of a PhD graduate—capable even of winning gold at the International Mathematical Olympiad. AI chatbots have become the fastest-adopted consumer application in human history. The speed of industry adoption has surpassed every previous technology. Token consumption doubles every few months. In the past year alone, global AI investment exceeded 400 billion US dollars; over the next five years, cumulative investment will surpass 4 trillion—the largest single infusion of capital and compute power in history. This will inevitably accelerate the emergence of more powerful models and hasten the spread of AI across every domain.

Achieving AGI—an intelligent system with general human-level cognition—now appears inevitable. Yet AGI is not the end of AI’s development, but its beginning. AI will not stop at AGI; it will march toward ASI—intelligence beyond the human, capable of self-iteration and continuous evolution.

AGI will free us from as much as 80% of routine tasks, allowing humanity to concentrate on creation and exploration. ASI, by contrast, will generate “super-scientists” and “full-stack super-engineers,” capable of solving problems at speeds we can scarcely fathom: curing diseases, inventing new materials, achieving sustainable energy breakthroughs, addressing climate change, even venturing into interstellar travel. ASI will drive exponential technological leaps, carrying us into an unprecedented age of intelligence.

We believe the road to ASI will unfold in three stages.

Stage One: Emergence of Intelligence — “Learning from humans.”
The growth of the Internet over past decades has digitized nearly the entirety of human knowledge, preserved in language and text. Large models trained on this corpus acquired generalized intelligence, emergent abilities in conversation, and the capacity to understand human intent, answer questions, and begin reasoning across multiple steps. Already, AI systems are reaching gold-medal performance on the world’s toughest exams. This has opened the possibility of solving real-world problems and creating tangible value.

Stage Two: Autonomous Action — “Assisting humans.”
At this stage, AI moves beyond language alone. It acquires the ability to act in the real world: decomposing complex goals, using and even creating tools, and interacting with both digital and physical environments. The key lies in tool use. Just as human evolution accelerated when we learned to make and wield tools, models now gain transformative power by learning to do the same. With tool use, AI can call software, APIs, and devices to execute sophisticated tasks.

Another breakthrough is coding ability. To handle longer, more complex tasks, agents must be able to code autonomously—functioning like a team of engineers, able to interpret requirements, write, test, and iterate. Natural language will become the source code of the AI era. Anyone, in their mother tongue, will be able to summon an agent: “Tell the AI what you need, and it will design the logic, build the system, call the tools.” This stage will unleash productivity gains across logistics, manufacturing, software, commerce, biomedicine, finance, and beyond.

Stage Three: Self-Iteration — “Surpassing humans.”
This stage depends on two breakthroughs:

• Connection to the full breadth of real-world data. Today’s AI excels in text-bound domains like content creation, math, and coding, where it has access to raw human-created data. But for the physical world, AI often sees only second-hand summaries. To truly transcend human cognition, it must engage directly with the raw signals of the world.

• Self-learning. With real-world interaction, AI will be able to refine its models autonomously—building infrastructure for its own retraining, optimizing data flows, and upgrading architectures. Each action and feedback loop becomes a micro-adjustment; millions of such iterations accumulate into a self-evolving system. Out of this process, early forms of ASI will emerge.

At the moment of singularity, humanity will feel the acceleration of history itself: technological progress advancing beyond imagination, unleashing new productivity that carries us into a new stage of civilization.

From our perspective, large models will become the next generation operating system. In this analogy:

• Natural language is the new programming language.

• Agents are the new applications.

• Context is the new memory.

• The large model is the OS, linking tools and agents as the PC once linked software and hardware.

Software as we know it will be absorbed. Anyone will be able to create applications in natural language. Hundreds of millions of potential developers will enter the field. Every user will become a maker.

This future demands infrastructure of immense scale. AI will become the electricity of the new era—the essential commodity powering every industry. Most AI capability will be delivered as tokens across global networks. Tokens are the new electricity.

Alibaba Cloud positions itself to build this foundation: an open platform for developers, the Android of the AI age; and a super AI cloud, one of the few on earth capable of vertical integration from chips to models to global-scale data centers. We are investing 380 billion RMB over three years into this vision, building the supercomputing power and global network needed to welcome the ASI era.

When ASI arrives, human-AI collaboration will reach a new mode. Already programmers glimpse the future: a single instruction at midnight, a fully functional system by dawn. This is the seed of a new paradigm—from vibe coding to vibe working. Families, factories, companies—all will teem with agents and robots working alongside us. Perhaps one day, every individual will wield the power of a hundred GPUs, amplifying human intellect as electricity once amplified muscle.

Every revolution has expanded our capacity, and every expansion has revealed new horizons. This is only the beginning. AI will reshape infrastructure, software, applications—the entire substrate of society. Together with our partners and customers, Alibaba will invest, build, and co-create, bringing intelligence into every industry.

writes Silver Bulletin and is the author of On the Edge: The Art of Risking Everything, now in paperback with a new foreword.

In today’s conversation, we discuss…

• Honesty, reputation, and paying the bills with writing,

• Impact scenarios for the AI future, including how AI could impact elections and political decision-making,

• The emerging synergy between prediction markets and journalism, and how Nate would build a team of professional Polymarket traders,

• How to build a legacy,

• Nate’s plan to reform US institutions and how that compares with real-world prospects for creating political change over the long term.

Listen now on your favorite podcast app.

Mathematicizing Persuasion

Jordan Schneider: Before we get going, I just want to say thanks, Nate. Writing on the Internet is scary, and you’ve made it less scary. Getting to the point where I can just say things that I know are going to piss off administration officials and $4 trillion companies takes a lot. Watching you do that over the years has been a good lodestar for not caring what powerful and rich people think and working toward the truth.

Nate Silver: I appreciate it, Jordan. There’s an equilibrium where people are way too short-term focused and too susceptible to peer pressure.

Conversely, once you develop a reputation for doing your reporting and speaking from a place of knowledge and experience — without trying to sanitize things too much — you develop trust with your audience. You carve out more of a distinct niche. People are too afraid of honesty and differentiation.

It’s easy to say if you cover fields that are popular and get a lot of audience and traffic, whether that’s electoral politics or sports. I’m not doing investigative reporting here, but I do think that working hard and being the best version of yourself — and being an honest version of yourself — is usually a smart strategy in the long run.

Jordan Schneider: That’s even more difficult with policy writing. ChinaTalk is closer to a think tank than it is to journalism. The vast majority of people who work in this field can’t make public comments because they either work in the government or work in government relations for a big company. Even if you’re at a think tank, you have to pay the bills somehow, and that basically means getting corporate sponsorship for your work.

Nate Silver: As a consumer, there are lots of issues — including China — where I’m not quite sure who to believe or trust. China is among many issues where I feel I’d have to invest a lot of time investigating who I can trust. At that point, you could almost write about it yourself. There are a lot of issues where there’s no kind of trustworthy authority. Kowtowing to corporate power is part of it. That’s part of the beauty of having a Substack model with no advertising.

But especially in diplomatic and international relations, people are always calibrating what they say. There are smart commentators, but you have to read between the lines — sway the reads 20 degrees left or right.

Jordan Schneider: There’s this recent micro-scandal. Robert O’Brien, former national security advisor, wrote an op-ed saying we should sell lots of Nvidia chips to China. It comes out three days later that Nvidia is a client of his.

Nate Silver: I’m never quite sure whether to assess these arguments tabula rasa and ignore who’s making the argument, versus considering that people have long-term credibility and reputational issues. One thing I do is play poker, and in poker, the same action from a different player can mean massively different things. A lot of stuff is subtextual. A lot of stuff is deliberately ambiguous.

One reason why I think large language models are interesting is because they understand that you can mathematicize language. In some ways, language is a game in the sense of game theory — it’s strategic. What we say, exactly how we say it, and what’s left unsaid is often powerful. A single word choice can matter a lot.

You probably think about this in a different context — in the case of official statements by the Chinese government, for example.

Jordan Schneider: Let’s stay on this, because this was actually one of my mega brain takes that I want your response to. We have Nate Silver at 11 years old wanting to be president, and now we’ve had 20 years of him thinking about analyzing presidents and presidential candidates and what they do. You don’t necessarily have to believe in AGI and fast takeoff to think that 10, 20, 30 years down the road, a lot of the decisions that presidents and executives make today — an AI will just strictly dominate what the human would do.

Maybe that Cerberus moment becomes what the Swedish Prime Minister was saying a few days ago — “Oh yeah, I ask ChatGPT all the time for advice.” I’m curious, what parts of the things that presidents and presidential candidates do you think are going to be automated the fastest, assuming we just let them ingest all of the data that a president or executive would be able to consume themselves?

Nate Silver: AI in its current form might be an improvement over a lot of our elected government officials, but that says a lot more about the officials than the AI necessarily.

I don’t take for granted — and some people do, including people who know a lot about the subject — that we’re going to achieve superhuman general intelligence. There are different meanings between these terms that we can parse if you want. But some of the reason that large language models are good now is because they train on human data and they get reinforcement learning with human feedback.

There are cases — pure math problems — where you can extrapolate out from the training set in a logical way. For more subjective things, political statements, I don’t know as much.

Some people believe that AIs could become super persuasive. I’m skeptical. First of all, humans will be skeptical of AI-generated output, although maybe I’m more skeptical than the average person might be. Also, it’s a dynamic equilibrium. You can message test, have an AI train, and it can figure out: “Okay, we can now predict — we’re running all these ads, sending out all these fundraising emails — we can predict which will get a higher response rate."

But when people start seeing the same email — “Nancy Pelosi says this or that” — 50 or 100 times, then they adjust and react and backlash to it. In domains where you are approaching some equilibrium, profit’s not easy to have. There are no easy tricks. You have to play a robust, smart strategy, and ultimately the strength of your hand matters, along with how precisely you’re constructing the mix of strategies that you take at any given time.

I’d bucket it roughly as a 25% chance that on relatively short timelines, AI just blows our socks off. 25% that it does that, but at a longer timeline — a decade, two decades, three decades out. Then 50% that AI is a very important technology — more important than the Internet or the automobile — and reshapes things, but does not fundamentally reshape human dynamics across a broad range of fields.

Things like international relations or politics are among the more resistant domains toward AI solutions. At the same time, another risk is that you’ll have people who view the AIs as oracular. We’ve seen cases of people who are encouraged by ChatGPT to think they’ve developed some new scientific theorem or discovered a new law of physics. They’re very smart at flattering you.

One thing I do is build models. Sometimes a bad model is worse than no model or your implicit mental model. Trusting an all-knowing and all-powerful algorithm, especially in cases where the situation is dynamic — the laws of mathematics don’t change, but international relations and politics are always dynamic and maybe changing faster — and whether the AIs can adapt to new situations quickly is also an open question.

Jordan Schneider: If we’re trying to bucket the types of things a CEO or a president or a senator does, we have personnel management — who am I going to hire, who am I going to fire? We have the outward-facing stuff — what do I say to this interviewer, how do I talk in the debate? Then we have these decision points where you have a memo, you could pick A, B, or C, and there are different sets of trade-offs where you could optimize for this thing or that thing.

I don’t think it’s crazy to think that parts of those different buckets could be radically improved, even just to play out the different second and third-order effects of whatever you’re negotiating for in the next budget bill or something.

Nate Silver: For discrete tasks, AI can already be wonderful. I’m doing a little coding now on a National Football League model, and it’s late at night. I’ve been up a long time, had some wine at dinner, and I’m thinking, “Okay, Claude, how do you do this thing in the language I’m programming in?” The thing is a discrete task where I have enough experience with these models to expect it to give a good answer, and I have enough domain knowledge that when I plug in this code, I can tell if it works or not. I’m not going to have some bad procedure that chains into other bad procedures in a complicated model.

There’s been mixed evidence on how much more productive AI makes people. My stylized impression is that it makes the best people even more productive and makes people who are not that smart maybe worse. I worry that it’ll be a substitute for domain knowledge and human experience, but for certain things it’s already superhuman, and for other things it’s dumb as rocks.

Knowing what is what — there’s a learning curve for that.

Jordan Schneider: There’s also this aspect where the human floor can be pretty low, especially if you’re tired or stressed or you’re the president and you’ve got a hundred thousand things being thrown in your face. It’s literally an impossible job. Maybe there’s also this weird electoral feedback thing where, presuming that AI is really helpful for winning and governance, the folks who trust it more and faster are the ones who perform better in their jobs and get elected to higher and higher office.

Nate Silver: Government is backward in a lot of ways. This varies country by country too. In some ways, America has maintained a relatively high degree of international hegemony despite having this constitutional system that’s now hundreds of years old. It has flaws that people — not to sound a little personal here — Trump has found a way to exploit.

It’s amazing that we still entrust all of this power in one president. New York City, with 8 million people, is probably about as large an entity as you should have maybe one person in charge of. But we haven’t really developed other systems.

If anything, one of the more dynamic places in the world right now — you’d still say the U.S., you’d say China, and then probably the Middle East — they’ve kind of cheated. The U.S. is increasingly less democratic, and the other two were not really democratic to begin with. Maybe my assumptions have been wrong.

Poker and Prediction Markets

Jordan Schneider: Let’s talk about prediction markets. You spent a lot of time thinking about poker and had this whole experiment in your book where you just spent a year betting on basketball. The thing about basketball and poker is there’s a lot of data and track record you can base your estimation on. You can find your edge in very weird corners. But a lot of these markets on Polymarket and Kalshi are very one-off. Right now there’s “Is Trump going to put more sanctions on Putin in the next six weeks?” Is there a regression you can run on that? Not really. It’s fascinating because these are so much more one-off and open-ended than what you would see in the stock market or sports betting.

Nate Silver: I’m a consultant for Polymarket, so I do have a conflict of interest to disclose. Sometimes the one-off events are not as good. One market where Polymarket, Kalshi, and others did not do as well was the election of the new Pope. Cardinal Ratzinger had a very low chance of being selected.

What happens there? On one hand, you have a papal election every 10 or 20 years, so you don’t have a lot of data. Everybody leaks, but the papal conclave does not leak, apparently. There’s not really any inside information. Then people apply the heuristics they might apply to other things. When they have the smoke signals come out quickly, they think, “Oh, it must be the most obvious name.” The favorites went up, and that wasn’t true. People just had no idea what was going on. There are some limitations there versus things like elections, which are more regularizable.

At the same time, there is a skill in estimation that poker players and sports bettors have. Maybe I’m making a real-time bet on an NFL game and Patrick Mahomes gets injured — the quarterback of the Kansas City Chiefs. I have to estimate what effect this has on the probability of the Chiefs winning. If you just do that a whole bunch, then you get better at it. You have to have domain knowledge and be smart in different ways.

When I’ve consulted in the business world — not capital-C consulting, but for people who are actually making bets — you realize that a good answer quickly is often what makes you money, whereas a perfect answer slowly doesn’t. This is one reason we’re seeing a shift of power away from academia toward for-profit corporations. You can say that’s bad or good — I think we need both, frankly. But you have a profit motive and an incentive to answer a question quickly.

In poker, the same thing. If I play a hand and I’m getting two-to-one from the pot, so I need to have the best hand or make my draw one-third of the time. Then you go back and run the numbers through a computer solver, and you’re like, “Well, actually here I only had 31% equity when I needed 33%.” That was a big blunder. For most people, 31 versus 33 is the same, but with training you can estimate these things with uncanny precision. There’s a lot of implicit learning that goes on, and it becomes second nature.

Jordan Schneider: Are you worried about insider trading with all this political betting? There’s an aspect where these are all crypto — you get on these markets with crypto. There were markets asking which way Susan Collins is going to vote. The tail outcomes for a legislative assistant in her office are that you can make 10 times your salary in a minute. What’s your thinking on this?

Nate Silver: There are a couple of qualifications. First of all, people on the inside often aren’t as well-informed as they think, or there are downsides to having an inside view versus an outside view. You might drink the Kool-Aid, so to speak. You might be in a bubble.

Jordan Schneider: There are ones where you can literally — I mean, there have been lots of group chats of people talking about very sketchy trades and one-way bets being made in the stock market about what’s going to happen with a trade deal. You can literally be the person who decides and be betting on the side.

Nate Silver: If there are incentives to make money in a world of 8 billion people, many of whom are very competitive and most of whom have access to the Internet, people are going to find a way to do it. It’s not just that game theory equilibrium is a prediction of what occurs in the ideal world — it’s what very much does happen.

We’ve seen things in the crypto space like an increasing number of crypto kidnappings. That’s one of the consequences of people being worth vast amounts of wealth that isn’t very secure. It’s just going to happen until you up security or have better solutions.

I don’t think there’s necessarily any more or less insider trading on Polymarket than there might be for sports betting sites — we’ve seen a lot of sports betting scandals — or for regular equities. The literature says that members of Congress achieve abnormal returns from their stock portfolios. I’d have to double-check that — I’m sure there’s some debate about it.

People can also sometimes misread insider information or read a false signal that becomes insider information or a fake signal. If they see an unusual betting pattern, they’ll think, “Oh, okay.” There were some tennis betting scandals where tennis is an easy sport to throw because it’s individual — two people. You don’t need multiple conspirators. Something unusual happens and people think, “Therefore, it must be an insider trading move” or “Therefore, it must be someone throwing the match.” Maybe sometimes it is, other times it isn’t. It’s very hard a priori to know which is which.

Jordan Schneider: It’s a new variable in politics. The way you could previously cash out was becoming a spy for another country — very high risk with lots of downside. Or you’d have your career and then become a lobbyist, but that pays out over years.

This is something new, and we’re going to have to watch it because I find I get a lot of value from seeing these numbers every day and watching how they change. Polymarket has become something I check before looking at the homepages of major news outlets. But there’s something that makes me a little queasy about opening up this new realm of betting where maybe we, as citizens, don’t want the people we’re paying to do these jobs to have this alternate way to cash in.

Nate Silver: Or journalists too. I know a couple of projects where people are basically trying to apply journalistic skills to make trades — not necessarily in prediction markets, maybe a little bit of that, but more in equities.

If you have a well-informed view of China, especially particular industries, that has big implications for how you might trade a variety of stocks, including American stocks.

My impression is that people at Wall Street firms trading equities don’t like all this macro risk. They prefer to predict what the Fed is going to do, analyze earnings reports, and work with long-term trends they can run regressions on.

They don’t like profound political uncertainty where the macro bets are very long-running. It may be hard to come up with the right proxy for the trade you want to make.

You’ll probably see more fusion between trading and research and journalism at every step along that path.

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Jordan Schneider: I’ve started interviewing a lot of these Polymarket investors and traders. It’s remarkable to me that there are no funds or teams. I assume that’s just because these markets aren’t liquid enough. But what would your dream team of skill sets look like if you were going to start the Polymarket hedge fund?

Nate Silver: You probably want some AI experts. You want macro people, you want a mix of people who are smart micro traders — poker player estimator types. More barbell theory. You want the macro people — a China expert, an AI expert, an expert on American politics. On average, the takes that Wall Street has about American politics are pretty primitive. You want someone who understands macroeconomics and inflation and the debt. You want a mix of skill sets.

In terms of what the banks and hedge funds are doing, different firms probably differ in what they think. There is reputational or enterprise risk to trading. Crypto can be a gray area. Prediction markets can be a gray area. I suspect there’s probably more of it than you might assume.

Until the last couple of years, there definitely wasn’t enough money in prediction markets overall to be worth it for institutional traders. Now there might be, especially for smaller firms. If you were a firm that wanted to say, “We are primarily trading non-traditional assets — prediction markets, cryptocurrencies, maybe low market cap stuff” — there are crypto hedge funds. If they’re getting more into prediction market stuff too, it wouldn’t surprise me in the least.

As prediction markets get bigger, then the bigger quant hedge funds and eventually Morgan Stanley and Goldman Sachs will want to trade them too.

The Barbell Strategy

Jordan Schneider: What do you think your legacy is now, and how would you want to change that in the next 10 to 20 years?

Nate Silver: The best work I’ve done is the book I wrote a year ago, On the Edge, now in paperback. The election models are valuable and might be what I’m best known for, even though it feels like they’ve been 5 or 10% of my lifetime productive work. That’s a really hard question to answer — I don’t think I’m quite old enough to answer it yet.

Jordan Schneider: I can answer it maybe. There weren’t a lot of numbers in many discussions before you. With elections, people have to respond to facts. The facts of you boiling all the polls and demographic data and voter registration data into one thing is a much more tangible, grounded set of facts than “you say Marist, I say Quinnipiac” — what does that even mean?

This approach is spreading now into wider areas on Polymarket and Kalshi, where different modes of politics now have numbers attached to them in ways they didn’t before. There’s literally a “Will China invade Taiwan?” market. However much we want to believe anyone has insight into that, there was no number you could point to before to ground you in that reality.

Great man versus trends — there’s been a lot more data and computing power over the past 25 years to enable what you do. But it was both the modeling and presenting it in a compelling, engaging voice that really helped reshape the way people think about these issues.

Nate Silver: I appreciate that I have certain talents. If you’re a 7 out of 10 on the modeling and a 7 out of 10 or maybe 8 out of 10 on the presentation, that overlap is somewhat rare. The overlap is maybe more than the sum of the parts — more valuable than being merely pretty good at each individually. I’m a good modeler, but the combination of those skills is valuable.

The world is moving directionally more toward this. Prediction markets in particular — if you look at sports betting, it’s not really growing as much as the big industry players had hoped, but prediction markets have had some false starts before. Now with Polymarket, Kalshi, Manifold, and others, you have a robust and well-constructed enough trading ecosystem where they are here to stay for many things.

If I’m about to publish a story — let’s say on Trump’s latest round of tariffs — and I need to check if Trump has done anything crazy in the past five minutes since I last read the internet, I’ll just go to Polymarket. Did any markets radically change? Is there some massive event that would make it insensitive to publish a story? Has there been an earthquake somewhere? You can instantly see that news. Twitter used to be somewhat similar for instant feedback.

But this leads to a gamified ecosystem where, as a poker player, sports bettor, or rapid news consumer, you’re always checking your email, phone, Twitter, and the internet. You’re always aware of 15 things at once. It makes it harder to unplug and creates fuzzy boundaries between work life and real life. If I’m running on the east side listening to a podcast and thinking about my next article, that’s work. If I’m checking my phone late at night when I’m out at dinner — checking work stuff, not gossip — that’s work too.

The world’s moving more that way, for better or for worse, and it prioritizes quick computation and estimation.

Jordan Schneider: Does this make it harder to do big things anymore?

Nate Silver: No, it creates more of a barbell-shaped distribution. Working on the book took me three years — that was really important fundamental work. Right now I’m working on this National Football League model. That’s a six-week project, not a three-year project, but it’s foundational work that will produce dozens of blog posts and hopefully hundreds or thousands of subscribers for Silver Bulletin for many years.

Having three or four things that you’re really interested in and fully invested in — obsessions, you might call them — is very valuable. But the skill of quick reaction is also important: your best flash five-second estimate, having the first authoritative take on Substack when Jamaal Bowman won the primary by a larger margin than predicted.

I was in Las Vegas at the World Series of Poker. I had just busted out of a tournament and hadn’t seen any great takes on this yet — it was a very fruitful subject. It was midnight New York time, 9 PM Vegas time. I cranked through until 3 AM Vegas time, 6 AM New York time, and published what I thought was a pretty smart story on it. That kind of thing is important.

The middle ground — the ground occupied by magazines, for example (not that places like The Atlantic, which have become digital brands, don’t do great work) — is maybe the in-between where the turnaround is too slow to be the lead story in a rapidly moving news cycle, but it’s not quite foundational work either.

Academia suffers from even more of this problem. The turnaround time to publish a paper is just too slow.

I’ll run a couple of regressions, give it a good headline, make some pretty charts, and it’ll be 90% as good as the academic paper in terms of substantive work and 150% better written because I’m writing for a popular audience, not journal editors. That exchange of ideas is what moves the world.

It’s fascinating to see these dynamics. I don’t know a lot about DeepSeek, for example, but it was interesting to see the narrative shape in real time about how competitive China is in the short to medium term on large language models. Or to see with Jamaal winning the primary — probably the general election too — how much that anchors the conversation in different ways.

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Stylized, abstracted, modelized versions of the real world become more dominant. We’re all model-building. I have a friend who’s a computational neuroscientist at the University of Chicago. He says ultimately the brain is a predictive mechanism. When you’re driving and looking at the road ahead, you’re not seeing a literal real-time version of the landscape in front of you. It’s a stylized version where your brain makes assumptions and fills in blanks because it’s more efficient processing. The message length can be shorter if you focus on the most important things.

You can notice this if you’re in any type of altered state — whether drug-induced, under anesthesia, tired, or experiencing extreme stress or stage fright. You process things differently at a broader level.

My first book, The Signal and the Noise, is about why the world is so bad at making predictions. Part of it is that you have to take shortcuts or else you’ll never get anything done. But when you take shortcuts, that leads to blind spots, and that’s not really solvable. AI might scrape off some of the rough edges, but sometimes the rough edges are created by the market being efficient and dynamic and by people keying off other people’s predictions and forming a rapidly shifting consensus. Those dynamics are going to remain very interesting.

Jordan Schneider: The DeepSeek experience was surreal for me because this is a story — China and AI — that I’ve been following for five to seven years. All of a sudden, it became the story. Our team hit it pretty well; we doubled our subscribers. But watching our little thing try to shape the broader narrative, and suddenly all these journalists are asking, “What’s this company?” I’m thinking, “I’ve been writing about it for two years. Where have you guys been?” I’ve never had one of my stories really become the main story before.

Nate Silver: It can be an amazing feeling. This relates to the Great Man theory in some way. Early in a news cycle, the way a story is covered is very important. One news outlet or journalist covering a story differently can shape attitudes about it for weeks to come. This is partly why PR people always say, “Don’t say so much, but be fast.” You want to preempt things because that founder effect can matter.

Nate Silver: Tell me, Jordan, what did the mainstream media — The New York Times, Wall Street Journal, and others — get wrong about the DeepSeek story?

Jordan Schneider: There was this first narrative that it cost them $6 million to train their model. That was illustrative of the problem. When I went on Hard Fork with Casey Newton, that’s the first question they asked me. I’d already written a few things, but no — it did not cost $6 million to make this model. You need to hire the people, run the compute, have the infrastructure, run lots of experiments. All in, it’s probably more like half a billion dollars.

But there were enough people for whom that narrative was interesting or financially useful that it spun faster than my loyal crowd of ChinaTalk listeners who were hearing us beat the other side of the drum.

Another thing that’s been shaped by this is the export control debate. There was this expectation that because DeepSeek exists, export controls are worthless. There’s lots more nuance to that, which we’ve covered in other podcasts. But the simplified version of drawing that line from A to B has really shaped the trajectory of American policy toward AI export controls and AI diffusion more broadly.

The cohort of folks who understood this nuance wasn’t able to seep into the halls of decision-making. We have now, quote-unquote, “lost” when it comes to semiconductor export controls, partially because there was this moment that ended up reshaping narratives, and the people who agreed with my version of the facts weren’t able to influence policy.

Nate Silver: These narratives that prevail are often in someone’s economic or political interest. There was a narrative after the 2024 election that Democrats lost because of low turnout, especially among younger voters. There’s a slight grain of truth in that.

However, this was exacerbated because people don’t realize it takes a month to count votes fully in the United States. The counts you see on election night and the next day shortchange turnout by tens of millions of votes. But that was a convenient narrative because people wanted to move to the left. It’s more that younger voters — particularly young men — shifted against Democrats. There’s somewhat lower turnout, but it’s still historically high.

It’s tricky when you have the more nuanced take versus the easily memeable take. If you’re making sports bets, a lot of it’s in the nuance. We all know this quarterback is good, but maybe he can be both very good and a little overrated by conventional wisdom for various reasons. There’s enough of a profit margin where you have positive expected value on your bet. In the news cycle, that’s less forgiving. But Substack and podcasts give a little more room for subtlety and exploring things.

Jordan Schneider: I’ve shied away from writing a book all these years. You’re very quick-twitch but have also done it and just made the case that it’s really valuable. Why don’t you expand on that for me? What has having these two book projects under your belt given you?

Nate Silver: For one thing, I like the process of writing a book. Ordinarily, day to day, I consider myself a journalist, but for the most part, the process involves me and a computer. Particularly when it comes to politics, I don’t really want to call Democratic or Republican sources and get their take. People are paying me for my take, and I don’t care to be spun. That increases the turnaround time.

For the book, it’s the opposite. On the Edge involved interviews with roughly 200 people — a lot of experts and practitioners in fields I find fascinating. Even if you weren’t working on a book, if you took two years to interview 200 really smart people about things they’re knowledgeable about just for your own edification, that would make you a lot smarter.

Jordan Schneider: When I was reading the book, I was annoyed. I wanted the Nate Silver experience — I want to listen to the hour-long conversation you had with Peter Thiel. That’d be fascinating if it’s on the record. Why not sequence it that way?

Nate Silver: The people I spoke with were often very candid, maybe against their narrow self-interest in some cases. But I would never approach somebody and say, “I want to talk to you about X.” I would approach them and say, “I’m writing a book about X that’ll be published in a year or two.” I would always be very honest about the rationale for the conversation.

If something Peter Thiel said was super newsworthy — and I’m trying to remember if that was a conversation with explicit ground rules — but if it’s a conversation where someone says something newsworthy in a non-book context, it’s a little ethically fraught. I don’t think it crosses some bright line journalistically, but it’s complicated.

With Sam Bankman-Fried, that was an explicit understanding. He definitely told me things because he thought the timeline would insulate him from some risk or he could shape the narrative somehow. It wound up coming out after he was already sentenced and in prison.

You’ll have reporters who embargo reporting on political projects — there should be lots of books about Biden’s decline. The fact is that people will tell you more when they have more protection. Probably 80% of my interviews were more or less fully on the record. Sometimes the background interviews use journalism’s distinctions for these terms, and there are in-between categories where you can publish with approval. I don’t love that, but I did it for one or two important sources where it was the least bad option.

People are more candid if they understand the context of your project and believe it’s coming out in the context of a book that puts everything into a broader universe.

I used to work at The New York Times — that ended in 2013, but now I write for them a few times a year. It’s friendly. If The Times calls me for a story, I’m still sometimes reluctant to say anything because you’re going to have one or two quotes put into their narrative that may or may not suit your purposes and may or may not be accurate.

The Times is popular in part because they write in narratives. Even a boring economic data story has a little spin on the ball — good writing, good headlines. Nothing wrong with those things, but sometimes there’s a narrative that’s a little reductionist. They’re the best in the business, or among the best. When you deal with people who don’t have those journalistic standards, you’ll encounter more problems potentially.

Jordan Schneider: We have these nice historical interludes in the book. Is that a type of non-journalism-driven writing? Is that something potentially on your horizon as well? How do you think about hanging out in the archives for a year or two?

Nate Silver: History and statistics are closely tied together. For this NFL project, I’m researching every NFL game played back to the 1920s. It’s remarkable to see how this one sport has survived with significant changes. But you come across something and wonder, “Why were there no games played that day?” Oh, the September 11th attacks. You encounter changes in real-world behavior and technological changes.

Any system model sometimes involves extrapolation from first principles, but the most empirical ones just say, “Okay, we are extrapolating from history and making the assumption” — and it is a big assumption — “that trends that existed in the past will correctly extrapolate to the future.” Often they don’t. Economic forecasting is notoriously difficult because there are regime changes. The economics of the internet era versus the pre-internet era versus the pre-automation era versus the pre-agricultural era — there’s great research showing these are all very different.

The field of economic history, sometimes called progress studies, is quite underrated. The notion of why different societies, great powers or not-so-great powers, rise and fall — why is South Korea as prosperous or more prosperous than Japan today per capita when there was a 10x or 20x gap 40 years ago? These seem like really high-stakes, important questions. Because they play out at longer time scales, they often don’t motivate people as much. But they seem vital.

Even within AI, from what I understand, the AI companies are not really putting a lot of effort into thinking about what this looks like in five or 10 years. They have longer time horizons than most, but they’re not really forecasting how the entire world changes if we do achieve superintelligence. They talk about it a lot — listen to the Dwarkesh podcast or whatever — it’s a popular subject, but that’s probably substantively more important than what’s in the daily news cycle.

Theories of Political Change 纳特·西尔弗思想

Jordan Schneider: There’s a myth of a software engineer who’s annoyed by something in the Spotify app, joins Spotify for two weeks, fixes it, and quits. I’m curious — what would you do during such a stint if you could plop yourself down anywhere in government?

Nate Silver: Let me redesign the Constitution, I guess. Maybe we need a ban on gerrymandering and we need to change the Senate. To some extent I’ve done that. I was dissatisfied with the way elections were covered, so what I thought was a little two-week project became a life-altering career.

I do feel like there’s maybe a little more openness to improvement. New York City has a new subway map now, which is much more legible. I saw that the other day — that was a nice little improvement. I could be a good restaurant consultant: “This restaurant’s not going to work. I live in this neighborhood. Nobody ever walks on this block. They walk on 8th Avenue and not 7th Avenue — I can’t explain why."

Being a copy editor, I guess. I notice copy editing problems in advertisements and things like that a lot.

Jordan Schneider: Think bigger. Come on. What Cabinet secretary? What bureau? Jamaal’s saying, “I’ll give you any job, Nate.” Which is it?

Nate Silver: How to have a good poker scene in New York — we’ve got to have poker rooms. We don’t need the rest of the gaming.

I guess I agree with the abundance critique where New York just takes an awful lot of time to build things. At the local government level, there often are incremental improvements made in different ways. In New York, our new infrastructure projects — LaGuardia Airport, the other airports, the West Side development — they’re all nice. It just took too long and was too slow.

But Jamaal is to my left, I think. I do think that he’s enough of an outsider and bright enough that he might do those smart, experimental things that don’t just fall under bureaucracy and inertia. I don’t know — was it Japan or Korea where they have little lights embedded in the sidewalk? That’s pretty cool. Just little things. If you’re looking down, you know when to cross or when not to.

Jordan Schneider: You’re a “department of special projects” guy — “let’s just make life better on the margin a little bit.” Or we’re going to let Nate Silver rewrite the Constitution. More barbell theory.

Nate Silver: Think big, everything’s small. Absolutely.

Jordan Schneider: Okay, let’s do barbell theory again with money. Say SBF hits and you’re just his advisor, and you got billions of dollars to spend on stuff — maybe not dumb stuff. Where are you putting your marginal $10 billion of philanthropy around politics?

Nate Silver: I don’t think politics is a very effective use of money. If it is, it’s at the local level. If you look at projects that were really successful — one of the most successful projects in American history is the conservative movement’s multi-decade effort to win control of the American court system. Supreme Court justices serve five times longer than presidents on average. Doing ground-level, long-term work is quite valuable. The notion of how to make government more efficient matters.

Jordan Schneider: Let’s lean on that for a second because one of the things that story did was invest in ideas and people and the intellectual superstructure for this movement. There don’t seem to be — maybe we’re starting a little bit now with the abundance stuff and Patrick Collison funding progress things — but there seem to be a lot fewer center or left billionaires who are investing in the interesting intellectual ecosystem to grow the movement.

Nate Silver: You probably see more of it on the right. The Peter Thiel Fellowship program pays kids to drop out of college — that’s an interesting ideological project that has produced some degree of success. The effective altruists would say that you want to purchase anti-malaria mosquito nets in the third world, and probably that’s very effective.

As much as there are lots of inefficiencies in politics and government, it also reflects the revealed equilibrium from complicated systems and complicated incentives. Maybe change is harder to achieve. It’s part of the reason why I’m reluctant to give off-the-cuff answers.

There have to be improvements you can make in government efficiency. Why does it cost 10x more to build a mile of subway track in New York than in France or Spain or Japan? I also think there are probably a lot of really sticky factors explaining why that’s the case.

In principle, I’d be on board with a project like DOGE. But DOGE should have spent the first three months studying this — not a fake commission, but actually studying where’s the overlap between problems where there really is inefficiency and where it’s tractable and solvable. That’s not something you could answer off the cuff or just by looking at a spreadsheet.

Jordan Schneider: Would you ever join a campaign?

Nate Silver: No, I don’t think I’ve ever really been offered that, believe it or not. It goes against my ethos — I want to study and have the outside view on politics. Campaigns are pretty rough. It’s very tough because you basically have one outcome: do you win or lose? In the presidential primaries, you have 50 states and they go in sequence, so it’s a little bit better. But it’s very hard to know what worked or what didn’t.

Kamala Harris and Donald Trump had lots of different, subtle, nuanced strategies. The fact is that if inflation had peaked at 4% instead of 9% in 2022, then she might have won, having nothing to do with strategy per se. It’s very hard to get feedback on campaigns.

I’m skeptical that you can gain as much through better messaging as you might think. It becomes saturated. The first time the next candidate uses Jamaal-style messaging, they’ll probably get something out of it. The fifth one who does it might backfire because it seems like a bad facsimile of what came before. Just like there are various Obama imitators or mini-Trumps, people like novelty — and they like some sense of authenticity.

What seems authentic is very tricky. Trump, in many ways, is a very fake, plasticky person, and yet he has this ironic, almost camp level of authenticity that would have been hard to predict in advance. I was not alone in 2015 when he’s going down the elevator at Trump Tower to think this is a joke.

This sketches the limits of prediction in general. The world is complicated and dynamic and contingent and circumstantial. Social behavior is contagious, and the focal points created by the media and the internet do more of this, where things can change unpredictably and rapidly. There’s less political science in running campaigns than in a lot of other fields that might possibly be in my interest set.

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Jordan Schneider: It’s interesting because the big tactical decision that people are still talking about is, why didn’t she go on Rogan? Well, even if she did, it wouldn’t have gone well because she doesn’t vibe with that. It’s a bit of a revealed preference — she didn’t do this open-ended media appearance because she doesn’t fit it.

There’s an aspect of — you can only “Manchurian Candidate” your candidate to go so far from their essence as a human being. Until we’re electing AI models, people can still just get a sense for whether they like or dislike people. That’s probably 2 or 3% marginal.

Nate Silver: When President Trump got shot, it was a very sympathetic moment. I never voted for Trump and wouldn’t, but even then I felt some sympathy. That moved the polls by one or two points. One of the most momentous events of the past 50 years of American campaigns.

When Biden had the worst debate in presidential history, that moved the numbers by maybe 2%. It mattered because he was already behind and now he fell further behind.

There are times when preferences are extremely plastic and times when they’re extremely sticky. Knowing which is which, which interventions work at which intervals, is probably important.

Jordan Schneider: Has covering politics shaped your view on the great man versus structuralist view of how things unfold?

Nate Silver: The empirical default is to be more structuralist — that’s the trendy thing. I don’t know. I think Donald Trump is a very important figure. If Donald Trump had been a stand-up comedian instead — Trump is funny — the world would look a lot different. Elon Musk has been very important to the shape of the world. I’m not saying positively or negatively, but Xi is very important.

Things are trending more that way. I’m not some Elizabeth Warren type, but if the top richest people in the world basically double their wealth every decade — and it’s different people cycling in and out of the list, but if you look at the inflation-adjusted list of the richest 10 or 100 people, and it’s often more about the 10 now than the 100 — they basically double their wealth, inflation-adjusted, every 10 years. You compound that over several cycles, and that concentration of power might shift things more toward a great man theory.

I’m sure there’s a substantial degree of randomness too. I have no idea how China formed, for example, but you get in these feedback loops where you have a virtuous loop or a less virtuous loop. Thirty years ago, Americans were worried about being overtaken by Japan. That happened to Japan a few times, and in some ways it’s still a very amazing, advanced society.

Maybe an example is Rome, Italy, which is one of my favorite places to travel to. I’ve been there at different points in my life. There are parts of Rome where if you go today in 2025, they don’t really look that much different than when I was a college kid in 1999-2000. Except for the cell phones, you could really be placed in 2000 and you wouldn’t miss a beat.

Jordan Schneider: Slight non sequitur. My favorite dad book is called An Italian Education. It’s this memoir of a cranky British person who married an Italian woman and is talking about raising their kid in early 1990s Italy. It’s really fun, kind of New Journalism-style writing. But it’s also this fascinating portrayal of this country at a big transition moment where they’re going from being super Catholic to more modern, and from being very localized to conceiving of themselves as part of this European project.

I don’t have great 2025 Italy takes, but it’s interesting just how much further — or not further — a country could have gone from that moment to today, looking at different parts of the world from 1994 to the present.

Nate Silver: I have a friend who’s Irish — actually Irish, not Irish American — who moved here in early adulthood. He’s gay, and he’s told me, “When I was growing up, Ireland was very Catholic and very anti-gay, and now they almost go out of their way to be pro-LGBTQ rights.” It is interesting how much countries can change.

Conversely, Russia and that sphere are separating a bit more. The United States is diverging more from Europe too. Europe hasn’t grown a lot economically — there’s not a lot of innovation there. At the same time, their lifespans are increasing and they’re taking this slower-growing dividend into quality of life. Whereas in the U.S., male life expectancies, even if you ignore COVID, have basically not increased in a decade.

We are getting wealthier. I worry a little bit that as we’re doing things that undermine American leadership and state capacity, we’ve been playing the game on easy mode because the dollar is a world reserve currency and the U.S. is the world’s biggest military. We’ve been — this is complicated relative to a low bar — a relatively trustworthy player in international relations. If we’re throwing those things away, there might not be an impact next year, but when you visit these different countries and extrapolate out 3% GDP growth versus 1% and compound that over 20 years, it’s extraordinarily powerful. You see it on the ground where these places are stagnant and these places are growing.

On Podcasting (Plus: Renaming ChinaTalk?!?)

Jordan Schneider: You interviewed a lot of really rich people for this book. Why do they all want to start podcasts?

Nate Silver: They do love hearing themselves talk. It’s not just that they’re rich. These are people mostly in competitive fields — a lot of them venture capital — where they’ve had success and it goes to their head. You see this in poker — being on a winning streak in poker is helpful. It improves your attitude, makes people fear you. But you can go on “winner’s tilt,” it’s called.

It’s very hard when you’re powerful — people start catering to you. “The Emperor’s New Clothes” is one of the more accurate fables. That and “The Boy Who Cried Wolf” are the two eternal fables that describe human behavior extremely well.

If you’re somebody like Elon Musk, he has made several really good bets, whether they’re skilled bets or luck. If the fourth SpaceX rocket had blown up — even he told Walter Isaacson that he was going to be cooked. But it’s very hard if you’re one of these people who has had that kind of success.

One thing I’ve learned, Jordan, is that there’s always one more tier of wealth and power behind a closed door than you might expect. There’s always one more privilege level. Even at an event that’s already privileged, there’s a VIP room and a VIP room within the VIP room. The biggest VIPs of all are not even at that — they’re already at the after party.

There are smaller worlds too. Keith Rabois told me there are really only six people in all of Silicon Valley that matter. Which is an exaggeration, but maybe not directionally wrong. Maybe a few dozen. They all know one another.

With the tech types and VC types, they feel embattled by their employees who are “too woke” and the media being mean to them. People are mean to me on the internet sometimes too.

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Jordan Schneider: Regarding your idea that there’s always one level up — if that’s your theory of the world, then why do you want to have an audience of 10,000 people listening to you talk about the news?

Nate Silver: Part of what I’ve done is go from a giant platform. I used to work for ABC News, which is about as mainstream as it gets. The average watcher is 70 years old at an airport somewhere or maybe a retirement home. Now with Substack, it’s an audience that turned out not to actually be narrower because the notion of building an email list is a good business model and very sticky.

At first, the stuff that goes behind a paywall is definitely reaching fewer people, but they’re willing to pay. You’re self-selecting too. Because the work I do, especially when it comes to election forecasting, is so easily misinterpreted, I don’t mind having a filter for people who come to the problem with more knowledge. It also can make the writing sharper.

If I’m freelancing with The New York Times, I have a good editor over there. They’re often saying, “Slow down, you have to explain this thing better.” It’s nice to have a conversation where you’re starting with certain premises and memories. I’ve stated complicated things before about my political views on issues that might come into play, or I’ve disclosed that I consult for Polymarket. It’s a cumulative project, and inherently nobody has time for everybody’s cumulative project.

Having a smaller audience of even dozens of people, hundreds, or tens of thousands is pretty important. Especially if there is maybe an unfortunate degree of concentration of influence and wealth and power. When I was working on the book, one of the things that surprised me is how many people I had no connection with were willing to have a conversation with me or at least provide a polite response if they had a good reason not to.

It’s a pretty small world and people talk to one another. That’s something that’s shifted a little bit again, maybe toward more of this Great Man theory — although all of them are men — toward this theory where individual agency matters more.

Jordan Schneider: My two cents on this is there’s a big cognitive bias for Keith Rabois to want to think that he is the center of the universe. There are more times than you would think where you have the market providing the discipline, or the people, or bigger sentiment when something blows up, where politicians or the media end up reflecting mass opinion more than they do the opinion of three people who are trying to pull the strings.

Nate Silver: One tip I heard in poker recently is that everybody is the main character of their own poker story. If I got caught making a big bluff against a third party earlier in the hand, and you’re sitting at the table not involved in the hand, Jordan, you might not even notice that — you’re going to be on your phone.

If you got bluffed by another player earlier and I’m not involved, that affects my strategy against you much more than what I did before, because I’m not involved in your narrative except to the extent I affect you. Life is often the same way.

Jordan Schneider: To close, I have an inside baseball question. Silver Bulletin is a great name. ChinaTalk... I don’t know, I think I should get out of it somehow, but I don’t want it to be The Jordan Show.

Nate Silver: People didn’t like the Silver Bulletin name at first. I came up with it in three minutes. I thought Twitter was gonna die, and I needed some placeholder. A lot of names are stupid when you think about them. Sports names are kind of dumb — the Green Bay Packers is kind of a dumb name. But it just sticks, and it seems normal because people repeat it over and over again.

Jordan Schneider: It’s not that I have names I’d be fine with. It’s more that the switching cost isn’t transparent to me — how much it’ll change listenership or open rates or whether it puts me on a larger growth trajectory. I wouldn’t change my coverage to do less China. Right now, it’s still 50% China, but it would just send a signal that it’s more than China here.

Nate Silver: That’s an interesting case. If it’s just a name, it’s a little awkward because it does include an implicit premise for what the subject is. Most of the time I would say the switching costs are actually pretty high. To sacrifice brand recognition is costly. Maybe you need to start a sub-brand or something. That’s a trickier one than for most people.

Jordan Schneider: The other thing is that advertisers are terrified of China. That’s just reality.

Nate Silver: Well, that tips it over to...

Jordan Schneider: Yeah. It’s more once I have a big contract, once I have Google telling me, “Jordan, we’ll buy $500,000 of ads only if it’s called the Jordan Schneider Show” — then you’ll know we’re doing it.

Nate Silver: We’re doing it for 500k. That’d be worth it.

We’ll take new podcast names in the comments below…

Nate said he was into shoegaze so his mood music is:

We have a ChinaTalk meetup this coming Thursday in SF. Sign up here if you can make it!

Uncle Sam is taking a bite out of companies left and right. Today, we’re going to focus on MP Materials — the Trump administration’s answer to China’s restrictions on rare earth material exports to America.

To discuss, ChinaTalk interviewed Daleep Singh, former Deputy National Security Advisor for International Economics, now with PGIN; Arnab Datta, currently at Employ America and IFP; and Peter Harrell, former Biden official and host of the excellent new Security Economics podcast.

Today, our conversation covers:

• How China achieved rare earth dominance,

• The history of rare earth mining and refinement in the US,

• What the MP Materials and Intel deals do, and whether they can succeed,

• The key ingredients for successful industrial policy and imagining a sovereign wealth fund.

Listen now on your favorite podcast app.

Broken Markets

Jordan Schneider: Why do deals like MP Materials even need to happen in the first place?

Daleep Singh: Critical minerals markets are broken for three main reasons.

First, there’s concentrated market power. China refines 70 to 90% of most minerals that we need to power clean energy, digital infrastructure, and defense systems. They have enormous market power — not just over supply, but also pricing, standards, and logistics. No market can be resilient if one player dominates the entire market ecosystem.

Second, there’s extreme price volatility. Prices for minerals like lithium, nickel, or rare earths swing far more violently than oil and gas. For producers, this creates asymmetric risk — if you undersupply the market, you may lose some profit. If you oversupply, you may go bust. That asymmetry deters the investment we need to expand supply when quantities are low and prices are high, preventing the market from clearing.

The third problem is that we don’t really have market infrastructure for critical minerals. For oil, we have futures exchanges, benchmark prices, and deep liquidity. For most critical minerals, we don’t. Transactions are opaque, bilateral, and heavily distorted by state intervention, especially China’s. Markets don’t provide price discovery, and producers and consumers don’t have hedging tools. Investors lose confidence in these markets and walk away.

All together, we have chronic underinvestment, chronic gaps between supply and demand, and chronic vulnerability to geopolitical shocks. Those are the problems.

Jordan Schneider: Daleep, let’s dig deeper into the market infrastructure piece. What does this mean in practice — that it’s not like WTI, Brent, or something similar?

Daleep Singh: If you’re a producer, you need tools to manage price volatility. When prices fall dramatically, you need the ability to continue generating revenue to stay liquid. You need futures markets and option markets that you can use to hedge against downside price risk. Right now, if you’re a critical minerals producer for most of the minerals that matter for our economic security, you don’t have that option.

You also need price discovery — to know where prices are in the market. We really don’t have genuine price discovery from any of these markets. China can decide, just by virtue of its dominance in supply, where it wants the price to settle. If it wants that price to settle at a level that wipes out the competition, that’s its choice. That’s not a market.

Arnab Datta: One quick piece to add is that the market infrastructure problem Daleep mentioned was really an intentional strategy by China. In addition to very robust industrial policy that provided substantial subsidies to producers and refiners, they stepped into the market infrastructure gap that was retreating in the West, particularly after the global financial crisis.

When you saw liquidity leave Western markets partly because of regulations passed during that time, China seized the opportunity. They built exchanges and benchmark contracts on Chinese exchanges so they could control that market infrastructure and how these prices were constructed.

Peter Harrell: I’d add two important pieces.

First, America’s dependence on China for rare earths is actually a relatively new problem. Historically, going back several decades, the US actually produced, mined, refined, processed, and manufactured plenty of rare earths in the 1950s, 1960s, really through the 1980s and into the 1990s.

It was in the 90s and 2000s — the era of peak globalization — where China successfully expanded its rare earth refining in particular. You saw Chinese firms begin to outcompete American firms, and a real decline in US manufacturing related to this consolidation of Chinese control. This isn’t because the US never made rare earths. This is really a problem of economics that emerged in the 90s and 2000s.

Second, we saw just a couple of months ago the critical risk that dependency on China for rare earths gives us, because it became part of the trade war Trump launched with China. Back in April, China retaliated by threatening to — and then actually — cutting off its exports of rare earths to the US, which had the potential to really impact manufacturing here. It became much less of a hypothetical long-term risk and much more of an immediate threat that could actually hurt the United States in the near term because of how China responded to Trump’s trade war in April.

Arnab Datta: Just to add to the WTI comparison — if you think about how WTI is priced, it’s a physically cleared contract. You’re purchasing a barrel that will be delivered at Cushing, Oklahoma. The pricing incorporates pipeline transport, logistics, and a whole infrastructure of traders, logistics providers, and port managers — all of that goes into the price of that physically delivered barrel at Cushing.

That’s something we just don’t have in the context of many of these newer metals markets. It’s very difficult to properly price a material when the only analog you have is a Chinese benchmark that potentially has very different constraints and very different characteristics.

Strategic Resilience Reserve

Jordan Schneider: This became very acute a few months ago when Trump imposed tariffs. Something that people have been talking about in Washington for literally 20 years — China using its role in the global rare earth export market to punish countries for doing things they don’t want — finally manifested. Trump walked back, and now we have this as a central thing that China and the US are tussling over.

Peter, Daleep, you guys aren’t dumb. You knew this was an issue. People have been writing about this for a very long time. What is the activation energy required in the 21st century to do the kind of industrial policy necessary to really change the dynamics on an issue like rare earths? Why have we only seen small, half-formed efforts until spring and summer 2025?

We have a Washington that has talked about the problem for a very long time now starting to spend nine and ten figures to address it in a more direct way than the incremental efforts folks had been pursuing. Peter, talk us through this deal. What came out of the Trump administration and the DoD over the past few weeks?

Peter Harrell: As you said, this isn’t a new problem. Policymakers have been aware for more than a decade that there was US dependency on China for rare earths. The Chinese had cut off their exports of rare earths to Japan back in 2011 or 2012. We’d actually seen the Chinese execute this playbook once before on an allied country.

This isn’t a new problem, and it’s not that there were no efforts to deal with this issue prior to the deal that the Defense Department announced in July. There were some efforts — previous grants, including to MP (the company that got the deal in July) to try to restart manufacturing and processing of rare earths in California where there’d been a longtime US mine. Actually, the mine had reopened in 2017.

There had also been some grants to other companies and universities to look at other ways of mining and processing rare earths — for example, to extract them from mine tailings in West Virginia. There had been some government money to try to sponsor innovation to reduce dependencies on rare earths, maybe create magnets and other products that you need rare earths for but without actually needing the rare earth elements.

There had been some policy processes and policy money put into trying to address this problem. But there were a couple of challenges with those prior efforts. First is just the scale of the effort. Frankly, the way Washington works, until there is a very acute crisis, it can be hard to mobilize the scale of effort that is actually needed to solve it. These prior efforts were much smaller in dollar spend and scope because the crisis seemed less acute. That’s just a political reality of how Washington works.

Second, this is a very complex issue. I don’t even think this new DoD deal with MP is going to be the whole solution. It’s going to require several parts. It is, in fact, a very complex issue.

Third, related to mobilization: solving a problem like this is going to cost money. You get into big debates about who should pay for it — should US taxpayers come up with the money, or should you make the private sector bear these costs? That adds to why it takes time. It’s not that there was nothing — there was some foundation that this deal is now building on. Not that there was nothing before, but Daleep, I’d welcome you defending our work together in the Biden administration.

Daleep Singh: Jordan, I appreciate you suggesting that we’re not dumb. That’s nice — we don’t always get that. But look, there have been piecemeal efforts to funnel public money toward private sector companies that could help produce minerals we need. What we haven’t done is fix the market. That’s where we are now.

I started thinking about reimagining the Strategic Petroleum Reserve into a Strategic Resilience Reserve for 21st-century vulnerabilities.

When prices crash and China continues to flood the market, we have this recurring problem of producers going bankrupt.

A Strategic Resilience Reserve could be a buyer of last resort or provide bridge financing to companies that are solvent but illiquid. That’s what could allow producers to keep producing during downturns and keep production capacity alive.

What can we do about investors not having confidence in these markets? If you don’t have futures markets and hedging markets, and refiners can’t lock in predictable revenues, could a Strategic Resilience Reserve step in with tools like selling a put option that allows you to make money when prices fall? Could it provide a price floor or some type of demand guarantee? The point is: can you create enough certainty for private capital to keep flowing?

What do you do about concentration risk? Even with a deal like MP, no country is going to mine its way to self-sufficiency when we’re up against what China has. But we do have producers and miners in places like Canada, Australia, and Finland. They’re hesitating to expand production because they know China can tank prices tomorrow.

An SRR, if we got that authorized, could provide demand backstops and offtake agreements. Could it intervene in the market so that producers in allied countries know they’re not going to go bankrupt if Beijing floods the market? That’s the idea we’ve started to develop over time — probably with some mistakes — to change the market itself rather than a series of ad hoc transactions that don’t alter the economics.

Jordan Schneider: SRR — a Strategic Resilience Reserve — a topic we’ll get to in a few moments. I’d also like to say in defense of the last 20 years of American policymaking that this was a latent threat, and the trajectory of US-China relations that made this become an actual threat has manifested relatively recently.

The fact that the Biden administration was able to “get away” with imposing semiconductor export controls, implementing big tariffs, essentially banning Chinese electric vehicles, and a handful of other tariffs without triggering this response is important to recognize. This is only a problem in the context of the US-China diplomatic relationship. Without that relationship souring, then we just get to use some subsidized magnets and the world moves on.

Peter, what was your thinking about trying to inch forward with more and more aggressive economic tools while seeing things bubbling up in terms of new Chinese legislation but not wanting them to hit back for the efforts you were making?

Peter Harrell: When I think about how one can solve a problem like our dependency on China for rare earth elements — and then we can unpack what this deal will and will not do — you need to think about several different categories of policy tools that you need to mesh together to solve the problem.

We’ve had this history in American industrial policy over the past decades where we’ve focused almost exclusively on what you might think of as supply-side industrial policy. We’ve given grants to companies to build a factory or a mine to do something. In some cases, that can be sufficient because the problem we need to solve is one of startup costs. It costs more to get something off the ground in the United States, and you can provide a capex incentive to help get it off the ground.

But when you look at China’s dominance of rare earths — where they not only have already spent a lot of capex, but their operating expenses are lower than in the United States and they control the market infrastructure — if you want to break China’s control here, you can’t solve it simply with our own capex.

You also need to think about the market infrastructure, as Daleep says, and you need to think about what the demand side looks like. If US operating costs for producing rare earths are going to be higher than they are in China, you have to find some demand for that higher-cost US product. Otherwise, US companies are going to keep buying Chinese products because the Chinese products are going to be cheaper.

You need to create a market infrastructure that’s going to ensure stable demand for the US-made product. Layering these things together — these different sets of policy tools to address the different parts of the chain — is not something the US government has done in a long time. You have to get your reps in and spend some time in the gym before you can do it.

Daleep Singh: Peter and I used to sit in the part of the White House that was straddling economics and national security. For most of us, very early on in the term we understood — especially as Russia’s forces were mounting on Ukraine’s border — that we’re going to be in this incredibly contested geopolitical environment for the rest of our lives. China and Russia have now made it very clear and revealed they’re going to challenge the US-led order everywhere. Because today’s great powers are nuclear powers, our expectation became that this competition is going to play out mostly in the theater of economics, energy, and technology.

The question was, if we’re going to prevail, how can we harness the financial firepower of the world’s most dynamic financial system to advance strategic objectives? Do we have the right tools, do we have the right institutions to overcome this short-term profit motive that drives most of what’s going on on Wall Street? The answer is no. As time went on and we started to have time to breathe, we started to think about new ideas. That’s where the Strategic Resilience Reserve came up. We also started to think about whether the US should have a sovereign wealth fund. These are all ideas trying to solve the same problem: the private sector systematically underinvests in exactly the kind of projects that matter most for our economic security and for our national security.

Can the Deal Create a Market?

Jordan Schneider: What does this MP Materials deal do? What is interesting and exciting about it? And why is it not the systemic solution that Daleep craves to manifest?

Arnab Datta: One thing this deal does is treat the problem holistically. Peter mentioned that you need a mix of supply and demand side tools. The administration deserves credit for using the DPA, the Defense Production Act, in a robust way. They are applying a toolkit that includes loans, equity investments, price floors, and a guaranteed contract for offtake for the finished product. That’s just a recognition. Ultimately, if we’re going to deal with this problem over the next one year, five year, ten year, decades, we need a robust toolkit and we need a mechanism by which we can address these very challenges.

Jordan Schneider: Arnab, briefly, who did this? This is very sophisticated, impressive work. It’s a lot of puzzle pieces which haven’t been put together in a very long time.

Arnab Datta: It was done through the Defense Department. It pairs a number of different authorities. I would say the most creative, atypical interventions were through the Defense Production Act — this is Title 3 of the Defense Production Act. It has very wide authority attached to it. Peter did a recent piece in Lawfare examining this, but it basically allows you to engage in a number of different transaction types to achieve the goal of building our defense industrial base. There’s also some capital from the Office of Strategic Capital. That’s where the loan is coming from.

One thing to keep in mind is that some of these appropriations are not spoken for. Over time you could imagine funding coming from different parts of DoD from the national defense stockpile. They’re going into this with the commitment and a very clear interest and effort in continuing with this deal. But there are some risks and there’s also some structural challenges with this deal that I’d be happy to go into as well.

Jordan Schneider: Peter, give us the flip side. What doesn’t this accomplish and solve?

Peter Harrell: Let’s first walk through what this deal is, because there was some news last month when it came out. I think a lot of the news focused on the fact that the Defense Department, as a piece of this deal, was taking equity in MP Materials, which now looks like a precursor for the Trump administration going out and taking equity in Intel and maybe a whole bunch of defense companies and everything else. I think that was the piece that attracted the news. But the deal is a fairly complicated deal that has a couple of different parts.

Part one of the deal is the government gave MP Materials, this mining company, some loans and then some cash as part of the equity stake to expand its mine in California, not that far from Las Vegas — Las Vegas is the nearest big airport to this mine, but it’s in California. To expand production at the mine and then relatedly to expand and build a new facility to take some of the rare earths being produced in this mine and to manufacture them into magnets, because what we need is not raw rare earths. What you need are magnets that go into motors and turbines and all kinds of other things. There’s almost no magnet manufacturing in the US and in fact, previously this mine had been producing rare earth ore and then selling it to China to be made into magnets there.

Part of this is a capital injection to MP to expand the mine and to build some magnet processing — expand some magnet manufacturing capability here in the United States. They’re doing that with both a debt and equity stake.

Another part of this deal is the Defense Department set a price floor for the raw rare earths, where the Defense Department has guaranteed that when MP is mining and doing initial processing for the raw rare earths, it now has a guaranteed minimum price, which by the way, is about twice what the current Chinese market price is.

That’s how you guarantee that it’s economical for MP to make this stuff over the next ten years. Because DoD said, “Even if the market price is $54,” which is about what I think it is today, “We’re going to guarantee a price of $110 per kilogram. We’ll pay you the difference between $54 and $110 per kilogram.” You have this price floor for the minimally processed rare earths. Then on the magnet side, DoD also said, “We’ll buy all of your magnets. You can produce these magnets for the next ten years, and we’ll buy all of them.”

There are some interesting pieces, such as if DoD and MP jointly agree that some of the magnets can be sold to buyers other than DoD, then there will be some profit sharing and other provisions. But it’s actually a pretty complicated deal with interrelated parts, which very clearly does ensure the viable business for the next decade of MP. MP gets capital injection. MP gets a guaranteed price floor for its rare earths concentrates — minimally processed rare earths. And then MP has a guaranteed buyer for its magnet.

MP is taken care of for the next decade and will be able to scale up production of both the minimally processed rare earths and probably of magnets.

But that doesn’t mean we have a market here. What we have is a market for MP.

That’s where I think there’s some interesting questions about this deal. Are we right to bet all in on MP as a national champion, or should we be thinking more systemically about the markets and less about how we guarantee the success of this particular firm? Arnab, I know you have a lot of thoughts on that piece of it.

Arnab Datta: We have a forthcoming article on the topic. We’re hoping to get it into Alphaville there, but they’re working it up the chain. We’re not fully signed off.

Jordan Schneider: In this piece, Peter and Arnab, you point out that this is similar to Chinese industrial policy circa Mao era, not the version 2.0. You’re picking one winner. And by the way, this company is probably not the best managed company in the world, as opposed to the way that China does it, where you have lots of firms fight it out to be the top dog.

Once you whittle it down to not one, but five or seven, then you start really turning on the jets and pouring on the money to secure your position in the global marketplace. As Daleep alluded to, this is also a concern with Intel.

For what it’s worth, I do think that manufacturing at the leading edge probably doesn’t support as many entrants as opposed to just building some mines and making some batteries. But, there does seem to be some tricky incentives and a lot of risk that their head of mining doesn’t go to a Coldplay concert with their head of HR or something. Daleep, where are you on this as an approach?

Daleep Singh: It makes me think of Intel a lot and I realize that we’re talking about very different markets, but I have the same take on it. Let’s actually pivot for a moment to Intel. There definitely needs to be government intervention in both of these markets. With leading edge semiconductors, we don’t produce any of them. Intel’s the only US firm capable of making them. But it has no customers and without customers, Intel can’t scale its unit cost efficiency — remains low and its competitiveness lags. Market forces aren’t going to solve that problem, nor will it solve the problem for MP.

But what gets interesting is instrument choice. What I worry about is ad hoc improvisation about what tools of industrial policy to use for particular sectors with a different context and a different kind of problem to solve. What I come back to is the systematic stuff. We do need a playbook, a governance structure, a doctrine for industrial policy. Start with the strategic objective. What problem are we trying to solve? Whether it’s MP or Intel or any other company, what is the market failure? Is it a shortfall of demand? Is it a capital constraint? Is it a cost differential? Is there a coordination problem? Is there some national security externality?

Then the third step is: pick the policy instrument that remedies the failure. Don’t default to equity injections or subsidies if the problem is demand, for example. Can you actually intervene? This goes to Peter’s analysis on MP. Does the intervention sustain competition and does it avoid a single point of failure? I would try to avoid substituting a foreign monopoly for a domestic point of failure. Can you tie the support to milestones, objective milestones, so that you can claw back the support you’re giving from taxpayers if they underperform? Can you sunset the support to avoid permanent dependence?

The last thing is how are you measuring the strategic return? What is the metric for success with this deal? It can’t just be for financial gain. How are we going to measure the benefit in terms of resilience, security, technological edge? That’s what’s missing for me. Maybe it’s out there somewhere, I just haven’t heard it.

Arnab Datta: I’d add to that a couple of things. This is a national champion that’s crowned without contest. We do have a pretty robust, vigorous competitive process folding out right now in the magnets space. There are other companies. MP Materials has the Mountain Pass Mine, but it has never produced a commercial magnet. It has not sold a rare earth magnet at commercial scale. When you think about the challenges that go into selling commercially — automotive is a major purchaser of these magnets — you need to get your production facility warranted. That’s a long process. There’s no sense right now — we don’t know they could get warranted for automotive. They might not. It’s a very challenging process.

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We do have competitors that are innovating. There’s a company, Niron Magnetics, that’s based out of Minnesota, they’ve produced a rare earthless magnet. This is the best of America in my opinion. You’re innovating yourself out of this vulnerability. I don’t know if Niron can scale at this point to the commercial scale that we need. But I also don’t know about MP Materials. When you start to get into some of these policy questions about is this intervention in this single company the right one, it raises a lot of secondary thorny issues.

This is a bet on vertical integration for rare earth magnets, that’s what they’re trying to build here. With MP Materials, that might be a good thing. A lot of the Chinese champions are vertically integrated, but there’s also a world where vertical integration on its own creates its own vulnerabilities. We see this a lot in the metals space where when we need to increase production because of some challenge, it’s not the vertically integrated producers that are responding quickly to price swings. It’s the marginal producers, the independent producers. This is something very common in metals markets. It’s something very common in the oil sector as well. These are really important policy questions.

My biggest concern globally with this deal is I don’t know what that reasoning is. It’s possible there are very well thought through reasons, but these are things that need to happen with some kind of a process that has technocratic democratic legitimacy to it. That’s why Daleep talking about the systemic solution is really important because we do need to make sure that these decisions are made in that context. I am not opposed to equity investments of all kinds. I think it’s an important tool for the government to have. It lets you push the risk frontier for your investments. If you’re a program, it lets you participate in the upside. But that needs to be done in a very thoughtful way. It’s a very powerful tool and we need to think about whether we are inculcating the things that make the American system dynamic — competition, innovation, technological innovation.

Daleep Singh: Can I ask Jordan, what is the exit strategy from the MP deal? Is it tied to production capacity or profits? How is the government going to sell down its public stake if at all?

Peter Harrell: The SEC filings talk about the government taking the stake. The government has also, in addition to the price floor, the guaranteed offtake agreement for the magnets. A belt and suspenders approach also guaranteed MP an annual profit of $140 million a year, which the government will pay as a cash payment if it’s not generated from the operations of the company. Presumably the government is intending to hold its equity for at least the ten year duration of the other elements of this deal. But there’s no specific language in the SEC filings about the government’s exit plan. It’s about the equity and then the duration of these other parts of the deal, which is a decade.

Arnab Datta: It’s structured as a ten year deal. I think ultimately the expectation is that the price floor and the offtake agreement will end at that point. But there’s no protection against the dependence. How do we stop this from becoming something that’s permanently dependent on this subsidy? It’s not clear.

It also doubles down on the Chinese market infrastructure. The benchmark that they are using is the Asian metals benchmark. That brings in the risk of manipulability too. China can bleed DoD for hundreds of millions more by flooding the market. How long is Congress expected to continue appropriations for that? These are not paid for. The one thing that was very clear in the 8-K is that they don’t have appropriations for all of this. How long can we expect Congress to keep paying? I think it is a very reasonable question as well.

Maximalist Industrial Policy

Jordan Schneider: I want to have this strategic question. What are reasonable goals over a three-year, five-year, or 10-year horizon when it comes to rare earths in particular. More broadly, what types of things would you want the Strategic Resilience Reserve to touch on?

Arnab Datta: There are a couple of key objectives that we’re trying to build here.

First, can we build a governance structure that is independent, technocratic and driven by market realities and not by political exigencies or other factors?

Second, can we build that robust toolkit that we talked about earlier for different markets? Rare earths we’ve talked about have particularly unique needs. They’re smaller than some of the bigger metals markets. We can’t be sure that you need a futures market for every rare earth that is on the market. But that’s a major goal as well.

Third, I would say the explicit purpose of what we’re trying to do here is build that competitive market. Are you supporting the buildout of a market infrastructure that is tied to market dynamics that US and allied producers face? Are we doing lending with intermediaries that can engage in more trading activity because they’ve got the leverage that left the market in the 2000s and 2010s, as I described? That’s an important piece of it because over five to ten years, if we can have a more stable market infrastructure for US and allied producers that reflects the costs they face, the logistical challenges they face, ultimately you’ll have a better stable foundation in place for those producers to compete.

Jordan Schneider: Beyond solving the market plumbing for things that would fall into strategic resilience, what is the big bold version of the systemic and thoughtful way to do the sorts of things that we’ve seen over the past few months with MP and Intel and we’ve seen over the past few years with the CHIPS Act and the IRA?

Daleep Singh: The maximalist version is a sovereign wealth fund. If you believe that the private sector systematically underinvests in projects that we need most for economic security and national security, then we’re not going to invest as a country at pace and scale to build fusion plants, dozens of semiconductor fabs, next-generation lithography, 6G telephony, or advanced geothermal. We’re also not going to invest enough in old economy sectors where we need to blunt a competitive disadvantage. Think about shipbuilding, or, lagging-edge chips, or mining.

What all of these projects share in common is that they require a lot of upfront capital and they require a decade or more of patience to generate a commercially attractive return. You need a huge tolerance for risk and uncertainty. The private sector venture investors, in particular, but also corporate America, are not likely to touch these in the size that we need them to because they’ve got plenty of other opportunities to make faster, higher, less risky returns. That’s why we have this valley of death right between breakthrough research and commercial scale.

I think the maximalist way to solve this problem is to create a flagship investment vehicle that gives the US patient, flexible capital, that can step in where markets won’t and that can crowd in private investment and back projects with genuine strategic value. That’s the case for a sovereign wealth fund. It’s not about picking winners, though. It’s about picking supply chains and technologies where our national security and our economic resilience are at stake.

It’s premised on the idea that left to itself, the US’ financial system is not designed to maximally align with our national interests. We need to intervene.

Jordan Schneider: I remember first reading you and Arnab’s piece on this a few years ago and thinking that was unlikely, but now Trump is into it. I wonder if it wasn’t called a golden share if he would have been as excited about this concept. But you do enough one-off ones and then you also learn that there are mistakes in the one-off ones and that you aren’t getting a systemic solution. It can go both ways. Either you give up on the project entirely or, given that the broader strategic purpose for these things keeps rearing its ugly head, you start to think in a larger and more systematic way at attacking these problems.

Let’s go level down. How are we funding this? What’s our governance structure? How’s the democratic involvement?

Daleep Singh: Whether you’re focusing on the MP deal or the 10% stake in Intel or the 15% revenue share from Nvidia or the golden share in Nippon, the point is we have a choice. Either we can improvise and experiment or we can develop a framework. Because I think the problem with improvisation is that if we just reach for different levers — an equity stake here, a profit share there, a golden share somewhere else — if we don’t have an overarching framework for why we’re using these tools and when and how and to what extent, I worry that this has the makings of a political piggy bank and a national embarrassment.

I understand some degree of experimentation is going to be needed. We haven’t done industrial policy in 40 years, and the muscles have atrophied. I get it, let’s take small steps and learn from those steps and then recalibrate. But I’m not in favor of ad hoc capitalism with American characteristics because that’s inevitably going to pick favorites and distort incentives.

You’re asking the right question. How do you govern a sovereign wealth fund or a Strategic Resilience Reserve the right way? How do you fund it? On the sovereign wealth fund idea, my thinking is we’re asset rich as a country. The federal government owns about 30% of the land. We have extensive energy and mineral rights. We own the electromagnetic spectrum. We have infrastructure assets all over the country. We’ve got 8,000 tons of gold that’s valued at 1934 prices. We’ve got $200 billion of basically money market assets that are sitting idle. The question is, are we maximizing the strategic bang for the buck on those assets? I would say no. That’s one potential source of funding.

You could also create new revenue streams to fund the vehicle. If you think that the US has too much Wall Street and not enough Main Street, that we financialize the economy into a series of boom-bust asset cycles, then let’s raise revenues from financial activities that serve no strategic purpose. I would say high frequency trading, for example, and fund vehicles that are explicitly designed to advance our national interests.

Jordan Schneider: As long as we stay away from fixed income.

Daleep Singh: Exactly. That’s untouchable. But the most appealing approach is the most straightforward one: ask Congress, be straight up about it. Ask Congress to seed the fund, authorize its existence as an independent federally chartered corporation authority. This is too important to leave entirely to the executive branch and have Congress set a clear mandate in terms of the objectives, the metrics for success, the oversight, the democratic accountability which Arnab was pointing at earlier. It’s a shame we didn’t do this ten years ago when our cost of capital was near zero. That would have made this effort far more affordable. But this is about our long-term national competitiveness. We don’t need to try to time the market.

Arnab Datta: One model that we think about a lot at Employ America is the Federal Reserve. The Federal Reserve has an independent board still, knock on wood. But that’s a structure that is well insulated from political day-to-day activities. It is not a 51-49 majority power structure. It has staggered terms, which, in my opinion, lends itself to depoliticization that’s helpful and has served us well over time.

In terms of the congressional point that Daleep made, we have had a version of this. We’ve worked with Senator Chris Coons’ office since 2020 on his proposal to establish an Industrial Finance Corporation. This is modeled off of the Reconstruction Finance Corporation that we had in the 30s, 40s, and 50s. We had then-Senator Vance on as a co-sponsor. I don't think the political viability of something like that is small. The way we structured that was we appropriated capital to it as a backstop against the borrowing that the corporation could do itself. This corporation could go out and raise capital by raising bond capital and then deploy that capital towards these investments that Daleep mentioned.

One value add about that is you don’t need to compete with the private sector on the rate of return, but you can generate a rate of return. Ultimately that type of a structure could pay for itself. There are a lot of technical accounting rules related to how you would structure that, particularly the Federal Credit Reform Act would come into play. But that is a structure that I think could be viable over time and we have the money to do it. Ultimately because a lot of these investments would be productive over 5, 10, 20 years, I think it would pay for itself.

The Right Tools for Intel

Jordan Schneider: I can’t let you guys leave without a few more Intel takes.

Arnab Datta: I’ve seen two separate conversations happening. One is on the legality of this and another on the policy justification. Peter did an excellent piece in Lawfare that came out a couple of days ago. This is possibly legal in a very technical sense, but does probably violate the spirit of the CHIPS Act in that the CHIPS Act is intended to incentivize manufacturing investments — they are giving this money to Intel but relinquishing most of those requirements. Earlier, we talked about milestones that companies should have to meet. Intel had a bunch of milestones attached to this money. They couldn’t get it all until they reached those milestones. They now have this capital, but they don’t have to meet those milestones. I think that’s a big problem.

Separate from the legality of the policy proposal here, why was this the best way, best thing for Intel? It’s not clear. As Daleep mentioned earlier, they need customers. An equity investment is not going to help them in that sense. For all I know, the share price could go down and our investment could go down because they can’t find customers. I think it’s a big problem that we’re not approaching the question of how can we make Intel more competitive? We seem to be approaching it in an ad hoc way — how can we get the best for our dollar in the form of a deal, an equity deal.

Daleep Singh: That’s my main concern — the right tools here. I agree with the intervention, but the right tools have to come from the demand side. Procurement guarantees, offtake agreements, sourcing mandates — all of those ideas make a lot of sense to me. It’s not clear how the equity injections fill the demand gap.

When you make upfront equity investments, you are foregoing optionality. I would have liked to see warrants or options that are tied to success. In general, I think policy support should be conditional. Conditional on whether you’re reducing unit costs or diversifying customers or hitting your production capacity targets. I do like the idea of clawbacks. The government has lost a lot of optionality with an upfront common equity injection. Maybe there’s a lot in the fine print that we don’t understand, but that’s what I found lacking.

Peter Harrell: I just echo what Daleep and Arnab said. The specifics of this deal are troubling. The idea of policy support, financial support to have onshoring of US semiconductors — clearly needed, clearly broad, bipartisan support. The idea that we shouldn’t be dependent on TSMC, the Taiwanese semiconductor firm for leading edge manufacturing, I think also has bipartisan and sensible policy support. You want to have some competition and some optionality at the leading edge of semiconductor manufacturing.

But what this deal did was take a grant in which Intel was getting $11 billion in exchange for Intel investing — call it $80 billion in fabs over the next decade. Intel was going to get the $11 billion in tranches as it built the fabs. If it failed to build the fabs, there was going to be a clawback. Now Intel is getting about $9 billion of the dollars in exchange for the stock. Plus they have to complete building certain DoD specialty lines.

Most of the obligations to build fabs went poof, and they got the cash in exchange for stocks.

I get why Intel might have done it. They get cash that’s largely unrestricted. They dilute their existing shareholders, but they probably decided the cash is worth it for us to do whatever we want with it. Reasonable call from Intel.

Arnab Datta: I’m also thinking about warrants. They’re using, in all likelihood, something called other transactions authority to legally justify the use of this deal. Other transactions authority is an incredible gift to the Commerce Department to be able to design very diverse mechanisms for policy here. In my opinion, wasting it on this equity investment that has little attached to it is a real mistake. They could put some effort into something creative that did go to the root of the problem about customers, and they’re squandering it, in my opinion.

Jordan Schneider: I think what you all said makes sense under a normal presidency living in the year of our Lord 2025. The way Intel survives is it gets customers, and the way it gets customers is Trump terrifies CEOs. If 10% of the company is what Trump can do to terrify CEOs, then all right, we’ll see. When we were talking earlier about MP Materials, it’s really not rocket science. You could have a beauty pageant with five different companies all trying to mine different places and have something. There’s one horse in this race and at a certain point you have to hope that they can execute as long as the demand’s there.

My sense and hope is that having a golden share owning 10% — Trump will care and be more invested and put more of his cycles and wrath into rounding up a handful of people who are going to spend the time to deal with Intel and help them get back on track. Regardless of whether it was warrants or a grant or equity, whether or not Intel is able to catch back up to TSMC is going to be a function of execution. And a president turning the screws on US fabless customer companies to play ball with Intel. The fact that Trump is caring about this and is focused on this, I would not have priced in completely from the get-go. He was literally talking about having to fire Pat Gelsinger — probably the only man who could, the person who I trust more than anyone else on the planet to actually execute this right who doesn’t work at TSMC currently. I’m more bullish on this than you guys are.

Arnab Datta: Can I offer one pushback on that, Jordan? One thing I would say is yes, there is a tremendous focusing mechanism — companies will, you saw this with MP where just a few days after the announcement Apple signed a big deal with them, a $500 million deal. The thing I would say is at some point the market has to trust that Trump’s commitment to this company will continue. President Trump is not going to be president forever. Intel is not going to be operating only on a four-year timeline. At some point Intel is going to require commitments from other companies and at some point they might turn and say this guy’s not going to be president anymore. We’ve got someone else to please here.

Certainly I take your bullish case. But Intel can’t survive only on that. They need an outside market and they need potentially capital from external sources down the line. At some point we’re going to be in a post-Trump world and it could look very different for Intel.

Mood Music:

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Ryan Julian is a research scientist in embodied AI. He worked on large-scale robotics foundation models at DeepMind and got his PhD in machine learning in 2021.

In our conversation today, we discuss…

• What makes a robot a robot, and what makes robotics so difficult,

• The promise of robotic foundation models and strategies to overcome the data bottleneck,

• Why full labor replacement is far less likely than human-robot synergy,

• China’s top players in the robotic industry, and what sets them apart from American companies and research institutions,

• How robots will impact manufacturing, and how quickly we can expect to see robotics take off.

Listen now on your favorite podcast app.

Embodying Intelligence

Jordan Schneider: Ryan, why should we care about robotics?

Ryan Julian: Robots represent the ultimate capital good. Just as power tools, washing machines, or automated factory equipment augment human labor, robots are designed to multiply human productivity. The hypothesis is straightforward — societies that master robotics will enjoy higher labor productivity and lower costs in sectors where robots are deployed, including in logistics, manufacturing, transportation, and beyond. Citizens in these societies will benefit from increased access to goods and services.

The implications become even more profound when we consider advanced robots capable of serving in domestic, office, and service sectors. These are traditionally areas that struggle with productivity growth. Instead of just robot vacuum cleaners, imagine robot house cleaners, robot home health aides, or automated auto mechanics. While these applications remain distant, they become less far-fetched each year.

Looking at broader societal trends, declining birth rates across the developed world present a critical challenge — How do we provide labor to societies with shrinking working-age populations? Robots could offer a viable solution.

From a geopolitical perspective, robots are dual-use technology. If they can make car production cheaper, they can also reduce the cost of weapon production. There’s also the direct military application of robots as weapons, which we’re already witnessing with drones in Ukraine. From a roboticist’s perspective, current military drones represent primitive applications of robotics and AI. Companies developing more intelligent robotic weapons using state-of-the-art robotics could have enormous implications, though this isn’t my area of expertise.

Fundamentally, robots are labor-saving machines, similar to ATMs or large language models. The key differences lie in their degree of sophistication and physicality. When we call something a robot, we’re describing a machine capable of automating physical tasks previously thought impossible to automate — tasks requiring meaningful and somewhat general sensing, reasoning, and interaction with the real world.

This intelligence requirement distinguishes robots from simple machines. Waymo vehicles and Roombas are robots, but dishwashers are appliances. This distinction explains why robotics is so exciting — we’re bringing labor-saving productivity gains to economic sectors previously thought untouchable.

Jordan Schneider: We’re beginning to understand the vision of unlimited intelligence — white-collar jobs can be potentially automated because anything done on a computer might eventually be handled better, faster, and smarter by future AI systems. But robotics extends this to the physical world, requiring both brain power and physical manipulation capabilities. It’s not just automated repetitive processes, but tasks requiring genuine intelligence combined with physical dexterity.

Ryan Julian: Exactly. You need sensing, reasoning, and interaction with the world in truly non-trivial ways that require intelligence. That’s what defines an intelligent robot.

I can flip your observation — robots are becoming the physical embodiment of the advanced AI you mentioned. Current large language models and vision-language models can perform incredible digital automation — analyzing thousands of PDFs or explaining how to bake a perfect cake. But that same model cannot actually bake the cake. It lacks arms, cannot interact with the world, and doesn’t see the real world in real time.

However, if you embed that transformer-based intelligence into a machine capable of sensing and interacting with the physical world, then that intelligence could affect not just digital content but the physical world itself. The same conversations about how AI might transform legal or other white-collar professions could equally apply to physical labor.

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Jordan Schneider: Ryan, why is robotics so challenging?

Ryan Julian: Several factors make robotics exceptionally difficult. First, physics is unforgiving. Any robot must exist in and correctly interpret the physical world’s incredible variation. Consider a robot designed to work in any home — it needs to understand not just the visual aspects of every home worldwide, but also the physical properties. There are countless doorknob designs globally, and the robot must know how to operate each one.

The physical world also differs fundamentally from the digital realm. Digital systems are almost entirely reversible unless intentionally designed otherwise. You can undo edits in Microsoft Word, but when a robot knocks a cup off a table and cannot retrieve it, it has made an irreversible change to the world. This makes robot failures potentially catastrophic. Anyone with a robot vacuum has experienced it consuming a cable and requiring rescue — that’s an irreversible failure.

The technological maturity gap presents another major challenge. Systems like ChatGPT, Gemini, or DeepSeek process purely digital inputs — text, images, audio. They benefit from centuries of technological development that we take for granted — monitors, cameras, microphones, and our ability to digitize the physical world.

Today’s roboticist faces a vastly more complex challenge. While AI systems process existing digital representations of the physical world, roboticists must start from scratch. It’s as if you wanted to create ChatGPT but first had to build CPUs, wind speakers, microphones, and digital cameras.

Robotics is just emerging from this foundational period, where we’re creating hardware capable of converting physical world perception into processable data. We also face the reverse challenge — translating digital intent into physical motion, action, touch, and movement in the real world. Only now is robotics hardware reaching the point where building relatively capable systems for these dual processes is both possible and economical.

Jordan Schneider: Let’s explore the brain versus body distinction in robotics — the perception and decision-making systems versus the physical mechanics of grasping, moving, and locomotion. How do these two technological tracks interact with each other? From a historical perspective, which one has been leading and which has been lagging over the past few decades?

Ryan Julian: Robotics is a fairly old field within computing. Depending on who you ask, the first robotics researchers were probably Harry Nyquist and Norbert Wiener. These researchers were interested in cybernetics in the 1950s and 60s.

Back then, cybernetics, artificial intelligence, information theory, and control theory were all one unified field of study. These disciplines eventually branched off into separate domains. Control theory evolved to enable sophisticated systems like state-of-the-art fighter plane controls. Information theory developed into data mining, databases, and the big data processing that powers companies like Google and Oracle — essentially Web 1.0 and Web 2.0 infrastructure.

Artificial intelligence famously went into the desert. It had a major revolution in the 1980s, then experienced the great AI winter from the 80s through the late 90s, before the deep learning revolution emerged. The last child of this original unified field was cybernetics, which eventually became robotics.

The original agenda was ambitious — create thinking machines that could fully supplant human existence, human thought, and human labor — that is, true artificial intelligence. The founding premise was that these computers would need physical bodies to exist in the real world.

Robotics as a field of study is now about 75 years old. From its origins through approximately 2010-2015, enormous effort was devoted to creating robotic hardware systems that could reliably interact with the physical world with sufficient power and dexterity. The fundamental questions were basic but challenging — Do we have motors powerful enough for the task? Can we assemble them in a way that enables walking?

A major milestone was the MIT Cheetah project, led by Sangbae Kim around 2008-2012. This project had two significant impacts — it established the four-legged form factor now seen in Unitree’s quadrupedal robots and Boston Dynamics’ systems, and it advanced motor technology that defines how we build motors for modern robots.

Beyond the physical components, robots require sophisticated sensing capabilities. They need to capture visual information about the world and understand three-dimensional space. Self-driving cars drove significant investment in 3D sensing technology like LiDAR, advancing our ability to perceive spatial environments.

Each of these technological components traditionally required substantial development time. Engineers had to solve fundamental questions — Can we capture high-quality images? What resolution is possible? Can we accurately sense the world’s shape and the robot’s own body position? These challenges demanded breakthroughs in electrical engineering and sensor technology.

Once you have a machine with multiple sensors and actuators, particularly sensors that generate massive amounts of data, you need robust data processing capabilities. This requires substantial onboard computation to transform physical signals into actionable information and generate appropriate motion responses — all while the machine is moving.

This is where robotics historically faced limitations. Until recently, robotics remained a fairly niche field that hadn’t attracted the massive capital investment seen in areas like self-driving cars. Robotics researchers often had to ride the waves of technological innovation happening in other industries.

A perfect example is robotic motors. A breakthrough came from cheap brushless motors originally developed for electric skateboards and power drills. With minor modifications, these motors proved excellent for robotics applications. The high-volume production for consumer applications dramatically reduced costs for robotics.

The same pattern applies to computation. Moore’s Law and GPU development have been crucial for robotics advancement. Today, robots are becoming more capable because we can pack enormous computational power into small, battery-powered packages. This enables real-time processing of cameras, LiDAR, joint sensors, proprioception, and other critical systems — performing most essential computation onboard the robot itself.

Jordan Schneider: Why does computation need to happen on the robot itself? I mean, you could theoretically have something like Elon’s approach where you have a bartender who’s actually just a robot being controlled remotely from India. That doesn’t really count as true robotics though, right?

Ryan Julian: This is a fascinating debate and trade-off that people in the field are actively grappling with right now. Certain computations absolutely need to happen on the robot for physical reasons. The key framework for thinking about this is timing — specifically, what deadlines a robot faces when making decisions.

If you have a walking robot that needs to decide where to place its foot in the next 10 milliseconds, there’s simply no time to send a query to a cloud server and wait for a response. That sensing, computation, and action must all happen within the robot because the time constraints are so tight.

The critical boundary question becomes: what’s the timescale at which off-robot computation becomes feasible? This is something that many folks working on robotics foundation models are wrestling with right now. The answer isn’t entirely clear and depends on internet connection quality, but the threshold appears to be around one second.

If you have one second to make a decision, it’s probably feasible to query a cloud system. But if you need to make a decision in less than one second — certainly less than 100 milliseconds — then that computation must happen on-board. This applies to fundamental robot movements and safety decisions. You can’t rely on an unreliable internet connection when you need to keep the robot safe and prevent it from harming itself or others.

Large portions of the robot’s fundamental motion and movement decisions must stay local. However, people are experimenting with cloud-based computation for higher-level reasoning. For instance, if you want your robot to bake a cake or pack one item from each of ten different bins, it might be acceptable for the robot to query DeepSeek or ChatGPT to break that command down into executable steps. Even if the robot gets stuck, it could call for help at this level — but it can’t afford to ask a remote server where to place its foot.

One crucial consideration for commercial deployment is that we technologists and software engineers love to think of the internet as ubiquitous, always available, and perfectly reliable. But when you deploy real systems — whether self-driving cars, factory robots, or future home robots — there will always be places and times where internet access drops out.

Given the irreversibility we discussed earlier, it’s essential that when connectivity fails, the robot doesn’t need to maintain 100% functionality for every possible feature, but it must remain safe and be able to return to a state where it can become useful again once connectivity is restored.

Jordan Schneider: You mentioned wanting robots to be safe, but there are other actors who want robots to be dangerous. This flips everything on its head in the drone context. It’s not just that Verizon has poor coverage — it’s that Russia might be directing electronic warfare at you, actively trying to break that connection.

This creates interesting questions about the balance between pressing go on twenty drones and letting them figure things out autonomously versus having humans provide dynamic guidance — orienting left or right, adjusting to circumstances. There are both upsides and downsides to having robots make these decisions independently.

Ryan Julian: Exactly right. The more autonomy you demand, the more the difficulty scales exponentially from an intelligence perspective. This is why Waymos are Level 4 self-driving cars rather than Level 5 — because Level 5 represents such a high bar. Yet you can provide incredibly useful service with positive unit economics and game-changing safety improvements with just a little bit of human assistance.

Jordan Schneider: What role do humans play in Waymo operations?

Ryan Julian: I don’t have insider information on this, but my understanding is that when a Waymo encounters trouble — when it identifies circumstances where it doesn’t know how to navigate out of a space or determine where to go next — it’s programmed to pull over at the nearest safe location. The on-board system handles finding a safe place to stop.

Then the vehicle calls home over 5G or cellular connection to Waymo’s central support center. I don’t believe humans drive the car directly because of the real-time constraints we discussed earlier — the same timing limitations that apply to robot movement also apply to cars. However, humans can provide the vehicle with high-level instructions about where it should drive and what it should do next at a high level.

Jordan Schneider: We have a sense of the possibilities and challenges — the different technological trees you have to climb. What is everyone in the field excited about? Why is there so much money and energy being poured into this space over the past few years to unlock this future?

Ryan Julian: People are excited because there’s been a fundamental shift in how we build software for robots. I mentioned that the hardware is becoming fairly mature, but even with good hardware, we previously built robots as single-purpose machines. You would either buy robot hardware off the shelf or build it yourself, but then programming the robot required employing a room full of brilliant PhDs to write highly specialized robotic software for your specific problem.

These problems were usually not very general — things like moving parts from one belt to another. Even much more advanced systems that were state-of-the-art from 2017 through 2021, like Amazon’s logistics robots, were designed to pick anything off a belt and put it into a box, or pick anything off a shelf. The only variations were where the object is located, how I position my gripper around it, what shape it is, and where I move it.

From a human perspective, that’s very low variation — this is the lowest of low-skilled work. But even handling this level of variation required centuries of collective engineering work to accomplish with robots.

Now everyone’s excited because we’re seeing a fundamental change in how we program robots. Rather than writing specific applications for every tiny task — which obviously doesn’t scale and puts a very low ceiling on what’s economical to automate — we’re seeing robotics follow the same path as software and AI. Programming robots is transforming from an engineering problem into a data and AI problem. That’s embodied AI. That’s what robot learning represents.

The idea is that groups of people develop robot learning software — embodied AI systems primarily composed of components you’re already familiar with from the large language model and vision-language model world. Think large transformer models, data processing pipelines, and related infrastructure, plus some robot-specific additions. You build this foundation once.

Then, when you want to automate a new application, rather than hiring a big team to build a highly specialized robot system and hope it works, you simply collect data on your new application and provide it to the embodied AI system. The system learns to perform the new task based on that data.

This would be exciting enough if it worked for just one task. But we’re living in the era of LLMs and VLMs — systems that demonstrate something remarkable. When you train one system to handle thousands of purely digital tasks — summarizing books, writing poems, solving math problems, writing show notes — you get what we call a foundation model.

When you want that foundation model to tackle a new task in the digital world, you can often give it just a little bit of data, or sometimes no data at all — just a prompt describing what you want. Because the system has extensive experience across many different tasks, it can relate its existing training to the new task and accomplish it with very little additional effort. You’re automating something previously not automated with minimal effort.

The hope for robotics foundation models is achieving the same effect with robots in the physical world. If we can create a model trained on many different robotic tasks across potentially many different robots — there’s debate in the field about this — we could create the GPT of robotics, the DeepSeek of robotics.

Imagine a robot that already knows how to make coffee, sort things in a warehouse, and clean up after your kids. You ask it to assemble a piece of IKEA furniture it’s never seen before. It might look through the manual and then put the furniture together. That’s probably a fantastical vision — maybe 10 to 20 years out, though we’ll see.

But consider a softer version: a business that wants to deploy robots only needs to apprentice those robots through one week to one month of data collection, then has a reliable automation system for that business task. This could be incredibly disruptive to the cost of introducing automation across many different spaces and sectors.

That’s why people are excited. We want the foundation model for robotics because it may unlock the ability to deploy robots in many places where they’re currently impossible to use because they’re not capable enough, or where deployment is technically possible but not economical.

Jordan Schneider: Is all the excitement on the intelligence side? Are batteries basically there? Is the cost structure for building robots basically there, or are there favorable curves we’re riding on those dimensions as well?

Ryan Julian: There’s incredible excitement in the hardware world too. I mentioned earlier that robotics history, particularly robotics hardware, has been riding the wave of other industries funding the hard tech innovations necessary to make robots economical. This remains true today.

You see a huge boom in humanoid robot companies today for several reasons. I gave you this vision of robotics foundation models and general-purpose robot brains. To fully realize that vision, you still need the robot body. It doesn’t help to have a general-purpose robot brain without a general-purpose robot body — at least from the perspective of folks building humanoids.

Humanoid robots are popular today as a deep tech concept because pairing them with a general-purpose brain creates a general-purpose labor-saving machine. This entire chain of companies is riding tremendous progress in multiple areas.

Battery technology has become denser, higher power, and cheaper. Actuator technology — motors — has become more powerful and less expensive. Speed reducers, the gearing at the end of motors or integrated into them, traditionally represented very expensive components in any machine using electric motors. But there’s been significant progress making these speed reducers high-precision and much cheaper.

Sensing has become dramatically cheaper. Camera sensors that used to cost hundreds of dollars are now the same sensors in your iPhone, costing two to five dollars. That’s among the most expensive components you can imagine, yet it’s now totally economical to place them all over a robot.

Computation costs have plummeted. The GPUs in a modern robot might be worth a couple hundred dollars, which represents an unimaginably low cost for the available computational power.

Robot bodies are riding this wave of improving technologies across the broader economy — all dual-use technologies that can be integrated into robots. This explains why Tesla’s Optimus humanoid program makes sense: much of the hardware in those robots is already being developed for other parts of Tesla’s business. But this pattern extends across the entire technology economy.

Jordan Schneider: Ryan, what do you want to tell Washington? Do you have policy asks to help create a flourishing robotics ecosystem in the 21st century?

Ryan Julian: My policy ask would be for policymakers and those who inform them to really learn about the technology before worrying too much about the implications for labor. There are definitely implications for labor, and there are also implications for the military. However, the history of technology shows that most new technologies are labor-multiplying and labor-assisting. There are very few instances of pure labor replacement.

I worry that if a labor replacement narrative takes hold in this space, it could really hold back the West and the entire field. As of today, a labor replacement narrative isn’t grounded in reality.

The level of autonomy and technology required to create complete labor replacement in any of the job categories we’ve discussed is incredibly high and very far off. It’s completely theoretical at this point.

My ask is, educate yourself and think about a world where we have incredibly useful tools that make people who are already working in jobs far more productive and safer.

China’s Edge and the Data Flywheel

Jordan Schneider: On the different dimensions you outlined, what are the comparative strengths and advantages of China and the ecosystem outside China?

Ryan Julian: I’m going to separate this comparison between research and industry, because there are interesting aspects on both sides. The short version is that robotics research in China is becoming very similar to the West in quality.

Let me share an anecdote. I started my PhD in 2017, and a big part of being a PhD student — and later a research scientist — is consuming tons of research: reams of dense 20-page PDFs packed with information. You become very good at triaging what’s worth your time and what’s not. You develop heuristics for what deserves your attention, what to throw away, what to skim, and what to read deeply.

Between 2017 and 2021, a reliable heuristic was that if a robotics or AI paper came from a Chinese lab, it probably wasn’t worth your time. It might be derivative, irrelevant, or lacking novelty. In some cases, it was plainly plagiarized. This wasn’t true for everything, but during that period it was a pretty good rule of thumb.

Over the last two years, I’ve had to update my priorities completely. The robotics and AI work coming out of China improves every day. The overall caliber still isn’t quite as high as the US, EU, and other Western institutions, but the best work in China — particularly in AI and my specialization in robotics — is rapidly catching up.

Today, when I see a robotics paper from China, I make sure to read the title and abstract carefully. A good portion of the time, I save it because I need to read it thoroughly. In a couple of years, the median quality may be the same. We can discuss the trends driving this — talent returning to China, people staying rather than coming to the US, government support — but it’s all coming together to create a robust ecosystem.

Moving from research to industry, there’s an interesting contrast. Due to industry culture in China, along with government incentives and the way funding works from provinces and VC funds, the Chinese robotics industry tends to focus on hardware and scale. They emphasize physical robot production.

When I talk to Chinese robotics companies, there’s always a story about deploying intelligent AI into real-world settings. However, they typically judge success by the quantity of robots produced — a straightforward industrial definition of success. This contrasts with US companies, which usually focus on creating breakthroughs and products that nobody else could create, where the real value lies in data, software, and AI.

Chinese robotics companies do want that data, software, and AI capabilities. But it’s clear that their business model is fundamentally built around selling robots. Therefore, they focus on making robot hardware cheaper and more advanced, producing them at scale, accessing the best components, and getting them into customers’ hands. They partner with upstream or downstream companies to handle the intelligence work, creating high-volume robot sales channels.

Take Unitree as a case study — a darling of the industry that’s been covered on your channel. Unitree has excelled at this approach. Wang Xingxing and his team essentially took the open-source design for the MIT Cheetah quadruped robot and perfected it. They refined the design, made it production-ready, and likely innovated extensively on the actuators and robot morphology. Most importantly, they transformed something you could build in a research lab at low scale into something manufacturable on production lines in Shenzhen or Shanghai.

They sold these robots to anyone willing to buy, which seemed questionable at the time — around 2016 — because there wasn’t really a market for robots. Now they’re the go-to player if you want to buy off-the-shelf robots. What do they highlight in their marketing materials? Volume, advanced actuators, and superior robot bodies.

This creates an interesting duality in the industry. Most American robotics companies — even those that are vertically integrated and produce their own robots — see the core value they’re creating as intelligence or the service they deliver to end customers. They’re either trying to deliver intelligence as a service (like models, foundation models, or ChatGPT-style queryable systems where you can pay for model training) or they’re pursuing fully vertical solutions where they deploy robots to perform labor, with value measured in hours of replaced work.

On the Chinese side, companies focus on producing exceptionally good robots.

Jordan Schneider: I’ve picked up pessimistic energy from several Western robotics efforts — a sense that China already has this in the bag. Where is that coming from, Ryan?

Ryan Julian: That’s a good question. If you view AI as a race between the US and China — a winner-take-all competition — and you’re pessimistic about the United States’ or the West’s ability to maintain an edge in intelligence, then I can see how you’d become very pessimistic about the West’s ability to maintain an edge in robotics.

As we discussed, a fully deployed robot is essentially a combination of software, AI (intelligence), and a machine. The challenging components to produce are the intelligence and the machine itself. The United States and the West aren’t particularly strong at manufacturing. They excel at design but struggle to manufacture advanced machines cheaply. They can build advanced machines, but not cost-effectively.

If you project this forward to a world where millions of robots are being produced — where the marginal cost of each robot becomes critical and intelligence essentially becomes free — then I can understand why someone would believe the country capable of producing the most advanced physical robot hardware fastest and at the lowest cost would have a huge advantage.

If you believe there’s no sustainable edge in intelligence — that intelligence will eventually have zero marginal cost and become essentially free — then you face a significant problem. That’s where the pessimism originates.

Jordan Schneider: Alright, we detoured but we’re coming back to this idea of a foundation model unlocking the future. We haven’t reached the levels of excitement for robotics that we saw in October 2022 for ChatGPT. What do we need? What’s on the roadmap? What are the key inputs?

Ryan Julian: To build a great, intelligent, general-purpose robot, you need the physical robot itself. We’ve talked extensively about how robotics is riding the wave of advancements elsewhere in the tech tree, making it easier to build these robots. Of course, it’s not quite finished yet. There are excellent companies — Boston Dynamics, 1X, Figure, and many others who might be upset if I don’t mention them, plus companies like Apptronik and Unitree — all working to build great robots. But that’s fundamentally an engineering problem, and we can apply the standard playbook of scale, cost reduction, and engineering to make them better.

The key unlock, assuming we have the robot bodies, is the robot brains. We already have a method for creating robot brains — you put a bunch of PhDs in a room and they toil for years creating a fairly limited, single-purpose robot. But that approach doesn’t scale.

To achieve meaningful impact on productivity, we need a robot brain that learns and can quickly learn new tasks. This is why people are excited about robotics foundation models.

How do we create a robotics foundation model? That’s the crucial question. Everything I’m about to say is hypothetical because we haven’t created one yet, but the current thinking is that creating a robotics foundation model shouldn’t be fundamentally different from creating a purely digital foundation model. The strategy is training larger and larger models.

However, the model can’t just be large for its own sake. To train a large model effectively, you need massive amounts of data — data proportionate to the model’s size. In large language models, there appears to be a magical threshold between 5 and 7 billion parameters where intelligence begins to emerge. That’s when you start seeing GPT-2 and GPT-3 behavior. We don’t know what that number is for robotics, but those parameters imply a certain data requirement.

What do we need to create a robotics foundation model? We need vast amounts of diverse data showing robots performing many useful tasks, preferably as much as possible in real-world scenarios. In other words, we need data and diversity at scale.

This is the biggest problem for embodied AI. How does ChatGPT get its data? How do Claude or Gemini get theirs? Some they purchase, especially recently, but first they ingest essentially the entire internet — billions of images and billions of sentences of text. Most of this content is free or available for download at low cost. While they do buy valuable data, the scale of their purchases is much smaller than the massive, unstructured ingestion of internet information.

There’s no internet of robot data. Frontier models train on billions of image-text pairs, while today’s robotics foundation models with the most data train on tens of thousands of examples — requiring herculean efforts from dozens or hundreds of people.

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This creates a major chicken-and-egg problem. If we had this robotics foundation model, it would be practical and economical to deploy robots in various settings, have them learn on the fly, and collect data. In robotics and AI, we call this the data flywheel: you deploy systems in the world, those systems generate data through operation, you use that data to improve your system, which gives you a better system that you can deploy more widely, generating more data and continuous improvement.

We want to spin up this flywheel, but you need to start with a system good enough to justify its existence in the world. This is robotics’ fundamental quandary.

I want to add an important note about scale. Everyone talks about big data and getting as much data as possible, but a consistent finding for both purely digital foundation models and robotics foundation models is that diversity is far more important than scale. If you give me millions of pairs of identical text or millions of demonstrations of a robot doing exactly the same thing in exactly the same place, that won’t help my system learn.

The system needs to see not only lots of data, but data covering many different scenarios. This creates another economic challenge, because while you might consider the economics of deploying 100 robots in a space to perform tasks like package picking...

Jordan Schneider: Right, if we have a robot that can fold laundry, then it can fold laundry. But will folding laundry teach it how to assemble IKEA furniture? Probably not, right?

Ryan Julian: Exactly. Economics favor scale, but we want the opposite — a few examples of many different things. This is the most expensive possible way to organize data collection.

Jordan Schneider: I have a one-year-old, and watching her build up her physics brain — understanding the different properties of things and watching her fall in various ways, but never the same way twice — has been fascinating. If you put a new object in front of her, for instance, we have a Peloton and she fell once because she put her weight on the Peloton wheel, which moved. She has never done that again.

Ryan Julian: I’m sure she’s a genius.

Jordan Schneider: Human beings are amazing. They’re really good at learning. The ability to acquire language, for example — because robots can’t do it yet. Maybe because we have ChatGPT, figuring out speech seems less of a marvel now, but the fact that evolution and our neurons enable this, particularly because you come into the world not understanding everything... watching the data ingestion happen in real time has been a real treat. Do people study toddlers for this kind of research?

Ryan Julian: Absolutely. In robot learning research, the junior professor who just had their first kid and now bases all their lectures on watching how their child learns is such a common trope. It’s not just you — but we can genuinely learn from this observation.

First, children aren’t purely blank slates. They do know some things about the world. More importantly, kids are always learning. You might think, “My kid’s only one or two years old,” but imagine one or two years of continuous, waking, HD stereo video with complete information about where your body is in space. You’re listening to your parents speak words, watching parents and other people do things, observing how the world behaves.

This was the inspiration for why, up through about 2022, myself and other researchers were fascinated with using reinforcement learning to teach robots. Reinforcement learning is a set of machine learning tools that allows machines, AIs, and robots to learn through trial and error, much like you described with your one-year-old.

What’s been popular for the last few years has been a turn toward imitation learning, which essentially means showing the robot different ways of doing things repeatedly. Imitation learning has gained favor because of the chicken-and-egg problem: if you’re not very good at tasks, most of what you try and experience won’t teach you much.

If you’re a one-year-old bumbling around the world, that’s acceptable because you have 18, 20, or 30 years to figure things out. I’m 35 and still learning new things. But we have very high expectations for robots to be immediately competent. Additionally, it’s expensive, dangerous, and difficult to allow a robot to flail around the world, breaking things, people, and itself while doing reinforcement learning in real environments. It’s simply not practical.

Having humans demonstrate tasks for robots is somewhat more practical than pure reinforcement learning. But this all comes down to solving the chicken-and-egg problem I mentioned, and nobody really knows the complete solution.

There are several approaches we can take. First, we don’t necessarily have to start from scratch. Some recent exciting results that have generated significant enthusiasm came from teams I’ve worked with, my collaborators, and other labs. We demonstrated that if we start with a state-of-the-art vision-language model and teach it robotics tasks, it can transfer knowledge from the purely digital world — like knowing “What’s the flag of Germany?” — and apply it to robotics.

Imagine you give one of these models data showing how to pick and place objects: picking things off tables, moving them to other locations, putting them down. But suppose it’s never seen a flag before, or specifically the flag of Germany, and it’s never seen a dinosaur, but it has picked up objects of similar size. You can say, “Please pick up the dinosaur and place it on the flag of Germany.” Neither the dinosaur nor the German flag were in your robotics training data, but they were part of the vision-language model’s training.

My collaborators and I, along with other researchers, showed that the system can identify “This is a dinosaur” and use its previous experience picking up objects to grab that toy dinosaur, then move it to the flag on the table that it recognizes as Germany’s flag.

One tactic — don’t start with a blank slate. Begin with something that already has knowledge.

Another approach — and this explains all those impressive dancing videos you see from China, with robots running and performing acrobatics — involves training robots in simulation using reinforcement learning, provided the physical complexity isn’t too demanding. For tasks like walking (I know I say “just” walking, but it’s actually quite complex) or general body movement, it turns out we can model the physics reasonably well on computers. We can do 99% of the training in simulation, then have robots performing those cool dance routines.

We might be able to extend this framework to much more challenging physical tasks like pouring tea, manipulating objects, and assembling things. Those physical interactions are far more complex, but you could imagine extending the simulation approach.

Jordan Schneider: Or navigating around Bakhmut or something.

Ryan Julian: Exactly, right. The second approach uses simulation. A third tactic involves getting data from sources that aren’t robots but are similar. This has been a persistent goal in robot learning for years — everyone wants robots to learn from watching YouTube videos.

There are numerous difficult challenges in achieving this, but the basic idea is extracting task information from existing video data, either from a first-person perspective (looking through the human’s eyes) or third-person perspective (watching a human perform tasks). We already have extensive video footage of people doing things.

What I’ve described represents state-of-the-art frontier research. Nobody knows exactly how to accomplish it, but these are some of our hopes. The research community tends to split into camps and companies around which strategy will ultimately succeed.

Then there’s always the “throw a giant pile of money at the problem” strategy, which represents the current gold standard. What we know works right now — and what many people are increasingly willing to fund — is building hundreds or even thousands of robots, deploying them in real environments like factories, laundries, logistics centers, and restaurants. You pay people to remotely control these robots to perform desired tasks, collect that data, and use it to train your robotics foundation model.

The hope is that you don’t run out of money before reaching that magic knee in the curve — the critical threshold we see in every other foundation model where the model becomes large enough and the data becomes sufficiently big and diverse that we suddenly have a model that learns very quickly.

There’s a whole arms race around how to deploy capital quickly enough and in the right way to find the inflection point in that curve.

Jordan Schneider: Is Waymo an example of throwing enough money at the problem to get to the solution?

Ryan Julian: Great example.

Jordan Schneider: How do we categorize that?

Ryan Julian: Waymo and other self-driving cars give people faith that this approach might work. When you step into a Waymo today, you’re being driven by what is, at its core, a robotics foundation model. There’s a single model where camera, lidar, and other sensor information from the car comes in, gets tokenized, decisions are made about what to do next, and actions emerge telling the car where to move.

That’s not the complete story. There are layers upon layers of safety systems, decision-making processes, and other checks and balances within Waymo to ensure the output is sound and won’t harm anyone. But the core process remains: collect data on the task (in this case, moving around a city in a car), use it to train a model, then use that model to produce the information you need.

Self-driving cars have been a long journey, but their success using this technique gives people significant confidence in the approach.

Let me temper your enthusiasm a bit. There’s hope, but here’s why it’s challenging. From a robotics perspective, a self-driving car is absolutely a robot. However, from that same perspective, a self-driving car has an extremely simple job — it performs only one task.

The job of a self-driving car is to transport you, Jordan, and perhaps your companions from point A to point B in a city according to a fairly limited set of traffic rules, on a relatively predictable route. The roads aren’t completely predictable, but they follow consistent patterns. The car must accomplish this without touching anything. That’s it — get from point A to point B without making contact with anything.

The general-purpose robots we’re discussing here derive their value from performing thousands of tasks, or at least hundreds, without requiring extensive training data for each one. This represents one axis of difficulty: we must handle many different tasks rather than just one.

The other challenge is that “don’t touch anything” requirement, which is incredibly convenient because every car drives essentially the same way from a physics perspective.

Jordan Schneider: Other drivers are trying to avoid you — they’re on your side and attempting to avoid collisions.

Ryan Julian: Exactly — just don’t touch anything. Whatever you do, don’t make contact. As soon as you start touching objects, the physics become far more complicated, making it much more difficult for machines to decide what to do.

The usefulness of a general-purpose robot lies in its ability to interact with objects. Unless it’s going to roam around your house or business, providing motivation and telling jokes, it needs to manipulate things to be valuable.

These are the two major leaps we need to make from the self-driving car era to the general robotics era — handling many different tasks and physically interacting with the world.

Jordan Schneider: Who are the companies in China and the rest of the world that folks should be paying attention to?

Ryan Julian: The Chinese space is gigantic, so I can only name a few companies. There are great online resources if you search for “Chinese robotics ecosystem."

In the West, particularly the US, I would divide the companies really pushing this space into two camps.

The first camp consists of hardware-forward companies that think about building and deploying robots. These tend to be vertically integrated. I call them “vertical-ish” because almost all want to build their own embodied AI, but they approach it from a “build the whole robot, integrate the AI, deploy the robot” perspective.

In this category, you have Figure AI, a vertical humanoid robot builder that also develops its own intelligence. There’s 1X Technologies, which focuses on home robots, at least currently. Boston Dynamics is the famous first mover in the space, focusing on heavy industrial robots with the Atlas platform. Apptronik has partnered with Google DeepMind and focuses on light industrial logistics applications.

Tesla Optimus is probably the most well-known entry in the space, with lots of rhetoric from Elon about how many robots they’ll make, where they’ll deploy them, and how they’ll be in homes. But it’s clear that Tesla’s first value-add will be helping automate Tesla factories. Much of the capital and many prospective customers in this space are actually automakers looking to create better automation for their future workforce.

Apple is also moving into the space with a very early effort to build humanoid robots.

The second camp focuses on robotics foundation models and software. These tend to be “horizontal-ish” — some may have bets on making their own hardware, but their core focus is foundation model AI.

My former employer, Google DeepMind, has a robotics group working on Gemini Robotics. NVIDIA also has a group doing this work, which helps them sell chips.

Among startups, there’s Physical Intelligence, founded by several of my former colleagues at Google DeepMind and based in San Francisco. Skild AI features some CMU researchers. Generalist AI includes some of my former colleagues. I recently learned that Mistral has a robotics group.

A few other notable Western companies — there’s DYNA, which is looking to automate small tasks as quickly as possible. They’re essentially saying, “You’re all getting too complicated — let’s just fold napkins, make sandwiches, and handle other simple tasks.”

There are also groups your audience should be aware of, though we don’t know exactly what they’re doing. Meta and OpenAI certainly have embodied AI efforts that are rapidly growing, but nobody knows their exact plans.

In China, partly because of the trends we discussed and due to significant funding and government encouragement (including Made in China 2025), there’s been an explosion of companies seeking to make humanoid robots specifically.

The most well-known is Unitree with their H1 and G1 robots. But there are also companies like Fourier Intelligence, AgiBot, RobotEra, UBTECH, EngineAI, and Astribot. There’s a whole ecosystem of Chinese companies trying to make excellent humanoid robots, leveraging the Shenzhen and Shanghai-centered manufacturing base and incredible supply chain to produce the hardware.

When Robots Learn

Jordan Schneider: How do people in the field of robotics discuss timelines?

Ryan Julian: It’s as diverse as any other field. Some people are really optimistic, while others are more pessimistic. Generally, it’s correlated with age or time in the field. But I know the question you’re asking: when is it coming?

Let’s ground this discussion quickly. What do robots do today? They sit in factories and do the same thing over and over again with very little variation. They might sort some packages, which requires slightly more variation. Slightly more intelligent robots rove around and inspect facilities — though they don’t touch anything, they just take pictures. Then we have consumer robots. What’s the most famous consumer robot? The Roomba. It has to move around your house in 2D and vacuum things while hopefully not smearing dog poop everywhere.

That’s robots today. What’s happening now and what we’ll see in the next three to five years falls into what I call a bucket of possibilities with current technology. There are no giant technological blockers, but it may not yet be proven economical. We’re still in pilot phases, trying to figure out how to turn this into a product.

The first place you’re going to see more general-purpose robots — maybe in humanoid form factors, maybe slightly less humanoid with wheels and arms — is in logistics, material handling, and light manufacturing roles. For instance, machine tending involves taking a part, placing it into a machine, pressing a button, letting the machine do its thing, then opening the machine and pulling the part out. You may also see some retail and hospitality back-of-house applications.

What I’m talking about here is anywhere a lot of stuff needs to be moved, organized, boxed, unboxed, or sorted. This is an easy problem, but it’s a surprisingly large part of the economy and pops up pretty much everywhere. Half or more of the labor activity in an auto plant is logistics and material feed. This involves stuff getting delivered to the auto plant, moved to the right place, and ending up at a production line where someone picks it up and places it on a new car.

More than half of car manufacturing involves this process, and it’s actually getting worse because people really want customized cars these days. Customizations are where all the profit margin is. Instead of Model T’s running down the line where every car is exactly the same, every car running down the line now requires a different set of parts. A ton of labor goes into organizing and kitting the parts for each car and making sure they end up with the right vehicle.

Ten to twelve percent of the world economy is logistics. Another fifteen to twenty percent is manufacturing. This represents a huge potential impact, and all you’re asking robots to do is move stuff — pick something up and put it somewhere else. You don’t have to assemble it or put bolts in, just move stuff.

Over the next three to five years, you’re going to see pilots starting today and many attempts, both in the West and in China, to put general-purpose robots into material handling and show that this template with robotics foundation models can work in those settings.

Now, if that works — if the capital doesn’t dry up, if researchers don’t get bored and decide to become LLM researchers because someone’s going to give them a billion dollars — then maybe in the next seven to ten years, with some more research breakthroughs, we may see these robots moving into more dexterous and complex manufacturing tasks. Think about placing bolts, assembling things, wings on 747s, putting wiring harnesses together. This is all really difficult.

You could even imagine at this point we’re starting to see maybe basic home tasks: tidying, loading and unloading a dishwasher, cleaning surfaces, vacuuming...

Jordan Schneider: When are we getting robotic massages?

Ryan Julian: Oh man, massage. I don’t know. Do you want a robot to press really hard on you?

Jordan Schneider: You know... no. Maybe that’s on a fifteen-year horizon then?

Ryan Julian: Yeah, that’s the next category. Anything that has a really high bar for safety, interaction with humans, and compliance — healthcare, massage, personal services, home health aid — will require not only orders of magnitude more intelligence than we currently have and more capable physical systems, but you also really start to dive into serious questions of trust, safety, liability, and reliability.

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Having a robot roving around your house with your one-year-old kid and ensuring it doesn’t fall over requires a really high level of intelligence and trust. That’s why I say it’s a question mark. We don’t quite know when that might happen. It could be in five years — I could be totally wrong. Technology changes really fast these days, and people are more willing than I usually expect to take on risk. Autopilot and full self-driving are good examples.

One thing the current generation of robotics researchers, generalist robotics researchers, startups, and companies are trying to learn from the self-driving car era is this: maybe one reason to be optimistic is that because of this safety element, self-driving cars are moving multi-ton machines around lots of people and things they could kill or break. You have people inside who you could kill. The bar is really high — it’s almost aviation-level reliability. The system needs to be incredibly reliable with so much redundancy, and society, regulators, and governments have to have so much faith that it is safe and represents a positive cost-benefit tradeoff.

This makes it really difficult to thread the needle and make something useful. In practice, it takes you up the difficulty and autonomy curve we talked about and pushes you way up to really high levels of autonomy to be useful. It’s kind of binary — if you’re not autonomous enough, you’re not useful.

But these generalist robots we’re talking about don’t necessarily need to be that high up the autonomy difficulty curve. If they are moderately useful — if they produce more than they cost and save some labor, but not all — and you don’t need to modify your business environment, your home, or your restaurant too much to use them, and you can operate them without large amounts of safety concerns, then you have something viable.

For instance, if you’re going to have a restaurant robot, you probably shouldn’t start with cutting vegetables. Don’t put big knives in the hands of robots. There are lots of other things that happen in a restaurant that don’t involve big knives.

One of the bright spots of the current generalist robotics push and investment is that we believe there’s a much more linear utility-autonomy curve. If we can be half autonomous and only need to use fifty percent of the human labor we did before, that would make a huge difference to many different lives and businesses.

Jordan Schneider: Is that a middle-of-the-road estimate? Is it pessimistic? When will we get humanoid robot armies and machines that can change a diaper?

Ryan Julian: It’s a question of when, not if. We will see lots of general-purpose robots landing, especially in commercial spaces — logistics, manufacturing, maybe even retail back of house, possibly hospitality back of house. The trajectory of AI is very good. The machines are becoming cheaper every day, and there are many repetitive jobs in this world that are hazardous to people. We have difficulty recruiting people for jobs that are not that difficult to automate. Personally, I think that’s baked in.

If, to you, that’s a robot army — if you’re thinking about hundreds of thousands, maybe even millions of robots over the course of ten years working in factories, likely in Asia, possibly in the West — I think we will see it in the next decade.

The big question mark is how advanced we’ll be able to make the AI automation. How complicated are the jobs these machines could do? Because technology has a habit of working really well and advancing really quickly until it doesn’t. I’m not exactly sure where that stopping point will be.

If we’re on the path to AGI, then buckle up, because the robots are getting real good and the AGI is getting really good. Maybe it’ll be gay luxury space communism for everybody, or maybe it’ll be iRobot. But the truth is probably somewhere in between. That’s why I started our discussion by talking about how robots are the ultimate capital good.

If you want to think about what would happen if we had really advanced robots, just think about what would happen if your dishwasher loaded and unloaded itself or the diaper changing table could change your daughter’s diaper.

A good dividing line to think about is that home robots are very difficult because the cost needs to be very low, the capability level needs to be very diverse and very high, and the safety needs to be very high. We will require orders of magnitude more intelligence than we have now to do home robots if they do happen. We’re probably ten-plus years away from really practical home robots. But in the industrial sector — and therefore the military implications we talked about — it’s baked in at this point.

Jordan Schneider: As someone who, confession, has not worked in a warehouse or logistics before, it’s a sector of the economy that a lot of the Washington policymaking community just doesn’t have a grasp on. Automating truckers and automating cars doesn’t take many intellectual leaps, but thinking about the gradations of different types of manual labor that are more or less computationally intensive is a hard thing to wrap your head around if you haven’t seen it in action.

Ryan Julian: This is why, on research teams, we take people to these places. We go on tours of auto factories and logistics centers because your average robotics researcher has no idea what happens in an Amazon warehouse. Not really.

For your listeners who might be interested, there are also incredible resources for this provided by the US Government. O*NET has this ontology of labor with thousands of entries — every physical task that the Department of Labor has identified that anybody does in any job in the United States. It gets very detailed down to cutting vegetables or screwing a bolt.

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Jordan Schneider: How can people follow this space? What would you recommend folks read or consume?

Ryan Julian: Well, of course you should subscribe to ChinaTalk. Lots of great revised coverage. The SemiAnalysis guys also seem to be getting into it a little bit. Other than that, I would join Twitter or Bluesky. That is just the rest of the AI community. That’s the best place to find original, raw content from people doing the work every day.

If you follow a couple of the right accounts and start following who they retweet over time, you will definitely build a feed where, when the coolest new embodied AI announcement comes out, you’ll know in a few minutes.

[Some accounts! Chris Paxton, Ted Xiao, C Zhang, and The Humanoid Hub. You can also check out the General Robots and Learning and Control Substacks, Vincent Vanhoucke on Medium, and IEEE’s robotics coverage.]

Jordan Schneider: Do you have a favorite piece of fiction or movie that explores robot futures?

Ryan Julian: Oh, I really love WALL-E and Big Hero 6. I prefer friendly robots.

Enjoy this deleted scene from WALL-E:

Mood Music:

This is part two of our show with Ian Toll, author of the Pacific War trilogy. Here’s part one.

In the second half of our conversation, we discuss…

• The various command styles that shaped US military strategy in the Pacific,

• How General MacArthur and Admiral Halsey became media darlings —controlling public opinion and war politics in the process,

• The evolution of submarine warfare and Japanese defensive strategy,

• Counterfactuals, including a world where the Allies invaded Taiwan,

• Broader lessons for the future of warfare, especially in the Taiwan Strait.

Cohosting is Chris Miller, author of Chip War. Thanks to the US-Japan Foundation for sponsoring this podcast.

Listen now on your favorite podcast app or watch on YouTube.

“What Becomes of a General?”

Jordan Schneider: Let's talk about the generals and admirals, starting with Chester Nimitz. You have this wonderful opening of him taking this secret train ride across America and reflecting on what he’s about to do. He’s trying to relax and play poker with his buddy, but at the same time, he understands the gravity of the situation.

Chris Miller: I was struck by the extent to which Nimitz has now been largely forgotten in American public discourse, but in your telling he emerges as probably the most important strategic thinker of the war in the Pacific. The contrast between him and MacArthur was striking to me, given that MacArthur is the one who’s remembered.

Ian Toll: One of the things that I always find very striking when you look at the admirals and officers, the leadership in the Navy during WWII, is that you have a group of men who have lived parallel lives since the age of 17 or 18 when they entered the Naval Academy. They have been shaped by a culture, by a context, a profession that had rigorous ideas about what leadership should look like. Yet when they reach the pinnacle of their careers, you realize these guys are very different. They have different personalities, different styles, and different ways of making decisions. They present themselves differently.

The full range of personalities comes through in the way that the leadership class — this is true in the Army as well — approached winning this vast, unprecedented war that they had been preparing for their entire lives.

Nimitz was the handpicked choice of FDR. FDR was not just confident in the role of commander in chief, but in particular, he had a parochial feeling about the Navy because he had served in a sub-cabinet position earlier in his career and because he had been president for such a long time and had personally pushed through and run a vast expansion in our Navy, the Two-Ocean Navy Act, which had occurred before the beginning of the war. FDR was very involved in personnel decisions at the highest level of the Navy. He selected admirals. Nimitz was his choice.

He had first offered the job of Pacific Fleet Chief to Nimitz nine months before Pearl Harbor. Nimitz had demurred. He said he thought he was too junior an admiral to take the position, and that for him to accept that command would arouse opposition and resentment among some of the other admirals, and he thought it was a bad idea. They gave it to Husband Kimmel instead.

When the attack on Pearl Harbor happened, when all of our battleships were knocked out of action in the first 15 minutes of the war, when Husband Kimmel was made to perform the role of the scapegoat for that, Nimitz was first to understand that it could have been him. It would have been him most likely, if he had been there. We would have remembered Nimitz very differently. That’s a snapshot of how historical contingency can cast such a long shadow down the decades. Nimitz could have been in the position of Husband Kimmel, a person that we remember solely because he suffered a terrible defeat.

But Nimitz’s great strength was that he had a gentle touch. His leadership style was based on personal warmth. After the trauma of Pearl Harbor, he showed up in Hawaii. He had a fifth of the Earth’s surface within his theater command. It was an enormous command of not just the Navy, but the Army, the Marines, the Air Force in his theater. He’s able to preside over this fractious group of people who are arguing over how to fight this war and to get them to work together and to forge a team out of what was a somewhat dysfunctional system managing inter-service operations in the 1940s.

He was the right man for the job. You said that you thought he was forgotten today. That’s true, but even more true of Ernest King, who was his direct superior. He was the Chief of Naval Operations. He is forgotten even by people who are interested in military history and the history of WWII.

But if you look at the major decisions that were made on the way that we would fight and win the Pacific War, the way that we would pick up the pieces after Pearl Harbor and put together an offensive, which less than four years later would force the surrender of Japan, it was Ernest King more than anybody else who had a blueprint in mind for how we would do that and who was in a position to impose that imprint on the rest of the Navy and all of the military services.

Jordan Schneider: I want to talk about the contrast of thinking styles that the admiralty ended up having to employ. There are scenes of big conference room debates where MacArthur says we should go left and Nimitz says we should go right. They’re making lots of different styles of arguments — some from a logistics perspective, others from a morale perspective. This represents a model of slow thinking and deliberation.

After they decide on a course of action, you have all of these plans and logistics, and you get the boats in place. But because of the nature of carrier warfare during the Pacific War, incredibly fast-twitched decision making is required. You have imperfect information because your scout plane may have seen something, and then you have to make a split-second call.

One of the admirals described it perfectly — “These carriers are boxers with glass chins, but they have enormous left hooks, and all we're doing is deciding when to swing and hoping for the best.”

It becomes very human at both levels of thinking. With slow thinking, you have all these personal histories that are intertwined. Everyone is thinking about their reputation and trying to save their people and resources. Then with the admirals’ decisions, soldiers who haven’t slept in 48 hours have to make these calls.

There’s this other approach where one commander delegates everything because he knows he needs to be sharp and fresh for the big thinking — when he has to make these enormous strategic calls.

These flag officers have to operate in very different modes, which you explored beautifully. I'm curious about your reflection on that and what it reveals about the nature of warfare and the nature of people at this moment in time.

Ian Toll: It’s true because the planning and anticipation of how these battles would go were important. Getting those decisions right, moving your forces into position at the right time — at Midway, most famously, Nimitz had a picture of what the Japanese plan was, thanks to this extraordinary intelligence achievement of breaking the Japanese codes. He was able to move what forces he had at that point, which were three aircraft carriers, into position to do battle. But after that, everything that happened was a contingency. It was chaos. There were a lot of chances involved. That battle could have gone the other way.

You had Spruance and Frank Jack Fletcher, the two American admirals, making decisions with imperfect information, feeling their way through the fog of war. In the end, winning that battle narrowly with a pretty significant contribution of blind luck. You would see this again and again in naval battles in the Pacific. If the right plan is put in place, you’re improving the odds for your side. Yet there are still fast-twitch decisions that have to be made, these opportunistic decisions, probabilistic decisions when you don’t have all of the information you need.

Those are two entirely different ways of thinking about military command. They may play to the strengths or weaknesses of different personality types. But one of the things that Nimitz did particularly well was to develop a plan and to make sure that his subordinate commanders, his ocean-going commanders understood that plan and make sure they would execute this plan in the same way that he would if he were there commanding a task force at sea.

But then once they left, Nimitz was in his headquarters back in Hawaii, in Pearl Harbor, you’ve got Halsey or Spruance or whoever the task force commander is on the scene. Nimitz, although he was often tempted, never got on the radio and intervened and started forcing decisions. He delegated those tactical decisions, even in a major battle, without interfering — trusting to the judgment of his subordinates. Most of the time, that judgment was vindicated.

Chris Miller: Nimitz seemed to me the opposite of a gung-ho military leader stereotype. You use the words “leading by his personal warmth, being gentle.” That came through in the narrative. He felt like a grandfather figure to me. But it was super effective. The one time he came down hard on a subordinate with the “where is task force 37” telegram, it was the softest criticism you could imagine.I wanted to pick up on the fog of war.

Fog of war is a metaphor and fog of war is reality with the weather playing such a critical role in almost every battle.

Ian Toll: Fog of war is a very frequent metaphor in naval warfare and often becomes a literal problem.

Chris Miller: You felt the clouds rolling in and every single battle rolling in and out. Then the typhoon you have off of Leyte Gulf is extraordinary — you’re fighting a battle and then you’re also dealing with these ancient problems of seamanship at the same time. Talk about contingency, every single battle has this uncertainty: what will the weather be like in three days? Your ability to find or be found was hugely impacted in this era when radar was not very good by what were the cloud patterns. That was a great example of the contingency at every moment.

Ian Toll: The weather is this universal thing. I quoted Joseph Conrad, who was a sea captain before he was a novelist, and he’d been through a typhoon in exactly the same waters just off Formosa or Taiwan. It occurred to me as I was reading that description by Conrad, this is the same storm. It’s five decades, six decades later, but that’s Typhoon Alley.

You have those storms going through every year, and you could pick a description if one existed from 2,000 years ago, and you’d be describing the same storm. The navy and the navies of other countries in the Pacific today have got to deal with those same weather patterns. There’s something universal across time to that X factor of weather. I think that particularly comes to bear on naval warfare.

Jordan Schneider: The suspense of not knowing where the enemy ships are is foreign to a modern mind today. The 1940s are not ancient history, but there were no satellites. Radar was just starting. There were so many uncertainties that these folks were facing.

Ian Toll: You’re relying on your planes to be your eyes too. The patrol flights become absolutely essential. It’s very easy for a plane to fly directly over a ship and not see it in overcast weather. We saw that happen again and again where you had patrol planes moving out from these task forces. They’re supposed to be the first trigger to tell you if there’s an enemy there. There was much more of a sense, particularly earlier in the war, of the fleets being blind and having to make decisions without being certain where the enemy was, if the enemy was there, how far, what direction. That uncertainty, the tension and inherently the drama of that conflict.

Jordan Schneider: If Nimitz was a gentle, modern manager, Bull Halsey was the opposite. His famous quote was: “Before we’re through with them, the Japanese language will be only spoken in hell. Kill Japs, kill Japs, kill more Japs.” The guy was living up to his caricature, and then he embraced it.

There were numerous points where the mythos surrounding him was such that he was kept in positions longer than he would have been otherwise. FDR’s view was, “We’re already going to win, and it would be a weird sign to get this guy out of command.” His ethos was much more dualistic, reflecting the brutal mindset you needed to start these operations where you knew tens of thousands of people would die over the course of a fortnight.

Chris Miller: I was struck by the fact that some of the key, really costly errors that you describe were made by him, but it also seemed you were suggesting there’s strong evidence that the people under his command really loved him. Where’s the balance sheet there?

Ian Toll: There are some caveats to that. Halsey became very controversial within the ranks of the Navy in the last year of the war. He had some severe critics, including some of the rear admirals who were the task group commanders of the Third Fleet. These were the next generation of leaders — the guys who would be promoted into the senior positions in the immediate post-war period.

The piece that I think is often missing — and it’s true when you consider MacArthur’s career as well — is just how important their public images became.

They became important because the United States is a democracy that has elections during wartime, which makes us a little different from other democracies. The political influence of a military leader can become very great in wartime.

You had a new media environment. Film and radio, the ability to run the same photographs in newspapers all across the country. Many of these technologies that we take for granted today changed the political environment. When you had leaders like MacArthur and Halsey — I’ll put them in the same category — who were very good at speaking directly to the American people and to the rank and file of the military services through the media, they became media darlings. They became people that reporters always wanted to talk to because they wanted that quotable line, that photograph. It sold newspapers. The American people started to look at the war and understand it by listening to these very colorful, charismatic figures, and that became a political consideration.

1944 was an election year in the United States, and MacArthur was seriously considering running against FDR and was implicitly threatening to do that. At the same time, FDR was faced with the decision of whether to return to the Philippines. Halsey was making significant mistakes, most significantly in October 1944, when he made a mistake that could have led to disaster and only didn’t because of blind luck. It was well understood within the Navy that he had made this inexplicable error. There was a feeling that he should be held to account — that he should not be running the Third Fleet anymore, that he should be relieved of command, maybe put into a different position. But his political popularity, his profile with the American people as the unofficial face of the US Navy became a factor in the decision to keep him in place.

The interplay of politics, publicity, media, and the way that all of that influences the major decisions being made at the height of the bloodiest war in history — that is a fascinating story that hasn’t received as much attention in historical literature.

Chris Miller: I love the description of MacArthur’s press team as “the most well-oiled press team outside of Washington.” I learned a lot from that.

Ian Toll: MacArthur’s emergence as the principal hero — I don’t think it would be going too far to say that to the American people during the WWII, MacArthur was on a par with FDR as a national figure, a leader, a symbol. All of that happened extraordinarily fast. This was a lesson about the way media can work in wartime.

In the immediate aftermath of Pearl Harbor — I’m talking four or five days after Pearl Harbor — you had a sense of rage among the American people, anger at the Japanese, but also at our own military leadership, our Navy leadership in particular. How could you let this happen? How could we be blindsided like this in the heart of our fleet base? There was a sense of shame, a sense that we’d been humiliated. It was inexplicable.

Then, almost immediately, another storyline emerged from the Philippines, where the Japanese are invading and the Philippines’ beleaguered army is outmanned, outnumbered, and too far away for us to support them because of what had happened at Pearl Harbor. They’re fighting for their survival. MacArthur stepped in with a very aggressive and effective media strategy to shape the way that story was told and give the American people another storyline — a heroic storyline.

People who had been conditioned by movies to understand complex events through heroic narratives — MacArthur was stepping right into that and very effectively using media, photographs, the daily cables that he was writing describing the war, to establish himself as a singular figure. That continued right through the Korean War when he was fired by Harry Truman and almost caused a revolt within the Democratic Party. For ten years, MacArthur was able to ride that successful media strategy.

That’s interesting to me because in an authoritarian or fascist model of government, you don’t have that. You don’t have the ability of individual military leaders to challenge the political leadership by appealing directly to the people through the media and the press.

Jordan Schneider: There were a few other media beats that I thought were fascinating. One was this debate in October of 1944, just a few weeks before the presidential election, of whether or not to let the public know that the Japanese had sunk a carrier. One admiral said, “No, please don’t tell the Japanese that this carrier has sunk.” Another was saying, “There will be an enormous scandal if we don’t tell the American people the facts a few weeks before the election.”

But I think my favorite arc was with King and the press corps in Washington.

Ian Toll: The culture of the Navy had inculcated this anti-media, anti-public relations philosophy that it’s dangerous to play with the media. They can divulge your secrets. You should lie low. We should be the silent service. We’ll tell the American people what happened after we win the war. There was a joke going around that King’s philosophy of disclosure and media was, “We’ll tell the media and the American people absolutely nothing about what’s happening until the day the Japanese surrender, and then we’ll put out a two-word press release — ‘We won.’”

For a thousand reasons, that became a problematic, unsustainable approach. The Army — particularly MacArthur — was stepping into this void and shaping the way the American people understood the Pacific War to be unfolding. There was an understanding among all of the military services that as soon as the war was won, there was going to be a complete reorganization of the services. What we have today — a Secretary of Defense, a Pentagon, Joint Chiefs, a way of managing the different military services and forcing them to work together — none of that existed in the 1940s. It was understood because FDR had essentially decreed it — “We will reform and reorganize the military, but let’s get the war done first.”

The Army, the Navy, the Marines, the Air Force — they all had their own agendas, and they were positioning themselves for this immense reform, this bureaucratic refashioning that they knew was coming. For all of these reasons, King was eventually convinced: “I can’t just ignore the media. This is a democracy. I’ve got to have some strategy.”

It was his own lawyer, who was a former reporter, who proposed: “Why don’t you start off-the-record briefings? Just get a bunch of reporters together in Washington. We’ll meet somewhere — not at your office, but at my house. We’ll get these guys together. We’ll have ground rules.” It would be what would today be called a deep background briefing, meaning you’re not going to use any of what’s disclosed. None of it’s going to be written up into any article. You’re not going to source anything. You’re not going to quote King, but it’s going to help you understand what’s happening. That will contribute to the way that you write the stories that you can write.

King thought this was crazy. “Why would you trust a bunch of reporters under these kinds of ground rules?” He was persuaded that if you get reputable reporters, they will adhere to these ground rules. After the first three hours of sitting with 20 reporters in Alexandria, Virginia, at his lawyer’s house, he realized, “This is exactly what I need to be doing because I’m getting these guys on side. I can then begin manipulating press coverage a little bit.” Even more than that, this was an opportunity for him to explain at a high level the strategic issues that they were dealing with to a bunch of guys who really were outsiders, but who were highly intelligent. King realized this was actually helping him to shape his own thinking in a beneficial way. For the rest of the war, he continued doing these deep background briefings.

I think that was an interesting arc. It helps us understand a little bit about who King was, but it also illuminates these issues that are unique to running a war in a democracy — different from the kind of challenges that Stalin, Hitler would face.

On Submarines and Taiwan Contingencies

Chris Miller: I was struck by the centrality of submarine warfare in the struggles that Japan faced. There have been some books on this in the past several decades, but relative to the Battle of the Atlantic, which takes center stage in histories of the war in Europe, the fact that the Japanese faced and lost the Battle of the Pacific in terms of shipping is central. I was struck by the way that you brought submarine warfare to life, with the USS Wahoo as a great case study. Upstream of that was the question of torpedoes — how do you get torpedoes that actually work, which ends up being a technical bureaucratic struggle.

Give us a bit of a glimpse into the trajectory of submarine warfare and its impact on the scope of the war.

Ian Toll: What you have in the submarine war — in any war of commerce, the Battle of the Atlantic being another example — is a cumulative way of fighting the war. You want to sink a certain amount of shipping, sink oil tankers, and little by little diminish the ability of your enemy to carry on the war. You’re attacking the economic underpinnings, the logistics underpinnings of the war. It’s a very different kind of campaign.

The war that the rest of the Navy is fighting, the Army is fighting, the Marines are fighting — you can diagram it on the map. We’re going to take this group of islands, and then we’re going to move, and we’re going to take this group of islands. We’re going to fight a naval battle here, and you could diagram the naval battle, and then you could show how that opens the way for us to make this next westward thrust, always moving closer to the Japanese islands.

Submarine warfare became death by a thousand cuts.

Sink one oil tanker at a time. There’s a cumulative effect that caused Japan’s war economy to sputter and run out of gas, and its ability to carry on the war became critical in the last year of the war.

You have to tell these stories side by side. You have to realize these were almost entirely separate campaigns. There’s very little direct coordination between these two campaigns, and they’re both important and they’re working together. That wasn’t the way the submarines had been envisioned before WWII.

An interesting part of the story is how the submarine commanders themselves came to realize: “We’re not using this resource in the optimal way if we’re using them to support fleet movements or to go out and be eyes and ears for the fleet.” This is the way fleet submarines — these diesel submarines — had been built with a very different role in mind. They were going to operate at the edges of these task forces as they went out. They weren’t going to fight the kind of long, solitary cruises where they’re going primarily to sink oil tankers and freighters.

It wasn’t until 1943 that the Navy realized we’re not using this resource the way we should. What we should do is largely disconnect the Navy submarines from what the rest of the fleet is doing and just send them out there to try to sink oil tankers. Let’s try to starve Japan of oil and other resources. Once they did that, once they fixed the torpedo problem, it became clear to the Japanese that they had nowhere to go.

Japan is a country poor in natural resources. It always has been. It has negligible oil production. It has always relied on importing oil. Their decision to attack us at Pearl Harbor was largely about oil. They had an oil stockpile, and they needed more. We had cut off the supply of Texas oil. They needed to go down to Borneo to take the Dutch and British oil fields there and replace that supply. Then they have the problem of transporting that oil from what is today Indonesia to Japan — 3,000 miles, an artery that if we could sever would cause the entire Japanese Imperial project to bleed out. That was what happened in 1944 and 1945.

You can tell this story with statistics. There were X many fleet boats that were going out. They were going on patrols of this average length for X many weeks. They were sinking X amount of ships on average. Those statistics will tell a story. But in order to bring the reader into what’s happening, you’ve got to show an individual boat and say, “Let’s imagine what it’s like to go on this cruise on the Wahoo and to see it from the perspective of those who were in the crew.” Use the example of that one very successful submarine and her career to illuminate the larger story.

Jordan Schneider: The Wahoo arc had aspects of a video game — we had to line up the shot and execute these crazy trick shots down the chute, diving while everything exploded around us. But it ties back to larger strategic questions. The bottom-up tactical innovations were fascinating, both understanding that the torpedoes were wrong and realizing we shouldn’t be going around with the carriers. We should be positioned between Japan and China to shoot down oil tankers.

One of the big themes is that technological innovation and change happened from 1941 to 1945, but more important were the failures of imagination. Starting with Pearl Harbor, there was this long evolution of understanding that carriers mattered more than battleships, then understanding that submarines were crucial, then not taking territory, and finally realizing we could skip islands without killing everyone. On the Japanese side, we’ve talked about the Kamikazes but haven’t discussed the infantry side much — going from Banzai charges 万岁突击 to honeycombing into ancient mountains. The fact that there was so much room to get better, even during moderate technological change rather than super rapid change, came through in your narrative.

Ian Toll: Japanese infantry tactics evolved, that was an important change. It happened primarily in the last year of the war when individual army commanders realized they had been using their army entirely wrong. If their goal was to exact the greatest possible price as the Americans came across the Pacific island by island, shrinking the ring around Japan’s home islands, then they needed to dig into the ground and make the Americans come to them — put five or six of their guys for every one of the Americans.

The Army abandoned the banzai charge entirely and began digging in. You saw this most effectively at Peleliu, Iwo Jima, and Okinawa.

Jordan Schneider: The fact that you can become 50% more effective by using the same available tools in a different way isn’t something you’d expect given how many experiments were being run. Even in Okinawa, they still talked themselves into some stupid attack because of the instinctive doctrines they’d been drilled in for decades.

Ian Toll: Their sense of honor, too. In Okinawa, you had a defensive line of fortifications that crossed the island. Okinawa is a long, narrow island about 60 miles long and maybe 9-10 miles wide. At the narrowest point, they picked rocky mountainous ground in the southern part of the island and built an extraordinarily ambitious string of tunnels and caves across the island.

If they were going to hold out, buy time, and inflict casualties on the Americans, they should have stayed in that high ground to use the advantages of terrain and prepared defensive positions. But once the Americans were ashore and had taken the major airfields, they immediately started preparing Okinawa as a stepping stone to Kyushu. They would use those airfields to bomb the Japanese homeland.

This created immense pressure within the Japanese army — “we’ve got to do something about this. We can’t just stay here. We’ve got to contest what the Americans are doing with the rest of the island.” Again and again, they sallied out from these defensive fortifications, got mowed down, suffered terrible casualties, and eventually realized they had to go back to this blueprint of trying to survive as long as possible while taking as many Americans with them as they could.

It was an evolving understanding of what the ideal tactics were in these battles. But there was also a subtle interplay of politics, policy, and the way military strategic decisions were made. You see that in Japan, you see that in the US, you see it in Great Britain. That’s part of the picture that’s important to illuminate and becomes relevant when we talk about the way different countries and regimes will wage war even when they have similar tools.

Jordan Schneider: It’s hard to second-guess wartime decisions because there was so much unknown in 1941 and 1942 about what carriers could do, what submarines could do, and what the Japanese political system looked like. Coming back to submarines — if the US just 10x’ed that effort, there’s a world in which very few people have to die because Japan decides to starve. Japan ends up starving, and that’s all she wrote.

Island hopping is another live debate about whether the US could have skipped more islands, Iwo Jima being the main one that people still argue about today. What do you think is the most interesting operational strategy or broader open questions when it comes to the way the war was fought in the Pacific that you’re excited to see more historians take on?

Ian Toll: There are a number of issues. What we found as we went along with this war was that we could go much faster — we could close the ring around Japan much more quickly than we thought. This is partly because we surprised ourselves with just how quickly we were able to mobilize our economy to get ships and troops and planes out into the Pacific.

But if you were to refight the war knowing what you knew in 1945, and if you were able to deal with the political challenge presented by MacArthur, who really was a force of nature all his own and who had the ability to shape decision making because of his political influence, what you would probably do is focus essentially all of your effort in a direct attack on Japan from Hawaii, moving directly through the Central Pacific (which is one of the routes we took), but not diverting into the South Pacific.

Take islands within bombing range of Japan and focus on cutting their supply lines with submarines in particular, then establishing the ability to bomb the Japanese homeland directly, which we did as well. If you took a more aggressive “close the ring around Japan quickly” approach, you would probably see a scenario where the war ends six months earlier and without using the atomic bomb.

That’s counterfactual history, but if you went back and applied the lessons that you got from the war itself, if you were able to use that wisdom of hindsight as you were doing it, we could have seen a shorter war or more efficient war, perhaps a war with fewer casualties, and that would force Hirohito and the ruling circle in Japan to recognize their error and that they needed to surrender.

One of the — at a high level — another counterfactual within the Pacific that is often forgotten by people who are familiar with the history is that we came very, very close to landing troops in what we then called Formosa, and today call Taiwan. It was Admiral King and most of the Navy planners, at least in Washington, who believed this was the key to forcing an end to the war — taking Taiwan.

It was Raymond Spruance, the Fifth Fleet commander or ocean-going fleet commander in the Western Pacific, who took the lead in saying we should bypass Taiwan. We should take Okinawa. Okinawa was smaller. The island is large enough for our purposes, essentially to establish as a stepping stone to an invasion of Japan as an air base, but will not commit us to this enormous undertaking of taking this very large mountainous island that has been a Japanese colony for 50 years.

What if we had taken Taiwan? It’s interesting to imagine how history might have unfolded. Would that have involved us in the Chinese Civil War, for example? That’s an interesting counterfactual. But if and when China does seriously consider rolling the dice and moving against Taiwan, it’s going to encounter many of the same issues that led our military to decide not to take that step in 1944.

It’s a large, mountainous, rugged island. It would require you to establish air supremacy over the island and naval supremacy at a beachhead to be able to maintain a continuous flow of supplies over that beachhead. Taiwan is 100 miles from China. That’s five times the width of the English Channel. These are immense problems that are not unlike some of the problems that we ended up solving in the 1940s, but should probably prompt military planners in China to think very seriously about this history and the nature of the challenge.

Jordan Schneider: We’ve run two articles in the past year, one on the debate around Operation Causeway and the other Operation Sho-2Go 捷2号作戦, which is the Japanese plan to ward off the Americans. They built all these relatively similar things that you saw in the context of Okinawa and Iwo Jima with all these tunnels.

I don’t think Americans on Formosa change a lot when it comes to the Chinese Civil War. The Americans were also thinking about invading Ningbo 宁波市, in Mainland China, and using that as a base to bomb Taiwan. The Americans did show up on mainland China after the war but did not stay long.

It seems to me that even if the Americans showed up in China, we would have pulled out really fast, like we did in a lot of the rest of the Pacific. The Korean War only happens because the Chinese Civil War happens the way it does and then everyone was on edge at that. Mobilizing America to do even more than what it did, which was already a lot when it came to giving Chiang Kai-shek 讲解可 a lot of weapons to fight in the late 1940s, seems to me to be a hard counterfactual to consider.

It was the Japanese invasion in the first place, which gave Mao Zedong 毛泽东 a shot. Can you imagine the world in which America went in with Chiang Kai-shek in 1946 and 1947?

Ian Toll: No, it’s unlikely. Our military services really felt an immense sense of relief that we did not have to invade Japan and had shared a realization of how costly that operation would be. To become involved in a civil war in a vastly greater country on the mainland of Asia would have compounded all of those issues.

But counterfactuals are always going to be somewhat controversial. There are many historians who think they’re not worth discussing at all. But so much happened in those last few weeks of the Pacific War that you’re almost forced to acknowledge that things could have gone differently.

The Red Army poured across the Manchurian border on August 9th, the same day we hit Nagasaki — a sudden declaration of war. Stalin let his war machine loose in Manchuria. If the war had lasted two weeks longer, if the Japanese surrendered less than a week later, if they had held out until the end of August? Would you have had a red army in Korea in a bigger way?

Stalin ordered his army to take Hokkaido. He wanted Hokkaido. He could have gotten Hokkaido if the war had gone on a few more weeks. Then you might have seen Hokkaido, the northern island of Japan, as the East Germany of Japan for 45 years through the Cold War.

All of those kinds of counterfactuals you have to take seriously, given how volatile the situation was. The real question about whether Japan would surrender, whether it would make any organized surrender at the end of the war at all, or whether the place would have collapsed into civil war and prevented any organized end of the Pacific War. Very different paths for Japan and for all of Asia in those final weeks.

Jordan Schneider: Another lesson when we’re talking about the Taiwan contingency today is that we spoke earlier in this conversation about how the die was already cast by January 1942 because American industrial might was what it was. But the balance of industrial forces plays out over longer time horizons and longer wars versus shorter wars. The importance of smaller technical decisions or point-in-time technological advantages can be amplified such that you don’t have these big national industrial tests of will.

Thankfully, we haven’t had too many of them when it comes to great powers going against each other since 1945. There’s a lot more uncertainty in the smaller wars where the national commitment level is one of the most important variables, which you’re gauging and adjusting for over time, as opposed to these scenarios where two empires are going all out to the death against each other, and then you can stack up the factor endowments and have a good sense of where it’s all going to end up.

Reading Recommendations

Jordan Schneider: You want to recommend some books, Ian? What have you read recently? Doesn’t have to be anything to do with this, but whose writing has impressed you of late?

Ian Toll: In These Times: Living in Britain Through the Napoleonic Wars, 1793-1815, which is a book by Jenny Uglow about Great Britain during the Napoleonic Wars. I have an interest in home front histories of all wars, the way societies deal with wars, the way they shape economies and politics.

Jordan Schneider: And maybe just some — are there voices or memoirs or letters? Many of these Americans and Japanese who lived through the Pacific War, they’re stylish writers. Which ones are the ones that stick with you these many years after writing this?

Ian Toll: Kiyosawa’s A Diary of Darkness. Kiyosawa was a scholar who was tarred as a liberal and marginalized in Japanese society, but he kept a daily diary through the end of the Pacific War that was superb in its observations of everyday life in Japanese at the time. He was a scholar who knew a little about politics, and his horror at the way Japanese media coverage was manipulated is recorded in the diary. The Japanese people were being lied to.

That’s a very good book that few people have read. It’s one of these books that was translated in the 1960s and published. Virtually no one read it, and today it’s almost entirely unknown. That’s one good example.

A US memoir, there are many that are very good. There’s a book by someone named Anthony Weller, who was an American correspondent who went into Japan immediately after the surrender. His book is called First into Nagasaki, and it includes a lot of the dispatches he wrote at that time, which were quashed by the American censors and never saw the light of day.

The book is partly about his visit to Nagasaki a week after the surrender, but there are also a lot of dispatches about Japan and about interviews with freed American and British and Australian POWs. It’s a terrific book. And again, one of these books that I don’t think has been very widely read, it is a neglected classic.

Jordan Schneider: Great. And I want to shout out a place. Yakushima, I ended up there in February of 2020. It’s this island off Kyushu. I was stuck because China already had COVID and America didn’t have COVID yet, and I was trying to stay in Asia.

And I’m really happy that Yakushima isn’t a place that now has to be associated like Okinawa or Iwo Jima as a horrific battle happening there. It’s one of the most magical places I’ve ever been. It’s a giant rainforest.

Ian Toll: Where the animated film Princess Mononoke was set.

Jordan Schneider: Exactly. It has enormous trees, and it’s really inconvenient to get to. There aren’t a lot of tourists, and America didn’t have to invade it because we dropped bombs on Hiroshima and Nagasaki. But we’re not in the worst of all possible timelines. The path where you have that invasion of Kyushu, where a few more million people would have died, is something that is hanging over the specter of your final book. People should all go to Yakushima and be thankful that we haven’t had a nuclear war since 1945.

Mood Music:

A guest post by Professor at American University as well as the author of the new Xi Zhongxun biography and a book exploring succession politics in the USSR and CCP.

September 3 will mark the eightieth anniversary of the end of World War II, and Xi Jinping will host Vladimir Putin in Beijing for a military parade to mark the occasion. For both men, it will be an opportunity to assert the civilizational agendas they are pursuing.

Xi and Putin see themselves as men who inherited a baton from their forefathers to continue a struggle against outside enemy forces who have always wanted to eliminate their countries’ distinct national characteristics and subjugate them.

For both, the war was personal. During World War II, Xi’s revolutionary father Zhongxun concentrated his energies against the Nationalists and was never near Japanese forces. Yet Jinping’s mother Qi Xin personally witnessed the Japanese seizure of Beijing, was nearly killed by enemy cavalry, and witnessed atrocities committed by imperial forces. Xi Jinping even lost a first cousin, only an infant, to the fires of war.

Putin’s family also suffered. His father was severely wounded in combat against the Nazis and survived the Siege of Leningrad, where an elder brother died. His maternal grandmother was slain by Nazi occupiers.

For both Xi and Putin, victory then was costly, but incomplete. Although the war concluded before they were born, it resonates with them differently from other contemporary world leaders. Xi and Putin believe that “hegemonic forces” still want to impose a foreign model upon them and block their rightful place in the world. Now, they want to use the memory of the war to inoculate future generations against Western values and legitimate the global order they envision.

Having witnessed the chaos their nations faced for much of the twentieth century, both are deeply preoccupied with the question of political order. Xi Jinping was incarcerated and exiled during the Cultural Revolution and feared state collapse during the Tiananmen Square protests in 1989. Vladimir Putin famously saw the collapse of Soviet power in East Germany as a young KGB officer. Both Xi and Putin believe that their rise to power stopped centrifugal forces, supported by the West, that threatened to tear their nations apart before they came to power.

Commemorating World War II serves that mission. Both men clearly believe that their nations need a sense of idealism, sacrifice, and commitment to survive. History as moral education is a powerful tool for that purpose. World War II was a moment that showed their nations could achieve extraordinary victories.

Xi and Putin see the suffering their peoples experienced as something that deserves only the most profound respect both at home and abroad. The anniversary has been turned into an instrument to instill loyalty to the state among a younger generation. That message is especially significant for their militaries, as Russia continues its war against Ukraine and China prepares the People’s Liberation Army for a possible war on Taiwan.

It is also a time to remind the outside world what China and Russia think they deserve as major contributors to victory in World War II. At the war’s end, both nations were recognized as major powers. For Putin, Yalta meant Russia was given special rights in its so-called “near abroad.” For Xi, the defeat of Japan meant Taiwan should rightfully return to the Chinese mainland. Beijing and Moscow see American activities in their neighborhoods as a return to the power politics that led to war decades ago.

That is why Xi and Putin obsess over a perceived grievance that diminishes the contributions of the countries' role in the war. Control over history is literally a matter of regime security and strategic imperatives.

The Chinese Communist Party opposes any attempts to deny the Nanjing Massacre and the horrific biological and chemical warfare experiments on human beings at Unit 731 in Manchuria. Two movies, one on each of those topics, are being released this year in China. The party also opposes the largely accurate narrative that the communists sat out much of the war against the Japanese.

In Russia, former Culture Minister Vladimir Medinsky used the words “human scum” to refer to anyone who debunked the legend of Panfilov's Twenty-Eight Guardsmen, who allegedly all died fighting off the Nazis outside Moscow.

Yet questions remain about the long-term efforts by Xi and Putin to immortalize their regimes and their use of the memory of World War II for that purpose. The story of Chinese and Russian history is often one of unintended consequences. Mao Zedong launched his Cultural Revolution to prevent capitalism from appearing in China. It was such a disaster it triggered Reform and Opening. Mikhail Gorbachev’s attempt to save the Soviet Union destroyed it.

Putin sees the war against Ukraine as a sort of sequel to World War II that can help him recast another generation of Russians according to his vision. He sneered as young people fled the country to avoid the draft, describing them as “scum and traitors” that Russians would “simply spit out” “like a gnat that accidentally flew into their mouths.” He seeks to politically empower veterans – for instance through his Time of Heroes program to get them elected on his party’s ticket. Patriotic education has contributed to the militarization of society. The economy is now hardened against sanctions and geared to fight a long-term war. Yet what will Russia do without its most talented young people if they flee or die on the battlefield? Will Russians become exhausted by the war? And how long can prolonged competition with the West last with an economy whose future has been mortgaged on the war?

Xi can only use the memory of war and the possibility of potential war in the future. He uses the revolutionary legacy, of which the war against Japan was a part, to achieve what he calls “self-revolution.” It is a call to vigilance, a call to “eat bitterness,” a call to yet another young generation of Chinese to devote their lives not just to themselves but also to national rejuvenation. Yet Xi does not want his relationship with the West to go completely off the rails. Unlike Putin, he wants to benefit from economic, financial, and technological ties while he can. The question is whether Xi can achieve both struggle and pragmatism at the same time.

As for the international community, the commemoration in Beijing will likely not fundamentally change any feelings in the West towards Russia or China. No Western nation is convinced that the Ukrainians are Nazis, as Putin falsely alleges. And although China has sought to avoid economic and reputational costs, it has unambiguously been a major facilitator of Russia’s war machine. The military parade, along with the recent treatment of Japanese citizens and military exercises around Taiwan, might frighten China’s neighbors more than win them over with the memory of China’s role in the defeat of Imperial Japan.

No historian can deny the contributions of China and Russia in the defeat of fascism in World War II. But the war’s role in justifying authoritarianism at home and expansion abroad is not a tribute that will inspire everyone.

For more with Joseph Torigian, check out our podcast on his first book on CCP power struggles.

And the two-part five hour epic we did covering his monumental biography of Xi Zhongxun.

For the 80th anniversary of the Allied victory over Japan, ChinaTalk interviewed Ian Toll about his Pacific War trilogy, which masterfully brings America’s bloodiest war — and the world’s only nuclear war — to life. Ian’s detailed scholarship creates a multisensory historical experience, from the metallic tang of radiation after the bombs were dropped to the stench of Pacific battlefields.

Ian’s forthcoming book, The Freshwater War, will explore the naval campaign the US fought against Britain on the Great Lakes between 1812 and 1815.

Today our conversation covers….

• How Ian innovates when writing historical narratives,

• Whether Allied victory was predetermined after the US entered the war,

• Why the Kamikaze were born out of resource scarcity, and whether Japanese military tactics were suicidal as well,

• How foreign wars temporarily stabilized Japan’s revolutionary domestic politics,

• How American military leadership played the media and politics to become national heroes,

• Lessons from 1945 for a potential Taiwan invasion.

Cohosting is , author of Chip War. Thanks to the US-Japan Foundation for sponsoring this podcast.

Listen now on your favorite podcast app.

The Pacific War — A Writer’s Guide

Jordan Schneider: I want to start with your closest scholarly forebearer, Samuel Eliot Morison. He was FDR’s buddy who ended up getting presidential approval to be embedded in the fight in the Pacific. Over the next 20 years, he published a 15-volume, 6,000-page history of United States naval operations in World War II.

For this show, aside from reading your 2,000 pages, I also read a few hundred pages of Morison, which — while there are echoes — feels like it was of a different time, era, and audience. When reflecting back on where you chose to spend your time in research and pages, compared to what he thought was most interesting and vital, what were the things that you both agreed needed the full treatment? What were things that you felt comfortable writing in the 21st century that you could spend less time on? What were some of the themes that you wanted to emphasize to a greater extent than he did in his book?

Ian Toll: Well, Morison will always be the first, if not the greatest, historian of the Pacific War. It’s an unusual case because Morison pitched the president of the United States — who was himself a former assistant secretary of the Navy — this idea. FDR ran the Navy day-to-day during the Woodrow Wilson administration and was fascinated with naval history going all the way back to the American Revolution. He was a collector and an antiquarian.

FDR was unique as a president in anticipating the importance of research and writing to document the history of this war, even before it began to unfold.

Samuel Eliot Morison, a historian at Harvard who was well-established in the field, said, “Why don’t you just put me in charge of this whole project and let the Navy know that I get an all-access pass to the Pacific War as it’s happening? I will produce a multi-volume official history — but really a history written by me, Samuel Eliot Morison, with all of my strongly opinionated views, having witnessed many of these events, in some cases from actually being aboard a ship in a task force as it went into battle.”

Morison’s concern was to write the first draft of the history, and he did a remarkable job. He had access in a way that no outsider could possibly have had. He became personal friends with many of the admirals who fought that war and was a direct witness to many events. That was true in Okinawa, where he was aboard a ship in the task force and could work his personal impressions into the narrative.

All of that is very unique. Morison was seeing the war through the eyes of his contemporaries. He was very much involved in the debates that the admirals had as they were rolling across the Pacific. He was probably less interested than I am in the way that the war was experienced by the ordinary sailor, soldier, and airmen, and more interested in grand strategy.

I like to pull those together — the way the war unfolded in the eyes of those who fought it, but then also returning to the conference rooms where the planning unfolded. I wanted to understand how the politics of inter-service rivalries in the US military affected decisions — that was an important story unique to the Pacific because of the divided command structure.

This Solomon-like choice to say the South Pacific will be MacArthur’s domain — the US Army will be in charge of the South Pacific, the Central and North Pacific will be Nimitz’s domain — meant we were really going to divide this enormous ocean into two theaters. We were going to let the Navy have one, let the Army have one. That was to establish peace within this large and fractious military.

In some ways, that was a suboptimal decision. In other ways, it seemed to work out fine because the United States had the ability to mobilize such an enormous war machine, such that we could fight two wars in the Pacific.

We fought two parallel counteroffensives — one south of the equator, one north of the equator. Because we had the ability to do that, the Japanese really were unable to concentrate their diminishing forces to meet either prong of this two-headed offensive.

Jordan Schneider: As you’re thinking about how to devote your research time and the pages that you allocate to these stories, can you reflect a little about your process of having all these simultaneous strains of the experiences of these individual soldiers, as well as these grand debates between MacArthur and Nimitz and the president about how to put all the pieces on the chessboard? What was both the research as well as synthesis process for you in this comprehensive history?

Ian Toll: My process, from when I first began doing this about 25 years ago, is to read everything. Now, with the Pacific War, you can’t literally read everything. The first book I wrote, Six Frigates, about the founding of the US Navy, I felt at times I was touching almost everything that had been written. That will never be the case with a war this big.

But to read very, very widely — histories, the original documents, the planning documents, the action reports, the memoirs, the letters, the letters of the military commanders and the lowest ranking soldier and sailor who experienced these events. Casting a wide net and spending years. before sitting down to write, going out and gathering up an enormous amount of material, and looking at the subject from every different angle.

Then there’s a middle step, which is important and often neglected by a lot of historians, which is to take all of that material and file it in a way that when you come back to the part of the narratives that you’re writing, you can immediately put your hands on that source to work it in. It is an information management issue, which requires a lot of thinking about how to do the research initially and how to organize it so you can then use it in the writing.

Eventually, it just becomes many thousands of documents organized in a certain way, a narrative that is going to unfold. The narrative is iterative in the sense that I may go down a blind alley and decide I need to throw that out. I throw hundreds of pages out. I’m doing it again with the book I’m writing now. To try to give the reader a sense that you’re shifting between different perspectives constantly — the perspective of Nimitz and his staff at Pearl Harbor planning an operation, then shifting immediately to the perspective of Marines in the Fifth Regiment who are landing on a beach and then carrying out the operation that you were just seeing how this was planned, then shifting to the Japanese perspective and shifting back to the US home front.

It’s a constantly shifting narrative, in which you’re looking at the same subjects from a different point of view, but then integrated into a narrative that unspools a little bit the way a novel would.

Chris Miller: How did you learn to do that, shifting perspective so smoothly? Because it’s easy to say, “Oh, shift from Nimitz’s room where he’s looking at the map, then shift to Iwo Jima.” But you do that in a way that few narrative histories do. Jordan and I both agreed that we’ve never read a 2,000-page history and wanted another page until we read yours. How do you learn that scene shifting? What were you looking at as examples? What were you reading that gave you a model for this type of vast, sweeping narrative history?

Jordan Schneider: To give a sense of what Ian does — one of my favorite scenes was Hirohito’s surrender speech, which covers 30 pages. First, there was a debate over whether or not to surrender in the first place. Then 10 pages of incredible palace drama — is there going to be a coup? Then, there was a coup, and it failed. Then the scene moves to NHK, and the phonograph is being placed, and the guy bows at the emperor’s photograph. Then you have these scenes all across Imperial Japan of different people responding to hearing the emperor’s voice in different ways.

The speech was in archaic Japanese, so people didn’t even know what it was saying. Some people decided, “Okay, if we’re going to surrender, then that means I need to do my final Kamikaze run.” Other people were saying, “Oh my God, thank God.”

It sounds overwhelming and kaleidoscopic, but it is actually one of the most incredible pieces of literature that I have consumed. Where does that all come from? How do you develop this skill?

Ian Toll: Well, I really appreciate the praise. It’s praise that keeps me going because this is hard work. I’ve been doing this full-time since 2002. That’s when I signed my first book contract. That’s 23 years, and I have four books to show for it. Part of the answer is that I take a lot of time. I throw a lot of work out. Probably a lot of that work is good, but it doesn’t work within the narrative pacing that I was going for. It’s a lot of following instinct.

I said in an author’s note that there’s room for innovation in this genre of historical narrative. It’s been a genre that has been trapped within certain ideas about narrative conventions — the idea that if you use the storytelling techniques of a novel or even a film, you might be compromising the scholarly purpose of the work. I don’t believe that’s true.

You can borrow from the techniques of novels or even films, in a way that may illuminate certain issues that you’re writing about, that may bring the reader closer to the way it felt for the participants to be there. I use research that I’ve accumulated over many years and have cast a very wide net to try to find material that hasn’t received as much attention as it should have in previous works.

Jordan Schneider: Let’s talk about that filmic quality.. There are these moments of terrific awe-inspiring beauty that you point to — these ships blowing up and these massive artillery barrages, the sunrise over Mount Fuji that the admirals see as they’re pulling into the harbor, about to accept the surrender of the Japanese and the way that they see that as this flag that they’ve been fighting against and finding on people’s corpses for the past six years.

Your book made me watch some more World War II Pacific movies, and I was disappointed, honestly, with what I saw relative to the incredible Technicolor visions that you and your narrative painted in my head. How did you develop that sensibility and when did it become clear to you that you needed to make sure that your readers have some of the images that were in these soldiers’ heads in ours as well?

Ian Toll: As I’m coming through these sources, I often zero in on these images, descriptions of images. One of the things you’ll find if you start reading Pacific War narratives again and again is that you will have an American from Illinois who had never traveled beyond a few miles where he was born, seeing these extraordinary things in the Pacific, this exotic, remote part of the world.

Often they’d describe the sunsets, and you’d get a sense that they are having a sublime, ineffable experience seeing these things. That grabs my attention when I see it. Then I want the reader to see that image, but then also get a sense of how that felt for people who had not traveled widely before being thrown into this extraordinary war.

On that subject, there’s a whole genre of wartime art. You have talented watercolorists working on a destroyer who took a sketchbook along and brought back images, which are particularly important because you weren’t permitted to take a camera with you in the Pacific War. You had to have special authorization to have a camera. The art sometimes is useful to see the war through the eyes of the people who were there.

Those aspects of the Pacific War narratives always jumped off the page for me. Then I tried to in turn weave them into the narratives.

Jordan Schneider: There’s beauty and there’s also horror. You spend a lot of time describing deaths. Even when people aren’t literally dying, the smell of some of these battlefields and the smell of the corpses is another thing that’s going to live with me for a while. That contrast struck me — these incredible sunsets and these spectacular displays of mechanical might and fleets that are extending farther than the eye can see. Then every once in a while, they blow up and people die horrific deaths because of what all these machines can do. How did you try to do justice to that as well?

Ian Toll: In the case of the Pacific War or any other war, really any other aspect of World War II, there’s plenty of carnage in the historical record. These things happened. The challenge becomes describing those in a way that gives the reader a sense of what it was like to be there. You’re right about the smell — that’s another thing that just jumps off the page. If someone describes a smell, whether it’s the awful smells that you get on a battlefield or even the smell of flowers on a beach, those tend to leap out at me, and then I try to find a way to work those in.

We have five senses. If you can get three out of four of the physical senses into a description of a battle scene, you’re able to reach the reader through more than one route. Those images, those impressions, tend to build on themselves. If you can get many of them into a narrative — not doing what a novelist does where you make it up, you need to pull these details from first-hand accounts that are reliable — but if you get many of them, that tends to build to where the reader gets a sense of what it was like to be there.

Jordan Schneider: This is my big note for the Chip Wars revised edition. Chris, we need more smell in it.

Chris Miller: You know, the place that really stood out for me in the book was on Iwo Jima, which everyone knows is this absolute bloodbath. But the discussion of the sulfuric volcanic ash all around in these subterranean caves — you got smells and also tastes, talking about the water being sulfuric in its taste. It felt like I was walking into Mordor, but it wasn’t made up in Tolkien’s mind. It was a hellhole on Earth.

Jordan Schneider: The smell and the taste that’s going to live with me forever is the Enola Gay dropping the bomb and the pilots tasting metal because of the radiation. They hadn’t looked back, but they knew that the bomb had gone off because they felt it in their molars. What more can you ask for from a historian?

Ian Toll: That detail really grabbed my attention too. That’s in one of the pilot accounts, I believe. You had this electric taste in your mouth from the explosion, from the bomb. They noticed that at the Trinity test, the first atomic bomb test in New Mexico, as well.

Chris Miller: You have these juxtapositions of extraordinary heroism and extraordinary barbarism on both sides. A lot of military histories tend in one direction or the other and don’t balance out both. You show them both being constantly present in different ways, competing impulses. Can you walk us through the ethics of what you’re recounting and how you, as a historian, try to properly balance these two competing impulses?

Ian Toll: You mean the impulses to acknowledge the humanity and suffering of the enemy — it’s part of what makes good war histories memorable, is that you have a situation in which it’s impossible for people on the battlefield not to feel a sense of hatred toward the enemy. This is murder on a mass organized scale. Then you have a war like the Pacific War, where, in some ways, that hatred reached a pitch that we haven’t seen, at least in any other American war — this dehumanization and hatred that was felt. Much of it was justified, honestly.

To evoke that for the reader, that sense of hatred, that sense that many Americans had that the Japanese were somehow less than fully human and that this justified wiping out their cities — to feel that in a visceral way for the reader because of the way you’ve shown how the war was experienced by the Americans who experienced it, by the POWs, by the civilians who were caught in the war zone in the way of rampaging Japanese armies. But then at the same time to acknowledge, to fully understand the humanity of the Japanese and the suffering of the Japanese.

It comes down to weaving these different perspectives together into one integrated narrative. Many others have done it well — such as John Toland’s book, The Rising Sun, which I recommend. He was one of the first to write the history of that war from the Japanese perspective in a way that was broadly sympathetic to the Japanese people and their suffering, while acknowledging that the Japanese militarists had tyrannized and abused that country and eventually brought on the immense suffering of 1944 and 1945.

The Kamikaze — A Problem of Scale

Jordan Schneider: The kamikaze dynamics that we get into in 1944 and 1945 are some of the most artful sections. The training system for Japanese airmen was incredibly selective, where a thousand people joined and only a hundred made it out the other side.

That led to this very elite core of fighter pilots, but ultimately, they were short of decent pilots such that pilots were so useless by 1942 and 1943 that the most efficient tactical maneuver to spend the least steel to deal the most damage on American ships was to use pilots as the 1940s version of guided homing missiles. It’s much easier to teach someone to fly into a plane than it is to dogfight with a Zero.

On one hand, it makes sense. On the other hand, you’re sending people to their deaths. On a lot of these missions, which aren’t literally suicide missions, you have Americans who are at some level doing the same thing, with flights that go off carriers where 12 planes go out and one or two make it back. But there is something that is particularly resonant and horrific about Kamikaze flights. My guess is, 500 years from now, if people are talking about anything when it comes to the Pacific War, the Kamikaze flights are going to be one of the three lines that people still remember.

How did you approach that? What are the different aspects of the story that you wanted to hit as you were describing the different parts of the Kamikaze story?

Ian Toll: The Japanese had trained what may have been pound for pound the best cadre of carrier pilots in the world at the beginning of the war. They were superb. There had been a national selection process, extremely difficult — tougher than getting into Stanford today — for getting accepted to naval pilot training in 1939-1940. Then they went through this extremely rigorous pilot training process that built these superb pilots. But they never thought seriously in Japan about the problem of expanding that training pipeline to produce many more pilots in order to fight a war on the scale of the Pacific War.

When their first team of pilots was killed off in 1942-43, with few left by 1944, they did not have a next generation of pilots to come in and carry on the fight. The decision to deploy Kamikazes on a mass scale was tactically correct in a sense. If you have pilots who you cannot afford to train — you don’t have the time, the fuel, the resources to train pilots to effectively attack ships using conventional dive bombing attacks, conventional aerial torpedo attacks, the kinds of attacks that the Japanese had used effectively in the early part of the war — then maybe what you do is train the pilot to fly a plane with a bomb attached to it into a ship like a guided missile. Maybe that’s simply the best tactical use of the resource that you have.

That is ultimately what persuaded the Japanese to go ahead and deploy Kamikazes on basically their entire air war — their entire air war was a Kamikaze war in the last year of the war. Then you have, on top of that, this question of the morality of sending 20-, 21-, 22-year-old men to their certain deaths in this situation.

The part of the story that has been neglected and forgotten in the West is that this was immensely controversial, even in Japan. The Kamikazes came to be revered. But at the outset, even within the military, within the Navy — the Navy was mainly the Kamikaze service that launched the Kamikazes — there was immense opposition to this within the ranks of the Japanese Navy. It took time for this to be accepted, but this was the way they were going to fight this war.

Trying to understand what it was like to be a Kamikaze pilot, to draw upon these letters and diaries that have been published, many of them in English, but then also what it did to the crew of a US ship to know that they were under this kind of attack. The unique sense of horror that they felt operating off of Okinawa in particular — the height of the Kamikaze campaign — where 34 ships were sunk, and many more were badly damaged with US Navy casualties running well into the thousands. Certainly, more Navy personnel were killed than Army or Marines at the Battle of Okinawa, as bad as the ground fighting was. That unique sense of horror and loathing that they felt as these planes came in making beelines, flying suicide runs, and doing terrible damage.

Chris Miller: I was struck by the other facet of how the Kamikazes emerged. There’s the logic of how you most efficiently use your limited number of airplanes and pilots to sink ships. But it also seemed like the Japanese army and all of its island defenses were pursuing a Kamikaze strategy. In all these island campaigns, 90% plus of the Japanese garrisons were killed. They would start the battle knowing they would lose, but trying to exact as much punishment as they could, which at a strategic level is rational, but tactically a brutal way to fight a campaign.

I found myself wondering, did the Japanese army have its own version of the Kamikaze mentality? Was the entire war effort on Japan’s side suicidal after 1942? It was obvious to everyone that the production differences were large enough that Japan would definitely lose. Is there something to that analysis?

Ian Toll: Absolutely. You could say that Kamikazes are a metaphor for the entire project of Imperial Japan, particularly after Midway and Guadalcanal when we reached the second half of the Pacific War, when it was clear that Japan was going to lose the war. Whatever that meant — losing could be many different versions of losing the war. But historians have traced a cultural change that occurred in the Japanese military after the Russo-Japanese War and then after the First World War, in which the Japanese Army leadership convinced itself, “We have got to do something about this problem of our soldiers surrendering. That’s not acceptable.”

They actually altered the military manuals and the standing orders to say, “You shall not surrender in any circumstance. There will never be any surrender in the Japanese Army.” That was a very fateful decision because once you’ve put your soldiers in that situation, which they know they’re not going to survive, that they’re going to fight to the last man, that alters the psychology on the battlefield and leads inevitably to a much more brutal environment.

On one island after another, starting most famously on the Aleutian island of Attu in the spring of 1943, you had entire Japanese garrisons fighting and dying to the last man. This being celebrated in Japan by a press that was being very closely guided and censored by the regime, building in Japan a sense that this is an extraordinary act of bravery, of commitment, of fanaticism that the allies, the Americans, would never be able to match.

This was going to be the secret weapon for the Japanese, showing that they were willing to make much greater sacrifices than their enemies were.

As the war went on and US forces drew closer to Japan, the story changed to, “This is how we’re going to protect the homeland. We’re going to show the Americans that the cost of invading our homeland, of trying to occupy our homeland, is so great that they won't want to pay it.” It became a question of whether they could force the Americans to the negotiating table to resolve this conflict in a way in which Japan would have to acknowledge its defeat. That would mean giving up some portion of its overseas empire, but preserving its emperor system and keeping American and allied troops out of Japanese territory. That became a driving obsession of the Japanese leadership in the last year and a half of the war.

These fanatical demonstrations, fighting to the last man on one island after another, the Kamikazes, all became a kind of theater. A way of showing the Americans, “This is what you’re dealing with. We’re different from other people. We’re willing to die — the whole country will die to the last man, woman, and child if necessary.” Wouldn’t it be better to sit down and negotiate some solution to this war, which leaves us with some vestige of the Imperial project intact?

Inside Japan’s Imperial Project

Jordan Schneider: There’s of course the irony that by the time the Americans land, MacArthur says, “Actually, when we got here, we were taking a big bet that they wouldn’t want to fight anymore.” Somehow, someone snapped a finger and the rebellion turned off, or we would be in trouble. We didn’t have enough troops to do this. But the fact was, once the war was done, the war was done. The only people still fighting were five guys in the hills of the Philippines who just didn’t get the message or something.

Another contrast is why Nazi Germany took it to the end and why the Japanese took it to the end. With Nazi Germany, it was one guy and all the generals. Definitely by late 1944, you had a whole plot. Everyone saw the writing on the wall, and there was a wide consensus — enough to have a whole conspiracy. You had these back-channel feelers to the English. But because of the lack of a focal point and because you had a consensus, even though you had dissenting voices, they weren’t able to mobilize even as much as the Operation Valkyrie folks were.

You have this thesis in Japan of, “If we just show them how crazy we are, then they’ll come to the negotiating table.” But they never really tried to do the negotiating in the first place, aside from this conversation with the Soviets, which anyone really could have seen wasn’t actually going anywhere.

Let’s talk about elite Japanese politics as well, starting in the second half of the war. Even though everyone was doing these suicide missions, even though everyone knew they were on this national suicide mission by 1943, a few million more people had to die before we got to the inevitable conclusion. Why is that?

Ian Toll: To understand what was happening in Japan’s ruling circle in the last year of the war, it’s necessary to go back to the beginning of the 1930s and understand how Japan descended into militarist tyranny. The story is one of extraordinary turmoil, chaos, revolutionary energy, assassinations, uprisings, and almost a complete breakdown of discipline within the ranks of the army, but also the Navy.

Again and again, hot-headed extremist officers and factions of younger mid-ranking officers threatened the Japanese leadership at gunpoint, forcing a much more right-wing, fanatical, imperialist, and aggressive foreign and domestic policy. Increasingly, the generals and admirals were running every aspect of military, foreign, and domestic affairs. The army took over the Japanese education system in the 1930s.

What happened with the China incident — the beginning of the Second Sino-Japanese War in 1937 — and then the attack on Pearl Harbor and the war with Great Britain and the US beginning in 1941, was that these large foreign wars tended to heal, or at least stabilize, this domestic turmoil within Japan.

The leadership saw war as a way to maintain a fragile peace and stability within a society that was in many ways very revolutionary.

As you approach the end of the Pacific War, the problem isn’t whether to surrender or not. The problem is that whatever Japan did as a country — if they surrendered, if they initiated negotiations, if they tried to use diplomacy to get out of this war — there was the threat of a resumption of these assassinations, a civil war. You could have a civil war between different elements within the Army. You could have fighting between the Army and the Navy. This was seen in Japan as a real danger.

To complicate the picture even more, in the US we had a window — imperfect, but we had a window — into what was happening within the ruling circle in Japan because we were reading their diplomatic mail. We had broken their codes, communications between the foreign ministry in Tokyo and Japanese embassies throughout the world. We were intercepting those messages, decoding them, and reading them.

We were aware that the Japanese, by the spring of 1945, had seen their last hope as bringing Stalin and the Soviet government in to mediate between the US and Great Britain. The Japanese had a historical precedent for this. The end of the Russo-Japanese War ended with a negotiated peace between Russia and Japan, which had been mediated by the US. Theodore Roosevelt won a Nobel Prize for Peace for that mediation.

They were trying to replicate what they had seen as the acceptable end to the Russo-Japanese War — a negotiated settlement which allowed them to maintain and build their empire. Here, they would like to try to negotiate a truce. They were deeply divided within the ruling circle over what such a negotiated arrangement might look like. But the point often forgotten in the West is that it wasn’t just a division — it was a fear of a descent into complete chaos and civil war, which would make it impossible for the Japanese government to do anything in an organized way.

Our leaders understood enough of that dynamic that we saw the necessity of strengthening the peace faction within the ruling circle, and neutralizing the Army in particular, which wanted to fight on. The atomic bomb became a means to that end.

Chris Miller: But the violence of Japanese politics in the ’20s and ’30s ends up seeming like a really important driver of the violence of Japan’s war effort and even the suicide dynamics that we just discussed. You get some of that in Japanese army politics in the ’20s and ’30s as well. It’s almost as if the Japanese army took over the entire country not just in terms of running the schools, but in terms of running the culture to a substantial degree.

Jordan Schneider: Yamamoto famously was doing his best to talk everyone out of bombing Pearl Harbor. But then at a certain point, he says, “All right, you guys are dumb enough to do it. Might as well do the dumb thing the smart way.”

The thing that strikes me about the tension of this narrative history is that once you get to Pearl Harbor and the American political reaction to it, that is your turning point — America’s decision to fight this war in the first place. Regardless of whether Midway had gone this or that way, if the Marines had gotten kicked off of Guadalcanal, you have such an enormous material imbalance between the Americans and the Japanese.

If, because of Japanese politics, you’re taking off the table Japan ever wanting to cash in their chips and negotiate, then it seems like a US victory was inevitable. What do you think about that inevitability question? If it’s all inevitable, aside from the human drama of the smells and the visuals, what is the point of spending so much time and energy studying the Pacific War?

Ian Toll: It’s an issue that will never be resolved. It’s the question of whether we want to take a determinist approach to understanding WWII. I probably lean a bit more toward the determinist way of thinking about it.

Winston Churchill, in his post-war memoir of WWII, had a famous passage in which, as soon as he had heard the news of the Japanese attack on Pearl Harbor, he said, “So we had won after all.” Meaning that this entire conflict, including the conflict with Nazi Germany, was now going to be settled. It was just a question of the proper application of military power. Now, that was written many years later. I think it was deliberately provocative in that mischievous, Churchillian way. But I do think it is true that before the attack on Pearl Harbor, you had a deeply divided political situation in Washington in which the isolationist movement was perhaps gaining strength in the fall of 1941.

This is a movement that had strength in both the Democratic and Republican parties. It had strength in every region. It was a formidable force in our politics, a sense of real moral fervor around the idea that we were not going to be dragged into a global war. After the attack on Pearl Harbor, that movement collapsed overnight. When I say overnight, I mean literally overnight. FDR asked for a declaration of war against Japan the day after the attack on Pearl Harbor. It passed both houses of Congress. I think there was one dissenting vote in the house. There was a unanimous vote in the Senate.

It does not go too far to say that this one decision the Japanese made to attack and launch a surprise attack at Pearl Harbor completely altered the domestic politics around going to war against Japan. Three days later, Hitler made the curious decision to declare war on the United States when we hadn’t declared war on him.

Then it was a global war, and the largest economy in the world — the economy with the greatest latent military power — was a combatant.

Not only were we combatant, but we had the broad public political consensus that we needed to quickly mobilize our economies for war, which we did. I think that was the turning point. It was the attack on Pearl Harbor and the reaction — the political reaction within the US — that really made it inevitable that not just Japan, but Nazi Germany would be finished within three to four years.

The one other major contingency is that the Soviets were able to stop the German attack on the Eastern Front and stabilize that war and survive long enough so that Allied supplies could get in, allowing them to turn the tide. If there had been some surrender on the Eastern Front, that could have taken the entire war, including the Pacific War, in a different direction.

“What Becomes of a General?”

Jordan Schneider: Let's talk about the generals and admirals, starting with Chester Nimitz…

Paid subscribers get early access to the rest of the conversation, where we discuss…

• The various command styles that shaped US military strategy in the Pacific,

• How General MacArthur and Admiral Halsey became media darlings —controlling public opinion and war politics in the process,

• The evolution of submarine warfare and Japanese defensive strategy,

• Counterfactuals, including a world where the Allies invaded Taiwan,

• Broader lessons for the future of warfare, especially in the Taiwan Strait.

Read more

The Schneider clan will be heading to the Bay Area from September 9 through the rest of the month. If you're interested in meeting up or doing a house swap with a two-bedroom in Manhattan, or just happen to have an empty apartment that can fit a few adults and a very cute baby, please do reach out to jordan@chinatalk.media.

Dan Wang at long last makes his solo ChinaTalk debut! We’re here to discuss and celebrate his first book, Breakneck.

We get into…

• Engineering states vs lawyerly societies,

• The competing legacies of the 1980s in China, One Child Policy and Tiananmen vs intellectual debate, cultural vibrancy, and rock and roll,

• Methods of knowing China, from the People’s Daily and Seeking Truth to on-the-ground research,

• How to compare the values of China’s convenient yet repressive society with the chaotic pluralism of the USA,

• What Li Qiang’s career post-Shanghai lockdowns can tell us about the value of loyalty vs competence in Xi’s China.

Listen now on your favorite podcast app.

From One-Child to Zero-COVID

Jordan Schneider: So Dan, you chose Robert Alter’s Hebrew Bible translation to sit next to your book. What can the Bible tell us about modern China?

Dan Wang: Something I wonder about is thinking less about the Old Testament, but more about the New Testament and the Catholic Church in particular. The Catholic Church and the Communist Party are very similar organizations, and it might be the case that the CCP and the Catholic Church will be enduring institutions that we’ll still find around 100 years from now — maybe even 500 years from now.

It’s no accident that the CCP resembles the Catholic Church, partly because, according to Kerry Brown, the Communist Party has spent an immense amount of effort trying to understand the Catholic Church. The Communist Party isn’t simply copying the Catholic Church, though. I understand the Communist Party to be a cross between the Catholic Church and the Sicilian Mafia, with this incredible sense of omertà and a very strong understanding that you can’t only be thugs. One has to build a church; one has to have an ideology. What we have is a very powerful Catholic Church in China that also has the omertà — that also has the gangsterism.

Jordan Schneider: One of the things I most admire about this book is how it looks forward multiple decades in a way that doesn’t bore me — unlike when someone like Peter Zeihan does it, talking about demographic destiny or geography. The way you incorporate different data points and pieces of context that you’ve absorbed over your years on this planet gives it weight that I take very seriously.

However, my critique is that you may have over-indexed on Xi and the Xi era, which at some point is going to end. Many of the forward-looking projections you have on the Chinese side are premised on whatever comes after Xi looking like what Xi was. Dan, how do you think about that issue?

Dan Wang: It’s interesting that you start by saying I may be over-indexed on Xi, because one strain of criticism I’ve seen is that maybe I’m under-indexed on Xi. In my central thesis of the engineering state, one can question whether Xi is really an engineer. On one hand, he is because he has a degree in chemical engineering from Tsinghua, but he also has a doctorate in Marxist economics, also from Tsinghua. There’s been debate about whether Xi is an engineer in the hydraulic mold set by Hu Jintao.

It’s very valid to consider that the China of the future will not look like the China of the present. In fact, we can guarantee it. But I have no confidence about what China of the future will look like in a post-Xi world. It could be that Xi Jinping represents someone like Chun Doo-hwan, South Korea’s dictator who intensified Park Chung-hee’s rule and triggered disaster as a result. Maybe someone who comes after Xi is an intensification of Xi in all aspects. Maybe it’s someone who looks quite different.

Given that we have to draw lines forward to some extent from what we have right now, I’m reluctant to assign a big rupture in China’s political traditions based on the idea that whoever replaces Xi might not end up looking like him.

Jordan Schneider: The story you focus on from the late 70s and 80s — which was a time in CCP history when you see more vibrancy, more lawyerly energy coming into the party — you focused on the most horrific, repressive arc of that period, which was the one-child policy and all the state invasion and suppression required to execute it.

But there are other stories you can tell about the late 70s and 80s that speak to many of the challenges you see in China today and project into China’s future. There’s the idea of a society that can create interesting cultural goods, party leadership that distrusts the people, bottom-up political innovation, economic innovation beyond what the state controls — and the state being more understanding of that than maybe it is today. How do you read that history beyond the universe that the one-child policy created?

Dan Wang: The 1980s were certainly China’s most interesting decade, and maybe it’s understudied and under-theorized. As you note, I spend quite a bit of time thinking about the one-child policy, and I didn’t quite grasp how brutal its enforcement was, partly because it was a while ago. The peak enforcement happened in the early 80s and then another wave in the late 90s, before both of our lifetimes. Much of the one-child policy enforcement focused mostly in rural areas, and we don’t have as many rural perspectives relative to elite urban perspectives.

That was one of the big stories of the 1980s. But you’re right — there were many other big stories. The 1980s is cited by many people, especially of my parents’ generation, as a decade when every question could have been asked inside Chinese society, inside the Communist Party. This was the decade of rock and roll. This was the decade when people really believed that China would have some degree of political liberalization.

Those questions kept persisting and might even have had a resolution different from how we know it resolved in June 1989, when the forces of liberalism were comprehensively crushed and the party took a pretty different direction. We could draw a different line from the 1980s, and maybe we should. But given that it ended with a really dramatic act of political repression and given that the conservative reformers — perhaps represented by Deng Xiaoping as well as Li Peng — had the upper hand, maybe the story is still more about politics than creativity.

Jordan Schneider: You have these two lines that capture the inverse of what the 1980s felt like. Someone you met in Chiang Mai who left China told you that contemporary China “feels like a space in which the ceiling keeps getting lower… To stay means that we have to walk around with our heads lowered and our backs hunched.” You also write that, “After six years in China, I missed pluralism. It’s wonderful for me to be in America now, in a society made up of many voices, not only an official register meant to speak over all the rest.”

The flip side of those two lines captures some spirit of what the 80s were like. I buy your argument that one side has won. They’ve been winning for the past 40-plus years. But even with the White Paper movement, there are still undercurrents that seem impossible to disappear.

Dan Wang: Absolutely. The currents are always out there. This is part of what makes people like Ian Johnson’s work really interesting. When he documents something like Mao’s quote that “a single spark can start a prairie fire (星星之火，可以燎原),” he’s absolutely right. It has become really difficult to comprehensively and decisively eliminate the forces of creativity — that desire for a different future. That’s always there and always worth supporting.

Jordan Schneider: As an aside, I went into this book thinking you wouldn’t tell me many new things — that I would get your takes, but not much fresh information. The one-child policy in particular was the section that I hadn’t fully internalized. The magnitude and personal horror attached to what that meant for tens of millions of people was striking. This goes to show why everyone should read the book and not just listen to all the podcasts Dan’s going to be on over the next few weeks.

It’s a book written for a mass-market audience, but it’s also something that every single listener of ChinaTalk will derive something new, unique, and insightful from — whether it’s from your historical work, the memoir sections, the travelogues, or the big thoughts.

It’s a remarkable achievement, and I want to congratulate you on it.

Dan Wang: Thank you, Jordan. I’ve used different registers, and you picked up on exactly that. My favorite chapter to write was unexpectedly the one-child policy, because I didn’t really expect that the emotional arc of the one-child policy still produces so much anger in people. Many normally temperate people in China would be driven to a froth of rage when they remember that era. We all know a lot about Zero COVID, which is also one of the social engineering projects I write about. But the one-child policy is understudied and perhaps under-theorized.

Jordan Schneider: This is striking because we have many folks from the mainland who moved here, and there are many Chinese Americans too. Chinese Americans have siblings, but mainlanders who’ve moved here over the past 30 years basically don’t. It’s wild to have an entire generation — for literally all of human history, you have total fertility rates above 2 — and for it to go below that in such an intrusive and brutal way. Not in a slow fade you’re seeing in South Korea, but something truly heart-wrenching.

Dan Wang: I had a really interesting conversation with someone who read that chapter recently — someone who was adopted himself in the US Pacific Northwest. We’re of similar ages. One of the things he told me when he read my chapter was that when he was growing up in the late 80s and early 90s, he would sometimes go to gatherings with other adopted children. A majority of the adopted children you could find in the US Pacific Northwest were Chinese girls. This is another one of those things that unless you have some experience here, is much less vivid than you might imagine.

Jordan Schneider: It’s the ghosts of all these lives that weren’t lived. What was it, something like 40 million?

Dan Wang: That’s the best estimate right now. We still don’t have a really comprehensive consensus on exactly how many lives the one-child policy cost, partly because the data is sketchy and it’s difficult to draw these hypotheticals. According to the Communist Party, state propaganda claims that the one-child policy averted something like 400 million births. That seems to be subject to strange extrapolation that not all demographers accept.

Some demographers say that the one-child policy was pure brutality without substantially affecting the birth rate in China. Even on this crucial period — and I acknowledge this in my book — it has become difficult to figure out exactly how many births the one-child policy era averted. But based on some of the more accepted scholarly estimates, there are 40 million Chinese girls. The femicide produced by the one-child policy was very intense, with families forced to keep boys and forced to discard their infant girls.

Jordan Schneider: I don’t know if I have a transition for that. It makes me think of the Bible. I have a new one-year-old, which you were just holding for a while, and reading that chapter in the context of now being a parent hit differently. You tell these truly horrific stories — you only give two paragraphs about some bureaucrat who was the “worst performing” when it came to births and decided “we’re not having births for a month.” There were abortions on the delivery table.

It felt cliché where everyone says, “Oh, the way you read the news and see the world is going to change when you have a child.” That chapter was maybe one of the first times where I experienced a piece of history or literature that sat with me in a different way. I don’t know if I want to thank you for that?

Dan Wang: Well, I thank you, Jordan, for letting me hold this extremely cute one-year-old. Part of what made this chapter difficult to write was that my wife suffered a miscarriage, coincidentally, just as I was writing this chapter. To think that it was a matter of state policy to have conducted over 300 million abortions — which is the official statistic from the National Health Commission — as well as many forced sterilizations, the brutality meted out against overwhelmingly female bodies. That was a challenge to think about, to try to place myself back in the 80s.

Methods of Knowing China

Jordan Schneider: …And we’re going to hard pivot. Methods of knowing. You’ve worked at a similar job that I had, covering Chinese policy at a very close, full-time clip. You’ve traveled around, you’ve read extensively, you slowed down and hung out in Michigan, looked at a pretty view, and wrote a book. You explore different levels in this book as well. I guess the answer is all of the above, right? Because it’s your revealed preference. But what are the limits of those different methods of exploring the world that you’ve used that ended up creating this book?

Dan Wang: There’s never enough information and sourcing about anything to satisfy even the most niche-specific question. This is something you know as an analyst or researcher. No matter how narrowly you try to define your research task, you’ll find that the literature is endless. Many people have covered this, and yet what they have is also totally incomplete.

I didn’t try to be overly formalist in my study of China. One could spend a lot of time thinking about everything Xi Jinping said. One could simply travel around the country and talk to people and experience how life differs between, say, Shenzhen and Guizhou. One could hang out mostly in Shanghai and try to be an analyst, figure out data, and talk to business executives.

I decided that I was going to do all of the above. I was going to read every speech published in Seeking Truth 求是, the party’s main theory magazine. I was going to read some of the necessary documents, but I wasn’t going to read every issue of People’s Daily. That would be madness. Thank you to the people who do this work — you’re doing God’s work. Not really for me, but I’m glad there are people synthesizing all of this excellent work.

I decided that I had to spend considerable time traveling around the country to physically see some of the ways Guizhou is improving through the build-out of better airports, better train stations, and bigger bridges. I decided that I had to spend time talking to folks in Beijing and Shanghai — the capital for politics, the business center for how executives think about the world. I did my best to try to be synthetic and not let any single perspective override the others, but to be as synthetic and comprehensive as possible, to produce whatever mix it ends up being.

Jordan Schneider: Not to praise you too much, but many people can choose to spend their time spreading their bets across different modalities of knowledge. Your ability to abstract away to get to the aphorisms and provocations while also being able to go levels down and levels up is what makes you a unique mind. But I’m going to stop giving you compliments.

Dan Wang: This is your show — you can give me all the compliments you want. The most important thing is to tread softly and lightly. Sometimes you need to dip deeper into a particular pond, but otherwise, maybe you should just be out there figuring out new ways to explore different areas.

Jordan Schneider: Maybe this is just me talking about myself, but going deeper and narrower seems easier to be useful and interesting, versus trying to do the big synthetic thing you did with this book, which is a higher degree of difficulty.

Over the long scope of ChinaTalk, I’m trying to think over a multi-decade horizon. But you’ve shown me what it actually means to do that in this book. You showed me a different way of going even further out, to levels of abstraction in a way that’s still interesting. Maybe the biggest provocation I’ll take from this is to try to think more at that level.

Dan Wang: Shucks, this is too many compliments, Jordan.

Do Books Matter?

Jordan Schneider: All right, let’s get some critiques. Your grandfather was in the PLA during the China-Vietnam War, and he was a propaganda officer. His job was dropping leaflets on Vietnamese troops urging them to resist. That, in retrospect, sounded laughable because these guys had just fought foreign colonialists for 30 years. What was a leaflet written in shitty Vietnamese going to do to them? But you think books matter?

Dan Wang: Books do matter. Maybe books matter a little less than they used to, but even if books are declining in importance, authors are gaining in importance. Especially if we are in the age of AI, as we seem to be, authors are gaining in importance. Maybe some people are just going to be Viet Cong troops trying to resist whatever big idea is going to threaten to enter their field of vision. But it’s still important for us to try to create knowledge.

This is something I admire you for, Jordan — maintaining ChinaTalk after a rebrand, having done this for so long. You were one of the first China podcasts, right? To have persisted in this format that was novel is admirable as well. That’s something we should applaud you for. If leaflets aren’t very good, well, maybe podcasts are the answer. Thank you for taking us there.

Jordan Schneider: Speaking of podcasts, you recently did a show with Stephen Kotkin — two hours, excellent, everyone should take a listen. He spoke in a misty-eyed way at some point about the dream of authors — you write a book, it’s read one year from now, read 10 years from now, maybe even, God willing, read 50 years from now.

I found it ironic that you both brought up The Power Broker with him and had this whole nice riff in your book about The Power Broker having soured the minds of a generation of Democratic politicians. Square the circle for me, Dan.

Dan Wang: Such is the power of books. No one would describe The Power Broker as a mere leaflet, which is what I’ve written with Breakneck. But The Power Broker has certainly had tremendous influence. It’s one of several books that we can pinpoint as having created the lawyerly society. Robert Caro’s monumental work is subtitled Robert Moses and the Fall of New York.

Aside from The Power Broker, we can probably name Silent Spring by Rachel Carson, which is about pesticide use in the United States. There’s also Jane Jacobs’ The Death and Life of Great American Cities. Maybe we can toss in The Population Bomb by the Ehrlichs as well. These four works were very important in confronting the mistakes of the American engineering society throughout the 1950s — which sprayed too many pesticides, which rammed highways across too many urban neighborhoods, which had exhausted itself with these gigantic land wars in Asia. They presented a very useful corrective.

If we doubt the power of books, let’s look at The Power Broker, which just celebrated its 50th anniversary. Now, I certainly don’t have aspirations that Breakneck would be read 50 years from now. I don’t have many aspirations that it will be read one year from now. But having just a little bit more to work with to think about — it’s always going to be important to have a sense of mutual curiosity between the US and China. Even if we can get people interested for just one year, that’s very well worth doing.

Pluralism in China and America

Jordan Schneider: You brought us to America. I want to come back to this idea of pluralism that you brought up. I was having a conversation at some very fancy China meetup — is there any other kind? — which was mostly white people. One of these white people had lived in Shanghai for a very long time, had become very wealthy, was an investor, and a ChinaTalk listener. He asked me, “Jordan, why don’t you live in China?” My response was, “Well, I couldn’t do my show in China.” He said, “But you’d have such a great standard of living. You’d be a great McKinsey consultant.” (He’s wrong — I’d be a terrible McKinsey consultant.) “You could have three nurses and two house cleaners, and if you just didn’t make any trouble, then you could have a really great life there.”

Reflecting on why I left China — the proximate reason was COVID; I was outside when the country closed and couldn’t get back — but the reason why six years, which is how long you made it, probably would have been my shelf life too, is this idea of living in a pluralist society. Having the freedom to say what I want and talk to people openly who have very divergent opinions is just core to what living a good life means to me. What’s my question? Is this enough to win a cold war? Should we go there? Where do you want to go with pluralist society?

Dan Wang: Your attitude towards this former Shanghai resident — I probably have the same attitude. This is insufficient for a flourishing society. But let me acknowledge that certainly for many people, a life in Shanghai or perhaps another first-tier city in China — maybe we can throw in Hong Kong here — is desirable because it is very convenient. This is one of the words that many Chinese bring up — that life is just very fāngbiàn, very convenient, to be in one of these big Asian cities.

There’s no doubt that life is very fāngbiàn in Shanghai or Hong Kong. The subways work very well, there’s excellent public order, there are great ways to try out new bars and new restaurants. One could have a nanny from probably Indonesia or the Philippines if you’re living in a city like Singapore, maybe from inland China, from Anhui, if you’re living in Shanghai. There are many ways in which life in Shanghai, Singapore, Hong Kong, or other first-tier Chinese cities is just much more pleasant than in New York, where we’re chatting. Here, the subways are extraordinarily loud, the streets aren’t necessarily very orderly and clean.

We can accept all of these things. But what we also have in New York — and this is part of the reason that I’m drawn back to the US again — are bookstores. At these bookstores, one can find books very critical of the US government, very critical of both the Republicans as well as the Democrats, who have both made incredible errors. For the most part, though there have been some restrictions on protests under Trump’s regime in America right now, there still is broad latitude for people to protest all of his illegal or inhumane actions, and that is still very real. Protest culture online is also very real.

What I’m saying is that I hope we don’t have to choose. The United States should be able to have, at its present levels of tolerance of dissent, as well as very functional cities that have good subways, good bus systems, nice airports, and where people are able to get around and have a rate of improvement that doesn’t come at truly absurd financial costs. New York in particular has a really hard time building anything. I don’t see why we should have to choose between having bookstores and Port Authority bus terminals that are well renovated in less than five years — which is not within the current project as proposed by Governor Hochul right now. We don’t have to choose.

Certainly, I acknowledge that for many Chinese who move back, they really like having the convenience of their food delivered to them. They get to save quite a lot of money because their rent isn’t necessarily very high. Maybe they really don’t care to think much about politics or philosophy or ideals. But there are also plenty of Chinese who do crave these things. These are creative types — journalists, feminists, people who are interested in ideas. They’re really keen to make something of their lives in cities like New York. That’s something we should welcome here in the United States and allow them to pursue the sort of activity that is borderline impossible in China.

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Jordan Schneider: You mentioned convenience. You had a whole chapter about when China was the least convenient place in the world. I love this line:

I often think about the China Daily headline “Shanghai Has No Plans for City Lockdown.” It could be read in two ways. I first understood it as a denial that the city would impose a lockdown. I understand it now as a totally accurate explanation of what happened next: The city had made no plans for confining twenty-five million people to their homes for eight weeks.

Dan Wang: Yes.

Jordan Schneider: Breakneck written in 2019 is a much different book than Breakneck written in 2023, 2024, particularly because since 1989, we really had close to three decades of the state not really imposing on people’s lives — as long as you were Han — in a way that really wrecked what you expected a functioning middle-class, convenient urban life to be.

Dan Wang: That’s one of the scary things about the engineering state: the capability is always there to make a lot of people’s lives go off track in really big ways. Throughout the 1950s, under this earlier, more idealistic era of the pursuit of communism, maybe most of the 1950s was pretty good if you weren’t a landlord, if you weren’t a kulak. But then that terminated with Mao’s great famine, in which these quack agronomy techniques, as well as lies to the central government, terminated in a famine that killed perhaps 30 or 40 million people.

After we felt that Mao was chastened, he again unleashed the forces of total mayhem to plunge the country into the Cultural Revolution. That is perhaps not so much a typical move by engineers. Mao was much more of a poet — he was romantic, he was a warlord. That was his answer to “bombard the headquarters.” The next great trauma that the Communist Party visited was the one-child policy, which was mostly against the rural areas.

You’re right — it was good for about three decades, if you didn’t mind the steadily worsening repression from Xi Jinping, which closed off a lot of avenues for creative expression as well as dissent, both online and offline. Maybe it would have been good if you weren’t a Uyghur in Xinjiang, if you weren’t a Tibetan in Tibet.

Then everybody around the country was plunged into this pandemic control, the apotheosis of which was Shanghai — probably the greatest lockdown ever imposed in the history of humanity, when 25 million people were unable to leave their apartment compounds over the course of eight to 12 weeks in the spring of 2022. The government organized, in the early stages, no adequate food delivery to many families who went hungry so that parents could save food for their children. That was about two weeks of the Shanghai lockdown, in which the food situation was quite severe.

In the midst of all of this, you have four decades of astonishing growth from China, in which the country was growing at a rate of 8 or 9%. That created tremendous wealth, alleviated poverty, and made a lot of Chinese right now feel really good about what the country was able to accomplish. This is where I really want to grapple with both the good aspects as well as the bad aspects of China. Yes, it’s absolutely the case that the wealth creation here was astonishing. That has been much more impressive than what any other developing country was able to achieve — India, Indonesia, Brazil have not had the economic takeoff that China enjoyed that brought so many people out of misery and poverty.

At the same time, we have more novel forms of political repression that humanity has never seen before. Both of these trends are real, and they both have to be acknowledged.

Jordan Schneider: If there’s one thing that’s missing in the book, it’s the Xinjiang chapter. Given that each chapter has some personal connection or observation from you, I get it — maybe you just didn’t spend a lot of time in Xinjiang. The Yunnan arc which you portray is this happy, fun, free place where these minorities are in the mountains so they can get away with not actually doing a lockdown.

The Xinjiang arc has an engineering story there. There’s an engineering of the soul story, which is probably even more dramatic than the digital authoritarianism arc. It’s this idea that you can do to the Uyghurs what you did to all the other minorities — basically wave your hand enough and then they stop being minorities anymore. Do you want to do your analysis of that? Did it get left on the chopping block? How do you think about covering that story?

Dan Wang: You’re absolutely right that I try to cover the stories that I have some personal experience of, something like Zero COVID. You’re right that I’ve never been to Xinjiang. I wish I had the opportunity to go, but it was challenging because foreign nationals — I’m a Canadian citizen — are tracked more intensively. I never quite had the courage to spend time in Xinjiang and see things for myself. I was actively discouraged by some folks in Beijing from even attempting the trip.

I try to write about things that I could talk more knowledgeably about. There was no other reason that I left off Xinjiang. I wrote a little bit about the treatment of Tibetans, mostly going off journal articles that I synthesized into the book. But there were plenty of things left on the chopping block. I could have written more about the Three Gorges Dam, which is the world’s largest power plant and displaced about a million people in China’s southwest. I could have written more about all aspects of social and digital control that people in China have to go through.

But I also wanted to write a relatively short book. My book is under 300 pages, and I wanted to hear that people criticized that I wrote a book that was too short by 100 pages, rather than a book that was too long by 100 or 200 pages. That’s where I chose to land and that was the side I chose to err on. But certainly if I had the ability to do some reporting and if I did take a look at this analysis, I would have written much more about the ethno-religious oppression that took place mostly under Xi.

Jordan Schneider: You did cram in a lot of good writing. Some quotes:

The Chinese government often resembles a crew of skilled firefighters who douse blazes they themselves ignited.

The engineering state can be awfully literal-minded. Sometimes, it feels like China’s leadership is made up entirely of hydraulic engineers, who view the economy and society as liquid flows, as if all human activity — from mass production to reproduction — can be directed, restricted, increased, or blocked with the same ease as turning a series of valves.

What’s the point of good writing? You could have done this faster, presumably, without having nice sentences and extended metaphors.

Dan Wang: I write for one reason, which is pleasure. In my daily life, all of us must attend to our daily pleasures, and that’s going to be very important. I don’t read that much poetry, although I expect that I want to. But I spend a lot of time thinking about the voluptuous beauty of Italian comic opera. I take a lot of inspiration from the cadences and beats of composers like Mozart and Rossini and Bellini and Donizetti and Verdi. There has to be something important about if you’re going to write any sentence at all, why not make it beautiful and readable and full of cadence and full of splendor?

Jordan Schneider: We’re going to do a few more.

“As more Americans retreat into a digital phantasm, Xi will be shepherding Chinese through the physical world to make babies, make steel, and make semiconductors.”

“When Song assured China’s leadership that the population trajectories could be as firmly controlled as missile trajectories, they listened.”

“Skeptics of a one-child policy were making population projections with the aid of an abacus or a handheld calculator. Song Jian presented his group’s projections in precise machine-generated lines on graph paper; other groups drew uneven squiggles by hand. It wasn’t even a fair fight.”

Dan Wang: What does beauty mean to you, Jordan? How do you practice it? How do you try to enact it in your interviews, in your podcasting and your writing?

Jordan Schneider: I don’t know. I feel really sloppy and I guess I’m okay with that. It’s not something I spend a lot of time cultivating. We’re gonna have 200-plus newsletters this year. That means I’m not laboring over every sentence. Every once in a while I do, and then I think, “Oh wait, but if I do this, the output changes and it won’t be as much."

The subtext, the psychological undercurrent of why I do so many shows and write so fast is to quiet my brain. I’m scared of silence and the contemplation that’s necessary to do something this considered. Or maybe there’s just too much ADD to do writing like this. But yeah, I should give it a shot every Thursday — slow down and try to actually write something really worth reading.

Dan Wang: Sometimes it’s really important, Jordan, to have a pause.

Mao 70% Right, Xi 60% Right…

Jordan Schneider: Xi Jinping, 60% right? Derek Thompson says that Trump is a great assignment editor. Is it too early to give him a percentage? Because I do feel like a fair amount of the stuff he’s gesturing towards is adjacent to the critique of this lawyerly society. He’s Nietzschean and beyond law in a certain profound sense, right?

Dan Wang: I call Xi Jinping 60% correct on everything for two reasons. Many of Xi’s motivations for trying to restrain the debt of property developers or to examine some of the anti-competitive behaviors of internet companies in China — these are completely valid and well-reasoned motivations. It’s just that often the solution, Beijing’s solution, is often worse than whatever scary problem China has. I also assign Xi to be 60% correct on everything, partly because Deng Xiaoping assigned Mao Zedong to be 70% correct on everything (三七开定论). Xi would be the last person to put up his hand to say that he’s better than Chairman Mao in anything. So 60% correct for Xi.

Jordan Schneider: Pretty good, but 70% is high for Mao.

Dan Wang: Well, that’s the official verdict of history.

Jordan Schneider: Okay, but what’s your number for Mao?

Dan Wang: Mao was probably 30% correct. That might be the right projection for Trump. It’s too early to say. We need to have Trump move on from this world before his successors can really assess his legacy and maybe give him something like 70% correct in most of the things he did. Perhaps we’ll have that. Who’s going to be the Deng Xiaoping of America, Jordan?

Jordan Schneider: …Amy Klobuchar?

Dan Wang: Maybe… probably not.

Jordan Schneider: I don’t know. Jake Paul? There’s no one man.

I departed the country with a better appreciation of the self-limiting features of the Chinese system. Most notably, the Communist Party distrusts and fears the Chinese people, limiting their potential for flourishing.

If you want to make the inverse of the argument that I made at the very beginning — if we’re presuming a party is still going to be there and we’re presuming that that party has still internalized the lessons of Gorbachev, who probably didn’t fear the Soviet people nearly as much as maybe he should have if he wanted to keep the party — the guarding, literally and figuratively, is a constant you can draw through not just the post-Mao folks, but really everyone. Even the Hu Yaobangs and the Zhao Ziyangs, the most liberal folks we’ve seen, still distrust and fear the people at some elemental level. To imagine a Chinese leader coming up through the party system who doesn’t have that in their core is hard for me to project forward.

Dan Wang: That’s absolutely right. Maybe the Chinese are looking at the United States and saying, “Well, in 2016, maybe the American elites should have feared their people a little bit more, and they didn’t have quite enough fear there.” That’s certainly a possibility. Yes, it’s going to be the case that the Chinese are never going to fully trust their people, or maybe even not trust them very much at all. This is one of the reasons that China will not have a flourishing liberal society by any stretch of the imagination.

If the Communist Party goes away, we would still have a party. If the Nationalists had won before they were ejected to Taiwan in 1949, we would still have a country nursing its grievances over imperialist incursions in the past, still very intent on achieving some degree of technological primacy over the rest of the world. They probably wouldn’t be trusting their people very extensively either.

I hope that China could develop a regime that does trust its people much more than they do now, because the Chinese people are such a lovable folk. Don’t you agree, Jordan? They can be extremely creative. Their memes are no less than what American 20-year-olds and 14-year-olds are able to produce online. There’s so much wordplay with the Chinese language. There’s a lot of joking throughout China. The Chinese are very funny. People in Yunnan are very funny, which is my heritage. People in Beijing are very funny. The people in Shanghai… maybe not so funny, but most people everywhere else can be very funny.

I wish that the regime could recognize that it has a lot of people who have wonderful, creative spirits who are going to have great memes all day long. They’re going to create wonderful pieces of artwork and literature and all sorts of great shows, great movies. If they had that opportunity, they would have all sorts of wonderful jokes that they could play on us. I’m really optimistic that the spirit of the Chinese teenager is indomitable, just as the spirit of the American teenager is completely indomitable. It’s only that one of them is very actively suppressed by the state and the other is not.

Jordan Schneider: The one line I disagree with was when you say, “I missed the ambient friendliness of Americans,” as if you didn’t get that in China. I moved through the country in a different way than you did with my face, but it was still very friendly. That’s one of the things that will never leave me. You mentioned it at a different point in the book, talking about why this is the destination of choice for so many Chinese. It’s not just because it’s rich and a land of opportunity, but the cultural overlaps in terms of entrepreneurship and ease of engagement with other folks are really profound.

Dan Wang: Well, I would say that you do have a good face, and I wouldn’t sell it short. I have a different face. Not all of us can be so blessed. Certainly there is ambient friendliness in China. But there can also be an ambient “get in your face about your business” sense. There’s sometimes an ambient aggressiveness and pushiness in China, as there is in the US as well.

This is more stark to me because I spent some time in Europe. I just traveled to Europe for two months and we were mostly in Denmark. One of the things we hear about Danish folks is that they have a really hard time making friends after high school. You would have your friends from elementary school, some friends from university, maybe some friends you made when traveling to the United States. But after that, people have enough friends. They’re good. People travel around in roving packs to the bar and then they don’t really socialize with the other roving packs at the Danish bar.

It’s much easier to have a conversation with someone on the bus in New York, on the street in New York, walking around, and they don’t get up so much in your business. You’re right that there’s absolutely a lot of ambient friendliness in China. That’s one of the things I really enjoy about the place. But the flip side of that coin is that they can really get up in your business. How often are you asked as soon as you meet a new Chinese person — Are you married? How many children do you have? What’s your salary? Sometimes I don’t really feel like answering those questions. It’s a bit odd.

Jordan Schneider: The ambient anxiety as well is something very different in the US. Even when you have these think pieces about how people can’t afford rent and life is terrible, it’s not a nationally defining thing in the US the way modern anxieties are in China.

Dan Wang: This is certainly one of the many reasons I am glad that I did not grow up in China, especially not as a woman, because the pressure that women face in China is completely insane. It’s not only workplace stuff. In the workplace, you and I both know that Chinese women are many of the most capable people. They do most of the work; often they are the most efficient people in every organization and they are consistently passed over for leadership because they are not a guy. China really doesn’t treat women very well in the workplace.

Then imagine the pressure you face once you are seeing your neighbors or even worse, family over the most important Chinese holiday. Over Lunar New Year, every woman is asked one question. To the single: Are you married yet? To the married: When will you have children? It feels like, unless a woman has produced at least one child and at least one son, then she will not have broader respect within the family. Chinese women are consistently the most undervalued people, and they are the ones who should be elevated the most.

Generally, China is just a high-pressure society where one does need a little bit of pushiness to get ahead. That can sometimes be pretty wearing once you’ve spent enough time in China, because the pushiness is not really wonderful. The overworked aspects of a lot of people — 996 is real for a segment of the population who work from nine to nine, six days a week. Then they go home and face a lot of family pressures. Many people don’t have an easy time being able to afford their apartments in Shanghai or Beijing. It’s a high-pressure environment. That’s one of these things where you come to the US, you’re left alone. You go to Florida or Texas, and people aggressively leave you alone. That’s something I crave after being over there for a while.

Jordan Schneider: The pushiness of both the one-child policy stuff and now the party telling you that you need to have more kids is just — you have a number of these Orwellian flips which you document in modern society. That’s one of them. The other, of course, is COVID being this thing that would kill you and is worth not getting your cancer treatment in order to prevent, to “Oh, it’s a flu — and by the way, you don’t even need ibuprofen to get through, much less a vaccine, much less a Moderna vaccine."

You see echoes of it in the US sometimes, where Trump says, “Oh, don’t care about Epstein anymore.” But it doesn’t work really to completely turn on a gravity distortion field and just say when you were saying A is A one day, to say B is A the next day. That’s another benefit of a pluralist society — to have people, to have noise that pushes back on that.

Dan Wang: Well, this is what engineers do. They tell you for a while, “You must not have more than one child,” to “You really should have three children.” To hear that COVID is this life-threatening thing and it is our national duty to prevent any transmissions, to “Oh, it’s not that big of a deal.” This is how engineers treat society — they swerve really suddenly every so often. At some point, that is going to give people very severe whiplash.

Jordan Schneider: “Beijing has been taking the future dead seriously for the past four decades. That is why they will not out-compete the United States.” What a line!

Dan Wang: The country that will outperform in the world has a sense of humor, and Beijing has the least sense of humor of all of them — at least official Beijing. Unofficial Beijing is very humorous. One of my favorite recent pieces is a gag where Alex Boyd, who is part of Asia Society, found and translated this page of official jokes from Xi Jinping.

You can read some of these jokes from Xi Jinping himself and decide how many of them are actually funny. Humor with Chinese characteristics isn’t really going to knock us off our feet. I prefer the superpower that isn’t taking the future with such seriousness. By taking the future with such gravity — this is one of the great insights from Stephen Kotkin — there is this apocalyptic sense in communist systems. You liberalize a little bit, you slip out a little bit, and somehow the entire system will collapse. Every day becomes an apocalyptic, life-or-death struggle for the Communist Party. That sort of system will end up being fairly brittle.

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Jordan Schneider: Another quote:

Engineers don’t know how to persuade. The Communist Party insists on a history in which the party is always correct and where all errors come from traitors or foreigners, rather than acknowledging fault and telling persuasive stories. The instinct of the engineering state is simply to censor alternative narratives. Xi comes off as someone who is a little too eager for groveling respect from the rest of the world, which is exactly why he’ll never get it.

Dan Wang: Yes.

Jordan Schneider: The other Kotkin-esque moment you highlighted is this idea that Li Qiang, who was the mayor of Shanghai initially, was one of the people trying to keep his city more open. But once it came down to it and he got the order, he implemented the biggest lockdown in human history. He became the most reviled local politician in the entire country, and then he got the biggest promotion anyone can get — to be premier. It’s such a reminder that while China is a country where people are promoted on performance at some level, once you reach the top rungs of power, it’s about loyalty. This man delivered on what he was told to do, even when it came at what would be considerable political cost in a democratic society. This is still a crazy system we’re dealing with — that’s not political logic.

You make the point that basically every party in the world that was in charge during COVID lost votes after COVID ended because people were upset about that time in their lives. But to have the emblem of bad Omicron-era COVID policy now be someone people are going to see on their TV for the next five years — this is remarkable.

Dan Wang: Well, maybe he’s going to be squeezed out of TV because he seems to be a remarkably weak premier by the standards of Chinese premiers. You’re absolutely right that in every pandemic country, the ruling party lost vote shares. It’s only in China that the most hated emblem of zero-COVID restrictions gets promoted to the top — the highest any politician could go under Xi.

Jordan Schneider: The idea that Kamala would have Fauci as her running mate is basically what we’re talking about.

Dan Wang: Yes, that would be quite something, wouldn’t it? This surely degrades and erodes some of the competence of other people inside the Politburo and Central Committee, because there were plenty of people who perhaps administered their cities more effectively with pandemic control policies.

One could debate how effective Li Qiang was. One could say he did his best trying to resist a very fierce lockdown, and then when that shifted, he was in charge with another vice premier of implementing that lockdown. Maybe he simply followed orders and did the best job he could. But certainly, I wouldn’t have expected after the Shanghai lockdown that Li Qiang, who was one of Xi’s protégés, would be promoted to anything as high as premier within the Chinese system. For him to become premier must surely have bred considerable resentment within his peers who looked at what an awful job he perhaps did. You can maybe debate that, but Li Qiang certainly created a lot of misery. For them to see this guy vault over them in terms of party hierarchy cannot feel good for other cadres.

Cold War 2.0?

Jordan Schneider: You’ve got Rickover, Moses, and Eisenhower as Americans you’re shouting out — all perhaps peaked in the 1950s or early 1960s, all products of Cold War America. Moses was doing his thing even in the ’30s, but there’s a narrative that was maybe a little more prominent in American politics a year or two ago: that Cold War framing is the thing that will get the US out of its engineering rut. We will do big things because now we have another adversary, and we’ll break eggs and build amazing stuff again because we have a new replacement for the Soviet Union. You’re still hopeful, though, that we can get there, even if this isn’t the defining framework for America for the next few decades.

Dan Wang: I certainly don’t hope we repeat all the mistakes of the last Cold War, which wasn’t very cold for Vietnam, which wasn’t very cold for Laos, and which wasn’t very cold for Afghanistan. The US and Soviet Union made tremendous mistakes and inflicted horrors on foreign populations, as well as somewhat on their own populations, in the course of pursuing the Cold War. I’m reluctant to say the US should desire or embrace anything resembling a Cold War, given how the last one went.

I’m hopeful the US will be able to recover some of its engineering chops, because it’s become tremendously obvious that the US needs to do this without any framing of China as the great adversary. We’re in New York right now. Affordable housing is a very big issue. New York can’t build subways at less than $2 billion per mile, which is far above European levels of construction. The US can’t fix Port Authority Bus Terminal in under five years. This is to say nothing of Massachusetts or California, which have really bad construction issues. None of that needs to implicate China. That’s purely an American lawyerly society problem.

We have movements like the Abundance Agenda trying to make sure US big cities are able to build quite a lot more. There’s broad complaint within both the American left and right that the US manufacturing base has rusted top to bottom, where apex manufacturers like Intel and Boeing have just an unbroken tail of woe if we look at any of their headlines. The US manufacturing base wasn’t able to produce anything as simple as masks and cotton swabs in the early days of the pandemic. That was pathetic.

We also have a defense industrial base that has significantly rusted, with the US unable to produce a lot of munitions or naval ships on time. Maybe the defense industrial base has to implicate China, but really that implicates already existing problems as well as the war in Ukraine, which took a lot of munitions from the United States.

The US needs to fix its own problems, not to be able to confront China, but because it has been doing pretty badly itself. The same goes for China — the contest will not go to the country that builds a bigger rocket or more homes. The contest will be won by the country that’s able to deliver better for its own citizens. That’s ultimately where both countries really need to get to.

Jordan Schneider: I agree with that. The question is: if we need a fundamental rethink and Cold War framing from 2020 to 2024 didn’t get us there, is Derek Thompson and Ezra Klein and Dan Wang evangelizing enough to have our Sputnik moment 2.0? Not only does it address the international stuff, but it also gets you the interstate highway system equivalent for what we need today. That’s our only data point. Maybe we can go back further in history.

Dan Wang: I’m also unsure that Cold War framing will work because right now, as we’re speaking at the end of August 2025, President Trump seems to be the most pro-China member of the White House, and he doesn’t seem terribly interested in a Cold War. A reporter asked him whether he should welcome more Chinese students to the United States. He responded, “It’s our honor to have them.” He’s right. The US should be attracting more students from China as well as from all nations. That won’t work if the commander in chief is uninterested in having a cold war.

We’ve tried to impose this Cold War framing for a while, and it hasn’t worked, at least so far. Maybe we will get there in some other way, but there isn’t a single knockdown argument that will have the US recover some of its engineering chops. There need to be many types of arguments, and the worse the situation becomes, the more the US needs to do.

Jordan Schneider: Mike Gallagher had an op-ed in the Wall Street Journal basically saying we should dramatically tighten immigration policy from China. You have a USCIS head saying that F-1 visa holders should understand that they’re not welcome here after graduation, and OPT may be going the way of the dodo bird. We’ll see how it plays out. It’s clear that Trump is not entirely on board with this. But I wonder if Xi is going to do something more dramatic than a balloon — which doesn’t necessarily have to be an invasion of Taiwan — that clicks, that gives the Cold War framing a second breath of fresh air.

Dan Wang: Maybe. But I suspect Xi has studied his history and is really reluctant to give Americans an excuse to engage in another Cold War. Even the balloon seemed like it might have been an accident where the leadership didn’t know about it. We can deal with balloons, Jordan. We can deal with balloons all day.

Jordan Schneider: Yeah, but can we deal with 50 Filipinos dying or something? We’ll see. As Kotkin says, history’s full of surprises. One thing we know about history is it’s full of surprises.

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On the Cold War stuff, when I had you and Ezra and Derek on, you asked me if the US should have a goal of constraining Chinese growth. Do you have an answer to that question? How would you frame our policy optimization function when thinking about that?

Dan Wang: The US should not be seen as being in a position to constrain China’s growth. It would be disastrous for the US if the Chinese earnestly believed that the US government was trying to hold down China’s innovation prospects or economic growth prospects, because that would seem very dramatically unfair. Now, there are some people in Beijing who already believe some version of this, but that’s not necessarily consensus.

It’s important for the US government to communicate that it wants a good future for Chinese people everywhere. There’s nothing Trump would lose by saying that he wishes the people of China can be rich, well off, and happy.

Jordan Schneider: Let’s close with some book recommendations. I don’t know why — read the Bible, Stendhal, someone you recommended to me the other day.

Dan Wang: The Book of Exodus, Jordan. That’s where it’s at. Maybe bested by the Book of Genesis. But the five books of the Torah — that’s something really important here.

Jordan Schneider: But you’re just shrugging off Prophets and Writings?

Dan Wang: Well, Ecclesiastes is very beautiful. As Robert Alter translates, the chapter is called Kohelet. There’s certainly a great deal of beauty in the Song of Songs and in the dreariness, frankly, of Ecclesiastes or Kohelet. Something important for us all to keep in mind is that the heart of the wise dwells in the house of mourning, while the heart of fools dwells in the house of mirth.

Jordan Schneider: Dan, what’s our outro song?

Dan Wang: There is no music more sublime than the ending of The Marriage of Figaro by Mozart, in which the Count asks and begs for forgiveness from the Countess for all of his incredible indiscretions.

The Schneider clan will be heading to the Bay Area from Sept 9 through the end of the month! If you’re interested in doing a house swap with a 2BR in New York, or happen to have an empty apartment that can fit a few adults and a very cute baby (no babyproofing or kid stuff required), please reach out!

This is a cross-post from the Cold Window Newsletter, a literature Substack about new and untranslated fiction from China. Each month, it features a handful of authors, books, trends, and news items from the Chinese literary world that haven’t yet caught much attention in English.

Over the last few months, I’ve sampled nearly every new Chinese short-story collection that’s come out this year.1 I want to tell you about my favorites.

Special: In search of the best new fiction in China

As of this summer, Chinese literary fiction is in a bit of a tough spot. Inside the country, there’s undeniable suspicion of literary writing affiliated with the cultural establishment: it is not a compliment to call someone 体制内, “inside the system.” A recent plagiarism scandal implicating many young establishment authors, and the schadenfreude with which their downfall was greeted on the Chinese internet, made this distrust abundantly clear.2 Outside of China, translators are working as tirelessly as ever to bring worthwhile stories out into the world, but there are still far too few young Chinese writers who get any sort of attention abroad (although I do think this tide is beginning to turn).

That’s why I decided to try reading everything newly published in China this year. This project was intended to be a pulse-check, an attempt to investigate in good faith the throwaway complaint that you see from Chinese readers online all the time: there’s no good literature in China anymore.

Surprise: that complaint is wrong. The five books below are some of the best I have ever read in Chinese. They’re mostly by women. They’re all by writers born after 1980. And, to a greater and greater extent as you move up my ranking, they all poke at the boundaries of today’s urban, technologized, hyper-globalized society, until it’s hard to tell what’s fantasy and what’s reality. That’s the kind of story that makes Chinese fiction worth reading right now. And it’s the kind that can only be written by young authors.

Let’s get into it.

Some stray thoughts on this project as a whole

• Speculative elements were extremely common across the whole sample and were nearly ubiquitous in my top 5. Not the hard sci-fi that China has become known for since The Three-Body Problem, but more commonly the uneasy, dreamlike invasion of magical or uncanny elements into everyday life.

• Related: stories about the internet were everywhere in the collections I read. English-language authors accurately capturing a text conversation in Serious Literature still feels like a rare achievement, but Chinese fiction seems to include convincing text-speak as a matter of course at this point.

• Domestic abuse and sexual assault were notable recurring themes across the sample, but I generally found that they were treated with the appropriate gravity, which is not always a given. If you read along with my recommendations, be forewarned that the top two entries on my list are particularly graphic in this regard.

• My favorite stories, nearly without exception, were long-ish novellas of the kind that are too long to ever ever get published in an English-language literary periodical. Someone invent a platform where we can publish high-quality translated novellas!!!

• Chinese cover design is just better than almost all of what I see in the US. Look at the book covers below. I’m not crazy, right?

• Overall: this project required a lot of reading. Some of the books on offer were boring, some were bewildering, and a handful were just bad. At least one was a strong contender for my top 5 but had to be dropped when that summer plagiarism scandal hit. I didn’t read any of the books in full, just in pieces, whittling away the ones that lost my interest until I was left with the list below. (I know I picked a good top 3 because they kept me reading late into the night, long after I should have set them aside and moved on to the next contestant.) Reading all these stories was exhausting and super fun, and I’d love to reprise the challenge for the second half of 2025.3

5. 邵栋《不上锁的人》(Those Who Leave the Door Unlocked by Shao Dong)

This entry is the odd one out on my list. I’d never heard of the author until he was nominated for the Blancpain-Imaginist Prize 宝珀理想国文学奖 earlier this month; he’s a bit younger than the other writers below, the only man of the bunch, and, judging by the pieces I read, the one who’s most grounded in realistic stories about traditional life. He won me over with the story 《文康乐舞》 “Recreational Dancing.” Its protagonist is a young female documentary student from Hong Kong poking around Fujian for material, and something about her voice as a narrator, both savvy and genuinely curious, made her feel like a real person in a way that not all literary narrators do. The nauseating, heartbreaking evocation of her father’s death during pandemic quarantine kicks the story into a darker mode and proves that the author has real range. I don’t think he’ll win the Blancpain prize, but he’s got me in his corner.

Shao Dong 邵栋
Born 1989

Recommended story in Chinese: 《文康乐舞》(excerpt)

Originally from Changzhou in Jiangsu Province, Shao Dong holds a doctorate from the School of Chinese at Hong Kong University. He currently serves as an assistant professor in the School of Humanities and Sociology at Hong Kong Metropolitan University. His fiction has appeared in Harvest, October, Shanghai Literature, and Hong Kong Literature and has been recognized with the first Lin Yutang Literature Award and the Hong Kong Youth Literature Award. His books include the fiction collections 《空气吉他》 Air Guitar and 《不上锁的门》 Those Who Leave the Door Unlocked, and the academic monograph Projecting on Paper: Yingxi Novels in the Early Republic of China. Air Guitar and Those Who Leave the Door Unlocked were both nominated for the Blancpain-Imaginist Literary Prize.

4. 默音《她的生活》(Her Life by Mo Yin)

I’ve always been curious about Mo Yin. I like that she translates novels from Japanese, including one by Yoko Tawada (Memoirs of a Polar Bear) that has gotten a lot of acclaim in China this year. I like that she has a reputation for mixing genre elements into literary writing. I like that this Reddit user went to the effort of making a (really good!) guide to her work, even though nary a word of her fiction has ever been translated into English so far. Sounds like something I would do...

《她的生活》 Her Life seems to have flown mostly under the radar within China, a small flourish between her better-selling novels and translations, but it proves that everything I’d heard about her writing is true. Consider the novella 《梦城》 “City of Dreams,” a sci-fi take on Hollywood set in future Japan. Through the eyes of a TV producer navigating corporate interests and cast-member intrigue, we explore a sci-fi world that feels upsettingly familiar: climate crisis, celebrity deepfakes, portable VR technology (“dreamvision”) that encourages you to isolate yourself from the world. I only learned later that Mount Fuji Diary, the book being adapted for dreamvision throughout the novella, is a real diary by Takeda Yuriko that was translated into Chinese by Mo Yin herself. The density of the ideas and references that Mo Yin plays with here is astounding.

Mo Yin 默音
Born 1980

Recommended story in Chinese: 《梦城》(excerpt)

Mo Yin is a novelist and translator. Her books include the fictional works 《甲马》Warhorse, 《星在深渊中》The Star in the Abyss, 《一字六十春》 One Word, Sixty Springs, and 《尾随者》 Tailgaters. She has also translated many literary works from Japanese, including Handymen in Mahoro Town by Shion Miura, Memoirs of a Polar Bear by Yoko Tawada, Normal Temperature in Kyoto by Kiyokazu Washida, Child’s Play by Ichiyō Higuchi, and Daily Notes and Mount Fuji Diary, both by Takeda Yuriko. Her newest collection of short fiction, 《她的生活》 Her Life, is accompanied by a sister book entitled 《笔的重量》 The Weight of the Pen, a collection of literary criticism.

3. 郭爽《肯定的火》 (Undeniable Fire by Guo Shuang)

I only read one of the three long pieces in this book, but it immediately made me want to press it into a new reader’s hands. The novella 《拱猪》 “Push Out the Pig” (named after a card game) is just such a perfect showcase of what new Chinese fiction is so good at: documenting the anxious disconnect between old and new, between parents who grew up in poverty and their children who grew up on the internet. I don’t know if Guo Shuang is a participant in fan culture herself, but she does an admirable job portraying how absorbing, liberating, and ultimately crushing it can be for a working-class child to seek escape inside online fandom. This deserves to be one of the first books people read if they want to learn about class in contemporary China.

Guo Shuang 郭爽
Born 1984
Paper Republic

Recommended story in Chinese: 《拱猪》(full story)

Available in English: review of 《月球》 Planet Moon in the China Books Review

Guo Shuang was born in 1984 in Guizhou. Her fiction has been published in Harvest, Writer Magazine, Mountain Flowers, Zhongshan, and West Lake. Her books include 《月球》Planet Moon, 《我愿意学习发抖》 I Want to Learn to Tremble, and 《正午时踏进光焰》 Stepping into the Noontime Light. She has been the recipient of the Selected Fiction Newcomer Prize, the Zhongshan Star Young Author Award, the West Lake–New Chinese Literature Award, and the Chu Jiwang Literary Award.

2. 杜梨《漪》 (The Ripple of Shattered Cuckoo by Du Li)

Now we’ve arrived at the truly magical writing on my list. I predicted in my end-of-year coverage for 2024 that 杜梨 Du Li would be an author to watch this year, and I’m pleased to discover how right I was. Her writing is not easy to read, at least for a non-native speaker—it’s dense, fast-paced, and prone to unexpected leaps into hallucinatory nightmarescapes. But it’s worth the effort.

There’s 《三昧真火》“True Samādhi Fire,” a novella about an amateur rapper named Najia who has to contend with unexpected fame after her verses at a local competition go viral. In mingling satire about Beijing youth culture with a gradual excavation of the troubled life Najia left behind in her home province, the novella manages simultaneously to be silly, contemplative, learned, and very dark.

And then there’s 《鹃漪》 “The Cuckoo Vanishes,” Du Li at her unsettling best. A young couple moves into an apartment known for uncanny occurrences—and, as in any good haunted-house story, it’s less the apartment that turns out to be haunted than the occupants themselves. At every turn I found myself thinking back to 《竹峰寺》 “Zhufeng Temple” by 陈春成 Chen Chuncheng, one of my favorite short stories of all time.4 Both stories use the collision of traditional culture with the present as the root of a mystery story—in “Zhufeng Temple,” it’s a legendary stone stele that has gone missing; in “The Cuckoo Vanishes,” it’s a Ming-dynasty text linked to women disappearing into their dreams. The difference is that Du Li, unlike Chen Chuncheng, likes to dive deep into the haunting nonsense aesthetics of a nightmare. The worlds she describes are disturbing—both the dream world, and the real world that it masks.

Du Li 杜梨
Born 1992

Recommended story in Chinese: 《鹃漪》(excerpt)

Du Li is a novelist and translator. A contracted author at Beijing’s Lao She Literature Institute, she received a master’s degree in literature in England and currently lives in Beijing. Her books include 《致我们所钟意的黄油小饼干》 You’re the Holy Light of My Junky Life, 《孤山骑士》 Knight of the Lonely Mountain, and 《春祺夏安》 Seasons of the Palace. She has received recognitions including the Hong Kong Literary Award, the Paper–Mirror Image Nonfiction Award, the Zhongshan Star Best Young Author of the Year Award, and a gold medal at the He Cailin Science Fiction Awards.

1. 张天翼《人鱼之间》 (Beyond Truth and Tales by Zhang Tianyi)

One thing that this project has taught me is that I like fiction that overflows with ideas. If an author has a capacious enough brain to come up with ten wildly different storylines and figure out how to weave them together, I don’t want her to cut a single one out. Give me writing like a rainforest: bursting with so many sights and sounds that I can’t take it in all at once, but still somehow forming a single dense, fecund ecosystem.

That describes all the books on this list to a greater or lesser extent, but none more than 《人鱼之间》 Beyond Truth and Tales. 张天翼 Zhang Tianyi takes the elements of the other books I liked and dials them up to eleven. Allusions to classic texts? The whole book is structured around postmodern deconstructions of myths and fairy tales.5 Speculative elements reflecting the excesses of real-world pop culture? This is the only book on my list where you will find a candy-colored parody of Hogwarts where students wear skinsuits to look like their favorite celebrities. (See《豆茎》 “The Beanstalk,” the collection’s closer.)

Most of all, Beyond Truth and Tales is just fun to read. Like Du Li, Zhang Tianyi knows how to make a silly moment deadly serious—and more importantly, she knows how to pull a deeply upsetting plot out of a tailspin and give you permission to laugh. I couldn’t help getting deeply attached to the awkward, endearing protagonists of 《雕像》 “The Statue” (a classical-art-themed romance)! And at the end of “The Beanstalk,” when it finally clicks into place how the story’s various threads link to each other—reader, I gasped aloud.

Zhang Tianyi is already a celebrity for her prior collection, 《如雪如山》 Like the Mountains, Like the Snow, which is among the most influential works of Chinese fiction from the last five years.6 If her writing stays this good, then we’re going to be reading her for a long, long time.

Zhang Tianyi 张天翼
Born in the 1980s

Recommended story in Chinese: 《豆茎》(excerpt)

Available in English: “Pottery Husband” (purchase); 2023 feature in ChinaTalk

Zhang Tianyi is a freelancer and a handcrafter of novels. She enjoys tulips, islands, swimming, cheese, and horror movies. She is catless. She once grew an osmanthus tree. Her books include the fiction collections 《如雪如山》Like the Mountains, Like the Snow and 《扑火》 Jumping into the Fire, as well as the essay collection 《粉墨》Face Powder. She has received the Zhu Ziqing Literary Award, the Zhongshan Star Literary Award, and the Flint Literary Award, and her work has been adapted into film.

That’s it for this issue. If there’s more good fiction you think I missed, let me know. Look forward to a shorter, more personal interim post in the near term, and another full issue next month. Thanks for reading.

Cold Window Newsletter

Reading, recommending, and reporting on new literature from China.

By Andrew

Are GPUs being smuggled into China? Nvidia says no. But Steve Burke, editor in chief of Gamers Nexus, has traced out the entire smuggling chain in an epic three-hour YouTube documentary. Earlier this year, he also he filmed another masterpiece of independent journalism exploring the impact of tariffs on America’s gaming computer ecosystem.

In today’s conversation, we discuss…

• Steve’s investigative process, including how he found people in mainland China willing to speak on the record about black market GPUs,

• The magnitude of smuggling, weaknesses in enforcement, and crudeness of US restrictions,

• China’s role in manufacturing GPUs they aren’t allowed to buy,

• And what it takes to stand up to Nvidia as an independent journalist.

Listen now on your favorite podcast app.

As of August 21st, YouTube has removed the full documentary via DCMA.

Having watched the entire documentary, I can confirm this video had zero business getting struck. GamersNexus is working on getting the video back on YouTube, but you can watch it here in the meantime.

From Craigslist to Shenzhen

Jordan Schneider: Steve, you are a madman. What motivated you to try to trace the GPU smuggling supply chain from the US into China?

Steve Burke: Honestly, I saw a Reuters story a couple of years ago about the concept of a GPU black market, and that concept is dystopian, cyberpunk, and weird. It’s really compelling because you normally don’t think of something that was historically used for playing video games as being marketable on a black market. That’s what started it.

We sat in the background for a couple years, and then this year, with all the policy changes, it came up naturally. Plus, Nvidia almost seemed to be inviting a response with their whole “smuggling doesn’t happen and it’s a non-starter” stance.

Jordan Schneider: Yeah, at one point they’re writing blog posts saying no one’s smuggling GPUs, while there are photos from the Hong Kong Police Department — DEA-style shots of captured CPUs instead of drugs, smuggled with fake pregnancy baby bumps or by packing the CPUs with live lobsters. It’s an interesting communication style that was so strident it attracted moths to the flame of incredibly ambitious YouTubers. How does one start reporting something like this?

Steve Burke: The concept of the story was simple — there are GPUs that are not permitted for sale into China by United States companies, but they’re getting there anyway. We wanted to find out how.

Our tariffs video introduced a new style where we flew around and spoke to people affected by the issue. Instead of writing the story around the information we gathered, we ran their discussions mostly unedited and learned a lot from it. We thought it would be great to go out to China and talk to people involved in GPU smuggling to see what they’d say.

I spent a lot of time looking for people to talk to, collecting research, and figuring out who the key players were. At some point, I decided we just had to pull the trigger and get on a plane.

Jordan Schneider: It’s interesting because there’s nothing illegal in China about bringing banned GPUs into the country — they’re not banned there. There’s this weird dynamic where these people aren’t criminals in the PRC. If they were, they probably wouldn’t be speaking to a Western journalist. You found this gray area where someone was buying RTX 4090s on Craigslist in the US and shipping them off by flying to Hong Kong and China. Connecting that full chain was really remarkable. Walk us through some of the steps.

Steve Burke: The hardest part of putting together a story where you’re relying on people to explain their part of the chain — and we wanted them to explain it themselves, not through me — was finding the first person.

We found Dr. Vinci Chow, who works at the Chinese University of Hong Kong. He was referenced in an old Reuters story, and I emailed him. From there, I was able to ask him about the steps involved. He couldn’t reveal his sources or supply chain for how he buys export-controlled GPUs, but he pointed us in the right direction to find people ourselves.

The first step was crawling through Alibaba listings. As stupid as that sounds, I typed in the names of banned GPUs into Alibaba, and they’re everywhere. I started messaging people, always telling them, “We want to make a video. I’ll buy a card if I have to, as long as you talk to me.” A lot of them responded with confusion, asking if I actually wanted to buy something or not. But we found a couple people who were game for it.

The two main sources we found were basically middlemen for these GPUs in China. Both of them wanted to be involved because they were curious about how Western media works — they wanted to see the process.

From there, the next step was taking it further. We had the user — Dr. Vinci Chow, who uses these GPUs — and someone representing the middlemen. What we really needed were the people supplying the middlemen, which would be the smugglers we found. We also needed anyone else in the chain who might be modifying cards or exchanging them in another middle process.

Basically, we broke down the supply chain into categories and needed to find one person for each category to follow a GPU from start to finish. That was the goal.

Jordan Schneider: There are a lot of fun, colorful personalities you met along the way. Why don’t you give some profiles? We start with the university professor who’s maybe the easiest to picture — he’s just teaching his students and has three or four A100s. Not an enormous national security risk, in my humble opinion, but you start upping the level of sketchy characters.

Steve Burke: First, it’s important to point out that at no point did I feel unsafe with any of these people. I was at an Asian grocery store a couple days after publishing this, and someone from China who was visiting ran up to me. The first thing he said was, “Oh my God, this seems so dangerous!” I think that’s the common conception, but we never felt unsafe with anybody.

They were all very interesting characters. The sketchiest guy would have been the person in the US from China who buys export-controlled devices from Americans through normal Craigslist or Facebook Marketplace sales. Then he gets them back to China to collect a profit. He was the only one where — I’m not versed in criminal law — but I’m pretty sure he was definitely breaking laws.

The middle people we worked with in China, who sit between the users and the smugglers, basically buy from people in the US. It was amusing talking to this one guy, Vincent. He’s basically a solo operator running a trading company. He doesn’t care about GPUs or any of the stuff he sells — he just knows it makes money. He can buy it, sell it, and make money.

Jordan Schneider: Yeah.

Steve Burke: He didn’t even know which cards were banned and which weren’t. In the video, he asked me, “Is the RTX 5090 banned or not?” I said it was banned, and he replied, “But you can just buy them on the market.” It was baffling to him — they’re right there, so how are they banned?

Jordan Schneider: Those visuals are incredible — you’re just in a room with walls of these GPUs.

One of the big takeaways for me is that yes, fentanyl is banned in America, but there’s still a lot of fentanyl in America. There are millions and millions of these GPUs made, so it’s not shocking that there’s some leakage. The fact that there are enough of these people out there for Steve to build a whole story around it — and as someone who has tried and failed for years to get mainland guests to come on shows with me in either English or Chinese — you have to imagine an enormous iceberg under this little thing you were able to capture on camera. What other indications did you get of the magnitude of this?

Steve Burke: One of the better examples was the repair shop. It’s just a repair shop that fixes video cards. They’re not formally involved in any black market — they’re not intentionally part of some illicit market. They just fix GPUs, and as part of that, they happen to fix export-controlled GPUs that are on what the US would consider a black market.

This was really interesting because it didn’t click for me until I got home and started editing. The repair shop owner talks about how he modifies these GPUs to increase memory capacity and make them more viable for AI users. What I picked up on was that it’s keeping export-controlled silicon in circulation.

Normally, the part that dies on a video card isn’t the silicon itself or the GPU — those are super resilient. It’s usually a MOSFET or a capacitor that costs three cents to replace. In the US, these types of shops that can modify memory are relatively uncommon. I don’t know of a single one, though there might be someone out there.

The point is that in China, if this silicon is export-controlled and there’s restricted flow into the country, you have these shops that can keep devices in service through no illicit intent of their own. They’re just repair shops making money. That’s really interesting because you can see how it prevents their supply from diminishing when devices go out of service due to something fixable breaking.

Jordan Schneider: Playing Nvidia rep hat here with some critiques — there are a handful of gaming PCs slightly above the thresholds, but the things folks are more worried about are accelerators and full racks. You have quotes from Jensen and David Sacks saying these things are really big and heavy — how could anyone smuggle them? What’s your take on that line?

Steve Burke: He said something about not being able to fit a Grace Blackwell system in your pocket. It was a brilliant misdirection for someone who doesn’t really understand the device he’s talking about, because there are a few problems with that.

First, you don’t need the device in China to use it — you can remote into it somewhere else. The problem with that approach is the data is remote, so processing is slow. If they have a lot of data and really need it on-premises, then you would still want to get it in country.

One of the companies we found and spoke to in Taiwan is basically a testing firm. What they do is bring devices on behalf of other companies, test them, clear or screen them, then forward them to the company that hired them to test the device. Maybe they’re testing a server rack or cooling solution to make sure it’s sufficient before forwarding it.

These types of companies can also work to forward export-controlled racks. The one Jensen was talking about in that video — yeah, you can’t fit it in your pocket, but you can fit it in a crate and ship it from Taiwan.

From what we saw, it happens. We weren’t allowed to film this part, but we were in a room where they had Grace Blackwell systems just sitting there. I asked, “Where are these going?” The response was, “China — there’s a company that hired us, and we’re sending them to China when we’re done testing.” He thought nothing of it, as if he wasn’t revealing some big secret.

Jordan Schneider: The stuff you got on camera was more small-scale operators, but it makes sense that this larger-scale smuggling is happening. This is a desirable product, after all.

The thing that’s different with fentanyl is that it’s illegal in America, so you have domestic law enforcement making it harder for gangs and cartels — they have to get creative, creating a cat-and-mouse game. But if the destination for the black market goods is outside the export-controlling country, and the rest of the world doesn’t care, then it’s much easier once this stuff leaves the US. Tens of billions of dollars of this product ships every year.

Particularly when we don’t have systematic tracking — there was this Reuters article that seemed like a deep state warning saying they put tracking devices on things, but you don’t really have systematic tracking. What I assume is happening is the DOJ is building a handful of cases against these smuggler people, not a systematic effort to track tens of billions of dollars.

Steve Burke: Especially because most of these devices are made in China. Almost all of them are manufactured there, so the DOJ isn’t at the end of the factory line putting trackers on products. It would have to be somewhere else — maybe at Nvidia’s warehouse or whoever handles their logistics locally.

It’s definitely possible, but I think a lot of this stuff isn’t distributed through a chain that would ever be intercepted by the DOJ. If a factory in China is assembling an accelerator and “oops,” this accelerator has a defect, it’s not going to America — it’s going in the bin. What happens after it gets in that bin is unclear.

In at least one instance, we found that with the university’s accelerators, it appeared that an accelerator with a defect was assembled from other components kept from other defective units or spares. It’s almost naive to think that every one of these devices has to go through an export flow through the US that would be trackable by the US or Nvidia. Stuff can just disappear.

Jordan Schneider: The packaging happens in China. What sort of level of involvement does China have in the process?

Steve Burke: The assembly process works this way — Nvidia designs the silicon (done all over the world, but they’re headquartered in California), and TSMC manufactures and fabricates the silicon in Taiwan. Then, Chinese companies manufacture — and sometimes engineer through contract — the cooling solutions, the PCB (printed circuit board), and source all the capacitors and voltage regulator components. Everything that makes one of these devices — pretty much everything — is sourced in China.

They bring it to a factory that assembles it on an assembly line, typically with automated machines called SMT lines (surface mount technology lines). These pick and place thousands of components down the line, with some manual assembly of the heat sink, and then it comes out the other side. They box it and ship it if it’s going to retail, or if it’s something going on a server, it’s simply shipped to the next location.

The assembly locations act as collection or aggregation points for everything else. The company that assembles the video card receives components from at least dozens of other factories. The company that puts that accelerator or video card into a server is itself receiving components from dozens of factories. They assemble it, and from there it should go out to whoever the customer is, which is often Nvidia.

Jordan Schneider: This needs to sink in for people. There are server racks which the US government — even the Trump administration — has decided are too powerful, too dual-use, too scary to give China access to. But we still need Chinese firms to make these things.

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Steve Burke: Yes, but they’re not allowed to have the thing that they make. It’s very interesting. I tried to drive this home in the video — it’s a black market from the US perspective. The people we spoke to in China see it as just the market.

The guy Vincent we spoke to in his small shop — we asked him, “Does China care? Does the Chinese government care?” His answer was essentially that it’s none of China’s business. They don’t have a reason to care about what he’s buying or that America thinks it should be export-controlled. As a small business owner, he doesn’t have any control over it anyway. If it’s on the market, he buys it. If someone wants it, he sells it. It’s really that simple.

Jordan Schneider: Then there’s the question of where Nvidia fits in all this. Clearly they’d like to sell as much as they can, but they also don’t want to literally break the law. I thought it was very funny that you had four or five different interviewees basically hit you with the same Chinese idiom.

Steve Burke: “Open one eye and close the other (睁一只眼闭一只眼).” Yeah, they all said that. The question I asked pretty much everyone was, “Does Nvidia know, and do you think they care to control it?” The answer was that they just turn a blind eye.

I do think there’s truth to that. Jensen’s on camera one day denying this is a thing, talking about how it’s a non-starter because some smugglers got arrested. But then you look at it — well, they made tens of millions of dollars, according to the DOJ, before they were arrested. Is it really a non-starter? That much money is a pretty good starter.

Jordan Schneider: That’s a pretty good starter, and these are the stupidest ones.

Steve Burke: Yes, these are the ones who got caught. Exactly.

Jordan Schneider: I just asked ChatGPT, and it said that Blackwells are mostly assembled outside of China. But the RTX 5000 series — are those the ones you’re referencing?

Steve Burke: We could talk about that. It depends on what they mean by assembly, because Blackwell includes RTX 5090s, which are assembled in China — a lot of them. A lot of Hopper is done in China. The GB — I’m not 100% sure where Grace Blackwell systems are all assembled, but I know for a fact that some of Nvidia’s largest partners for manufacturing and assembling the boards we’re talking about are in China. The RTX 5090s most certainly are.

Jordan Schneider: Gotcha. Just to close the loop on this — we had Chris Miller and Leonard Lerer on last week. Leonard was pounding the table on the idea that if we want this to happen and we’ve decided it’s okay for China to get GPUs, let’s keep doing the playbook we have now where you can have cloud access in Singapore and Malaysia. There’s a little lag, but you can train all your models. It’s easier to see if someone’s doing something sketchy if it’s happening in Malaysia versus in a data center in western China. If the world really goes to shit, it’s much easier to turn those off if they’re in another country than if they’re already in the PRC.

ChinaTalk

EMERGENCY POD: H20 Drama

We’re bringing back Lennart Heim of RAND and Chris Miller author of Chip Wars and newly on substack, to discuss the new H20 drama, when exports were banned in April, and now selling it with a 15% export fee…

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2 months ago · 48 likes · Jordan Schneider

Steve Burke: It’s interesting where, with sufficient power, an open market leader also benefits from being the leader of a closed market or black market. If those in charge — Nvidia and the government — decide that access in Singapore, Malaysia, or wherever is safer because it can be toggled or monitored for military use, the interesting byproduct is that it’s creating or fueling this secondary market in China for these devices to be purchased locally.

The most interesting thing to me personally is that we cover this stuff as gaming hardware — DIY PCs that you build to play video games. That’s how it started. What stands out is that gaming users, when they look at content about the product, aren’t trying to figure out how much money they can make from it. They want to buy it and use it to play video games. They’re not making money.

The whole thing has shifted now with AI use cases being so in demand and everybody trying to make a buck off of it. The person at the other end of the product consumption pipeline is trying to figure out how much they can make on this and whether it’s sufficient for the thing they’re trying to use to make money — like an H100 with higher memory capacity.

From my perspective, it feels so much less innocent than where it started with Nvidia’s GPUs, which was about getting high frame rates in Quake or Counter-Strike.

Jordan Schneider: I remember literally talking to people in the White House over the past few years, and they’d say, “We’re not trying to screw over Chinese gamers here. This is not our intention.” But the past 30 years of what Nvidia has built is so odd and happenstance — the thing they’ve been developing happens to enable you to create God as well as render 3D environments.

We’re in this weird moment where the RTX 5090 is marketed and sold as a gaming card, and that is its primary use case. But if you take that technology and put a lot of them together, you can train AI models that can do lots of wonderful things — and also train your AI drone swarms on how to target Taiwanese Marines.

Steve Burke: That’s the other thing that’s interesting — the computing time. One of the points brought up by one of the two professors we spoke to was, “Okay, you’re forcing me to use a slower device, but it can still do it, so I’ll just wait another day or two for that processing.” From the perspective of the US Government, that is still somewhat of the impact they want. If you slow someone down to two days instead of one, that’s a big difference — a 100% increase in processing time.

At the same time, it’s interesting from our vantage point as a more technical outlet — the US government really doesn’t know how to control any of this. They don’t seem to understand how performance is calculated. They don’t use benchmarks that make any sense. If they were to contract someone making YouTube reviews from a bedroom, they might have a better formula for controlling these things.

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Instead, what we get is, “Well, let’s just take the FLOPS from the brochure and multiply it against the bit length of the operation or something and see if that works out.” It seems like they backwards-computed that formula until they restricted the ones they wanted, and then the formula broke when the next generation came out.

The US doesn’t seem to have put the right people on this or done it in the right way to think through the problem. As a technical reviewer, I look at it and wonder: why are we not benchmarking something that considers time to complete, memory capacity, memory bandwidth, and then maybe FLOPS at the end and clock speeds? For whatever reason, that’s not what the formula is.

It blows my mind that it seems so naive to not factor in these other specs on the spec sheet when judging performance, because every application is different.

Jordan Schneider: We should explain who you are and what Gamers Nexus is.

Steve Burke: Generally speaking, we do consumer hardware-facing product reviews and benchmarks — technical analysis of computer components to help people decide whether they should or shouldn’t buy something, whether it’s accurately represented, things like that. We also do consumer advocacy reporting. We’ll take stories about companies screwing over the little guy — warranty denials, things like that.

It’s an advocacy approach where we’ll take a case from a viewer who feels they’ve been wronged by a company, then we’ll take ownership of it and see it through to the end. We try to fix it while also figuring out what went wrong.

On YouTube, we have something like two and a half million subscribers. I started it in 2008 as a website — an article-driven website. Our core team currently has four members, with eight to nine people working on stuff daily.

Tariff Mania and 21st-Century Journalism

Jordan Schneider: All right, tariffs. What was the story you guys tried to tell with that documentary?

Steve Burke: The tariff story was fun because that was a three-hour documentary — our test case for this approach. We got to the GPU story because of the tariff story, where we thought, “All right, that formula worked, let’s try that again."

The way we got to the tariffs story was through conversations I’d already been having with hardware manufacturers who were warning me of price increases. They were trying to figure out how to convey this incoming increase to an audience that would be very upset about it. We were already having those conversations when what I believe was called “Liberation Day” — those tariffs came down.

That was the day I immediately started calling everybody I knew, dating back twelve years in the industry, to see if we could get them on camera to talk about this. Everybody was freaking out because this would potentially mean — in some cases — up to 170% tariffs. It was also starting to target other countries that companies had just started moving to in order to avoid tariffs.

The topic was hot, everybody was upset, and they were willing to go on camera. The problem they ran into was, “We’re going to have to skyrocket the prices on a computer case that should be $90, and customers are going to think we’re gouging them.” In some cases that may be true — that can also happen — but it was just the right moment to try and talk to everyone.

Jordan Schneider: There were two levels that made it such compelling content. First, you had Corsair, but it was mostly small to medium-sized businesses saying, “Oh, Steve’s coming. Let me share a spreadsheet of our future cost structure.” You had these very granular case studies of what the Liberation Day numbers would mean to these companies, as well as the emotional impact of all these conversations.

People forget that when you have a new tariff number, it means an enormous amount of stress on management thinking, “Oh shit, do we need to cancel this buildout? Do these SKUs need to die? Our entire business plan is thrown out the window.” Because this number went from 3% to 50%, down to 20%, up to 25% — and every single one of them repeatedly saying, “There’s absolutely no way I’m building a factory in America. I’m not embarking on a manufacturing renaissance of PCB boards or coolant or decals or whatever, because I’m just trying to stay alive. I’m not trying to plan for the future here."

Steve Burke: Most of these companies don’t own their own factories. Even if they wanted to make products here, that’s not their decision — they don’t have the capital, and the supply chain isn’t here.

Personally, as an individual endeavor, I can take a 3D rendering of a product idea to SEG Market (赛格电子市场) in Huaqiangbei in China, show it to a guy who prints PCBs and a guy who sells capacitors and MOSFETs, and probably have a sample within a couple of days. That doesn’t exist here. That’s a problem if you want to move the supply chain, because you can’t just bring over the end product — you have to bring over all the components that go into it to avoid these tariffs.

For some companies in the story, like Hyte (a small computer case and cooler company), they decided it was easier to halt shipments to the US and move all their advertising and product sales to Germany, England, and anywhere they wouldn’t get hit with these tariffs. They focused on those markets instead.

It ended up creating the opposite of the intended effect — now you’ve got a shortage of products in the US that people really want, and prices are going up due to low supply and tariff concerns.

Jordan Schneider: It’s interesting — it doesn’t really show up in inflation if the thing doesn’t exist anymore. That was really striking. In the interview, you asked if companies might die from tariffs: