The U.S.-China Economic and Security Review Commission late last year released its annual report to Congress. ChinaTalk welcomes two commissioners to the pod to discuss.

Before joining the Hoover Institution, Mike Kuiken spent two decades on the Hill with Senators Schumer and Durbin. He was appointed to the commission by Leader Schumer. Leland Miller, the co-founder and CEO of China Beige Book, was appointed by Speaker Mike Johnson.

We get into…

• What the U.S.-China Commission does, and why “alligators closest to the boat” explains Congress’s blind spots,

• The case for an economic statecraft agency, and reorganization lessons from post-9/11 sanctions reform,

• The year supply chains became sexy — and the best-case scenario for responding to chokepoints like rare earths and pharmaceuticals,

• Xi’s unresponsiveness to consumer spending concerns, and the military-tech developments he’s targeting instead,

• The quantum software gap, synthetic biology in space, and Congress’s role in competing with China.

Listen now on your favorite podcast app.

Fishbowl Politics

Jordan Schneider: The U.S.-China Economic and Security Review Commission is out! Christmas has come early for U.S.-China policy nerds. Mike, what is the U.S.-China Commission?

Mike Kuiken: Next year marks the 25th anniversary of the U.S.-China Economic and Security Review Commission. Congress created it around the same time it was debating China’s accession to the World Trade Organization and the establishment of Permanent Normal Trade Relations. Congress approved these measures, but wanted to closely monitor China. The commission was created to keep tabs on both China and the executive branch as events unfolded. That’s our origin story.

Every year, we conduct a series of hearings — usually six — always co-chaired by a Republican and a Democrat in a bipartisan fashion. Then we publish an annual report with recommendations. We also engage regularly with the executive branch, including conversations with figures like Jamison Greer, Undersecretary of Commerce for Industry and Security Jeffrey Kessler, and military leaders. Earlier this year, we met with General Stephen D. Sklenka, among others.

Everyone on the commission brings experience from the Hill, the security space, or the economic policy, like Leland. It’s a fascinating mix of backgrounds, and we have a great team. We produce an 800-page report every year, which dives into a variety of issues. It is the definitive geek-out-on-China document. Our staff does an incredible job. Leland, what did I miss?

Leland Miller: You didn’t do your “alligators closest to the boat” riff. That one’s always good.

Mike Kuiken: Don’t worry, I’ll get to the alligator closest to the boat.

Leland Miller: A million people in D.C. are working on today’s issues. The China Commission focuses on more distant concerns — the ones on the horizon. What should we be paying attention to now? What should Congress be monitoring closely in economics, military affairs, and technology? How do we create smarter policy? We try to look further ahead and recommend ideas that Congress should be considering.

Mike Kuiken: Since Leland decided to trigger me, let me give you the “alligator closest to the boat” analogy. Folks on the Hill deal firsthand every day with the most immediate, pressing issues — the alligators closest to the boat. We’re looking at the horizon or beyond it, focusing on issues that aren’t making headlines yet. We raise awareness and call attention to them. Another part of our work is increasing literacy on these topics.

Jordan Schneider: As someone who’s been reading this document for a decade now, it’s refreshing. The level of discourse in the American political ecosystem around these topics is often heated and not grounded in evidence. Having this report come out every year offers a different approach — something substantive and measured.

I get a similar feeling listening to nuanced Supreme Court discussions — “Oh, wow, here are people engaging with the world, engaging with facts, and trying to understand things.” You don’t write a 60-page report about China’s ambitions in space without doing research and putting in the work.

We have two commissioners here, and you guys get all the glory, but there’s a large team of staffers putting in the work. From my interactions with them, they take their jobs incredibly seriously. They examine issues in depth. Unlike the intelligence community, where only certain people see the analysis, this is a product for the American people. Thanks, guys, for all your work.

Leland Miller: The staff are the backbone of this operation. The commissioners drive the agenda — we all have our different, overlapping priorities. It’s common for staff to push back and say, “No, I don’t think you can base that on evidence.” We have a discussion, and they do the research — extensive research, constantly. By the time we publish something, it’s not just passing through us. It reflects our perspective, but it’s evidence-based. The report is fundamentally a research document that focuses on policy grounded in real data. The research component is critical.

Mike Kuiken: Before I joined the commission, I spent years with Leader Schumer accessing some of the most sophisticated intelligence in the world. My first year on the commission, as I read through the initial draft our staff put together, I highlighted at least five or ten sections to ask, “Where on earth did you get this?” I was amazed at the amount of information available in open sources and their ability to find and extract it.

Jordan Schneider: We’re not complaining about the seven citations to ChinaTalk this year. That’s how you know it’s good stuff.

Mike Kuiken: Is that too many or too few?

Jordan Schneider: We’ll chart it over time. We’ll have ChatGPT track how we’re doing. Now, make the case for Congress’s influence on U.S.-China issues.

Leland Miller: Start with the guy who’s been on the Hill longer.

Mike Kuiken: If you look at the big moves in U.S.-China policy over the last decade, many have come out of Congress. That includes sanctions bills, the CHIPS and Science Act, and the Foreign Investment Risk Review Modernization Act (FIRRMA), which reformed the Committee on Foreign Investment in the U.S. (CFIUS). The BIOSECURE Act hasn’t passed yet, but the idea for it came from the commission, a legislative branch entity. Outbound investment screening — many of these are ideas that either originated from the commission or from members of Congress.

The CHIPS and Science Act has an interesting origin story. Leader Schumer and Senator Young got together and created the legislation for one of the most significant pieces of industrial policy we’ve seen in a generation. If you look at the last 10 years, Congress has passed incredible, agenda-shaping legislation. The executive branch has broad authority in foreign policy, but many of the guardrails and tools the executive branch uses have been provided by Congress or have been driven by congressional agenda-setting. Leland, what do you think?

Leland Miller: Administrations are fleeting, but Congress is forever. If you want durable, lasting policy, you need Congress involved. Mike gave examples of topics Congress has been essential to. Look at outbound investment — it’s not a success story, at least not yet. It’s something the Biden and Trump administrations handled, but Congress hasn’t cemented the foundation for it in legislation. Right now, you don’t have a durable outbound investment mechanism. This is a call for Congress to constantly be on the tip of the spear, not just reacting to whatever one administration does as Republicans and Democrats alternate in the presidency.

Mike Kuiken: Congress passes a National Defense Authorization Act every year, and that is full of China policy, both on the economic and security side. Pieces of that legislation drive the agenda for both the Department of Defense and the broader executive branch.

Keep in mind that we updated the Taiwan Relations Act three or four years ago, which was also carried by the National Defense Authorization Act. That was driven by Congress, not the executive branch. It was done with a lot of push and pull from the administration, which was saying, “Oh my God, we can’t possibly do this or that.” Ultimately, it was Congress that said, “Yes, we can.”

Jordan Schneider: “Yes, we can.” What a throwback.

There’s this weird dynamic where the executive branch sometimes — perhaps increasingly — doesn’t do what legislation says they have to do. One of your recommendations is to more closely follow the Taiwan Relations Act update. We have the ongoing TikTok saga where both the Biden and Trump administrations have punted, and did not reflect the intent of the votes in the House and Senate. What happens when the executive branch doesn’t follow through on legislation on China-related issues?

Mike Kuiken: I was on the Armed Services Committee in the early days of the wars in Iraq and Afghanistan. Looking back now, I think it was like holding up a fishbowl. If I tilt it this way, the water sloshes one way — if I tilt it that way, it sloshes another. I use that analogy because it’s never perfectly in balance — maybe for brief periods, but not for a sustained time. There’s this historic push-pull relationship between the executive and legislative branches. It’s different with divided government versus one party in power, but there’s always some sloshing around.

Over the years, Congress has provided broad authority to the executive branch. When the executive doesn’t listen, Congress finds ways to put up guardrails, constraints, or funding prohibitions. That’s the tradition of our country. We’re seeing some of that sloshing now. I obviously worked for Democrats, so I see things a particular way, but the fishbowl is never going to sit perfectly settled on the counter. There’s always some rumbling in the water.

Leland Miller: Speaking of rumbling in the water — when administrations come to power, they have a million priorities. Most of the time, they’re not planning to make structural changes to the system. One of our recommendations this year was creating an economic statecraft agency or similar entity to improve coordination and integration among the various entities in government that handle sanctions, export controls, and other tools.

I’m not sure anybody on the Republican or Democrat side would look at that and say it’s a terrible idea. But if for the administration — whatever that administration might be — the last thing they want is to structurally change a bunch of things. What we’re saying is, “We have to focus on the mission, and if the mission is best conducted by restructuring or reintegrating things, then let’s do it.” That’s something an administration focused on getting a million things done in the next 24 hours often can’t do.

“Pulling Thread Through a Needle” 穿针引线

Jordan Schneider: Leland, you jumped the gun here. This is a theme I’ve been writing about and doing shows on for four or five years now — a new reorganization to bring disparate pieces of government that touch the China challenge together. You identify the Bureau of Industry and Security (BIS), the Office of Foreign Assets Control (OFAC), the export control part of the State Department, and the Defense Technology Security Administration (DTSA) — which does export controls for the Defense Department — as pieces that should work together.

During the Biden administration, there was internal disagreement among key officials overseeing economic policy. Each principal controlled different pieces — investment controls, export controls, and so on — and they disagreed about how aggressively to pursue these tools. If cabinet members are already at odds with each other, how would creating a unified economic statecraft entity solve that problem? Would this centralize decision-making in the White House, effectively removing authority from these cabinet-level officials? How exactly would this structure work?

Mike Kuiken: This is something Leland and I worked on together. Beloved Commissioner Randy Shriver and I wrote a piece earlier this year, arguing for reinvigorating the Department of Commerce’s export controls. We argued that similar sanction reforms to the ones at the Treasury Department post-9/11 are needed.

This year, as we held a series of hearings and meetings, I became so frustrated that I almost put my hand on my forehead and said, “Oh my God, we didn’t go big enough.” I’m frustrated that export controls — and also sanctions — happen at a mid-level layer in departments and sometimes don’t reach senior officials. As a result, they often languish — decisions languish — everything languishes. There’s no natural forcing function.

Rather than having these functions sitting at the Assistant Secretary level or below in multiple agencies and departments, you consolidate them. This creates a forcing function not within multiple silos, but in one. Hopefully, you have a senior leader — whether in the Department of Commerce, Treasury, or a standalone entity — that propels the issues to the top. You don’t need to go to the National Security Council every single time to get a resolution.

We’re silent on where this entity should go. The issue of export controls and sanctions is controversial in Congress. The Senate Banking Committee has jurisdiction over export controls and sanctions, while the House Foreign Affairs Committee has jurisdiction in the House. Other committees have significant equities, including the Foreign Relations, Foreign Affairs, and Armed Services Committees, among others. We’re silent on that piece, but we are clear-eyed that we’re in a period of economic statecraft. It’s going to be a cycle of measures and countermeasures between us and China. We need to be thoughtful and strategic in a consolidated way. That was the motivation behind this recommendation. Leland, what did I mess up?

Leland Miller: I’ll offer a pessimistic take. The current structure sets up export controls and sanctions to fail. At the Commerce Department, the undersecretary is in charge of export controls, but the secretary is in charge of promoting U.S. businesses abroad. He is structurally disincentivized from enacting tough policy.

Staffers at the secretary level are patriots and want good policy, but there’s an inherent tension in the system that prevents them from pushing policy if it interferes with their major mandate. The same thing happens at Treasury and, to a degree, at the State Department.

This proposal frees important national security policies from the structural disincentives built into the current system. This is a neglected element of policy we are trying to bring attention to. As long as the top policy is promoting business, it will be hard for a mid-level official to promote a conflicting policy.

Jordan Schneider: Regardless of where you put this entity, there will be counter-forces — parts of the government that want to promote exports, retain global financial stability, keep oil prices low, or other reasonable arguments against coercive actions against Iran, Iraq, Russia, China — pick your country. There is a cost to sharper economic measures the U.S. is considering. Are you arguing for a cabinet position whose job is to push for these tools?

Leland Miller: That would structurally set up the policies to succeed. None of this can succeed without a broader national economic security policy overlaying it. The one thing that administrations — plural — are missing right now is a national economic security strategy that integrates all these different pillars.

There are different reasons why people don’t want to have that — there are many issues in economic foreign policy — trade, investment restrictions, technology controls, supply chain resilience measures, and domestic re-industrialization, whether it’s the defense industrial base or advanced manufacturing. All these pillars are advocated for by people who want their policy to succeed.

Without a broader policy that weaves the pieces together as part of a broader mission, everybody is fighting in parallel for their own piece of the pie and their own resources. The focus on trade and tariffs might siphon focus from export controls and divert all attention from investment restrictions.

With an overarching strategy and structural reform, we could divide economic security issues into those with a national security dimension and those without. For issues with national security implications — supply chain resilience, investment screening, technology controls, trade policy — we need coordination, not competition, between departments. These tools should work in tandem, not against each other. The right policy framework, combined with a structure that doesn’t create conflicting incentives, would make coordination possible.

Jordan Schneider: The catch is that this costs money. Mike made the point earlier that politicians are focused on the alligator closest to the boat.

Mike Kuiken: He’s put it in your mind now. A former colleague of mine on the Armed Services Committee, Tom Goffus, used to talk about the alligator closest to the boat when we were on trips.

Jordan Schneider: The commission is focused on challenges two to five years out. China’s rare earth export controls this year should have been a massive wake-up call. For years, everyone worried China might use rare earths as leverage — and they finally did.

You’d think that would galvanize action — more funding, serious attention, bureaucratic reorganization, even Congress ceding some turf to address the sharp Sword of Damocles held by the Chinese government. You’d think it would accelerate exactly the kind of supply chain security and resilience measures Leland is pushing for. But I’m not seeing it. The moment that should have changed everything has changed little.

Leland Miller: I’m going to push back on your pessimism. Nobody was talking about supply chains until a few months ago — and now everyone is — because they weren’t seen as a tier-one national security priority. Supply chains are boring. If you had brought us on ChinaTalk a year ago and said, “Let’s talk supply chains,” it would have been a different conversation. Fewer people would have tuned in for a podcast on supply chains. They would think, “Oh, gosh, this is boring.”

The way to elevate supply chain resilience — a top-tier priority — is to make it a core pillar of a national economic security strategy. This strategy would define the five critical things we need to do regarding China and other competitors. Supply chains can’t be left to corporate decision-making — they’re a fundamental element of the U.S.-China relationship and require government attention.

Our sixth hearing this year examined Beijing’s choke points on critical U.S. supply chains. We’d been planning it for months, but by the time we held it, rare earths had finally captured everyone’s attention.

Other vulnerabilities will worsen over time, such as pharmaceuticals. China doesn’t ship many finished drugs to the U.S., but it dominates the active pharmaceutical ingredients (APIs) behind medications and the key starting materials (KSMs) behind those APIs. When you see statistics about U.S. pharmaceutical imports from India, most of those drugs trace back to Chinese source materials. How much exactly? We don’t know — even after months of research with full access to government data, we could only produce ranges. The FDA hasn’t been required to collect this information.

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The same pattern repeats across printed circuit boards and legacy semiconductors — these are potential choke points that Beijing has over the U.S. economy. APIs and KSMs sound technical and boring — until you realize China may control U.S. access to insulin, heparin, and antibiotics for both civilians and troops. That’s an enormous vulnerability. This needs to be part of our national security strategy. This perspective barely existed a year ago, but has finally entered the discussion in DC.

Supply chain resilience needs to be a core pillar of national security strategy, not just a talking point. Frame it that way, and the logic becomes clear — reducing Beijing’s leverage over critical supplies expands U.S. policy options. The goal is to identify five or six tier-one priorities and integrate them into a unified policy framework. You can debate which issues make the list, but they need to be recognized and addressed together to have a coherent China policy.

Mike Kuiken: When we worked on the CHIPS and Science Act in 2018-2019 — long before it was cool — we pushed supply chain issues. This was in the early days of the Endless Frontier Act debate. Industry pushed back hard — supply chains were their domain, and they didn’t want to share information. That resistance shaped Leland’s thinking.

The second formative experience was the post-9/11 integration of sanctions and intelligence. We embedded the sanctions community into the intelligence apparatus, so intelligence actively fueled Treasury’s work. That integration was crucial.

The Bureau of Industry and Security had access to the intelligence community but wasn’t integrated into it. The difference matters — with access, you get information when you ask. With integration, intelligence proactively dedicates resources to meet your needs. Right now, that industrial-scale effort doesn’t exist for export controls. A core part of our recommendation is to deeply integrate this entity into the intelligence community so it can leverage what we know about supply chains.

The U.S. government hasn’t been strategic about supply chains. We might track sensitive materials for specific defense systems, but we’ve never taken a coherent, comprehensive approach. That gap drove both our hearing and the commission’s recommendation.

Strategies for a Two-Speed China

Jordan Schneider: Leland, in 2024, you said, “supply chains weren’t sexy,” but they were in 2020 and 2021. I’m sure Mike can riff about how the chip crunch during COVID helped get the CHIPS Act across the finish line.

This stuff takes money, or does it? Do you need a double-digit-billion-dollar bill to address printed circuit boards (PCBs), active pharmaceutical ingredients (APIs), and rare earths? The executive branch has been creative with loan guarantees and buying small stakes in companies, but Congress has been inactive. Where’s the bill for this? What should it look like?

Mike Kuiken: None of these things run on fairy dust. They all run on money. Ensuring that we are appropriating the necessary funds to the defense side, but also to the non-defense side — which includes the Bureau of Industry and Security (BIS) — is an important piece.

As Congress evaluates our economic statecraft recommendation, it’ll decide whether to provide more resources to implement it, along with a variety of other decisions.

Jordan Schneider: Congress has been vocal in its displeasure with the lack of semiconductor export controls to China, through bipartisan letters and momentum behind the GAIN Act. Integrating intelligence into BIS sounds good in theory, but if the administration has effectively paused new export controls for a year, what’s the point?

A weaponized API crisis would have triggered more public alarm than temporary car factory shutdowns. What’s your read on congressional appetite for these measures more broadly? How are they thinking about economic security tools right now?

Leland Miller: Those in Congress and the administration who support export controls have to make a better case for why they’re important. Industry is arguing that we need to stop provoking China — “don’t poke the bear.” They argue we want better relations, so why are we acting in ways that could bring us closer to war?

This perspective forgets the 30,000-foot view of China’s economy. China has a two-speed economy. The broader macroeconomy is slowing down significantly due to slowing domestic demand, weak consumption, and a deflating property bubble. But the national security side of the economy is running at a different pace. Xi Jinping has made it clear in the “Made in China 2025” sectors.

For our policy, we don’t care if China’s middle class gets richer — that might be a good thing if they import more U.S. goods. We should focus on the economic areas with a national security nexus that Xi Jinping is targeting. That requires smart trade policy, smart outbound investment policy, and smart export controls that target the critical inputs for China’s technological and military machine.

A potential nightmare scenario is China breaking quantum cryptography, achieving AGI, or making some other enormous breakthrough in AI first. Imagine they cure cancer. A shock would go through the system as we’ve never seen — our approach would have failed.

Jordan Schneider: I don’t know, if they cure cancer, hats off to them.

Leland Miller: We want someone to cure cancer, but we don’t want China to control the pipeline for that cure. If China has enormous success in AI, quantum, and biotech, it shows we are failing on the national security side.

Xi Jinping largely ignores the broader consumer economy, letting it generate enough growth to fund the technology and manufacturing sectors he cares about. If China achieves a major technological breakthrough using that model, the U.S. reaction would be severe — probably triggering broader decoupling and a more dangerous, confrontational relationship.

Jordan Schneider: The cancer example illustrates the challenge of deciding what counts as national security. In Washington, every issue becomes a “national security problem” when someone wants attention. You could theoretically connect cancer research to bioweapons or enhanced soldiers, but you need to draw a line somewhere.

Where is that line? Are we only restricting China’s access to advanced technology, or is there no space for cooperation on medical breakthroughs that benefit humanity?

Leland Miller: I’m not against cooperation, and obviously, everyone wants cancer cured. But if there’s going to be a winner in that race, U.S. industry — which funds enormous R&D — should be it. The alternative is China controlling those supply chains and the leverage that comes with them. We need a strategic approach, not a scattershot of policies. Identify what’s providing capital or technology to the Party or military, then shut those channels down. The problem isn’t only weak policies — it’s that we refuse to even track these flows.

Take supply chains. The issue isn’t that our policies are bad — it’s that we’ve refused to collect the basic data needed to understand our vulnerabilities. Why? We’re too concerned about encroaching on industry’s turf and potentially hurting companies.

That concern has merit, but national security priorities have to take precedence. The government needs to require the FDA to collect supply chain data from companies so we can see the problem. First get the data, then develop policies. Right now, we’re nowhere close to good policy because we don’t have good data — not only on supply chains, but on investment and technology flows as well.

Mike Kuiken: Let me approach the innovation cycle from a different angle. We can’t have meaningful conversations about supply chains unless we’re actively innovating. Our report makes several recommendations — on quantum computing, biotech, and other areas — that all stress the importance of protecting and nurturing our innovation ecosystem.

The Endless Frontier Act was designed as a $100 billion investment in innovation. For 80 years, America has reaped the benefits of investments we made during World War II. Those investments launched our innovation flywheel and kept it spinning. Now it’s time to fuel that flywheel again, especially given China’s manufacturing capabilities. They’ve built an impressive manufacturing machine. Our innovation machine is remarkably strong — I genuinely believe that — but it needs sustained investment.

Everything runs on money. If we want to plan for supply chains 10, 20, or 30 years down the road, we must invest in the innovation machine today. That means funding foundational science and early-stage development. These investments tell us what will go into future supply chains and what we’ll need to build tomorrow’s technologies. Without them, we’re guessing.

Jordan Schneider: That dynamic reminds me of Mike Kratsios giving speeches about Vannevar Bush while the government cut science funding.

Let’s shift to the parallel between Treasury sanctions and Commerce export controls. One recommendation that caught my eye was creating a whistleblower program for export control violations. That playbook has been incredibly successful for financial sanctions enforcement, but it doesn’t exist for export controls. Why is there a gap? Is it because export controls are harder to enforce — you’re dealing with physical goods across thousands of small companies rather than dollar flows through banks?

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Leland Miller: We have extensive recommendations for bolstering the Bureau of Industry and Security’s export control work. However, BIS is catastrophically under-resourced for the job it’s being asked to do. As export controls expand — especially to the Middle East — the workload grows while staffing remains skeletal. Some countries have one person doing inspections. More funding is coming, but nowhere near enough.

Our recommendations go beyond asking for more money. We focused on force multipliers — how can technology help? What about a whistleblower hotline, like the one that works for sanctions enforcement? Can we shift from a “sale” model to a “rent” model — where U.S. companies and the government maintain ongoing control over how chip technology is used abroad, instead of losing visibility after the initial transaction?

The goal is to make BIS’s job more effective and manageable, in addition to being better funded.

Jordan Schneider: Let’s do a history lesson on financial sanctions. What breakthroughs gave financial sanctions their teeth?

Mike Kuiken: The biggest breakthrough was after 9/11— we began to see how non-state actors were leveraging the financial system, and that invigorated the process. There was also a reorganization in the intelligence community. I don’t remember the exact year, but that allowed for more resources and thoughtfulness in that ecosystem. Those are the big parallels. The current debate isn’t about non-state actors, but a lot of the lessons learned from the post-9/11 sanctions reforms can be applied here.

Finally, the Foreign Investment Risk Review Modernization Act (FIRRMA) did a lot of important work — we need a FIRRMA 2.0 to hit a refresh key. This is a cycle of measure and countermeasure. We need to make sure that the entities involved in the economic statecraft elements of our government are resilient and flexible enough to respond to Chinese actions.

Jordan Schneider: We’ve all been doing this work for a long time. I appreciate Mike’s optimism and Leland’s urgency, but I’m skeptical. This reminds me of defense acquisition reform — everyone thought Ukraine would force fundamental change. Years later, some legislation has been passed, but no paradigm shift.

China’s rare earth controls should have been that catalyst. It wasn’t a surprise threat — it was a threat we’d discussed for years. Yet it hasn’t created a 9/11-style moment — no “enough is enough, we’re spending the money, getting new authorities, and building the government capacity to handle this mission.”

Instead, we have an executive branch divided on what to do. I like these recommendations, but this is the most pessimistic I’ve been in years about whether any of it will happen.

Mike Kuiken: I’ve worked in both the majority and minority in Congress, and I’ve always seen my job the same way — keep pushing. I’ve never been called sunny before, so I’ll take it. Don’t stop when the situation looks bleak.

Someone needs to feed ideas that look beyond the daily crisis — ideas focused on the horizon and beyond. Yes, we can be pessimistic about rare earths and critical minerals. We can also have a strategic conversation — this is happening now, the executive branch has the wheel, so what should we be considering to make ourselves more resilient long-term?

The rare earths problem is serious, but it’s also not going away. We can talk about building mining and processing facilities. We should also ask — what’s the innovation strategy? What alternatives are we investing in to work around this dependency? Are we being thoughtful about diversification, or reactive?

Leland Miller: We are doing that. I’ll be the cheery guy for a change. Let’s enjoy it while it happens. Big things are happening on critical minerals and rare earths. A year ago, nobody was focused on this. Sourcing isn’t the problem — processing is. We’ve all come around to that idea. The rare earth issue has received attention over recent months, partly because it disrupted the President’s trade and tariff agenda. It caught the White House’s attention.

The Pentagon’s response signals a new model — taking equity stakes in companies and establishing price floors. This addresses the fundamental supply chain problem — China has cheaper labor, and massively subsidizes anything it deems a national security priority. That’s why we’ve outsourced so much and become dependent on Chinese imports.

We’re shifting the paradigm. For designated national security priorities, we’re no longer relying on market economics alone. Price floors and equity stakes — like the Mountain Pass rare earths facility or coordination with Australia on processing plants — make sense for these specific cases.

Yes, the U.S. government only reacts to crises. But this mini-crisis has done more than trigger action — it’s prompted genuinely new thinking about economic models for critical supply chains. That’s meaningful progress.

Mike Kuiken: The Chinese are incredibly effective at boiling of the frog or salami-slicing the status quo, right underneath everyone’s nose. I wrote for RealClear about how America’s biotech future is now made in China. China has been steadily acquiring biotech manufacturing and research capabilities, and also the entire infrastructure layer underneath the biotech economy.

When policymakers hear “biotech,” they typically think pharmaceuticals. But it’s much broader — advanced materials, bio-cement from North Carolina companies, even purses made from mushrooms and sawdust in South Carolina.

China has acquired this infrastructure slowly over decades, as it did with rare earths. The spy balloon was unusual — a dramatic moment that broke through the noise. The typical pattern is gradual erosion. They chip away steadily, in Taiwan and across strategic technology sectors, building dependencies before anyone notices the shift.

Leland Miller: Our biggest challenge isn’t convincing Congress to take supply chains or even biotech seriously — those threats are visible. The harder sell is future technologies like quantum computing. Quantum will determine whether we control our own cryptography and digital infrastructure, but the payoff isn’t immediate.

That’s the spectrum we’re dealing with — urgent crises Congress can see versus medium and long-term threats. Quantum sits at the far end. We’ve recommended Congress develop a quantum strategy now, but can we get policymakers focused on tomorrow’s vulnerabilities when today’s are so pressing?

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Mike Kuiken: Jordan, I don’t know if you geeked out on quantum, but Leland and I led an incredible commission trip to the West Coast on quantum, and a few things became clear. First, the U.S. is pursuing multiple technological pathways to quantum computing — more diversity than we expected. Second, chemistry and materials science are critical. There’s a physical infrastructure layer to quantum that is often overlooked.

Third, surprisingly, quantum software doesn’t exist yet — not in a meaningful way. People hear “software” and assume Silicon Valley has it. They don’t. None of the major software companies are building software for quantum computers. Both the private and public sectors need to be strategic about these investments now, which is why quantum software made our top 10 recommendations.

Jordan Schneider: The second recommendation says, “See the commission’s classified recommendation annex for a recommendation and discussion related to U.S.-China Advanced Technology Competition.” Mike, blink twice if that’s a Manhattan Project for Unobtainium. Is this how we’re going to solve all our rare earth issues?

Mike Kuiken: I’ve worked in the classified space long enough to know my answer — look at the classified annex. I will note that the commission’s number one recommendation last year — which Cliff Sims and Jacob Helberg worked with me on — was a Manhattan-style project for AGI. We were way ahead of the curve on that conversation.

Jordan Schneider: You called it. Though you didn’t need government action — a few trillion dollars of global capitalism handled it for you.

Space Race 2.0

Jordan Schneider: Let’s close on space, which I know you love. What’s the space recommendation about?

Mike Kuiken: Working with Leader Schumer gave me visibility across all three space communities — civilian (NASA), military, and intelligence. At our hearing, General Salzman spoke more candidly about military space capabilities than I’ve heard from any military leader. We also heard from industry and think tanks on civilian space. You see the enormous public investment over 80 years and what the U.S. government can accomplish.

The problem is that much of that infrastructure, built during the shuttle program and moon race, is aging. Meanwhile, China is accelerating — pouring resources into launch capabilities, infrastructure, and deployable space technology. We’re cruising at 60 miles per hour, but they’re coming up behind us at 100.

Two weeks ago at the iGEM synthetic biology conference, I had a realization. Sustaining life in space — whether in orbit, on the moon, or on Mars — requires synthetic biology. The biotech ecosystem isn’t only about Earth — it’s foundational for any future space presence, whether sustaining humans, plants, or other life support systems. That’s why we need to be strategic about who’s investing in and controlling these technologies now.

We’re kicking off our Powerful AI and National Security series with the great Richard Danzig. He was Clinton’s Secretary of the Navy, is on the board of RAND, and has done a great many other things. He is also the author of the recent paper, Artificial Intelligence, Cybersecurity and National Security: The Fierce Urgency of Now. What will it take for America to, as Danzig puts it, get out of bed?

Our co-host today is Teddy Collins, who spent five years at DeepMind before serving in the Biden White House and helping to write the 2024 AI National Security Memorandum.

Thanks to the Hudson Institute for sponsoring this episode.

Do note we conducted this interview in July of 2025.

We discuss:

• Why present bias and slow adaptation leave the national security establishment unprepared, and what real AI readiness requires today,

• Why relying on a future “messianic” AGI instead of present-day “spiky” breakthroughs is a strategic error,

• How the Department of War’s rigid, siloed structure chronically underweights domains like cyber and AI,

• Parallels with the 16th century, including the age of exploration and the jump from feudalism to capitalism,

• Plus: What AI is doing to expert confidence, Richard Danzig’s advice for parents, and book recommendations.

Listen now in your favorite podcast app.

A Continuous Revolution

Jordan Schneider: You start this paper with a 10-page section about the sorts of things we can reasonably expect AI to unlock rapidly when it comes to cybersecurity. Why don’t you run through a few of those to give folks a sense of what’s at stake here?

Richard Danzig: As everybody is noting, AI is a vastly transformative technology. Some people analogize it to the development of electricity. One analogy that appeals to me is that it’s like the coming of the market. If people sitting in 1500 tried to anticipate the consequences of the jump from feudalism to capitalism, they’d have an extraordinarily difficult job guessing what the next two centuries might look like. From restructuring of family life because people are no longer apprenticing in the family, to movement to the cities, changes in public health, and the rise of the nation-state — we just couldn’t predict it. In the same way, I don’t think we can predict the consequences of AI with much confidence.

As Polanyi put it, The Great Transformation occurred in Europe between 1500 and 1700 — it took two centuries. Changes from AI are likely to occur in a much more compressed time period, perhaps less than a decade. They’ll have equivalent kinds of influences. My proposition is, in some respects, let’s just take a small corner of that to understand it. The small corner that I’m focused on is intrinsically important. But also, and now this is the context in which I mean it as representative — it’s a representative case. It’s suggestive and important.

The reason it’s important or foundational is that AI automates the capacity to both defend software and to attack it. There’s a lot of debate about which of those dominates over time. But my point is, whether you think our ability to patch exceeds our ability or others’ ability to attack, or vice versa, the thing that’s fundamental is that there’s a first-mover advantage that’s significant but perishable. If you get there first and you defend your systems before others attack them, you’re in a vastly better position. If you get there first and you can embed some exploits in the opponents’ software systems so that you can deter them from attacking you in any number of ways, including through software, you have a huge advantage.

I want to place an emphasis — this is why I speak about the fierce urgency of now — on getting there quickly because I think the existing establishment is quite content to be reactive and passive. I can say more about that, but that may be an overview of my approach.

Jordan Schneider: It’s interesting because on the one hand, you have the reactive and passive approach, assuming that nothing is going to change. Then you have this reactive and passive approach, assuming that AGI is going to solve all and every problem. There’s an interesting parallel going on there.

Richard Danzig: I think that’s right. The relatively passive stance at the moment gets rationalized in part by saying, “Well, everything will change with AGI.” A thing I’m trying to emphasize is no, it’s a continuous revolution, and it’s happening now — as, for example, in the capabilities to attack or defend software — and that’s extremely fundamental.

On top of that, I’m skeptical about the concept of AGI and even superintelligence and argue that AI is “spiky” — a term that Dave Aitel at OpenAI used. It occurs quickly in some particulars and more slowly in others. The coming of AGI or superintelligence will be uneven. Further, not only is it likely to be uneven, but its coming will not be like the coming of the Messiah, where it sweeps away everything in front of it. It’s part of a larger ecosystem, and the way in which it’s assimilated and the other components of that ecosystem are extremely important. For all those reasons, I would strongly urge attention to this now and vastly more effort on quickly assimilating what we are now without deferring to some uncertain future.

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Teddy Collins: What you’ve outlined is certainly consistent with the way I see this stuff. I can imagine that given the finite bureaucratic capacity that could be dedicated at a place like DoD for preparing for AI, there may be trade-offs in terms of preparing for scalable near-term automation of stuff that isn’t too crazy and preparing for, let’s set aside the term AGI, but preparing for really transformative capabilities that some people think could emerge in the relatively near future. I wonder if you have any thoughts about what those trade-offs look like and, under the uncertainty of the present day, how we should allocate resources accordingly.

Richard Danzig: Jordan rightly points to the last lines of my paper in which I say, the U.S. Department of Defense doesn’t need a wake-up call about AI — they’re well aware of it. What they need to do is to get out of bed. That’s what I’m urging. They need to get going.

My urging in that regard is to put more emphasis on the present. There’s always the inclination to defer. The future has high degrees of unpredictability, and the best path towards that uncertain future is by developing your expertise, your assimilative capacity, your relationships with the frontier companies, et cetera, with the fierce urgency of now. When you build that platform now, it leads you towards the longer term. There are these lines like, “Brazil is always the country of the future.” DoD has always got capacities on the horizon that look wonderful. I’m for now.

Jordan Schneider: Can you give some historical examples of the type of thinking that AGI is going to solve all of this, or sort of putting your eggs in the basic research, 10-plus years out basket, such that fast forward 10 years and you’re actually, it ends up being more of a crutch to make it easier to not do hard change than something that enables you to be more successful in the future?

Richard Danzig: I’d be interested in your answer to that because you’re a keen student of military history. But the example that most immediately comes to mind is the thought that with the coming of nuclear weaponry, people thought you didn’t have to have such strong conventional capabilities. The realization was no, you need the particular capabilities in the short term and at lower levels of the escalatory ladder. So that’s an example of an effort to kind of say, “Well, I can get by without attending to my near-term conventional needs because I have this ace or trump card in my hand.” I worry about that kind of thinking. If the rules of ChinaTalk permitted, I’d be interested in your answer, Jordan. Teddy, will you maybe put the question to him so he’ll answer it?

Teddy Collins: Yeah, I invoke my co-host privilege to transfer Rich’s question to you, Jordan.

Jordan Schneider: Have to get back to me… I mean, there are the assumptions of primacy that the U.S. had after the Cold War, which comes back to the cyber stuff. It’s like, “Sure, we can build all this stuff in the cloud, and we can have everything run off satellites,” because we’re going to assume that we’re going to have the same ability to act over bombing Iran and bombing the Taliban as we do in any other conflict we might get into in the future. I can’t claim to be a deep student of stealth or air defense in the 1990s and 2000s, but I imagine there was a lot of complacency and a lot of distraction. The sort of technological demands that you needed to track Ayman al-Zawahiri and try to do COIN stuff were different from the type of investments that you would make to really have a higher degree of confidence that you could beat off Russia or China in a conventional conflict.

Richard Danzig: I think that’s a good answer, Jordan. I’m glad that Teddy pressed the question upon you. I would just note that there’s a certain irony in your saying at the outset, “I subscribe vigorously to the fierce urgency of now, and I’ll have to get back to you about what that means.”

Jordan Schneider: Well, no, it’s hard, because you want to win the war you’re in. I imagine if you look at DARPA projects in the 2000s and 2010s, there was a lot more shifting to dealing with IEDs and jamming stuff.

Richard Danzig: Staying with the interesting thing, I think, is that it’s schizophrenic. There’s a tendency, as your comment earlier suggested, to emphasize the present above all. “We’re not going to invest in technology — readiness is what’s most important. I’ve got this urgent need for more munitions to ship to Ukraine, etc.” Those are real imperatives — I honor them. But then the other side of the schizophrenia is the tendency to put off the technology investments for the distant future when you’ll get everything that you need. The technology demands something that isn’t day-to-day now, but isn’t decade-to-decade in the future. It’s month-to-month or year-to-year. Finding that middle position is, as your question implies, challenging.

I remember in the 1990s, as Under Secretary of the Navy, I tried successfully actually to push the Joint Staff towards more attention to biological warfare. One manifestation of this was vaccination against anthrax for some troops. Some members of the Joint Staff thought, “Well, I don’t want to do that because the vaccine against anthrax has these various burdens and disadvantages. I’ll wait till I have a vaccine that manages to counter all possible biological threats.” Fortunately, I had in hand Josh Lederberg, a great figure, Nobel Prize winner, president of Rockefeller University, to say that’s a fantasy. But the tendency to wait for the fantasies is very strong.

Jordan Schneider: I have one more for you. What Japan did in the late 1930s is optimize around the most exquisite version of what a plane and a pilot could be. They had these crazy hazing and training rituals that make SEAL Team 6 look like a walk in the park — where 100 candidates walk in and only one becomes a pilot. Then you have these really high-crafted, very high-risk jets where they couldn’t tolerate a lot of flak hitting them, but they were the fastest and baddest planes on the planet.

That worked well for a while until you were in this large industrial, national mobilization type conflict, where you really would have rather had 40 people pass that pilot program and have some decently good pilots, and a jet that could be more easily mass-produced and be able to take more damage at the cost of the exquisiteness of its speed and maneuverability. Not being able to conceptualize a war that was not number one on the priority list led you to not have more flexibility when it came to how you could use that force once things started not going entirely according to plan.

Richard Danzig: The general point is that the technological change is continuous, and you can’t take a vacation from it. You can’t say, “Well, it’s summertime — I’ll wait till after Labor Day to come to grips with this.” You don’t ever win. Definitely. And that’s true in cybersecurity. I have a paragraph in the paper where I say, it’s not that AI will end battles over cybersecurity. This is just not the end of history. It’s not a culmination or termination of warfare in this domain. It’s just a new form of armament that will evolve over time.

First Mover Statecraft

Teddy Collins: Well, first, I have one for you. Maybe it’s a bit of a provocation, and it comes from my experience with Biden’s National Security Memorandum, which was a third failure mode. If we think about these two failure modes that you outlined — one of really kicking the can down the road, and the other of being too focused on the really immediate problems — I found another failure mode was something sort of in between, which was limited incrementalist thinking. We would talk to a lot of people in different parts of DoD and the Intelligence Community about AI, and we would get responses along the lines of, “Absolutely, we completely understand AI is going to be a really big deal. There is this discrete, well-defined process, and we think that in the next 18 months, AI could speed that up by 30%.”

If that’s your framework, you’re sort of missing the forest for the trees — especially if we really do believe that this is going to be something on the order of electricity or markets. You wrote in the paper that, “Policymakers must shed a tendency to see AGI or superintelligence as transforming everything upon its appearance.” I think that’s true, but I actually found the opposite failure mode to be more common — I wanted people to think much more expansively about how deep and systematic the changes could be. I felt like people were often blind to the long tail of really transformative possibilities. In your view, is that at odds with what you’re saying, or is this all part and parcel of “getting out of bed”?

Richard Danzig: It’s the latter. You’re correctly observing a problem, and it’s part and parcel of our difficulty. But if you step back and say what is it we might agree on that we need most strongly? Square one from my standpoint would be expertise. Way too little real expertise on AI at senior levels. I’ve just seen too many examples of a lack of understanding about that in depth, the kind of cutting-edge ability. A second thing would be general knowledge and awareness. That is to say, it’s a problem that many senior military officers don’t have a working knowledge of this without deep expertise.

A third problem is the distance from the companies. The companies and the government are doing better about this. As I wrote the paper, various things were occurring over the six months I wrote the paper that improved the situation, but only marginally. It’s a very unusual circumstance that the center of this technology development is in the United States, but it is not substantially integrated with our national security. When you look at the priorities of the companies, national security isn’t terribly high on that. They worry about things like jailbreaks and bio-attacks derived from knowledge in AI, and the like, but they don’t really focus on national security.

I want, first, deep expertise in the government and growth in capacity, and we can talk about how to do that. Second, an enrichment of the general appreciation of the technology amongst the non-experts. Third, closer relationships with companies. And then fourth, I really do believe that the cyber transformations are the cutting-edge case. The general neglect of cyber as a domain within DoD is, to me, extremely troublesome. It’s amplified by the coming of AI.

I suggest in the paper that one of the challenges is that just as we talk about the models’ decision-making being shaped according to weights which are programmed in there, bureaucracies, which are analogous to the models, the mechanisms of group decision-making, and the like, bureaucracies are also weighted, and their decisions are not simply logical consequences. They’re consequences of the weights that they’re pre-programmed to give. So when you have an Army focused on land warfare, and a Navy focused on sea and under-sea and air, and an Air Force focused on air, and a Space Force focused on space, and you don’t have a cyber force focused on cyber, the tendency is to underweight that factor in the decision-making, the budgetary allocations, and the promotional processes, et cetera. That for me is a big problem.

Teddy Collins: Following up on that, this touches on something I find quite interesting. In addition to the challenge of AI being a powerful, dual-use technology that emerged from the private sector — which is historically unusual and makes it difficult for the government to adopt — another thing that seems distinct is the technology’s general purpose nature. Under the current paradigm, one single model tends to be very capable across many tasks.

This fundamentally challenges the organizational structure within government and the military, which tends to divide responsibilities into separate departments. Historically, if the IC or DoD wanted a really good system for Thing X, they would build a narrow, specialized system. If they wanted a system for Thing Y, they built another, entirely different one. We ended up with many bespoke, narrow capabilities.

Having systems that are inherently general-purpose and require immense resources for development (compute power) imposes significant bureaucratic difficulty because it forces different offices to pool resources. What are your thoughts on solving that problem?

Richard Danzig: That’s largely correct. But while the government certainly needs large amounts of compute, they are primarily involved in the work of inference — using pre-trained models — and not in the work of creating those foundational models. The computing power required for inference is notably lower.

The other point I would add is that what tends to happen is that the new technology is thought about in terms of the old techniques. The question is, “How do I do what I’ve always been doing, but do it better with the new technology?” This occurs for all users of all technologies in all circumstances. When IBM introduced the personal computer, I remember I was practicing law at the time, and the attitude in my law firm was, “This will be great for word processing.” It’s very hard to see, “Oh, it’s going to be different and transform all kinds of things.” So the military manifests this, I think, by saying, “Oh well, I’ll use AI to assist the pilot, or in target recognition, or the analyst.” Those are all attractive and meaningful things, but they don’t come to grips with the power of the revolution. I think that’s part of your point.

Jordan Schneider: The sort of forcing function that you get in the private sector or in law firms. You write in your conclusion, “Adapters eventually account for these effects, moderating some and amplifying others. Time eventually levels the field as those who do not adapt die.” But the feedback loops for militaries who fight big wars every, I don’t know, 30 years maybe is very different. The peacetime versus wartime innovation dynamics are just a really tough nut to crack. Aside from writing papers — I mean, we have a big war that is happening right now, and still, you’re unimpressed by what has been transpiring over the past few years with respect to the U.S. defense community. What else can we do, or how much can we even really expect?

Richard Danzig: I put the emphasis elsewhere. It’s true that they only fight the big wars after substantial intervals, but I think the military are very aware of, “Oh my God, I’m deploying ships to the Red Sea, and people are firing missiles at me, and what’s going on in the Ukraine and in Gaza and so on.” It is all very salient for them.

The problem is that to me, the engine of change in the private sector is the nature of competition and of startups. The enterprises that are aged either change or they die because of the internal competition. But in the Defense Department world, you don’t get that. We’re not generating alternative Navies. Nine out of 10 compete and nine out of 10 die and the 10th is better. We have to reform the existing established one. We don’t have the Schumpeterian creative destruction engine that we have in other arenas.

The best substitute for it in our system is when you get civilian leaders who are intense on driving change, and they pair with military leaders who are open-minded and sophisticated and committed to change. But the military leaders themselves can’t do it because of the institutional constraints. They can’t strip money away from the Navy and move it to the Army or whatever. As a former Navy Secretary, there’s such a strong institutional set of boundaries. You have to have that refreshment from strong civilian leadership. That’s part of what I’m preaching. The problem can only be lifted up by two hands. One is the internal military bureaucracy, and the other is the civilian leadership. I’m not seeing that, and that’s deeply troublesome to me.

Jordan Schneider: Okay, so we need the civilians to show up and also some excitement about change bubbling up from the officer side. To what extent is Congress irrelevant? Can Congress be leading on this stuff, or are they always following? What other forces in the system impact the way these developments play out besides folks working in the Pentagon?

Richard Danzig: First off, I don’t think it’s just a question of bubbling up from the military. There are some senior military officers whose capabilities in this arena are considerable, and who get it and are committed. It’s just that the chain of command, the nature of the consensus process, and the competition over resources make them, in my view alone, unlikely to be able to drive this. That is why you need the civilians who stand outside the system, and they have to together form a coalition for change.

Congress is extremely relevant to that, but more as a brake or an accelerator than as a steering wheel. It’s very difficult for Congress to lead the executive branch to dramatically better outcomes. What Congress can do is say, “We’re going to get behind this that these civilian creative leaders or these remarkable military leaders are pressing, and we’re going to validate it, and we’re going to make it easier by providing additional resources for it,” which makes it incomparably easier. Or they can retard it by saying, “We don’t like this, we’re going to under-cut resources,” et cetera. That, to me, is the greatest power of Congress in this arena.

Unfortunately, I just don’t think Congress can actually have the sustained attention and the micromanagement touch that you need to have. Just take one example — who gets promoted? Congress confirms — it can oppose people, it can warmly embrace them, but it can’t generate the choices. The executive branch, if it’s left simply to the military — when you deal with three- and four-star appointments, the Secretaries of the services recommend to the Secretary of Defense, who recommends to the President, who nominates to Congress. Below that rank, you have promotion boards and the like. But who you’re promoting to three and four stars and the commitment you ask of them before you nominate them for promotion, that’s something that only the executive branch can do. That is imperative. You begin to then populate the senior ranks of the military leadership with people who are adept at that, and then the message is transmitted through the ranks — “If you really want to be promoted to the senior levels and you want to participate in what’s happening, you need to get smart in this area and get behind it.” To me, that’s how change happens.

It’s interesting, though. What’s so striking to me is, and this is another theme in the paper, we talk about AI and its impacts, and the tendency for technologists is to think about it as a technology. For people like me who live in a bureaucratic world and worry about those problems, the emphasis is on assimilation in the human context. People like Jeff Ding and his admirable book have studied this and written about it. For me, it’s a phenomenon of co-evolution. The technology develops and changes, and the human adaptation adopts and changes, and the two interact with each other. How the technology will in fact evolve — what we use our models for, where we put our resources, how we invest in data and data centers — all that will be responsive, should be responsive, to the human elements of this, and the two intertwine.

On the risk side, I think it’s also important to recognize that technology has some inherent risks, which people talk about — guardrails and so on, the AI safety institutes — but the human risks are really very substantial, of actual malevolence, but also of accidents. I develop an offensive capability with my AI system and some of our opponents develop that capability and suddenly there is a cyber attack using an AI system. I don’t know whether that’s actually the machinery run awry or the equivalent of a lab escape in the biology arena, or an actual attack. How do humans respond to that and what do we do with the technology?

It’s not just that the technology risks running away on its own — it risks running away because of that co-evolution with the humans. So, both on the positive side (actually getting the benefit of it) and on the risk side, for me, the tale needs to be told in two dimensions. If you look at it one-dimensionally, just the technology or just the assimilation, you’re unfortunately going to arrive at a misunderstanding.

Jordan Schneider: Why don’t you tie that to how you hit really hard in this piece about having a first mover advantage and the importance of doing that adoption quickly as opposed to just being comfortable that it will come to you?

Richard Danzig: Well, if a model’s just out there and announced to the world, or even if it’s held private, and for example, you get the equivalents of DeepSeek or the Kimi model now in China, coming out with much more fast followers when the model’s announced, if everybody has equal access to it, you’re going to very quickly find that whoever is the quickest to pick it up has a substantial advantage because they can, in my example, cyber patch or attack before the other side is really well armed.

It’s astonishing to me that these are American companies at the cutting edge, but we haven’t really forged that national security nexus. We’ll see what the President says today. But the foreshadowing of his AI plan 180 days into his administration is one of emphasis on developing the AI systems and building data centers and the like. But it’s not, so far as I know at the moment, a real integration with the national security establishment.

Teddy, I’m a fan of what the Biden administration did and what you did in those contexts, but I don’t see, again, this strong national security part. I see an emphasis on AI safety and the development of the technology and appropriate concern about its ramifications in a number of dimensions. But from my standpoint — maybe because I’m a national security guy, that’s where I’ve spent my career — this seems pretty elemental and should be featured much more. Am I being unfair, Teddy, in my brief sketch?

Teddy Collins: I completely agree in terms of the fact that a lot more needs to be done. Probably the document that foregrounded this the most during the Biden administration was the National Security Memorandum, which at least as of the time of this recording, remains alive, unlike some of the other documents that we put together. But I think I and anyone else who worked on that would say that that was the first of the baby steps that are needed in order to get in the direction that we want to go and that we are very, very, very far short of where we want to be.

A huge piece of my job was just the most basic translation of taking things that people would say in Silicon Valley-speak and explaining what it meant in national security-speak to policymakers and vice versa. So yeah, I couldn’t agree more that we need these two worlds to be speaking to each other more extensively. We tried to lay a foundation for it in the NSM, but I totally endorse the idea that the government needs to get out of bed because we’re maybe in a slightly better situation than we were a few years ago, but we are not in, I would say, objectively a good situation in terms of the engagement between these two spheres.

The proposition is that AI is a General-Purpose Technology (like electricity or markets) whose impact will be widespread across all areas. Given this, what fundamental organizational and cultural changes are necessary within a large, heavily siloed institution like the Department of Defense (DoD) to ensure AI’s capabilities can be fully adopted and propagated throughout the entire system? This is a unique challenge because AI is not a discrete, specialized piece of equipment.

Jordan Schneider: We do have this thing called the NSA, and you sort of allude to it in your paper, that a lot of times the kind of mid- or senior-level expertise that goes into the Pentagon is detailed over what does and doesn’t work about having that organization as something that I assume folks can think, “Oh, not to worry, they got a handle on it. We don’t need to invest in this stuff at home.” Yeah, let’s do that one.

Richard Danzig: The NSA is just a terrific place. It has huge pools of expertise, but it’s got the same problem. The French call this la déformation professionnelle — the way in which professional identity causes us to narrow our perceptions and our activities.

As you well know, after much discussion, a structural change was made and CYBERCOM was created as a part of NSA and as a part of DoD, and now has increasing degrees of independence. CYBERCOM in its civilian side is staffed in substantial measure by NSA people. But the NSA people tend to be hugely focused on intelligence. They’re trained in that realm, promoted in that realm. They go to CYBERCOM for two or three years, and then they rotate back to NSA. So you don’t create a career force that has extraordinary capability in that regard.

On the military side, you do the same thing. Military are rotated in for two or three years for general purposes and then they go back to their mainstream careers. It doesn’t work for building an institution that would work.

We made it work with Special Operations Command, which is analogous, but that’s because we had previously developed in the services special operations operators and promoted them and developed that expertise. Whereas we’re not doing that with the digital world. Cyber is a manifestation of it. AI is a meta-manifestation of it.

It’s as though we developed airplane flight with propeller airplanes.

Jordan Schneider: Can you explain some more of your historical analogies?

Richard Danzig: Well, the suggestion in the paper is that the national authorities globally now with AI are like the European governments were in 1500 when they looked at the New World. They know it’s extremely important that it’s going to change things, that they have to be engaged with it. But they have fantasies about what it means. Nobody really knows. They think there’s a Northwest Passage and there’s a Fountain of Youth. The people who live there all grew up in India. Our understanding of AI is rather like that.

Therefore my effort to chart a small square of that territory — the cybersecurity — is an effort to try and say, “Hey, I can map this part of the New World and show you something about what it’s like.”

Beyond that, other aspects of the analogy interest me. Two just to mention are the way in which the European powers project onto the New World their rivalries, et cetera. This goes back to my point earlier about co-evolution of the technology. The New World exercises power of its own. The old world shapes the new. That’s the way, in my view, it’ll be with AI as a technology. The technology will shape things by its inherent logic and its capabilities, but the humans will also shape it in the way that the Europeans shaped the New World, including bringing smallpox, et cetera — the equivalent of malevolence in the AI world.

But then the other thing is — and this is what you were referring to, Jordan — the role of private companies in developing the New World, the charters, et cetera. Obviously the expeditions to the Americas, but the example I particularly point to in the paper is the British East India Company founded in 1600, which winds up having an army twice as large as the British government. I quote William Dalrymple, the leading historian of the British East India Company, who says people think that the British conquered India. No, it was the East India Company.

We have this extraordinary complex of private enterprises now and then shaping the exploration and the development of the new territories and complicating and rendering more opaque the interactions of the governments. The whole thing becomes more difficult to predict, more complex, more intricate. Those are some of the aspects of that metaphor that make it instructive for me.

No single metaphor captures AI. I’ve suggested three or four in this call. There are many others that others have advanced, and I’m just contributing my ingredient to the pot.

Teddy Collins: Maybe one question building on this — what should the relationship look like between the government and the companies? This is something that a lot of people have different thoughts on, and I’d love to hear your take.

Richard Danzig: It should be closely collaborative and mutually supportive. The government should be investing more in the companies. There should be more exchange of personnel between the companies and the government. There needs to be more capacity inside the government. But there needs to be more acceptance in the priorities of the companies that national security — U.S. national security — has a front-ranking seat at the table in the discussion about what should be released, how guardrails should be constructed, where the directions of effort ought to be, et cetera.

I’d like to see a lot more of that. In the paper, I suggest if you can’t get it collaboratively, you’re going to get it through the regulatory mechanism. I’m not a fan of that, but I can’t imagine a future for AI in which the extraordinary power of a superintelligence was left in the private hands of leaders of OpenAI or xAI or Anthropic or Microsoft.

If you give me a superintelligence, all else aside, my impact on the political system can be huge through information and disinformation activities. My impact on the financial markets can be fundamentally disorienting because I can engage with way more skill and knowledge in high-frequency trading or other activities that enable me to give myself an advantage in the market. That’s before I even come to the national security point.

My observation in the paper is that it’s elemental that we think governments should have more capability in the domain of violence than any private citizen. We do not want a private citizen to have an army so big that the U.S. government can’t control them. Internationally, we want to be at least as capable as anybody else. AI is at least as powerful in its superintelligence mode as violence. The same principle applies. I don’t think the U.S. government can be secondary to anybody.

Now that still generates a huge amount of problems. How do you make that work? And for that matter, who guards the guardians? How do I feel about the U.S. government having this capability and how do I constrain that? I don’t think I’m offering a satisfying suite of answers, but I’m pretty sure that I’m pointing in the right direction, which is you’ve got to figure out how the government exercises control in this arena. If you don’t figure it out now, you’re going to wind up being desperate to figure it out later when some crisis of one kind or another occurs because you don’t have that government power. It’s private power.

Teddy Collins: Picking up on this question of “Who guards the guardians?” — you mentioned that one reason that it’s important to have government involvement is that there’s an extreme public interest, and we want to make sure that these systems are developed safely. I could also imagine to some extent some governance concerns going the other way, which is if we want to avoid something like Project Maven, is it possible that the companies that might have some ethical concerns about exactly how this stuff is used, if it does get used by the national security state, are there some requirements that they can, that they sort of have leverage to try and put in place as a precursor to any serious engagement with the national security community?

Richard Danzig: It’s an argument for collaboration because if I’m working closely with DoD, I’m arguing with them and saying, “Hey, if you want this, I need reassurance about this other thing.” But if I’m at arm’s length, I don’t have that. Whatever DoD does with its models when it acquires them on the market is opaque to me, and I don’t like that.

I want that. I also value the international aspects of this. It’s tempting to think, “If only the U.S. ruled the world without any opposition, the world would be better.” Well, maybe it would be better, but you’d worry about the unconstrained power of the U.S. government. The fact that other countries — for example, allies like Britain and the AI Safety Institute there — are working on these issues is helpful.

The fact that we have competitors is, in the long term, probably good for humanity, though I would not like those competitors to prevail. But they represent some controls on what we do. The trouble is that, as with anything, you can skew too much in the other direction, and the competition may cause all kinds of bad acts because people are paranoid about what will happen in the competition. “Paranoid” may not be the right word because they may be right.

Teddy Collins: Can you think of previous instances where private sector actors had something that was so potentially valuable to the national security state, but where the business of selling to the national security state represented such a small fraction of the company’s commercial interests?

Richard Danzig: Health supplies, pharmaceuticals are exemplary of that. If you think, for example, about the extraordinary achievements of the COVID time and the development of government incentives for companies to develop a COVID vaccine, you see that on their natural incentives, the companies pursue financial goals that are different. Only a fraction of what the companies do is responsive to the government as a government market. Now the fact that we have regulation in that area changes some of that calculus. Above all, the fact that we have the Medicare insurance schemes and Medicaid are really important. But the health industry in general has that attribute.

When you think about it, it’s true of most industries. The decisions that the energy companies are making about how to proceed show some deference to the government, either as a customer or as a regulator, but the bulk of their thinking is oriented towards the private market. That’s the way I think about this.

There’s a nice report that was just put out by a commission set up by the state of California, supported by some Berkeley folks, on AI. I wasn’t terribly taken with their executive summary or their statement of principles. But if you actually read the text of the report, it’s a pretty richly textured assessment of what’s going on. One of its virtues is that it thinks about analogies to AI in other markets. Whenever it recommends something, it tries to think of an analog in, for example, the way in which the EPA regulates carbon.

I’m absolutely delighted if this program generates some more readership for my piece. If both of you have read it, that in itself may double my readership. But I would recommend this as well.

Writing Well, Life Hacks, and Book Recs

Jordan Schneider: Speaking of writing papers, reading this, I felt like my brain had rotted, and I was very jealous of the sustained thought and attention that you can give to something where you’re both writing about developments that are happening in real-time, but writing for an audience for today and also for five and ten years from now. Going back to some of your other larger national security papers over the past decade, which we’ll link to in the show notes, it’s clear you’re doing is trying to look for what is enduring. Even things you’ve written about 10 years ago with respect to cybersecurity and acquisitions, when it comes to the idea of modularity and driving in the dark and trying to really grapple with the fact that so much about the future is by definition unknown, is a very different modality of thinking and writing than the vast majority of what I see coming out of the think tank and policy community.

Can you offer reflections on that? How about some lessons for folks who are trying to write enduring work in a field that is unfortunately biased toward writing for the present moment only?

Richard Danzig: I appreciate those comments first because I appreciate the compliment and the reinforcement. To the extent it gets people to look back at things like my Driving in the Dark paper, which is called 10 Propositions about Prediction, that’s great. People frequently still assign it or talk to me about it.

Having said that, though, I appreciate that there are just different functions. It’s like some chorus that sings in different voices — there are tenors and there are basses, et cetera. What you are doing, for example, is to cover a very wide area and then have a particular focus on China and technology issues. I think it’s very valuable to have that as well, and you can’t do both. You’re not going to take off six months to do the kind of work I did, and I’m not able to do this if I’m doing what you’re doing. So, I think that they all have a place.

Third and most fundamentally, an interesting thing happened to me at the end of this, which made me reflect about AI in another dimension. I stayed up late one night trying to finish this paper and was working on it toward 1:00 AM when a colleague sent me a paper that another colleague had elicited from a deep research inquiry to an AI model. It was on a related topic, in this case, offense-defense balance and cyber.

I looked at it and thought, “This is a very worthwhile paper.” I didn’t think it captured what for me was central. I had problems with the paper, but if a colleague sent it to me, I would think, “This is a reasonable colleague I want to interact with.” This was in the closing hours of my writing my piece, which piece I wrote essentially without AI involvement. It wasn’t an AI-drafted piece in any way. I used AI a little bit for some of the research.

Then my thought was, “You know, maybe what I’m doing, which you just nicely praised, is anachronistic.” Some of this is just my getting older and reflecting on this. What does it mean to have this capacity for AI? I’ve labored six months on this, and the AI labored six minutes on what it produced, and what it produced was in the ballpark. I’ll claim mine is better, but it’s not in a different league. Then I thought, “Boy, if this is causing me to have these doubts with all the advantages that I’ve had over the decades and the seniority I have with respect to doing projects like this, what is it like if you’re 25 and you’re thinking about doing projects like this?”

It’s a subtle aspect, maybe not so subtle, of AI and the kinds of issues it presents, transmitted in a very personal way for me around the kind of enterprise I’m engaged in. For sure, that enterprise will look different for people who are now undertaking it, and especially for people who are undertaking it for the first time in less mature, developed ways.

I just want to add one other thing, which is, there was a nice piece in the Times by O’Rourke, a woman and a poet, who very thoughtfully came to grips with her use of AI — her initial skepticism, then her appreciation, and then her reservations. It touched on this to some extent.

For me, writing is a way of figuring out for myself. Her point, and one that I also have arrived at, is that the real sacrifice may be not be so much in the product, but in the fact that the human who would learn a lot by developing the product doesn’t have that depth of learning. That’s an extraordinarily important thing that I think we need to grapple with, quite apart from the subject matter of this discussion about national security.

Jordan Schneider: The ability of computers in the summer of 2025 to do 85% of the work of a Richard Danzig 70-page think piece is a remarkable thing. Fast forward three years, and we’ll maybe get to 97%. The computers aren’t going to be making all the decisions. I have this whole riff about an AI President or an AI CEO, where 20 years from now, or even sooner, if you sort of have a president wear glasses and get all the data inputs that someone would have, plus presumably a lot more because there’s more processing power that a computer can do taking in stuff than a president or a Chief Executive, the sort of point decisions that that person will make almost certainly at some point in the future are just going to strictly dominate what a human can do on their own, at least on certain dimensions.

Not all of what happens in the Pentagon or the national security establishment is people thinking about policy papers. But I’m curious, as you sort of meditate on this, where do you think the humans are still going to be useful and relevant? Where does it not matter that we didn’t have someone doing the six months of thought around the topic? And where could it end up being really dangerous if we end up trusting this stuff too much?

Richard Danzig: There’s a lot here that I don’t know. Coming back to, what’s the impact of the market on human psychology in 1500? We’re predicting the next 200 years. You can’t do it.

My view, though, starts from a sense that we exaggerate the role of humans now. If you take an archetypal decision like a president’s decision to unleash nuclear weapons in response to an impending attack, what actually happens? He’s got 30 minutes for a decision, but what is he doing? He’s relying on machine inputs. The machines are telling him the missiles have launched. Does anybody actually see the missile launch? No. Satellites are detecting this through a variety of technologies that the president is unlikely to understand. They transmit that information, it gets introduced into models, and people say, “Here are the results.” It’s extremely unlikely that the underlying nature of the models is understood. By the time he’s got a very few minutes for decision-making, his decisions may be largely shaped already by those machines.

We exaggerate the degree of human opportunity here. Now you can argue that it’s still important that he can have an intuition about whether it is reasonable to expect that somebody would be attacking me in this context, et cetera. But I think the degree to which we allow decisions to be made by bureaucracies and markets — those are impersonal enterprises, but we’re all incredibly shaped by them. We delegate to them large numbers of decisions that affect our everyday lives, and they still occur. They have extra power to shape our judgments.

If you ask how many people go into public school teaching as compared to investment banking when they have an option, the market is shaping the weights that underlie their decisions. We think of it as a wonderful individual human decision. Some human beings have the ability to say, “I’ll ignore the market signals,” but the market signals shape most people most of the time.

I think we’re just going further down this path. What is that like, and where does that leave us as human beings? I just don’t know. I think it’s one of the very important things to be figuring out now and discussing and debating amongst ourselves. I can say more about it, but I don’t think my thoughts are worth any more than anybody else’s on this subject.

Jordan Schneider: Okay, let’s do some life hacks. Fiber One. I got that from you three months ago. Incredible. What else do you have for me?

Richard Danzig: I’m a big advocate of reading fiction. When I was Navy Secretary, the Marine Corps traditionally asked the Secretary to suggest books for Marine officers to read, and traditionally, they’re military histories. Partly for the pleasure of throwing them a curveball, and partly because I believed it, I gave them a list of 10 novels.

My argument was, and is, that if you really want to understand other human beings, the best way to do that is to read creations by other people that get into other people’s heads. I’m just amazed at this capability, so far exceeding anything I could do, to envision what the world looks like from the standpoint of someone else. So, I’m frequently encouraging people to read fiction and the like.

I’m a big fan of parenting. My general view about that is that people with our cultural predispositions are constantly trying to educate their kids and move them along and get them to progress and be more like adults. My view is do everything you can to retard their development. What you really want to do is have pleasure in kids at the age that they’re at, and they’re not going to be at that age in the time ahead. They outgrow their childhood, so enjoy it while you have it and treasure the way they look at the world.

I suppose, up there with Fiber One, are these two recommendations.

Jordan Schneider: All right, so we’re not taking sponsorship from Kellogg’s, but General Mills, if you want to reach out, there’s a conversation to be had.

Richard Danzig: See the power of the market there. Here I’m offering these highfalutin observations, and you’re reducing it to your quest for sponsors.

Jordan Schneider: I had a few points there. The threshold for me of AI writing compelling fiction was crossed only two weeks ago. I would really encourage folks to go to Kimi.com, the latest Chinese model. There’s something about its English that feels a little foreign in a way that ChatGPT and Claude have been honed to a T to not anger you and just be anodyne. That works for some functions, but not when you tell it to write you a Jewish story in the style of Tolstoy or whatever.

Let’s close, Richard, with some book recommendations. Should we spin around? Should we have you walk around with your laptop and give us a little library tour, see what speaks to you, or what’s right for cybersecurity and bureaucratic change?

Richard Danzig: My recommendations might induce a certain amount of queasiness in general, but walking around with my laptop for sure would do that. So I’ll restrain myself on that count.

Some stuff I’ve read recently: You’ve been an enthusiastic supporter of the Apple in China book, which I think is really worth attention. I’m just very impressed with it. I just finished reading Robert Graves’s Goodbye to All That, a memoir of World War I, which I’d never read before. The first 90 pages or so are engaging about his life before World War I, but not particularly special. The descriptions of his experiences during the war, very matter-of-factly delivered, are really worth reading. His post-war tough efforts to adjust, and difficulties with that, both physical and mental, are illuminating about Ukraine now and what people there are going through. So I very much recommend that.

Of novels I’ve read recently, I caught up with Rachel Cusk’s Outline, which I think is a remarkable book. It takes a narrative voice that everybody’s fiddled with — narrative voices for centuries in Western literature — and finds a relatively new way of doing this. The writing is frequently dazzling, and the insight about human relations is terrific. It’s just a few hundred pages. Those are three books that immediately pop into my head sitting here at my desk. I see that I’ve got the Anil Ananthaswamy book Why Machines Learn: The Elegant Math Behind Modern AI, which I think is a masterpiece of exposition. The math is at times beyond my patience or skills, but if you’re mathematically inclined, it’s a book I would definitely recommend on AI. I’m just impressed by it. So those are some diverse things that come to mind.

Jordan Schneider: I want to press you on this one more time because you kind of pivoted to the AIs being able to do the work, but I still want to get one more chance to get in your head. What are the questions you are asking yourself as you’re trying to write things that are both relevant to today and relevant for years from now?

Richard Danzig: I’m not sure I have a good answer for that. I’m pretty incremental. What amazed me in writing this paper is maybe three things.

1. How much I kept changing my mind. Talking to other people — I cite a number of them in the acknowledgments — it’s really helpful. The driving force for me was trying to understand it better myself. That took me a number of iterations. I look back on where I started, and there were just a lot of things that I was naive about or didn’t understand.

2. How difficult it was because the field was changing. People keep producing stuff, and you know, O3 comes out and starts doing achievements in math and on coding, and DeepSeek, you name it. I was constantly having to revise things, where I said “AI may be capable of this” into “AI already did this” or whatever.

3. People are also being very productive in their commentary. Your team here at ChinaTalk, but also Jack Clark and his Substack and various other things, are trying to keep track of the field. I would have some original idea, I thought, and somebody else would publish it. Then I’d spend a while trying to develop the data on something and write it up over the course of three pages, and somebody else would publish 15 pages that did it better. You have this sense, it’s like the tide is rushing in, and you’d better scramble to find some high ground. Eventually, you just have to say, “Stop, I’ll publish it.”

The day I committed the manuscript to being done, the next day, there were two things I thought, “Oh God, I wish I’d known about this. I should have.” I didn’t quite catch up with the developments in that. Just as a concrete example, I talk a little bit about formal methods in the paper and point to the DARPA Hack-A-SAT experiment, where they demonstrate their ability to use formal methods to make helicopters safe against red team cyberattack. I described it briefly, but I hadn’t realized they had actually now completed the experiment. I wish I devoted more time to that, and I’m quite interested in it as a potential additional thing. But it was just on my horizon and not in the center of my focus when I wrote the paper.

There are all too many other examples of that. The world is moving so quickly. In my analogy to the market in 1500, it took two centuries for that to unfold, and it still is unfolding. But what happened in those two centuries will happen in single-digit years with AI in terms of the magnitude of change. We adjust to the speed of change in the same way as we adjust to routinely flying off to Europe in a way that would have been unimaginable to my grandparents. But it’s still astonishing. In a way, we lose track of that astonishment; we lose track of the character of modernity. Anything we grew up with, we take for granted. Anything we didn’t grow up with poses all kinds of challenges of assimilation.

Teddy Collins: Can I throw in one final question, just building on that? I know that this kind of runs up against the caveat that you gave at the beginning, which is it’s very difficult to make predictions in these domains, but I wonder if you have any intuitions about what we expect to see in terms of this magnitude of capability gaps between key players. Let’s say between two countries in terms of AI adoption, taking into account that these capabilities are, as you said, we may end up having technological change of the magnitude that previously took decades being compressed into a much shorter period of time.

Richard Danzig: You’re asking, Teddy, what I think is the likelihood that there are substantial gaps between, for example, the U.S. and China or other competitors?

I think that those gaps tend to be exaggerated and that the fast followers will follow fast. The gaps are short-lived. But there are two important qualifications. One is that a short-lived gap can be critical if the advantaged party knows how to use it.

The second is that it may be that there is the potential for takeoff through recursive self-improvement, so that if you’re in an advantaged position, you can amplify that advantage over the time ahead. You’re very familiar with these ideas. It’s hard for me to weigh them. We’ve talked a little bit, and Jordan rightly points out it’s been a long-standing concern of mine about prediction and the difficulties. I think it’s difficult to predict trends and what’s going to happen, but I think that’s doable and way easier than predicting how much weight to give to the different variables and the timing of the evolution of the different variables. Timing is the most difficult thing to predict.

I point out a little footnote in the paper that if you take the U.S. stock market, it’s so striking. This is an extraordinarily regulated environment with rules and requirements for disgorgement of information and regulation of trading and the like. Nobody’s figured out a way to actually time the market well. The two dominant variables of strategies are to get around that problem either by buying and holding and saying, “I’m indifferent to the timing fluctuations,” or at the opposite end by engaging in high-frequency trading. You trade so much every microsecond that, as a practical matter, you’re not as exposed to the issues of timing. You’re always trying to pair your trades, hedging them, etc.

It interests me that conceptually, I don’t think we’ve come to grips with these three propositions — one, how fast the followers are. Second, how difficult it is to give weight to the different variables we perceive. And third, the difficulties of predicting timing. It seems to me those are a part of the great mystery that I have spent time looking at over the course of my career and many others have grappled with as well, sometimes without realizing that it’s what they’re grappling with.

Jordan Schneider: I think that’s a pretty good articulation of our thesis statement for our Powerful AI and National Security series, which Teddy and I will be continuing throughout the rest of the year — we can’t know anything, but it is a worthwhile effort to try to start from the technologies themselves and build out an understanding of what sort of potential futures of what the technology gives and potential gaps that could be developed between the U.S. and its adversaries.

Richard Danzig: I’m grateful that the two of you are out there exploring this new world and applaud you for doing it. My biggest encouragement is, Teddy, keep asking Jordan questions.

Teddy Collins: I will enthusiastically embrace that mantle.

Jordan Schneider: I want to pick up on the parenting thing because that’s a nicer place to close. My daughter is turning one in a week, and we are at this beautiful, interstitial phase of saying her first words, but not entirely getting their meaning right or understanding what they are all the time. The semantic connections are not totally there. So “baby” is “baby,” but also it is a watch. Anytime someone gives her a watch to play with, that is “baby,” too. “Wow” is now associated with when she turns a light on, and when she sees books, and when she sees the sunlight in the morning. So, we’re watching a model train in real-time. It’s fun to play with the finished model, but it’s also fun to play with these weird artifacts that get spun up over the course of the training run.

Richard Danzig: I encourage you on two counts, Jordan. One is to continue that sense of wonder and not correct her when she sees light and says, “Wow.” Just say “Wow” yourself. The second thing is, you might think about having her keep sharing with the rest of us by having her on ChinaTalk.

Isn’t that really your ambition, that you would ask some question and your guest, in that case your daughter, would say, “Wow”?

Jordan Schneider: Once I had a kid, someone was like, “Jordan, you’re building a dynasty now. You need to inculcate her into the rites of ChinaTalk.” And, “We need to come up with different eras, and they can have another sibling and then battle for the throne.” I’m not sure this is quite the generational business that the New York Times has turned out to be, but anything’s possible in the world where a new printing press hits the planet.

In 2025, ChinaTalk’s eighth year of existence and my third doing it full time, we did the thing. We put out on the newsletter over 150 editions that centered on China AI lab, policy, and application coverage.

On the podcast we published a hundred shows about:

• Chinese elite politics and US-China policy

• US-China chips and AI

• Economic statecraft around export controls and tariffs, which made up the majority of our ten emergency pods this year (double 2024’s emergencies!)

• A growing focus on defense, with the launch of our weekly Second Breakfast show, a good bit of military history and our AI and the Future of War series

ChinaTalk’s substack grew 60% this year to 65k subscribers. This is a really big number. The second largest think tank substack is SCSP, which has 35k. Recent CFR, the Atlantic Council, and Brookings annual reports say that, after two decades of building lists, they each have around 200k total email subscribers. Not a bad showing for ChinaTalk’s $500k budget and three years in the game.

The show gets 10-15k listens per show across the podcast and YouTube, and was downloaded a million times last year. These are also really big numbers. Across all of foreign policy think tank-dom, only one show (CFR’s The President’s Inbox) is bigger. And it’s not like Mass Ave isn’t trying. CSIS has 40 shows alone.

Why do so many people engage with our work?

1. US-China tech is an covering important, underserved niche. A year after DeepSeek, to my endless surprise there are still only a handful of analysts working in English in public on tech and China. While there is more out there on the defense side, most coverage tends toward SpecOps bro, Zeihan geopolitics bro, or lifeless industry coverage.

2. We make substantive, engaging content that resonates in today’s media landscape. In traditional think tanks, podcasts, newsletters and responses to news developments are afterthoughts to the long reports and small in-person events funders expect as outputs. Since podcasts and research with outputs under 10,000 words often aren’t directly funded and so happen on fellows’ personal time, talent in these areas isn’t hired for or developed. By only accepting unrestricted funding, we’ve had to limit our headcount growth, but it ensures we’re covering what matters today, not getting stuck writing long reports that won’t matter by the time they’re finished in the extremely fast-moving field of US-China and technology.

3. Brands matter in DC way less than they used to. Writing a smart newsletter in some ways even gains you credibility vs working at a brand name think tank, university, or news organization. It blew my mind as well to learn that Jasmine Sun wrote that “I was shocked to learn from a senior WaPo reporter that they consider anything over 10,000 views good.” Our worst performing posts do more than this!

2025 was the year to test whether I wanted to grow a research team or continue to float along as an extended Ezra Klein cosplay, podcasting and writing when the mood strikes. The answer to that is a definitive yes to growing a team. It's been a pleasure getting to empower young talent in an open ended, self-driven think tank position I wish existed when I was in my 20s. We’ve brought on some great analysts who have all already contributed to the national conversation: Lily Ottinger, Irene Zhang, Nick Corvino, and Aqib Zakaria.

Unfortunately, funding is still holding us back from the fully humming ChinaTalk as we don’t have the money to grow headcount. If you’re interested in seeing ChinaTalk flourish even more in 2026, please get in touch!

What follows is a rundown of our most memorable podcasts and articles.

Our 10 Most Memorable Podcast Episodes of the Year

Here’s a spotify playlist to listen to them!

Contemporary Politics

PLA Purges with Jon Czin

Jon Czin, longtime CIA China analyst now in the think tank world, chatted PLA purges. I’ve done less domestic chinese political coverage of late, as not much surprising or dramatic has happened since the COVID response drama, but the PLA purges are easily the most interesting domestic elite political development in years.

I’m also pretty proud of my thumbnail for this one…

Jake Sullivan

Felt like I’ve been prepping for this one for five years. All the other podcasts he’s done since leaving government followed the same trajectory of the hosts beating up on him for Gaza/Ukraine leading Sullivan to spend his airtime defending his record. I wanted to do something different, instead trying to explore what the experience is like of serving as NSA. I think we succeeded.

Dan Wang

Dan Wang came over to my house to discuss 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 podcaster all-star show with Dan Wang + Ezra + Derek!

Allied Scale and Net Assessment with Rush Doshi

If America doesn’t use its allies, it will lose the 21st century. This interview with Rush Doshi explores how the U.S. should strategically compete with China by leveraging partnerships with allies. While China faces real challenges like demographics and debt, Doshi argues that China’s scale, manufacturing dominance, and industrial capacity pose enduring strategic threats. He critiques both the Biden and Trump approaches to alliances: Biden’s overemphasis on persuasion and Trump’s heavy-handed use of coercion. Instead, Doshi emphasizes the need for capacity-centric statecraft, where allies help each other build economic, technological, and military strength.

China’s Rare Earth Controls

An emergency pod with the Two Chrises ( and Chris McGuire) after China dropped their rare earth controls for the second time this fall. China successfully backing down the Trump administration by deploying rare earth controls felt like a turning point in the relationship.

Deepseek: What it Means and What Happens Next

Early in the year, and I reflected on the long term implications of the DeepSeek saga, looking into what the firm does and doesn’t illustrate about Chinese innovation and implications for future US policy. It holds up pretty well!

Liberation Day Pod: MAGA: A Guide for the Perplexed with Tanner Greer

In this podcast episode, recorded on Liberation Day, Tanner Greer and I talk through the chaotic dynamics of Trump’s second administration China policy. Greer explains Trump’s unpredictable decision-making style, his use of internal factional conflict as a management tool, and the administration’s disjointed tariff policies. The conversation explores four quadrants of Trump World ideology and how adherents of each quadrant approach trade, industrial policy, and Taiwan.

Trump’s Pivot to Putin + AGI and the Future of Warfare

Recorded the day after Trump’s disastrous meeting with Zelensky in the Oval Office, Mike Horowitz, Shashank and I discussed what the brave new world of Trump’s global diplomacy and just how much war is changing. The second Shashank show of the yar we did following up with Rob Lee exploring to what extent the war in Ukraine is a revolution in military affairs continues the theme.

History

Inside the Soviet Cold War Machine

Sergey Radchenko’s To Run the World explores the Cold War not as a clash of ideologies, but as a tragic and often absurd contest for prestige, legitimacy, and recognition among insecure leaders struggling to validate their power, both externally and at home. In this interview, Radchenko argues that authoritarian regimes, especially the USSR and China, pursued global influence to compensate for internal weakness.

Part two came out in April, and it’s even better than part one! In this deep-dive, Radchenko unravels how personal egos and the battle for international prestige shaped Soviet decision-making — from Khrushchev’s downfall to Brezhnev’s Vietnam gamble, the paranoid Sino-Soviet split, Nixon’s unlikely détente, and the disastrous invasion of Afghanistan. This episode asks the question, what if boredom, not grand strategy, is what starts wars?

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.

Most Memorable Articles of the Year

We already recapped our tech coverage in our “China AI in 2025 Wrapped” post, but I wanted to highlight a few more pieces that stood out.

On the travel side, Lily found some fascinating China connections travelling in Kyrgyzstan, Irene and Lily reflected on some Korean makeup and massacres, and I spent some time in Tel Aviv and the Bay Area.

On the war beat, we ran a piece by a Japanese colonel studying at Air War College in Alabama about lessons from how Japan intended to defend Taiwan against an American invasion in WWII.

I also updated my early career guide for folks who are interested in topics adjacent to ChinaTalk themes.

25 Biggest Events in US-China Relations This Century

Stealing ’s listicle format, I ranked the 25 most important events in US-China relations this century. If there’s interest I could explain my reasoning in a full piece. I’d also be interested in taking submissions on this theme!

1. Xi Jinping becomes CCP General Secretary (18th Congress/1st plenum) — 11/15/2012

2. China joins the WTO (trade-driven takeoff shorthand) — 12/11/2001

3. Trump elected U.S. president — 11/08/2016

4. China abolishes PRC presidential term limits — 03/11/2018

5. Chen Shui-bian wins Taiwan presidential election — 03/18/2000

6. Shinzo Abe returns as Japan’s PM (Second Abe Cabinet inaugurated) — 12/26/2012

7. U.S. “Oct 7” export controls on advanced computing/semiconductor tools to China issued — 10/07/2022

8. “Liberation Day” tariffs announced (Rose Garden speech) — 04/02/2025

9. 9/11 attacks — 09/11/2001

10. Dr. Li Wenliang dies as COVID escalates — 02/07/2020

11. “Made in China 2025” issued by State Council — 05/19/2015

12. Huawei added to the U.S. Entity List — 05/16/2019

13. Tsai Ing-wen wins Taiwan presidential election — 01/16/2016

14. Trump signs Section 301 action memo (trade war kickoff marker) — 03/22/2018

15. Lehman Brothers files for bankruptcy (financial crisis kickoff) — 09/15/2008

16. Hong Kong National Security Law takes effect — 06/30/2020

17. NYT publishes the “Xinjiang Papers” leak (standing in for Xinjiang repression) — 11/16/2019

18. DeepSeek releases R1 — 01/20/2025

19. Bo Xilai sentenced to life imprisonment — 09/22/2013

20. U.S. SecDef calls for halt to land reclamation/island-building (Shangri-La Dialogue) — 05/30/2015

21. Tibetan unrest begins with Lhasa protests — 03/10/2008

22. Beijing 2008 Olympics opening ceremony — 08/08/2008

23. U.S. BIS issues denial order cutting off ZTE’s export privileges — 04/15/2018

24. U.S.–China Anchorage talks open (Blinken/Sullivan vs. Yang/Wang) — 03/18/2021

25. Obama delivers “pivot to Asia” speech (Australia Parliament) — 11/17/2011

Ins and Outs for 2026

And lastly, borrowing the format from , we’re doing some Ins and Outs for 2026. Predictions are NOT endorsements!

Happy New Year! This is your reminder to fill out the ChinaTalk audience survey. The link is here. We’re here to give the people what they want, so please fill it out! ~Lily 🌸

Ben Buchanan, now at SAIS, served in the Biden White House in many guises, including as a special advisor on AI. He’s also the author of three books and was an Oxford quarterback. He joins ChinaTalk to discuss how AI is reshaping U.S. national security.

We discuss:

• How AI quietly became a national security revolution — scaling laws, compute, and the small team in Biden’s White House that moved early on export controls before the rest of the world grasped what was coming,

• Why America could win the AI frontier and still lose the war if the Pentagon can’t integrate frontier models into real-world operations as fast as adversaries — the “tank analogy” of inventing the tech but failing at operational adoption,

• The need for a “Rickover of AI” and whether Washington’s bureaucracy can absorb private-sector innovation into defense and intelligence workflows,

• How AI is transforming cyber operations — from automating zero-day discovery to accelerating intrusions,

• Why technical understanding — not passion or lobbying — still moves policy in areas like chips and AI, and how bureaucratic process protects and constrains national security decision-making,

• How compute leadership buys the U.S. time, not safety, and why that advantage evaporates without building energy capacity, enforcement capacity, and world-class adoption inside the government.

Listen now in your favorite podcast app.

The Biden Administration’s AI Strategy — A Retrospective

Jordan Schneider: We’re recording this in late 2025, and it’s been a long road. What moments, trends, or events stand out to you looking back at AI and policymaking since you joined the Biden administration?

Ben Buchanan: The biggest thing is that many hypotheses I held when we arrived at the White House in 2021 — hypotheses I believed were sound but couldn’t prove to anyone — have come true. This applies particularly to the importance of AI for national security and the centrality of computing power to AI development.

You could have drawn reasonable inferences about these things in 2021: AI would affect cyber operations, shape U.S.-China competition, and continue improving as computing power scaled these systems. That wasn’t proven in any meaningful way back then. But sitting here in 2025, it feels validated, and most importantly, it will continue in the years ahead.

Jordan Schneider: Maybe there’s a lesson here, going back to the 2015-2020 arc. People think many things will be “the next thing.” Was this just happenstance? Was there some epistemic lesson about how folks who identified AI as the next big thing recognized it?

Ben Buchanan: I’d love to say I knew exactly where this was heading when I started exploring AI in 2014-2015. The truth is, I simply found it intriguing — it raised fascinating questions about what technology could achieve. At the time, I was working extensively on cyber operations, which is interesting in its own right.

Fundamentally, though, cyber operations are a cat-and-mouse game between offense and defense — cops and robbers on the internet. That’s valuable as far as it goes, with plenty of compelling dynamics.

But around 2015, I thought, “AI is conceptually driving toward something bigger, forcing us to grapple with questions about intelligence and humanity, with an impact broader than cyber operations.” That’s what drew me in. Once I started digging deeper, it became clear this technology was improving at an accelerating rate, and we could project forward to see where it was headed.

The real turning point came somewhere in the 2018-2020 period when the scaling laws crystallized. That’s when I developed the conviction that AI would fundamentally matter for international affairs and that computing power was the fulcrum. I wrote a piece in Foreign Affairs in the summer of 2020 called “The U.S. Has AI Competition All Wrong,” which argued that we should stop focusing on data and start focusing on computing power. For the past five years, the scaling laws have held.

Jordan Schneider: Can you reflect on how different pieces of the broader ecosystem woke up to AI? This is now a front-page story constantly. Nvidia is worth $5 trillion. The world has caught on, but looking back, different lights turned on at different times. What’s interesting about how that happened?

Ben Buchanan: Probably the strongest technical signal came in 2020 with the scaling laws paper from Dario Amodei and the team that later founded Anthropic. That paper put real math behind the intuition that a few people had about the importance of computing power in rapidly accelerating AI performance.

Then GPT-3 came out in May 2020 — a crazy time in America with COVID and the George Floyd protests. GPT-3 provided even more evidence that you could make big investments in this technology and see returns in terms of machine capability. That was enough for me and others heading to the Biden administration to have conviction about the importance of computing power.

We spent 2021 and 2022 getting the export controls into place. ChatGPT was released in November 2022. Since then, it’s been a parade of even bigger developments. The Kevin Roose article in the New York Times in 2023 brought AI to a new set of non-technical people. The increasing AI capabilities since then have only accelerated awareness.

I’m proud we got some of the biggest actions done before the whole world woke up. When that happened, we could say truthfully, “We’ve already done some of the most important policies here — there’s much more to do, but we’re already taking big steps.”

Jordan Schneider: The CHIPS Act wasn’t necessarily an AGI-focused policy from the start, was it?

Ben Buchanan: I’d differentiate between the CHIPS Act and the export controls. The CHIPS Act is the legislative step — I get no credit for that. Tarun Chhabra and Saif Khan deserve tremendous credit for working on it. That’s not an AGI-focused policy at all. It’s a supply chain policy recognizing that chips are important for many reasons, and we need domestic chip manufacturing like we had decades ago but no longer have. You can reach that policy outcome without believing in AGI or even really powerful AI systems.

On the chip control side, those policies don’t need AGI assumptions to be smart policies. When we justified them, we talked about nuclear weapons, cryptologic modeling, and all the applications possible with those chips before even considering really powerful AI systems. Everything in that justification is completely true. It’s a robustly good action given the importance of computing power — a long-overdue policy independent of AGI considerations.

Jordan Schneider: We had Jake Sullivan on recently discussing the Sullivan doctrine about maintaining as large a lead as possible. But the implementation wasn’t the maximalist version of “as large a lead as possible” regarding controls. Other considerations mediated where they landed in October 2022 and how they evolved over the following years. What are your reflections on bringing these policies to the table?

Ben Buchanan: The process started in 2021 when a small group of us arrived at the White House. Most of us have been on the ChinaTalk podcast before — folks like Tarun Chhabra, Chris McGuire, Saif Khan, Teddy Collins, and myself. We had these convictions about the importance of computing power.

Jake honestly gave us a lot of rope and deserves tremendous credit. At a time when not many people cared about AI — when the world focused on COVID, Afghanistan, Ukraine — Jake and the senior White House staff heard us out. Eventually in 2022, we reached the point where we were actually going to do it.

Everything in government is a slog sometimes, and this was an interagency process. Something like this shouldn’t be done lightly. It’s good there’s at least some process to adjudicate debates. As you mentioned, Jake gave a speech in September 2022 about maintaining as large a lead as possible in certain areas. My view was always maximalist — we should be very aggressive. But I recognize there are many constraints, and someone in Jake’s chair has to balance different concerns that a dork like me doesn’t have to balance. I’m just focused on AI, chips, and technical issues.

Everyone can draw their own conclusions about what we should have done and when. But I’m very proud we got the system to act even before AI became the mainstream phenomenon it quickly became.

Jordan Schneider: The hypothetical Jake entertained was doing the Foreign Direct Product Rule on semiconductor-manufacturing equipment from the beginning. You wouldn’t have this situation where, for example, BIS lists a company with some subsidiary, and one of their fabs is listed, but the fab across the street isn’t. Ultimately, you have this dramatic chart showing semi-equipment exports actually doubling after the controls came into place. Is that the big fork in the road? What else is contingent when looking at how China can manufacture chips today?

Ben Buchanan: On chip manufacturing equipment, the more aggressive option would have been using the FDPR to essentially blanket ban chip manufacturing equipment to China — rather than negotiating with the Dutch and Japanese — the way we did with chips. That’s probably one option.

If we were doing it again, we probably would have been more aggressive earlier on things like High-Bandwidth Memory. Or we would have used a different parameter. The parameter we used in 2023 related to the performance density of chips we would have targeted in 2022.

Anytime you’re doing something this technical, I’d love mulligans to get technical parameters right. But the core intuition and motivation for the policy has held up well, and most of the execution has been good from a policy perspective. I wouldn’t second-guess much of it. I wouldn’t change much except to say I would have loved to do even more, even faster. But that was my disposition throughout this process.

Jordan Schneider: What are the broader lessons? Is the key just “trust the nerds who are really excited about their niche areas”? Is there anything repeatable about the fact you had a team focused on this back when Nvidia was worth a lowly $500 billion?

Ben Buchanan: This is something I thought about in the White House. Jason Matheny asked this question well — “Okay, we found this one. How many other things like this are out there? Can we do this for 10 other things?” We did do something similar eventually in biology and biology equipment.

There probably were others. But there’s also a power law distribution for this kind of thing. The semiconductors, chip manufacturing equipment, and AI nexus were by far the highest leverage opportunities. I’m glad we found it. I’m glad we acted when we did. But I don’t know of another thing at that level of scale. There were probably others at lower impact levels that we could have pursued, and some we did pursue. But this was the biggest, highest leverage move available to us.

Jordan Schneider: What did you learn about how the world works sitting as a special advisor on AI in those final years?

Ben Buchanan: I learned a lot about process. I had this concept that someone — maybe the president — just makes a decision and then it all happens. Anyone who’s worked in government can tell you there’s much more process involved. Some of that process is good, some is annoying, but there’s a mechanism to it that’s important.

I recall a moment when I made some point in a meeting, and someone said, “Well, that’s great, Professor Buchanan, you’ve worked out the theory, but what we’re doing here is practice.” It turns out in many cases, the theory isn’t that difficult. Many of us had written about this in 2019 and 2020 — the theory was worked out long before. But it was still a cumbersome process to get the system to act. Sometimes for good reason.

Jordan Schneider: Why?

Ben Buchanan: I don’t know what the export market was at the time, but we’re talking about a company worth hundreds of billions of dollars — Nvidia. We’re talking about very important technology. We’re talking about essentially cutting off the world’s largest country by population from that technology. Those aren’t things that should be done lightly. It’s fair that there should be a gauntlet to run before the United States takes a decision like that.

Jordan Schneider: What are your state capacity takes after doing this work, in the vein of Jen Pahlka?

Ben Buchanan: There are real questions on enforcement. The best counterargument I never heard to our policies was simply, “The United States government isn’t capable of doing this. Maybe we could write the policies eventually, but the enforcement isn’t there. There will be subsidiaries. The Bureau of Industry and Security in the Department of Commerce, which carries out enforcement, is chronically underfunded.”

I don’t buy that argument. The U.S. Government should do this and could do this. I’m all for building state capacity in basically every aspect of AI policy. When I moved to one of my later roles in the White House — working with the Chief of Staff’s office and the domestic side where I had more control — this was a big priority. We hired probably more than a thousand people in 2023 and 2024 across a large variety of agencies to build that state capacity.

Jordan Schneider: If you had — maybe not 100% but 65% — the level of top cover that DOGE had in its first few hundred days to take big swings without worrying about getting sued two years later. I know you’ll say rule of law is important, but if you had your druthers and things worked out fine, what directions would you have liked to run harder on?

Ben Buchanan: Rule of law is important, but it’s actually easier to burn things down than build them up. We had substantial top cover — Jake Sullivan, Bruce Reed, and ultimately the President gave us top cover at every turn. But on the China competition front, I would have wanted to do more things faster and more aggressively, especially given what I now know about how correct the general theory was.

You mentioned chip manufacturing equipment — that was one. HBM is another that didn’t come till a couple years later. Obviously I would have bulked up enforcement capabilities with that kind of control. Much of that still holds up. The China Committee in the House did a good report maybe a month or two ago on things that could be done on chip manufacturing equipment. Those are robustly good actions. We should be doing them as soon as possible. If we could have done them earlier, that would have been great, but we certainly should be doing them now. That’s in the Trump AI action plan. This isn’t a partisan issue. They just haven’t done it yet. The Rickover Imperative

Jordan Schneider: Setting what Trump is going to do aside, what do you think the federal government is capable of? What do you think the federal government could really do if they put their mind to it?

Ben Buchanan: Wearing my AI hat more than my China hat, the most fascinating question of the moment is, what is the relationship between the public sector and the private sector here? This is a time when you have a revolutionary technology, probably the first one since the railroad, that is almost exclusively coming from the private sector. Nukes and space and all this other stuff, it’s coming from the government. Maybe the private sector is doing the work, but the government’s cutting the check.

This is a question that we just started to get our hands around, but if I had this level of control you’re talking about and I was still in the government, I’d be going to places like DOD and the intelligence community and saying, “You have to find ways to develop this technology and build it into your workflows and take what the private sector has built and really make sure we are using this for full national security advantage.”

I actually think the analogy there is maybe less like DOGE, though there’s some of that, and more like, who’s the Rickover of this era, and what does that look like? What does the Rickover look like for AI? Someone who’s taking the technology and really integrating it into military operations? The CORONA program and what the American spy agencies did were incredibly impressive, pushing the boundaries of the technological frontier. They basically took early spy satellites and dropped the film canisters from space. It’s just insane that it worked. That’s the kind of stuff that requires a lot of air cover, a lot of money in some cases, and a lot of ambition. I would be really pushing, and we did push to get government agencies to do that kind of work, to have similar levels of ambition, taking a private sector-developed technology and putting it to use for our very important missions.

Jordan Schneider: Are there too many structural bounds on doing Rickover-type stuff for the national security complex as currently established to take those big swings?

Ben Buchanan: As someone who’s never worked in DOD or the IC, I don’t know that I have a high confidence view. But the answer probably is yes. We worked on the President’s National Security Memorandum on AI, and there’s a line in the introduction of that document which says something like, “This is not just about a paradigm shift to AI, but this is about a paradigm shift within AI.”

I think if you go to DOD or you go to the intelligence community, a lot of folks will say, “No, no, of course we do AI. We’ve done AI for a long time. Don’t you know, we funded a lot of AI research in the 1980s?” But really what we’re talking about is, how quickly after Google drops Gemini 3 or Anthropic drops Claude 4.5 can we get that into the intelligence community and DOD workflows, including classified spaces, and put it to use for the mission? How much can we redesign those workflows to accommodate what the technology can do in the same way that, in the early days of the industrial revolution, everyone had to redesign factories to account for the engines and electricity? I’m not saying I’m qualified to do any of that, but that’s where I’d put a lot of focus if I want to benefit American national security.

Jordan Schneider: Private sector firms will be able to outcompete other private sector firms by doing a better job of employing AI and whatever capabilities it unlocks. If that is automating low-level stuff, if that is informing strategic C-suite decisions, then you have a sort of natural creative destruction element going on. As Sam Altman said at one point, “If OpenAI isn’t the first company in the world to kick its CEO out of a job and hand the reins over to AI, then we’re doing something wrong.”

It is inevitable that governments all around the world are going to be slower adopting that than, you know, the five-person startup that’s worth $5 billion because they can be incredibly nimble and are really technically proficient in working at and even beyond the frontier of what is commercially acquirable. But the question is, aside from people sitting in the White House telling agencies to get their shit together, or just being scared of being outcompeted by China or Mexican cartels or whatever, what could the forcing function be to drive some of the legislative and executive branch action to have that stuff actually happen?

Ben Buchanan: There are a couple of points here.

First, the stakes are higher for DoD in the intelligence community than they are for the five-person startup. It is reasonable that, to some approximation, those places would go a little bit slower because we’re dealing with life and death and not cat yoga or whatever the startup is these days.

Second, the forcing function for students of history should be what you said, which is the fear of being outcompeted.

Jordan, you have sent me enough books on World War II over the years to know that the tank offers a very illustrative analogy here and that it was the British and the French who invented the tank in the waning years of World War I. They didn’t really know what to do with it. They didn’t know how to apply it. And then it was the Germans in the early days of World War II who figured out how to use it. And it offers the lesson that, you know, this technology was invented at the end of World War I and it kind of sits dormant, then the Germans pick it up, and then they use it to just roll across Europe with blitzkrieg. I am deathly afraid of that happening in AI, where it is America that invents this technology, the American private sector, but it is other nations that figure out how to use it for national security purposes and create strategic surprise for the United States. That should be the forcing function.

Realistically, you are going to need significant DoD leadership and intelligence community leadership to drive that. I’m worried we’re going in the wrong direction. Laura Loomer got Vinh Nguyen fired. He was the Chief AI Officer at NSA and one of the best civil servants I ever worked with. So I’m worried we’re going in the wrong direction on that front. But I do think that’s the imperative.

Jordan Schneider: The corollary of that, which makes it scarier, is this — America’s lead in compute suggests a world in which we could get away with not doing a good job on the operational level reimagining of intelligence and defense. But there are also many futures in which, even if America ends up having two or three times the compute power, the downstream creativity when it comes to employing that compute for national security purposes is such that you can’t just rest on your laurels of having more data centers. We aren’t just good because Nvidia makes better and more chips than Huawei.

Ben Buchanan: Emphatically not. Even the best defense of our policy to buy a lead or build a lead over China in terms of computing power is to say it buys us time. And then if we don’t use that time, we get zero points. It’s not like, “Oh, well, you get a B-plus because you built the lead and then you blew it.” You still blew the lead.

I view the AI competition with China as coming down to three parts.

1. The competition to make the best models, the frontier. This is where compute really helps. The private sector is taking the lead.

2. The competition to diffuse those capabilities out into the world, to win the global market, to win over developing nations and the like.

3. National security adoption. To say, “Okay, we’re going to take this technology that we’re inventing, that only we are inventing at the frontier, and we’re going to put it to use our national security missions.”

It is entirely possible that we win the lead to the front, we win the race to the frontier. We have success in that competition. But if we don’t get our act together on the national security side, we still fall behind, just as the French and the British fell behind in the early days of the tank.

Jordan Schneider: The other thing folks don’t necessarily appreciate is that if you just win A, or you win part A and part B, it doesn’t solve everything. There are always other moves you can do if you feel like your adversary is winning in this dimension of the conflict, like data. America has 10 times more data centers. What happens when the lights go out? Or what happens when some drones fly into them? I mean, there’s just so much asymmetrical response. To bank your entire future on superintelligence seems like a rather foolhardy strategic construct.

Ben Buchanan: I would never advise a nation to bank its entire future on superintelligence. On the other hand, I would never advise a nation to cede preeminence in AI. Preeminence in AI is a very important goal for a nation and for the United States in particular, and shows up in all parts of economic and security competition. But definitely it’s not the case that, “Oh, we have more data centers and we’ve cut China off from chips. We’re good.” That is the beginning of the competition. It is far from its end.

AI and the Cyber Kill Chain

Jordan Schneider: All right, let’s do a little case study. Your first two books, The Cybersecurity Dilemma, a bestseller, and The Hacker and the State, which we were almost going to record a show on until Ben got a job. They’re all about cyber. What’s the right way to conceptualize the different futures of how AI could change the dynamics that we currently see?

Ben Buchanan: The intersection of AI and cyber operations is one of the most important and one of the most fascinating things I’ve been writing about for a long time. There’s a bunch of different ways you could break it down. Probably the simplest conceptual one is to say we know what’s sometimes called the kill chain — basically the attack cycle of cyber operations — looks like. We know what the defensive cycle looks like. For each of those steps, how can AI change the game?

There’s been so much hype here over the years, and we should just acknowledge that at the outset. But there is a reality to it, and as these systems continue to get better, we should expect the game of cyber operations will continue to change.

You could break that further into two parts. If you look at the offensive kill chain, I think you could say one key piece of this is vulnerability, discovery, and exploitation. That is a key enabler to many, though certainly not all cyber operations. We’ve seen some data that AI companies like Google are starting to have success doing AI-enabled program analysis and vulnerability research in a way that was just not the case a few years ago. The second one is actually carrying out offensive cyber operations with AI, moving through the attack cycle more quickly, more effectively with AI. We can come back to that, but let’s stick with the vulnerability for a second.

When I was a PhD student, a postdoc, DARPA ran something called the Cyber Grand Challenge in Las Vegas in 2016. It was an early attempt to say, “Could machines play Capture the Flag at the DEF CON competition, the pinnacle of hacking?” And the answer was, “Eh, kind of.” They could play it against each other, but they were not nearly as good as the best humans. This was so long ago, we weren’t even in the machine learning paradigm of AI.

Then, when I was in the government and we were looking for things in 2023 to do on AI, I was a big advocate of creating something called the AI Cyber Challenge, which essentially was the Cyber Grand Challenge again. We were saying, “Now we’re in a different era with machine learning systems, what can be done?” DARPA ran that in ‘24-‘25, and I think that told us a lot. There probably is something there about machine learning-enabled vulnerability discovery and either patching or exploitation. That’s probably where I’d start.

Jordan Schneider: Okay, let’s follow your framework. Let’s start on the offensive side of the divide that you gave. What is the right way to conceptualize what constitutes offensive cyber power, and how does AI relate to those different buckets?

Ben Buchanan: At its core, offensive cyber power is about getting into computer systems to which someone does not have legitimate access and either spying on or attacking those systems. A key part of that is this vulnerability research that we were talking about — finding an exploit in Apple iOS to get onto iPhones or in critical infrastructure to get onto their networks.

We are at long last starting to see machine learning systems that can contribute to that work. I don’t want to overhype this — we have a long way to go. But Google has used its AI system called Big Sleep to find significant zero-day vulnerabilities. Now they’re using the systems to patch those vulnerabilities as well. We’re starting to see evidence in 2025 of that kind of capability. It’s reasonable to expect that this is the kind of thing that nations will, if they’re not already interested, will before long be interested in because of how important that vulnerability discovery capability is to offensive cyber operations. That is a key part of national power, insofar as cyber is a key part of national power, getting access to AI systems that can discover vulnerabilities in your adversary networks.

Jordan Schneider: Presumably, this just comes down to talent. Just how many good folks can your government hire and put on the problem?

Ben Buchanan: Before you get to AI, it definitely comes down to talent. These are some of the most important people that work at intelligence agencies, those who can find vulnerabilities. It’s a very, very cognitively demanding, intricate art. Again, I don’t want to overhype it — but the argument goes, “Well, I can start to automate some of that,” and to some degree, that will be true. And to some degree, you’ll still need really high-end talent to manage that automation and to make sure it all actually works.

Jordan Schneider: It’s talent and it’s money, right? Because you can buy them as well. I guess we’re left with a TBD, like we are in many other professions, thinking about to what extent the AI paired with the top humans is going to be more powerful, whether it allows more entry-level people to be more expert, or whether we’ll just be in a world where the AI is doing the vast majority of the work that was previously a very artisan endeavor.

Ben Buchanan: It’s TBD, but there’s also a direction of travel that’s pretty clear here, which is towards increasing automation, increasing capability for vulnerability discovery by machines. And we should expect that to continue. We can debate the timelines and the pace, but I don’t see any reason why it wouldn’t continue.

It is worth saying that it might not be a bad thing. In a world in which we had some hypothetical future machine that could immediately spot insecure code and point out all the vulnerabilities, that would be a great thing to bake into Visual Studio and all the development environments that everyone uses. And then, the theory goes, we’ll never ship insecure code again. It is totally possible that this technology, once we get through some kind of transition period, really benefits the defensive side of cyber operations rather than the offensive.

Jordan Schneider: Staying on the offensive side, though, let’s go to the exploit part. I’m in Ben’s phone. I don’t want to get caught. I want to hang out there for a while and see all the DoorDash orders he’s making. Is that more or less of an AI versus a human game?

Ben Buchanan: Just to make sure we’re teeing the scenario up here — you have a vulnerability in a target, you’ve exploited that vulnerability, you’re on the system, then you want to actually carry out the operation. Can we do that autonomously? We are starting to see some evidence that hackers are already carrying out offensive cyber operations in a more autonomous way. Anthropic put out a paper recently where they attribute to China a set of activities that they say autonomously carried out key parts of the cyber operation.

It’s worth saying here, as a matter of full disclosure, I do some advising for Anthropic and other cyber and AI companies. I had nothing to do with this paper, so I claim no inside knowledge of it, but I think it’s fair to say OpenAI has published threat intelligence reporting as well, about foreign hackers using their systems to enable their cyber operations. There is starting to be some evidence essentially that AI can increase the speed and scale of actually carrying out cyber operations. That totally makes sense to me.

Jordan Schneider: There is a rough parallel between offense and defense — attackers want to find and exploit vulnerabilities, while defenders want to find and patch them. Is there any reason to believe AI will have a different ‘coefficient’ of impact on these distinct phases? Will AI be significantly better at finding flaws than it is at exploiting them, or should we expect these capabilities to develop roughly in parallel?

Ben Buchanan: I think it’ll roughly be in parallel. If we play our cards right, we can get to a defense-dominant world. Because if we had this magic vulnerability finder, we would just run it before we ship the code, and that would make the offense’s job much, much harder. Chris Rohlf of Meta has done good writing on this subject, and has made the case for it most forcefully. But we have to get there.

Best practices would solve so many cybersecurity problems, but no one follows the best practices — or at least, not enough people do. That’s why cybersecurity continues to be an industry, because it’s this cat-and-mouse game. I am cautiously optimistic that we can get to a better world because of AI and cyber operations, offensive and defensive. But I’m very cognizant we’re going to have a substantial transition period before we get there.

Jordan Schneider: Are there countries today that are really good at one half of the equation, but not the other?

Ben Buchanan: There are limits to what we can say in this setting about offensive cyber, but I think America has integrated cyber well into signals intelligence.

Jordan Schneider: I meant the split between finding the exploits and using the exploits. Is that basically the same skill?

Ben Buchanan: I think they’re very highly correlated. If anything, using the exploits is easier than finding them, and finding them is a very significant challenge. There are not that many found per year. But there’s a notion we have in cybersecurity of the script kiddie, someone who can take an off-the-shelf thing and use that themselves without really understanding how it was made. So, yeah, I think that’s the difference.

Jordan Schneider: And then, the net assessment on the defense side?

Ben Buchanan: It’s worth just saying that on the defensive side, huge portions of cyber defense are already automated with varying AI technologies. The reason why the scale of what we ask network defenders to do is so big is that you need to have some kind of machine intelligence doing the triaging. Otherwise, it’s just going to be impossible. This is a huge portion of the cybersecurity industry. It’s a huge portion of things as basic as spam filters and things that are more complex in intrusion detection. The picture you painted before about this race between offense and defense, and both sides using machine learning in the race, I think that’s basically right. It’s even more fundamental to the defensive operations than it is to the offensive side.

Making Tech Policy

Jordan Schneider: Broadening out theories of change for policy. What inputs matter and which ones don’t?

Ben Buchanan: In the current Trump administration or just more generally?

Jordan Schneider: More generally. Well, we’ve already talked about — one is individuals who are really passionate about a thing, get into the government and then convince their principals that their thing is important. But there clearly are other things going on besides staffers’ passions that end up in the policy, right?

Ben Buchanan: You shouldn’t win policy fights based on passion. You should bring some data. On subjects like technology policy, in a normal administration, there is still a lot of alpha in actually understanding the technology, or if you’re in a think tank, teeing up an understanding of the technology for the principal, because it is really complicated. If you’re looking at something like the chip manufacturing supply chain, there are so many components and tools — it’s probably the most complicated supply chain on earth. This is a case where technical knowledge — either on the part of the policymaker or on the part of a think tank author — is just a huge value above replacement. When my students and others come to me and say, “What kind of skills should I develop such that I can make contributions to policy down the line, either in the government or advising the government?” My answer is almost always, “Get closer to the tech.”

Jordan Schneider: It’s kind of a bigger question though. I mean, there’s money, there’s news reporting, etc. but what should you do as an individual? Just reflecting on the way debates have gone over the past five years around this, what is your sense of the pie chart of the different forces that act on these types of questions?

Ben Buchanan: Certainly, other forces include money, lobbying, and inputs from corporations that have vested interests. To some degree, that’s legitimate and part of the democratic process. And to some degree, that can become a corrosion of national security interests. We were able to push back on that a fair amount, and our record shows that. But it’s undeniable that that is a very key part of how the U.S. Government makes its decisions is just the incoming and lobbying from people who have a vested stake in what those decisions turn out to be.

Jordan Schneider: You know, the answer you gave is the one that we want to hear on ChinaTalk, like, “Oh yeah, you just learned the thing, and it’ll be good.” But what else ground your gears then?

Ben Buchanan: Maybe I’m presenting too rosy a view to ChinaTalk, but that was kind of my experience. Again, the process was longer than I would like and so forth, but big companies, Nvidia chief amongst them, were not happy about the policies that we put into place. I get that. But the policy stuck, and there’s becoming a bipartisan consensus on this that even lobbying has not been able to overcome. This is the case where I do think, with important exceptions, the facts have mostly won out, and I think that’s good. Now, there are probably a lot of aspects of national security policymaking where that’s not the case that I didn’t work on. But I feel lucky that I’m speaking about my experience here. And for the most part, my experience has been fair-minded. People in the government heard us out and made the right decision.

Jordan Schneider: What are the other big questions out there? What do you want? What do you want the kids to write their PhDs on?

Ben Buchanan: One of the most important questions at the moment is just how good AI is going to get and when. I see no signs of AI progress slowing down. If anything, AI progress is accelerating. One of the really interesting papers from earlier this year, something called Alpha Evolve from Google, which provided the best evidence we’ve seen thus far of recursive self-improvement, of AI systems enabling better and faster generation of the next generation of AI systems. That is really significant. In that case, the AI system discovered a better way of doing matrix multiplication, one of the core mathematical operations in training AI. No one in humanity expected this. We’ve done matrix multiplications the same way for the last 50-plus years. And this system found a way to do it 23% better. That kind of stuff suggests we are at the cusp of continued progress in AI rather than any kind of meaningful plateau.

Another subject that maybe is a little bit closer to the ChinaTalk reader is energy. You know better than I do the way in which China is just crushing the United States on energy production, which of course is fundamental for AI and data centers. I expected the Trump administration to be much better in this area than they actually were. They talked a very big game. Republicans in general are pro-building and so forth, but Trump has cut a lot of really important power projects, basically because they’re solar projects. Michael Kratsios, Trump’s science advisor, said, “We’re going to run our data centers on coal.” That’s obviously not realistic. That’s another fulcrum of competition with really clear application to AI between the United States and China.

Jordan Schneider: What have you been reading nowadays?

Ben Buchanan: I read a book recently called A Brief History of Intelligence by Max Bennett. It came out a couple of years ago. I thought that was a fascinating book on thinking about intelligence, because it’s not about AI, but basically how human intelligence developed. You can see over hundreds of millions or billions of years, depending on how you count the development of intelligence, you can see how evolution was working through a lot of same ideas that humans had to work through when we were developing AI systems over the last 70 or so years, in some cases picking many of the same solutions to some of the same or similar problems. What is it we’re actually talking about when we talk about intelligence? So much focus is on the artificial part. Let’s put some focus on the intelligence part. That was a great book.

Jordan Schneider: I feel like I would have trusted that book more if it came out in 2020 or 2019. I don’t know the field, and there was a whole lot of, “Oh, look how these models actually worked, just like the organelles.”

Ben Buchanan: I mean, sure, there’s some of that, but I think the bigger point is just put aside the analogy to AI if you want. It’s just a really interesting story of how our own brains developed and how human intelligence developed. I don’t know enough about neuroscience to say — maybe there’s a great rebuttal to it. But I found that history of intelligence development in the biological sense really interesting.

But one question that’s important, maybe for the ChinaTalk reader and analyst, is — what’s the relationship between the Chinese state and the Chinese tech industry? We talked a little bit earlier about how much of a challenge it is to get the U.S. private sector and public sector work together, at least canonically. It is easier for China to achieve that. I would love to know the degree to which that’s true in practice. And to what degree are companies like Alibaba, Tencent, Baidu, and DeepSeek working with the PLA or working with the Chinese state? Or to what degree are they creating some space for themselves? There was some media reporting a week or so ago. I forget exactly about Alibaba working with some part of the military apparatus. I would love the ChinaTalk treatment of the subject.

Jordan Schneider: I mean, my two cents are, it’d be weird if they weren’t. I mean, it’s fair to say that Microsoft and Google are part of the American military industrial complex in one way or another, at least on the cyber side, to be sure.

Ben Buchanan: On offensive cyber?

Jordan Schneider: Well, I think the Ukraine case is a pretty straightforward run about all the work that they ended up doing more on the defense side.

Ben Buchanan: I would draw a distinction because those companies are in the defensive cybersecurity business. But, I would love to know more about a company like Tencent, which is on the 1260H list, basically identified as working with aiding the Chinese military. ChinaTalk readers will be well served by a deep dive into those kinds of companies and what they’re doing for the state over there.

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Jordan Schneider: Reflecting back, I think it’s fair to say that the story of export controls was that it took a lot of political appointee expertise to come in and be the subject matter experts. We’ve had a lot of shows, and there have been a lot of papers written about how to build in more of a long-term analytical body to serve both Congress as well as the executive branch to get in front of this stuff. You don’t necessarily need CSET to exist to pay people to do it for you. What are your reflections on the ability for the government to grok emerging technologies? How would you structure this thing?

Ben Buchanan: It’s nascent, and it got better during the four years I was there. I am worried it is getting worse, and I’m worried we’ve bled a lot of talent from the intelligence community, and some of the people who I thought were the sharpest at understanding this technology are no longer there.

The analogy that I often drew upon was if you think about the early days of the Cold War, the United States and Soviet Union were each starting to push into space and spy satellites and all of that. We built entire agencies essentially out of whole cloth to do that analysis and build those capabilities. Getting our own intelligence capabilities up there and then understanding what the Soviets were doing, that was a totally new thing, and I think we basically have to do something like that here. Now I’m not saying it’s a new agency, but I do think it’s that magnitude of community-wide change to respond to just a completely different technical game than the IC is used to playing or historically has been used to playing. And I think we were lucky to work with a fair number of folks in the IC who, at leadership levels, got this. David Cohen at the CIA is one example. Avril Haines and Charles Luftig at ODNI are others. There were people who got it. It’s just a question of time and consistent leadership. The President signed a National Security Memorandum in October 2024 that provided a lot of top cover and direction. And then we were all out by January. I don’t know what the status is now, but a big change is required at the magnitude of what we did during the Cold War to extend the reach of intelligence to space.

Jordan Schneider: It’s tricky though, because even the space analogy, that’s a discrete technology. Then, it was like, someone’s going to have to build the satellites, and then we’re going to give the photos to the people who know something about Russian missiles and figure it out. But the sort of technological overhang that AI is presenting is that you have this tactical and operational stuff around our conversation with cyber, but there’s a broader question of how do you set up an organization?

The number of job descriptions that are going to change and the ways that private sector companies are going to evolve in their workflows has the potential to be extremely dramatic. And there is very little in the sort of regulatory or bureaucratic structure that gives me a lot of confidence that just having a sort of body over there is going to do it, and that these organizations have enough capacity for internal renewal to really do the thing.

Ben Buchanan: I agree. The answer I gave you was the answer to how the intelligence community confronts the technology itself, which is different from the question of how they confront their own way of doing business.

You’re right that AI will and should change key parts of organizational structures, including in the intelligence community, in a way that space fundamentally did not. And it is fair to say we articulated that question and sent the very beginnings of gestures of an answer to that question. But first of all, the tech wasn’t there in ’23 and ’24 when we were really working on a lot of stuff. You can only skate to where the puck is going. But it is something that if we were in now, I would hope we were spending a lot of time on.

Jordan Schneider: I had this conversation with Jake Sullivan about experience, and asked him something like, “In what dimensions did you get better in this job in year four than you were in year one?” And on one hand, he was like, “I was burned out. I needed a six-month break somewhere in there.” But also he was like, “Look, if you’re in, living through crises, being in this, there’s just, there’s no way to simulate it.” Then I got to thinking, we’re not that far from a world where I can tell GPT-7 to build me a VR simulation of being Ben Buchanan in the summer of 2021 and try to send some emails and talk in some meetings to convince people to do FDPR on semiconductor manufacturing equipment. From a sort of future policymaker education perspective, beyond doing a PhD, think tank reading, writing, analyzing stuff, what other skills would you have wanted to have come in? And is there a world in which AI can help serve as that educational bridge to allow people to operate at a higher octane than they would be going in cold?

Ben Buchanan: The first half of that question is very easy. The second half is very hard. The first half of the question, essentially, is where did I get better over four years? Or what skills did I wish I had that I didn’t have in 2021? It’s just understanding how the process works, understanding how the U.S. government makes decisions, understanding how you call people, how you run meetings, how you put together an interagency coalition. I was very lucky that I got to learn from some of the best people on earth in doing that. Tarun Chhabra is the obvious archetype. That was a skill that I did not have going in, though I felt confident on the technology side. And when I left, I felt much more confident, like, “Okay, I’ve learned this.” How could you learn that on the front end? I don’t know if it’s an AI thing. I guess you could, you could maybe do it. But there probably is something in there about, you know, role-playing to me always felt kind of hokey, but like, how would you role-play this, and how do you get people to practice this skill and so forth? Maybe there’s something there. I hope there is, because it’d be great if our policymakers could hit the ground running on that skill in a way that I definitely did not. But I don’t know what it looks like.

Jordan Schneider: You’ve had a year or a little less. You’ve had coming up on a year now to just have more time playing around with models. What have you been using this stuff for? What’s different now that you have more bandwidth and more time to read?

Ben Buchanan: It feels longer than a year, Jordan. I can tell you that it hasn’t been the fastest year of my life. I have more time, but also more access to this stuff. It’s crazy that basically for the whole time I was in the White House, this stuff was not accessible on government computers, even on unclassified networks. Again, back to the challenge we were talking about. We tried to make it a little bit better, but this is a heavy lift. I just have much more time to use this stuff now, and I can, I can use this. When I write something, I love giving it to Claude and saying, “Look, you’re a really aggressive editor, tell me all the reasons this is wrong.” And I don’t take all of its edits. But I do find that if you tell Claude to be really aggressive, it’ll go after your sentence structure. It’ll say this is unclear. It’ll say, “Have you thought about this counterpoint?” I really enjoyed just having access to tools like that on a day-to-day basis. I don’t do as much coding and the like as I used to, but if I were doing software development, it really does seem like that has just changed everyone’s workflow. And there’s probably a broader technology lesson from that too.

Jordan Schneider: You’re writing this book about AI. What are the parts that feel easier to write? What are the parts that you’re still noodling on, which feel harder?

Ben Buchanan: Writing about AI as a whole is harder than I expected because of the very same thing that makes AI so interesting — everything is interconnected. You have a technology story that’s unfolded over a couple of decades, but really accelerated in the last decade. That’s an algorithm story, a data story, but it’s also its own computing story and the complexity of the compute supply chain. You have a backward-looking story, but then you also have the forward-looking story of how this is going to get better and recursive self-improvement, etc. You have the core tech, and then you have its application to a bunch of different areas. We talked about cyber. And then you have a bunch of geopolitical questions. The United States, China, national security, adoption, chip controls, all of that. And then you have a bunch of domestic questions. Are AI companies getting too powerful? Will we have new antitrust and concentration of power issues? What’s the trade-off between privacy and security in the age of AI? The jobs question, the disinformation question, so forth.

I love it because it’s this hyper-object where everything is so connected. If I’ve got this huge hand of cards here and they’re all connected, what is the way in which I unfold these cards on the page? That has been the challenge in teaching it in the classroom and in writing about it. And it’s incredibly frustrating, and anyone who tells you otherwise has not done it because there’s no easy way to do it. But it does give me even more appreciation for just the depth and breadth of this subject. This is also why AI policy is so hard — it doesn’t fit in jurisdictional boundaries. All the mechanisms we’ve set up to govern our processes break down when you have something this all-encompassing.

Jordan Schneider: You will have written four books in the time in which I will have written zero. A lot of what ChinaTalk does is kind of live at the frontier of that hyper-object, whether it’s AI or Chinese politics. But the bid to write something more mainstream for a trade press about this is different from your older books. What was the appeal to you of trying to bring a more kind of holistic thesis statement that can be read by more people than already listen to ChinaTalk about this topic?

Ben Buchanan: There are three reasons, and I don’t know the honest weighting of which one’s the most.

1. This subject is incredibly important. ChinaTalk is going to reach a lot of people. I’m not comparing audience sizes, but I do think a book-length deep dive treatment into this subject that’s accessible to a lot of people has value because it’s going to touch on many aspects of their lives and of policy. In a democracy, we all kind of have to engage with the most pressing issues.

2. There’s a lot of value in refining my own thinking by trying to get it on the page and structure it in a book. And I think in many cases again, you can live in the milieu and feel like you understand the milieu, but your own thinking just gets so much sharper when you’ve got to structure it across 300 pages and say, “What are all the really important things I’m going to leave out and how do I prioritize this and how do I unfold the different pieces?” So that’s been incredibly frustrating, but I hope it pays off, not just for the reader, but also for me.

3. I just get great joy out of explaining it or trying to explain it. Insofar as the promotions I got in the White House and the responsibilities I was given by the end being the White House Special Advisor for AI, I don’t think I got that because I had the deepest knowledge of AI in the world. You could take someone from Anthropic who could go much, much deeper into, “How do we do the reinforcement learning step of reasoning models?”

I think my comparative advantage was that I could understand it enough, and then I could explain it to people who don’t work in AI — the President, Jake, Bruce Reed — who have to manage the entire world, but who know this is important and want the crisp explanation. I’ve just gotten a lot of joy from doing that. That’s why I’m a professor, and why I was a professor before the White House.

Jordan Schneider: That’s very wholesome. But on that first point — when do ordinary people actually get a say in all of this? AI went from something only a handful of Bay Area and DC nerds cared about to something that now affects people’s 401ks and is starting to reshape workplaces. Returning to your earlier framework about what drives competition, the potential democratic backlash to the social and economic upheaval AI will cause feels like one of the biggest unknowns in the U.S.–China picture. To get the full benefits of this technology, we’re probably going to go through real social weirdness and real economic dislocation.

Ben Buchanan: It will be a political issue. And I think there’ll be a lot of dimensions of AI policy that show up in the 2028 presidential race. Jobs being one, data center infrastructure being another. Probably some national security dimensions to it as well. Child safety, another really important dimension, not my field, but one that I imagine is going to resonate in 2028. I think this is the case where you will see a lot of this show up in the political discussion. And I claim no ability to actually influence the political discussion, but insofar as I can help make it a little bit more informed by the technical facts, especially on the national security side, where I have a little more expertise, I think that’s a really important thing to do.

Jordan Schneider: Let’s talk a little bit about regulation. Social media came and went without any real kind of domestic regulatory action, and we’re dealing with the consequences of that. The shockwaves that will come if AI hits seem to be an order of magnitude or two larger than what we saw from Facebook and Twitter.

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What are the tripwires where Ben Buchanan wants the government to step in and shape this technology? And on the flip side, what are the tripwires from a public demand perspective — what will it take for the public to insist on regulation?

Ben Buchanan: I think a core purpose of the government is to manage tail risks that affect everyone but maybe no one else has an incentive to address. In AI, that’s things like bioterrorism or cyber risks as the technology continues to get better.

We took steps on that using the Defense Production Act to get companies to turn over their safety test results. President Trump has since repealed those, but I stand by them as robustly good things to do with very low imposition on the companies. One CEO estimated that the total compliance time for our regulation was something like one employee-day per year. Pretty reasonable, but it also had tractable benefits.

Where I don’t think the government should be is in the business of prescribing speech — outside of a national security context — telling companies, “You have to have this political view,” or “You’ve got to have this take when asked this question.” That strikes me as a road we don’t want to go down based on the evidence I’ve seen so far.

We tried to be very clear. Even on the voluntary side, we focused on national security risks and safety risks. That strikes me as the right place to start, and I would be hesitant to go too much further beyond those core, tractable risks.

Jordan Schneider: There’s an interesting U.S.-China dynamic here regarding the AI companion context. That’s where I can see a really dark future where we’re all best friends and lovers with AIs that have enormous power over us. The Chinese system has shown its willingness to ban porn or restrict video games for kids to 30-minute windows. It’ll be interesting to see if we end up having a new version of a temperance movement, or some big public demand for government controls — or even a rejection of what’s on offer in the coming years.

Ben Buchanan: Look, that may happen. I’m not even sure we can debate how it would be good or bad. There is probably some context in which we could say, for example, “AI systems should not be helping teenagers commit suicide.” This is not a complicated thing morally. But there’s a different question — should the federal government be the one doing this, and what does that look like?

We didn’t really go near any of that. We focused on the national security risks where I think we can all agree — yes, it is a core federal responsibility to make sure AI systems don’t build bioweapons. Frankly, the government has expertise around bio that the companies don’t. The companies were the first ones who told us that — they wanted a lot of assistance, which is why we created things like the AI Safety Institute.

Jordan Schneider: Well, that was a punt. But there better be an AI companion chapter in your new book, Ben.

Ben Buchanan: I don’t have developed thoughts on AI companions, except that I absolutely have concerns about the way in which AI will erode fundamental pillars of the social contract and social relationships.

Jordan Schneider: I mean, right now we’re all walking around with AirPods, playing music or books.

Ben Buchanan: And podcasts — mine play ChinaTalk.

Jordan Schneider: Great. But it’s still me on the other side of that, right? I worry about the level of socialization we’re going to end up with when it’s just optimized. Whatever is in your AirPods is perfectly calibrated for scratching that itch, making every neuron in your brain fire. It’s a weird one. But you said you don’t have thoughts on this, so we can move on.

Ben Buchanan: No, I don’t have smart thoughts on it, but I appreciate the concerns about “AI slop.” Ultimately, I think the trusted AI companies will be the ones that are explicitly humanistic in their values. These are questions that aren’t for the U.S. government to answer, but for U.S. society to answer.

Jordan Schneider: Sure. All right, let’s close on AI parenting. I bought the Amazon Alexa Kids the other day. They had some promotion. It was like 20 bucks. And I was so disappointed. You figure it could talk to you in a normal way? It’s still really dumb. It’s kind of shocking that there are not “smart friends” for children yet.

Ben Buchanan: I think there’s a lesson there about AI adoption and diffusion within the economy. You have a few companies — Google, OpenAI, Anthropic — inventing frontier tech, but the actual application of that tech to products is still very nascent, jagged, and uneven. I don’t know what LLM is in the Amazon Alexa, but the general trend is that we are in the very early innings of applying this stuff, even as we’re racing through the movie to invent more powerful versions of it.

Jordan Schneider: Ben, I used to ask people for their favorite songs, but we keep getting copyright struck. So we are now generating customized Suno songs based on the interview. I’m going to do one about creating export controls, but I need you to give me the musical genre.

Ben Buchanan: The musical genre? It has to be jazz. Clearly, there is an element in which every policymaking process is improvisation. You have some sense of where you’re going, but I certainly didn’t feel like I was reading from a sheet of music — not that I can read sheet music anyway. But it has to be jazz, Jordan.

Farrell Gregory is a nonresident fellow at the Foundation for American Innovation. You can follow his work at @efarrellgregory on X.

Over the course of the last year, we’ve seen China suspend rare earth exports twice, generating a short-lived round of public interest and short-lived “expertise” in America. Each crisis followed a similar progression: an aggrieved China introduces export licensing, effectively suspending US access to certain rare earth elements and downstream products. The American public is subjected to alternating shouts of panic and confident assertions that ‘rare’ is a misnomer and the necessary elements are actually abundant in the Earth’s crust. After a period of confrontation, and likely following concessions on both sides, access is reestablished before too much harm is done.

Examining the differences in each crisis is less important than establishing what is quickly becoming a pattern: China is increasingly willing and able to use its dominance in rare earths as leverage against the U.S. It’s worth noting what a change this is from even five years ago: during the entirety of the 2019-2020 U.S.-China trade war, Beijing never introduced export controls for rare earths, despite making threats to do so. Now China assesses its position differently — they’ve accumulated leverage and they’re willing to use it with increasing frequency.

This frequency might be in part because China’s dominant position in rare earths is a time bomb for both sides. The PRC likely wants to use its REE dominance to extract further concessions before the U.S. manages to defuse this dominance with some combination of reshoring and tech advances.

I think it’s a matter of when — not whether — China decides to activate its standing export control infrastructure. They’ve built up leverage, and over time, that leverage will dissipate. In the near-term future, throttling rare earth and magnet exports is still an effective threat to employ in trade disputes with the U.S. In the medium term, successful reshoring and reliance-decreasing efforts will diminish what concessions China can extract from the U.S.

So, expect the rare earth crisis cycle to play out again. When it does, here are a few clarifications on rare earths that may prove helpful for avoiding the most common misperceptions.

1. They Really Are Rare

You can find trace amounts of the seventeen different elements that we call REEs throughout the Earth’s crust. However, for the purposes of reshoring supply chains, potential mines must meet at least two criteria. First, their deposits of rare earths must be sufficiently concentrated–meaning that the proven reserves yield a much more dense concentration of rare earths compared to the global average. Additionally, the mine must be commercially viable, taking prices, infrastructure, mine life cycle, and financing into account. Rare earth deposits that meet these criteria are, in fact, scarce. One might even say ‘rare.’

This scarcity is demonstrated by the disproportionate output of just a few mines: three in China, one in Australia, and one in California (Mountain Pass). Together, these five mines account for 85% of global output by weight.

But that production is not evenly distributed. While Mountain Pass supplied a majority of the world’s total rare earth oxide (TREO) during the Cold War, it was soon outstripped by Chinese production in the late 20th century. By the 2010s, output from Mountain Pass fell to zero. Even now, with the success of MP Materials, the mine’s new owner, and considerable investment from the federal government, the U.S. accounted for about only about 11% of global TREO output in 2024. Mining rare earth elements at scale in an economically feasible way requires a good site, which is hard to find.

2. Not All Rare Earths Are Created Equal

The reshoring picture gets more complicated from here. The subsection of rare earth elements can be further subdivided into seven light rare earth elements (LREEs) and eight heavy rare earth elements (HREEs). The basis of this distinction varies, although it typically follows the atomic number of the element or its chemical properties. Generally speaking, the full range of REEs is all found together, but in drastically different proportions in different sites. And because the properties and uses of each element vary, a mine that only produces light rare earth elements does not provide the full range of technical capabilities that rare earths enable.

And a LREE-only site is exactly what America has in Mountain Pass. It’s a valuable site that meets critical needs, especially the two most important light rare earth elements, neodymium (Nd) and praseodymium (Pr). When you hear about the importance of rare earths in magnet production, these tend to be NdPr magnets used in automobiles, turbines, robots, and other vital technologies.

But Mountain Pass cannot produce a meaningful supply of heavy rare earths, particularly dysprosium (Dy) and terbium (Tb), which are used in Neodymium Iron Boron (NdFeB) magnets. Utilizing the properties of heavy rare earths, these performance magnets are capable of withstanding more strain and higher temperatures than NdPr magnets. Absent a domestic source, any disruption to America’s heavy rare earth element supply chain leaves us entirely unable to produce a wide range of advanced electronics.

That’s why the last two rounds of Chinese export controls have targeted heavy rare earth exports. It’s well known that China mines 70% and refines 90% of rare earths, but when it comes to heavy rare earths, Chinese production dominance jumps to 99%. Assuming that the DoD bet on MP Materials succeeds and America develops a domestic supply chain for light rare earth mining and NdPr magnet production — a scenario which is far from guaranteed — we would still rely on China for essential heavy rare earths.

3. China’s Dominance is More Than Just Refining

Another common line about China’s rare earth dominance is that they only have an advantage in refining rare earth oxides (the intermediate step between the extracted earth and refined metals). That is where they’ve developed a skilled workforce and proprietary processes since the 1990s. But that’s still an incomplete picture. The primary reason that China is so dominant in rare earths, and especially heavy rare earths, is advantageous geology.

Different concentrations of rare earths tend to occur in different geological and mineral environments. Sites that are disproportionately rich in heavy rare earths tend to be ionic clay deposits. The scientific explanation for why is too long for this article, but in short, Southern China’s topology, geography, and tropical climate proved to be an ideal environment for easily extractable ionic clays to absorb REEs. It’s worth pointing out that these smaller HREE mines are separate from China’s big three (Maoniuping 牦牛坪, Weishan 微山, and Bayan Obo 白云鄂博), which primarily provide LREEs. The southern HREE mines were less regulated, more artisanal, and especially environmentally damaging. The easiest way to extract the elements from the clay is by injecting chemical fluids into the terrain, producing toxic waste, contaminated soil, and an element-rich liquid from which the HREEs are extracted.

Increasingly, this HREE leaching takes place in environmentally similar sites across the border in Myanmar. Not only does this provide a new source of heavy rare earths within easy reach of Chinese companies, but environmental protections are also even lower (or nonexistent) in a country engaged in prolonged civil war. Despite the fact that Myanmar is an unreliable provider of rare earths — the rebels who captured mines in late 2024 temporarily blocked Chinese access — the geology is so ideal that it remains an attractive source.

While the ionic clay environment in Southern China is particularly enviable, it is not the only possible source of heavy rare earths. Back in 2019, the U.S. Geological Survey released a paper examining the viability of American deposits. There are good reasons to assume that any HREE mining in the U.S. would be held to a higher standard than in-ground chemical injection in rebel-controlled Myanmar. However, concern around environmental externalities would still be a substantial barrier to bringing the HREE supply chain fully stateside.

Brazil, with the world’s third-largest REE reserves, has potential, but it would need to dramatically scale its output to replace Chinese supply. In 2024, Brazil mined only 20 tons of rare earth oxide. China mined 270,000. This scaling problem still hasn’t stopped American officials from buying up future production in Brazil(?), at the expense of European access.

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Getting Ready for Round Three

Before the next round of Chinese export controls comes down on the US (we’ve already seen Japan get hit just this week!), these geological dynamics will shape what policies the U.S. could pursue. Since the rare earth détente, the Office of Strategic Capital has invested $1.4 billion in a deal with ReElement Technologies and Vulcan Elements to expand domestic magnet supply chains. The Department of Energy’s Critical Minerals and Energy Innovation is putting $134 million towards rare earth production. That comes in addition to the $1 billion in Congressionally-appropriated funds that are being directed towards REE projects.

The Trump administration is clearly prioritizing reshoring rare earth production over other minerals and materials, in my view a positive development. The broader “critical mineral” category gets a lot of attention and is too frequently treated as a single problem with a single solution. But as the 2025 USGS Critical Mineral List makes clear, some minerals are more critical than others.

Rare earths, alongside a few other minerals, stand far apart for their strategic value and the likelihood that their supply chain will be disrupted. Dozens of other minerals are either less subject to Chinese manipulation or are less consequential. Ultimately, the U.S. government is working with a fixed pool of capital and expertise to lessen Chinese influence over critical supply chains. Programs that treat all materials as equally consequential, for whatever other benefits they may have, aren’t likely to move the needle. Actually reducing reliance on China for rare earths will require focused investment and accounting for these geological and chemical realities that give China an enduring advantage.

While 2025 was, in USTR Jameison Greer’s phrasing, “the year of the tariff”, industrial policy served as a strong leitmotif. From the US-China rare earths saga to equity stakes, golden shares and prepurchase agreements, Trump 2.0 has wholly embraced the sort of muscular intervention into private markets that would have made the GOP of just a decade ago cry bloody murder.1 Looking past this administration, JD Vance and Rubio, the two 2028 nominee frontrunners, both have Senate track records filled with bill proposals around industrial banks and domestic manufacturing promotion.

But for all the motion around creative applications of industrial policy in America, it’s been surprising to me how little thought has been applied to the big questions around these swings. Key questions I see unanswered include:

• What should the long term goals of national industrial policy be?

• What does it mean to be an economically secure nation? Where should marginal dollars be spent to promote economic security?

• Just how important is manufacturing relative to services?

• What are the tradeoffs involved in furthering these aims?

To kick us off, Chris Miller, Chip War author and reigning belt holder for most ChinaTalk appearances, published an excellent piece on what the core policy questions are for industrial policy. We’re rerunning this from his exellent new substack below.

Exploring these themes will be a focus of our coverage in 2026. Look out for essay contests coming in the next few weeks on this theme. Leave in the comments your ideas for what our first prompts should be!

The Economist, in a recent survey of Europe’s economic woes, sparked a minor controversy by urging the continent to adjust to intense Chinese competition in manufacturing by reorienting toward services. “De-industrialization,” it argued, “need not be synonymous with decay.”

The argument goes like this: rich economies are rich because of high value-add services. America is the least industrial (measured by manufacturing as % GDP) of all big economies, but also the richest. One reason that Germany and Japan are relatively more industrial is because they never developed much of a software industry. They’re more industrial partly because their manufacturers are relatively more successful (eg, their auto firms retained more market share the US ones over the past few decades) but also partly because they’ve underperformed in high value services.

Here’s auto manufacturing, where the US has dramatically underperformed the trend (data from Gemini):

And here’s software market cap and market share, also from Gemini. Ask “would you rather have: 1) a world in which GM performed as well as Volkswagen over the past 30 years or 2) Silicon Valley?” the answer is obvious.

Perhaps that’s an unfair phrasing of the question, assuming that the only options were to either double down on an aged-out industrial base or to deindustrialize in favor of software.

Was there an alternative? Peter Thiel has quipped that we were promised flying cars and instead got 140 characters. Could we have redirected talent to produce less social media and more SpaceX? I’m unsure, though I’d note that Elon’s initial fortune came from enabling online shopping (PayPal) and Peter Thiel was an early Facebook investor. Palmer Luckey founded Anduril after he’d already sold a business to Facebook. It’s not easy to separate America’s titans of deep tech from the profits of the internet economy.

I’m a supporter of the “reindustrialize America” impulse. But I also haven’t seen clear thinking around the tradeoffs it implies. We need to prioritize when allocating people, dollars, and other scarce resources. So whether and when does manufacturing matter? Here are some ideas.

1. Jobs

I find completely unconvincing the theory, commonly hawked by politicians of both parties, that manufacturing is a good source of “jobs.” Even supposing that it’s true that manufacturing jobs pay better than service sector jobs on average (I haven’t yet parsed this data carefully), manufacturing is only ~10% of employment in the U.S. and so a 20% increase in manufacturing employment will be negligible at the economy-wide level. Moreover, the only way to manufacture in the U.S. cost effectively is to aggressively automate. So as a theory of policy, “manufacturing is good for jobs” makes no sense.

2. Driving productivity growth

I also don’t think much of the theory that you need a big manufacturing sector to drive productivity improvements in an advanced economy. If that were true, Germany would be richer and America poorer. But America has deindustrialized (manufacturing as % GDP) even as its economy has outperformed. I’m open to the idea that developing economies sometimes need manufacturing to drive productivity growth—a debate that has huge ramifications eg for India, but none for the United States.

The tech sector is a useful case. As Patrick McGee argues in Apple in China, America’s largest consumer tech firm is inextricably intertwined with China-based manufacturing. Perhaps hopelessly so. I worry a lot about the geopolitical implications of this. But I don’t worry much about the economic implications.

A decade or two after “capturing” Apple, Chinese firms still haven’t captured much economic value. Around a quarter of the bill of materials of an iPhone accrues to China-based suppliers, but generally for the lower margin components. A lot of the higher value manufacturing done in China is in factories owned by foreign firms, as Vishnu Venugopalan and I have explored.

Apple still makes ~50% margins across the iPhone business. It makes ~80% of all global profits from selling smartphones, despite selling only a fraction of the world’s phones. Chinese brands—Oppo, Vivo, Xiaomi, Honor, etc—dominate the industry by units sold. Most of the world’s phones are assembled in their neighborhood. But these companies haven’t found a way to make much money. Samsung’s done better than the Chinese firms at profitability, but far worse than Apple, despite that Samsung is much “closer” to the manufacturing process, making displays, memory chips, logic chips, and other components itself. In other words, the smartphone company furthest from the manufacturing has made the most money, now for nearly two decades. It’s actually pretty shocking.

If you assume away geopolitics—which of course we can’t, more on this below— smartphones suggest that there’s no generalizable link between manufacturing, productivity improvements, and value extraction. I’m open to this dynamic existing in certain industries, but it doesn’t seem like a strong case for broad-based support for manufacturing.

3. Defense and geopolitical leverage

The best argument against The Economist’s embrace of deindustrialization came from Sander Tordoir, who wrote in a letter to the editor: “Europe will need drones and tanks, not just consultants.” The ability to make stuff has military and geopolitical importance.

The claim that manufacturing matters for geopolitical power is obvious in the abstract. We’ve all studied the “arsenal of democracy.” We’ve lived through economic warfare around manufactured products like chips and magnets.

Yet the policy relevant question is not “is manufacturing geopolitically useful?” but rather “given resource constraints and a preexisting factor allocation, how much should we spend to boost our manufacturing capabilities? Should we target a) pure defense, b) dual use, c) chokepoints, or d) across-the-board civilian production?”

We haven’t put much collective thought into the answers. We agree that chips and magnets matter, while t-shirts don’t. What we disagree about is everything in between.

Here’s President Trump:

I’m not looking to make t-shirts, to be honest. I’m not looking to make socks. We can do that very well in other locations. We are looking to do chips and computers and lots of other things, and tanks and ships.

And CFR President Michael Froman (and former USTR) on ChinaTalk earlier this month:

Can we take T-shirts and sneakers and toys from China without compromising our national security? I would think so.

The problem is, there’s a whole lot of manufacturing that falls in between t-shirts and rare earth magnets. Of America’s ~$2 trillion in imports, only ~7% is textile products like clothes and furniture (using the excellent Atlas of Economic Complexity’s trade categorization.) Agricultural products are something similar. Toys are less than 2%. Games are 0.3%, sporting equipment 0.2%, and Christmas decorations are 0.14%. In other words: take out toys, textiles, t-shirts, and the like, and the U.S. is still importing a ton of manufactured goods.

The key remaining categories by complexity and scale are: cars, computers, phones, a wide variety of industrial and electronic machinery, chemicals and metal products. If you want to say something serious about reindustrialization, you need a view on these good. Should we be producing more of them?

Here’s a visualization: green goods are deemed by Harvard’s Atlas of Economic Complexity to be “complex” goods—roughly, high value. The yellow are simpler things produced by a larger number of trading partners, that are lower value and at lower risk of monopolization. As you’ll see, there’s a lot of green.

The scale of imported manufactures—including relatively complex, relatively higher-value added goods—illustrates the scale of trade offs around reindustrialization efforts. For reckoning with these trade offs as they relate to national security, I see a couple of hard-to-answer empirical questions.

1. What’s the risk a given product can be monopolized and used for leverage, like China’s done with rare earth oxides and magnets this year?

Economists have produced rough estimates of elasticities, but you often need deep supply chain knowledge to fully understand these dynamics. If it were easy, we wouldn’t see so many supply chain disruptions in the auto industry.

2. How shiftable is manufacturing capacity in a crisis?

One of the arguments in favor of building industrial capacity is that it can be repurposed if needed. Ford made tanks and planes during World War II. Yet how generalizable is such repurposing?

3. How tightly linked are today’s manufacturing ecosystems and tomorrow’s?

If losing today’s manufacturing capability also prevents a country from making tomorrow’s key products—and if benefits accrued not to a specific firm, but to a broad ecosystem—it might be reasonable to subsidize it. How strong are these ecosystem effects? Some good historical examples:

4. What’s the opportunity cost?

Even acknowledging the scale of China’s manufacturing dominance and the incapacity of our defense industrial base, we still must ask whether a marginal dollar is best spent on trying to shore up our manufacturing base versus buying defense-specific or other capabilities. Not that I wouldn’t gladly take some more manufacturing capacity, if it were free. But it isn’t. We’re constrained by labor, electricity, capital, etc, as anyone building a factory in the U.S. will immediately report.

If you gave me money and tasked me with mitigating risks to U.S. security, I would buy a lot of anti-ship missiles and place them near the Taiwan Straits. Then some more missile and air defense systems. Then I’d build more resilient communications networks in the region. I’d consider buying some more submarines, too. I’d have a long shopping list before I’d get to “strengthen America’s manufacturing base” as a reasonable use of funds. (Setting aside the fact that buying more defense equipment would also on its own expand the U.S. manufacturing base.)

In other words: given a marginal dollar to strengthen security or to expand geopolitical influence, it’s far from clear that subsidizing manufacturing is an optimal strategy. We simultaneously need to recognize the danger of being swamped by China’s manufacturing capacity, as it approaches 40% of global manufacturing value add, but also to think clearly about trade offs.

I was struck by a point Christian Brose of Anduril made on a recent episode of Aaron MacLean’s excellent podcast School of War. Brose discussed Anduril’s new Arsenal-1 factory in Ohio:

When we looked at where to scale ‘Arsenal-1,’ Ohio was the obvious choice because it represents a return to the true industrial base of this country. You have a workforce in Ohio—many of whom are former autoworkers—who understand the discipline of the assembly line and high-volume manufacturing. These are people who have spent decades perfecting the art of taking complex designs and turning them into physical products at a scale that the traditional defense industry simply isn’t equipped for today.

Here’s the analytical challenge: the autos→defense equipment ecosystem dynamic still lives, at least to some degree. But if the US auto industry were growing rather than shrinking, it’d be harder to acquire this talent. So one could also argue it’s a good thing that this labor and expertise is now readily available for reallocation toward defense production.

Where does this leave me? Still sympathetic to the “reindustrialize America” impulse, yet still convinced that we need better answers for “when and how does manufacturing matter?” that addresses everything between rare earth magnets (where we all agree) and t-shirts (where we also agree.) For everything in between—cars, computers, chemicals, industrial equipment, etc—we need better analytics around:

1) monopolization risk

2) shiftability in a crisis

3) ecosystem effects and

4) trade-offs.

A goal for 2026: find some better answers to these questions.

Rahm Emanuel returns to ChinaTalk with a characteristically blunt assessment of U.S.-China relations and verdict on year one of Trump 2.0.

We discuss:

• The “Fear Factor” in Asia: Why Japan and South Korea are ramping up defense spending not because of Trump’s strength, but because his unpredictability and isolationism have forced them to buy “insurance policies” against a U.S. exit,

• Corruption and “Own Goals”: How “draining the swamp” has turned into institutional degradation — and why the Trump family’s entanglement of personal business interests with foreign policy damages U.S. credibility and strategic leverage,

• Adversary, Not Competitor: Why the U.S. needs to stop viewing China as a strategic competitor and start treating it as a strategic adversary — one whose win-lose economic model is designed to hollow out global industrial bases,

• Education as National Security: Why tariffs are a distraction and the only real way to beat China is a massive domestic push for workforce training,

• AI and Inequality: Rahm’s evolving thinking on artificial intelligence — why he’s still learning and why a technology that boosts productivity but widens inequality is a political and social risk.

Plus: why Ari Emanuel’s UFC US-China robot rumble is sound policy, Rahm’s case that he’s now the real free-market capitalist in the room, and rapid-fire takes on J.D. Vance, Marco Rubio, and the 2028 Republican field.

Have a listen in your favorite podcast app.

On Playing Into China’s Hands

Jordan Schneider: Rahm Emanuel, welcome back to ChinaTalk. What a year for US-Asia policy it has been.

Rahm Emanuel: That is the understatement of the year.

Jordan Schneider: In our 2024 show we started out with me asking you questions about, “Oh, look at all this nice stuff you guys did. Rebuilding alliances. Japan and South Korea are friends again.” And now we’ve got all this.

Rahm Emanuel: How did we go downhill so quickly? Is that what you’re asking?

Jordan Schneider: We now have a year-long sample size of “Trump II” taking a very different take from both Biden and Trump I. Really, it’s a departure from the past 70-plus years of US foreign policy when it comes to relations with our treaty allies. What has it been like watching this, Rahm?

Rahm Emanuel: It’s depressing. It’s infuriating. There are a lot of other emotions. Look, it starts from a premise. China’s view is that they are the rising power. America is receding. Their message is, “Either get in line, or we will give you our full China coercion policy.”

Our message is that we’re a permanent Pacific power and presence and you can bet long on the United States. Unfortunately, everything President Trump’s doing is underscoring China’s message with a bunch of exclamation points because of the way we’re behaving.

When President Biden and his team walked in in 2020, China was on their front foot. When we left, they were on their back heel. They were angry at being isolated and it took a strategy of flipping the script. Rather than them isolating Japan or the Philippines, we isolated the isolator through the United States, Japan, Korea, Australia, New Zealand, the Philippines, and India. They knew it on a political, military, and strategic level.

All our military exercises were multinational. Japan was the number one foreign direct investor in the United States and is a long pole of our policy there. We built an alliance that China thought could never be done — and part of their strategy relied on it not being done — between the United States, Japan, and Korea. This culminated in what we accomplished at Camp David. That was, and remains, China’s worst nightmare. Trump basically took it off the page.

We then extended it to Japan, the United States, and the Philippines. If you look at where the Philippine islands are and where the Okinawa islands are, China’s strategy to quarantine Taiwan becomes much more difficult to achieve.

It had a strategic, political, and military level that was unprecedented. Then we had the Quad. We doubled down on the Quad, which Trump had actually pushed along in his first term to his credit. But now he has taken a 35-year project of bringing India into our orbit and totally expelled them for Pakistan’s vanity. It looks like it was done for Pakistan’s economic gifts to the Trump family, the Witkoff family, and the Lutnick family. Specifically to the Trump boys. That’s what it looks like.

China has been trying to force Japan into submission through economic coercion — which they haven’t done since 2010. It took the United States almost two weeks from the get-go to finally do a B-52 air surveillance run with Japan’s F-35s. Crazy. We should have been there immediately to send a direct message, but we didn’t.

At every level, this administration has made America weaker and more vulnerable. It has actually played into China’s message to all the countries we were attempting to pull into the US gravitational pull.

Jordan Schneider: The MAGA retort would be, “Look, we said some mean things, and defense spending in all these countries is going up. What’s not to like about that?”

Rahm Emanuel: First of all, not Japan. Let’s just deal with that. Japan increased their defense budget from the ninth largest to the third largest when I was there. To their credit — I don’t deserve it, and the Biden administration doesn’t deserve it — they did it early on, even before I got there. That wasn’t due to President Trump. They committed to 2% and did it in five years. They were well on their way before President Trump ever put his right hand on the Bible. So that’s calling offsides for what was not true.

Second, they have done things in that defense budget regarding counterstrike capability that pre-date Donald Trump. They just concluded a sale of ships to Australia. They did things they were constitutionally prohibited from doing, also pre-Trump. If anything, their willingness to go above 2% of GDP in defense spending is probably more out of fear of Donald Trump’s failure to show up than it is because of prodding by the Trump administration.

That has also been true to the credit of the new Korean president. His first set of conversations were with the Japanese because of their fear that the United States is AWOL. The facts just don’t bear out.

Plus, I’m right about India. The Trump administration totally punted on a bipartisan project that was succeeding in making China very nervous. Go look at what they were doing in the Himalayas. They haven’t shown up as it relates to the Philippines and the South China Sea islands.

Then last week, the Trump administration validated the AUKUS submarine project between the United States, Great Britain, and Australia. That all predates them as well. If that’s their argument, they better get some facts to back it up because nothing across six different countries adds up to that argument.

Jordan Schneider: There is a part of this that is downstream of this MAGA worldview that America just isn’t up for it anymore. What do you think about this whole idea of defining down what America can accomplish on the global stage?

Rahm Emanuel: I don’t buy it. A superpower doesn’t pick geographies, which is what they’re trying to do. They failed with Canada, they failed with Panama, they failed with Greenland. We’ll see what happens in Venezuela. The only place you could say they had a success was a $40 billion pledge to Argentina in the middle of cutting healthcare for the United States. I don’t think it should be hemispheric.

As a superpower, does that mean they are going to pull up stakes on the Middle East where Russia has now been kicked out and China is a bit player? That is an important geographic, strategic, and resource-rich area. Dumbing down or strategically pulling back only makes the world more dangerous.

Now, there are reforms that should be made to the alliances. But as you and I are talking about this, for 40 years the United States was telling Europe, “Don’t get economically energy-dependent on Russia.” Now the President of the United States is begging Europe to become more of a vassal energy-wise to Russia. This is in direct competition with our own energy policy and interests.

I’m a former ballet dancer, so I’m proud of being flexible. But these guys redefine flexibility. Here you are saying maybe we should dumb down or restrict ourselves, yet you’re telling Europe to get more dependent on Russia — and less dependent on Texas, Oklahoma, North Dakota, Wyoming, and Colorado. I can’t think of anything more stupid than that.

Also, in the Mideast, Russia has been kicked out of Syria. China has no play. It’s a major geographic area strategically. It’s a major purchaser of defense weapons. It’s a major investor in America’s economy. We have an ally both in Israel and in the Gulf countries, and also in the immediate Arab world. That is to our strategic advantage. Pulling back from that would make America more vulnerable politically, economically, and strategically. It’s foolish without even touching the rest of the world.

Would I say that Latin America and Central America in American foreign policy over the years have been stepchildren? 100%. Focusing on it is the right thing to do, but not at the expense of other regions. America can walk, chew gum, and be a superpower that brings a strategic presence to our policies in the Indo-Pacific, as an example.

Flooding the Swamp

Jordan Schneider: When I was reading that national strategy document, I was trying to make sense of it. You try to get in their worldview and think about how serious it is. But at the same time, you got everyone’s children making billions of dollars on the side. I really think this is a new thing in American history. It makes it very hard to take this new grand vision of how they want America to play in the world all that seriously.

Rahm Emanuel: Well look, I saw this today — it’s a pivot. When they had the big signing in the Sinai and around this ceasefire in Gaza, the Indonesian president says to Trump, “I need to talk to Donald.” The two boys are very upfront about it — they got caught on tape. In the midst of a tariff negotiation, we are mixing our strategic vision with President Trump’s checkbook. They’re not one and the same.

When I got to Congress, I set up a blind trust. First member to do it. Kept it as Chief of Staff. I had to re-up it and change it to meet the executive branch requirements. As Mayor, I filled out massive financial forms. In fact, I got an email about four months after I left saying, “You have to do your exit financial form.” I said, “You guys must be really lonely because you’re chasing me after I’ve left where I have no conflict.”

Meanwhile, you got a bunch of people who just left prison and are now investors. Crazy. Okay? I don’t know if you noticed, but they just left prison.

But you can go through the country. There was an announcement the other day. A startup company on one of the private equity funds from — I’m not sure which of the sons of Donald Trump — won a $700 million contract out of the Pentagon. A startup.

I wrote about this in the Wall Street Journal. The theory of “Broken Windows”is that small crimes create conditions for big crimes. That’s exactly what’s been happening. It’s not just about streets — it’s also about the corporate suite. The kids of Lutnick, Secretary of Commerce Witkoff, the special advisor for everything and anything, and Donald Trump’s kids — their checkbook is bigger today and yours is smaller today because they’re conducting themselves to enrich themselves.

The only envy Donald Trump has of Putin is that that is their business model, and he would like it to be America’s model. He has to work around some legal boundaries, of which the Supreme Court continues to remove for him. It is unbelievable to me what goes on here, having spent a lot of money with lawyers and accountants.

One of the things I’m proud about, starting from Bill Clinton forward, is that I’ve never hired a lawyer for anything I did when I was in public service. What these guys are doing makes me feel like I was a schmuck. I’ve never seen anything like this, and nor has America in American history. We have a lot of competition — and I’m from the city of Chicago — for corruption. But they have not only corrupted in the sense of the money they’re making in public policy, but they’ve corrupted the process of doing it.

Jordan Schneider: There’s big 17th or 18th-century European aristocracy energy here — like the princes marrying each other and doing deals on the side. [Neo-royalism!]

Rahm Emanuel: Here’s the thing. In the last 48 hours, two people were caught — ethics reports for not selling stock or whatever. Who’s going to investigate them? The FTC? The SEC? The Antitrust Division of the Justice Department? The Supreme Court — John Roberts and the rest of those hacks — gave him a carte blanche to go steal.

You basically can appoint members, fire all the Inspector Generals, and appoint or fire whoever you want at these independent agencies. You have a Justice Department and FBI which is a bunch of Keystone Kops. So of course people are going to break the law. You told them they get to write the law for themselves and nobody will enforce it. That’s what John Roberts did — the genius that he isn’t.

Jordan Schneider: I’m old enough to remember, “Drain the swamp”. And it won an election.

Rahm Emanuel: And what they decided was just to make the swamp a little bigger. Take India and Pakistan and the strategic point here, because there are other things relating to the American family’s checkbook being smaller than the Trump family’s. One is getting bigger and one is shrinking.

We have had a project from George Herbert Walker Bush to Bill Clinton to George Bush to Barack Obama to Donald Trump One to Joe Biden — bring India into a closer strategic alliance. Because Modi did not want to play stooge to Donald Trump, he made peace. Trump gets angry. Pakistan waves a bunch of contracts. The Financial Times has a great story about this regarding crypto and mining for the Trump kids.

We’ve abandoned a 35-plus-year project of America’s strategic interest just so the two Trump boys can have a little gold coin. That is what happened. And I stand by it.

Jordan Schneider: I would be remiss not to bring up Hunter’s pardon.

Rahm Emanuel: Bring it up. It was wrong.

Jordan Schneider: I thought it was really gross. It was really disappointing. I actually thought he wouldn’t do it.

Rahm Emanuel: If you want me to live in a glass house before I throw a stone, I ain’t doing it. But I’m going to say this, I never hired a lawyer for something I did. I believe in what Kennedy said about public service. That is not the virtue of this White House. They are stealing in broad daylight and getting away with it because John Roberts gave him a “get out of jail” card.

Who’s the Socialist?

Jordan Schneider: Let’s talk US-China. We had Liberation Day, we had Liberation Day v2. We had rare earths thrown on the table twice. Then the Trump administration backing off. What’s your read on all this, Rahm?

Rahm Emanuel: The whole “Tariffs and Liberation Day” was about drugs one day, then manufacturing the next — whatever the moving target was based on the day. I don’t disagree with the desire to build America’s industrial capacity, but three points of fact illustrate the issue.

When the President walked in, there were 50,000 manufacturing jobs with “Help Wanted” signs that nobody could fill. We would be 50,000 manufacturing jobs ahead today if we had focused on the training side — getting Americans ready to do those jobs. Instead, we’ve lost jobs under Trump.

Number two — this went unnoticed, but two weeks ago, the CEO of Ford said he has thousands of empty jobs today paying six figures because people don’t have the skills — mechanics, electricians, etc. These are not in the corporate suite. They’re on the shop floor, and he cannot fill them. He says it’s only going to grow.

There was a story about China being ahead of us on energy production. One of the big problems for us to compete with China on AI and transmission is that we are short 200,000 electricians. Every one of those is a six-figure job with healthcare and retirement. The Merchant Marines — which are key to building up both economic and security capacity — are short 200,000 jobs over the next decade.

If we had focused on the problem analysis — that you need industrial capacity and a base in the United States to compete — that part is true. But tariffs and looking weak? Of the top five choices, that was number ten. We have Americans looking for work, the ability to buy a home, and a way toward economic independence. We have jobs that would give you a start on that independence — six figures — and every one of those companies is short workers.

Nobody covered what the CEO of Ford said. It was treated like a little thing that happened on the side. If the President had dropped 50,000 “Help Wanted” signs on manufacturing the day he walked in, we’d be a hell of a lot farther ahead on manufacturing than with tariffs — which he calls “the most beautiful word in the English language.”

The President continues to do this. He analyzes a problem not entirely wrong — not always right, but not wrong — but then his solution is far worse than the problem he started to try to solve. It didn’t work against China, it made us look weaker, it divided us from our allies, and he is telling Europe to buy oil and gas from Russia, not from us.

In fact, the oil and gas industry in America has fewer wells today — which means fewer people working, drilling, and transporting — than when he walked in. Even his “drill baby drill” strategy is failing. I find this immensely frustrating from an economic renaissance perspective because we have a challenge that is actually an opportunity and our politics, and specifically how this administration is failing America and Americans, is the issue.

Jordan Schneider: So, forward-looking — we’ve had this rare earths saga. It is clear that big parts of the US economy have — and probably will for the foreseeable future — large dependencies. The economic coercion playbook that China has is significant. What is the international strategy to handle them? And also, how do you spend that money to start to ameliorate those vulnerabilities at home?

Rahm Emanuel: Having been Ambassador to Japan, I recall the first critical minerals economic coercion playbook China started was in 2010 against Japan around the Senkaku Islands. We knew about the old playbook and didn’t do squat — both parties. Then, when it came to COVID, they withheld basic medical gloves, masks, etc. That was economic coercion up front, though more for their own self-preservation than just for punishing everyone else. This has been part of their playbook.

You have to look across the system. I wrote a piece in the Washington Post about how we’ve had five helter-skelter national industrial policies. The auto bailout was a national industrial policy. What we did on CHIPS and the IRA under Biden was a national industrial policy. What we did during Warp Speed and COVID was an industrial policy. Some elements of policy are successful and others aren’t.

You quoted the National Security Council producing the NSS. I would have the National Economic Council produce an economic blueprint at the beginning of every administration — that looks out over the horizon. Here are our strengths, here are our weaknesses, here are our vulnerabilities. Today, it’s obviously critical minerals and magnet production. Four years ago it was — and still is — semiconductors and the production of chips, which was the impetus for the CHIPS Act and IRA coming out of the chip wars. Look through the strengths, weaknesses, and vulnerabilities, and then develop a strategy around that.

China has decided that on quantum, AI, life sciences, fusion, and alternative energy, they’re going to kick our ass. They’re not going to compete with America; they’re going to try to beat it. You saw after COVID their vaccine was a debacle. They made a decision that would be the last time. Now, five years later, they are competing, if not superseding us in certain areas, on life sciences and new drugs. You can look at what they did on chips and what they’re doing on alternative energy.

This attack on America’s research foundation, the university system, is an “own goal” of the worst kind. You won’t see the pain today — you’ll see the pain for the next decade. Donald Trump is leaving America far worse off. We should not concede any one of those areas. I spent time as an ambassador helping on quantum computing for America’s competitiveness between the University of Tokyo and the University of Chicago, bringing IBM and Google in to fund that at $150 million.

Pick the areas, compete, and win. Our scientists and our funding mechanism, while not great, keep us at the top of the game. We should not be trying to strangle MIT, Harvard, Stanford, the University of Michigan, or the University of Illinois in competing and winning the innovation war against China. That’s number one.

Number two, the brawn behind the brains. We should be in a massive education push, whether it’s electricians, mechanics, or in jets, so we have the capacity to compete. China’s AI is getting more competitive not because of innovation, but because their electricity is 50% cheaper than ours — because our transmission and energy production are way behind.

Third, related to regulatory reform, there is a place for consensus on legal immigration. We should be very clear about bringing the best scientists, the best engineers, and the best-educated to the United States of America. Each one requires drilling down deeper, but at 10,000 feet, that’s what I would do.

Jordan Schneider: At a principle level, it’s been very interesting to watch. In 2009 and 2010, you guys got screamed at for being socialists for saving GM and Ford. Now we have a Republican administration taking equity bites. We’re doing “national champions” now, I guess. What’s your read on that? And broadly, how far should the government go to mess with these private sector dynamics?

Rahm Emanuel: You have golden shares in Nippon buying US Steel as an example. You have the Intel 10%. I disagreed with Senator Romney on this — then a presidential candidate. He talked about GM and Chrysler going bankrupt. We spent political and financial capital saving the auto industry for a reason. Yes, we were called socialists. We were also called socialists on healthcare. It’s a normal card. I suppose, if you keep playing it, one day you may be right.

Jordan Schneider: We’ll see how many companies Zohran ends up buying.

Rahm Emanuel: What China has done is outright intellectual property theft — some of it explicit, some corrupt. But they invest in certain new technologies and they refuse to let those companies raise money so they can bankrupt them, and then steal all the patents or take them back to China. That is their national strategy. They can’t replicate the beauty of America’s research, innovation, and entrepreneurship, so they steal it through the front door, the back door, and the kitchen window. That’s what’s going on right now.

To me, that’s where we’ve got to sharpen up. To your point about socialism — Solyndra. We invested in this new solar firm and everyone’s like, “Oh my God, oh my God!”, and here are these guys investing in and putting public money in companies with zero operating capacity.

I believe I’m more of a capitalist and a free marketer than the Trump administration and the Republican Party. The Democrats would never take economic stakes in a company. Let me say this — we did bail out GM and Chrysler to save the jobs and the communities that depend on them. We got our money back, plus profit. But the goal was to get out, not to stay in and increase ownership. We did it with AIG, got out, and made a profit.

The goal was not to get in, stay in, and increase your stake. The Secretary of Commerce says we want royalties for our public dollar investments now. I think there’s a way you could pay a system that funds greater research, but what he’s thinking about is ownership — which is the last thing you need. I love politics, but that’s not the type of politics I want.

Jordan Schneider: Here’s a blast from the past. I was a press office intern in the Biden administration. It was during Solyndra, I think it was summer 2012. And what you guys ended up doing was letting journalists see every single email that was sent about it. I had to sit in a room minding all these Politico journalists. We’ve gone from that level of transparency to, like, if Sasha and Malia were on the board of Solyndra or something.

Rahm Emanuel: Let me just be really clear. You had us investing in a startup to jumpstart a technology in America and that was called socialism. Today, you have the United States investing and owning pieces of companies. Back then you had journalists who actually cared about what was going on. Today, if you did that, you’d get fired from your corporate leadership because you were “offensive” to the President. So the world’s gone full circle. You’re not crazy. It’s just gone upside down.

“We’re Now Adversaries”

Jordan Schneider: So let’s do the US-China piece a little bit. This idea of America losing escalation dominance — we had a Biden administration that was able to slowly start to boil the frog when it came to a lot of these technology controls without necessarily having China snap back in an aggressive fashion that would affect America’s economy. And now that dynamic has shifted. So what happens next, Rahm? What’s the smart play here?

Rahm Emanuel: Look, I’d just be forthright and honest. I would tell China: “You wanted to be strategic competitors, but you have decided you want to be a strategic adversary. You have decided to go into our entire infrastructure — our utilities, our waters, and our systems. You’re also in our software, in our government agencies. That’s not a competitor — that’s an adversary. So if you want to go back to the competitive era, I’m ready. Everything you’ve done to endanger America — get out of here. We’ll compete, but we’re gonna go to a different level if you want to be adversaries.”

In this challenge, we don’t have an American to waste or a community to overlook. We made a mistake in 2012 thinking that Battle Creek can battle Beijing on their own. It’s going to take an all-country effort. I’m talking about what Ford said. I talked to you about other industries that have job openings and nobody there to fill them. We have thousands of young men and women looking for purpose and looking for economic independence, and every one of these jobs they can do. So I would go on a massive training push.

And I would be clear both on a technological level and a strategic level to our allies — “We have a certain period of time we have to buy. Our allies can play a bigger role in that effort so we can get to a point of competitiveness and a point of making China as deterred as they have done to us under President Trump.”

Don’t lose sight of Liberation Day and how we backed off. How much degradation to our deterrence posture was created when the President — after his talk with Xi, which he does first—then calls the Prime Minister of Japan (our number one ally) and never mentions Taiwan? And then for two weeks, while China is intimidating Japan, we don’t do anything. How much does that deterrence get degraded?

And while it’s being done to Japan, if you’re in the Blue House in Korea, you’re in Melbourne in Australia, you’re in New Delhi in India, you’re in Manila in the Philippines — you’re looking at what the United States doesn’t do with Japan and you’re saying, “There I go but for the grace of God.” So you bet you start to buy your insurance policy. You start to say — “Okay, the United States can’t be trusted. So what do I do?” That’s what’s dangerous here.

Jordan Schneider: The nuclear proliferation arc, which we haven’t quite seen yet, but I mean it’s coming, right?

Rahm Emanuel: When I got back early in February, I wrote this — if you think non-proliferation was expensive, wait till you see the bill for proliferation.

We spent a good time — not me directly, but in the region — convincing South Korea not to go independent on a nuclear weapon. We made a lot of assurances, too. You look at what’s happening now; it’s going to be hard to convince South Korea, given North Korea and China, to stay nuclear-free much longer. Not saying it’s not possible, but they’re going to look around. Part of their strategic overview is a nuclear and military guarantee and support from the United States. You look at what’s been going on in the last year, you’re going to sit there in the Blue House in Seoul and say, “Well, we can’t keep it like this now.”

If South Korea were to go nuclear, other countries like Japan would sit there and go, “Wait a second.” You have China building up nuclear capacity massively. North Korea, we know. And India and Pakistan. What if you add in South Korea and Japan? What could go wrong with six nations in a small geographic space — all who have 800 years of history and animosities — what could possibly go wrong? This is insane at every level.

Jordan Schneider: Well, we haven’t even talked about Iran, Saudi, UAE...

Rahm Emanuel: Can I say one thing that’s underappreciated in the strategic world and doesn’t get a lot of coverage unless you’re like a weirdo like me and read it? Iran is going through one of the biggest social-cultural revolutions since the Ayatollah walked into Tehran in 1979. They’re allowing concerts because they can’t control the youth. Women are openly totally disregarding the cultural norms of the ruling government. Because of a water shortage and corruption, they’re thinking of moving the capital out of Tehran.

I get Tehran has a strategic vision of themselves in that Shiite arc from Tehran to Beirut. There is a slow-boil implosion happening in Tehran right now. I don’t know how it manifests itself, I don’t know where the ball bounces, but there’s a cultural revolution going on — and I use “revolution” with a small ’r,’ not big. Given the demographics of the country — it’s dominated by people aged 30 and younger who so much want to be part of the rest of the world and believe the ruling class is holding them back economically, politically, and culturally.

There’s something going on in Iran and in a year from now, or maybe two —I’m going to look prescient saying what I just said. Something is happening there that we’re not seeing. And one day we’re going to wake up and say, “Who knew?” But you can’t have a ruling class all of a sudden — because of political vulnerability — say to the kids, “Right. You want to have all these concerts and go out and do all this that are not part of the norms? Go ahead.” Once you do that, that genie’s out of the bottle. If that genie’s out of the bottle, there’s going to be another genie out of the bottle. That’s the one thing we know from cultural history.

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Jordan Schneider: One more foreign policy one for you. Let’s do a little bureaucratic reform talk. Someone’s going to have to rebuild the civil service. Say you’re Secretary of State 2029. What do you do with the place?

Rahm Emanuel: You know, it’s interesting you say this. I was down in Austin about three weeks ago, and I grabbed lunch with two very, very good top national security former generals. I don’t want to use their names — I don’t want to get them in any trouble if they’re doing any kind of advisory board for the government. Very smart people that I’ve worked with who rose to the highest levels in their roles out of the national security institution.

And I asked this question, “Okay, you got all this chaos. We all operated in this. If we have the opportunity here — you got a clean legal path — how would you reorganize this?” I was thinking, you know, move this here, move that there, which is the thrust behind your question. Basically, I was in the same kind of zeitgeist you are.

Their response was interesting. I’m not saying they’re right, but it was actually interesting and not what I expected. They said, “You hire good people at the top. It does two things — lifts morale and brings the talent that’s left back in. If you start changing things and moving furniture around, it’s just all this energy on something else, when the immediate thing you have to do for the next couple of years is get the intellectual capacity back in. That means the top of the org chart. No B’s, no B-minuses, no B-pluses. You got to get A’s. They’ll get the morale up, and they’ll get talent to come back in and do public service.”

I gotta be honest, I was surprised because I thought, “Oh God, it’s a clean slate. We could do this.” But they said, from a capacity to run while you’re fixing something in chaos, talent is the number one goal. They said some other things which are true, like the intel operation capacity over the State Department, and the anti-terrorism financial end of the Treasury — both underappreciated in the intelligence world and swinging way above their weight class and they should be at the big boys’ table, not at the kids’ table anymore.

Those were just two observations from the national security side that I thought were persuasive. So I posit that that’s how I would approach it. Go with a talent at the top, get morale up, and make it a magnet for other types of talent to come back in.

Jordan Schneider: All right, rapid fire round. Selling chips to China?.

Rahm Emanuel: No.

He is the worst negotiator. I’m going to give you a story. We’re negotiating a balanced budget. It’s Erskine Bowles, myself, Gene Sperling, Bruce Reed, John Podesta, Sylvia Mathews, and I’m senior advisor. So one day in the morning I go to the Oval Office and I said, “Mr. President, every night Gingrich is calling you and you’re giving away the store. We spend the first three hours clawing back stuff you’ve given away. I’m just going to tell you, if you’re negotiating, Rule One is the other side has to know that you can live with the ‘No.’ You want to get to a ‘Yes.’ Everything you do is to convince the other side you are very comfortable with a ‘No’ as much as you are with a ‘Yes.’” I said, “We cannot have you doing this. We’re going to get to a balanced budget agreement. We have the upper hand here, but we are giving it away and diminishing it.”

Anyway, the lesson here is Donald Trump is so solicitous of trying to get a deal that he’s selling the family jewels to get it, and the Chinese know it. He’s going to run around on some soybean deal — which is his problem — or fentanyl and a couple other things. I’m not disregarding the fentanyl issue, but he’s so hungry for a deal, the Chinese are going to play him. And they’re playing him now — and they haven’t even gotten to a deal yet. And you can see it.

He just gave away the chips for what? What’d you get? He gave away something he could have gotten at the table for something else. What did we get? They just did a military exercise with Russia around Japan, your ally, forcing you to come out of the closet and finally do your B-52 covers with the F-35s. What did you get for that chip deal? Bupkis. As my grandmother used to say, “Bupkis”. The worst negotiators I’ve ever seen.

China’s Win-Lose Model

Jordan Schneider: Where is the Democratic Party on China?

Rahm Emanuel: There’s no uniformity. Having spent some time on this, I’ve come to the conclusion that we have a fundamental problem. They’re not strategic competitors — they’re strategic adversaries. They’re trying to bury us. Your competitors don’t get buried into the infrastructure, technology, and systems to destroy this country. God forbid we ever get to something kinetic. We don’t steal private information from government officials like they do, or steal from Google. We’re not stealing Huawei’s IP.

Second, we believe(d) — until Trump — in the rule of law. As part of their business model, they’re open to economic espionage and intellectual property theft. It’s very hard to have two economic models integrated where one believes in the rules and one believes the law doesn’t apply.

Third, our economy, even with the tariffs and Liberation Day, is integrated. The world is dependent on America. Their economic model is that the world becomes dependent on China, and China becomes independent of the world. That is why they’re exporting and crushing every other country’s industrial base — developed or developing world — whether it’s steel, toys, or EV cars.

It’s very hard to have an integrated model where destroying the other side is the goal. It’s one thing if you want to trade and it’s one thing if you want to compete. It’s another thing if the goal is “I win, you lose.” There has never been a “win-win” in China’s model. I don’t say that because I’m angry at them. That’s a fact.

Now we have to figure out where we’re going to go from here. They just passed a trillion dollars in trade, and their imports from other countries are down. South Korea’s only steel plant closed. Chile’s only steel plant closed — 20,000 jobs. That’s not the United States. That’s China. They’re doing it across the board. If Europe doesn’t protect itself, its auto industry will be destroyed.

We’re on a win-win model. Sometimes we win, sometimes we lose. They’re on a win-lose model based on economic espionage and intellectual property theft. There’s a case where they were stealing AI secrets from Google and from ASML, which is Dutch. They were caught stealing intellectual property.

I have not seen our companies that are into chip manufacturing stealing intellectual property from companies of other countries. I’m willing to stand corrected and say I’m wrong if there are suits on patents, but not outright government-sanctioned, government-sponsored intellectual property theft. As an example, Tokyo Electron, which makes chip manufacturing machinery, competes against ASML. Neither one has been found cheating and stealing IP from the other. China has been caught stealing and cheating from both of those companies.

Jordan Schneider: Rahm, your brother’s got a role to play in all this. Ari pitched the UFC on having an event in China, and they took him to a robot demo. He said this on a podcast — maybe we should have American and Chinese robots fight in a cage. America needs to see our robots getting their asses handed to them because right now, it’s not salient just how good China is getting at all these emerging technologies. You don’t see the cars on the road, you’re not really using the AI models. It just shows up in trade numbers and in factories closing. Having that as a primetime thing on Paramount Plus — there’s something to this, Rahm.

Rahm Emanuel: Let me just say this. Since I usually tell Ari and Zeke at family meals and holidays to just shut up, I’ll let Ari know that you think he has a good policy idea. But it will not come from me complimenting him, because there’s very little space I’ll give Ari in the policy world. The worst thing to do is tell somebody in Hollywood they have a good idea because they think they’re brilliant.

Jordan Schneider: Unless you’re George Clooney.

Rahm Emanuel: Yeah.

AI and Education

Jordan Schneider: Ok, domestic politics of AI. This dog hasn’t really started biting yet. But by 2028, it’s gotta be one of the top three things just from an education, social change, and job displacement perspective alone. You just pitched that we should be banning social media for kids under 16. What’s your take on all this?

Rahm Emanuel: You wanna talk about kids, poverty — I’ve got ideas. I’m learning about AI. I had a lunch today with somebody I consider very, very smart who discussed the confusion between OpenAI and open weights, and how the real challenge is in open weights where there are no firm protocols.

I want to be clear: I don’t have the answer. I know it’s important. I’m learning as we go. I’m trying to figure out who really knows their stuff.

While AI is important to the future and productivity, I have two cautionary notes. One, we have to figure out our energy production in the United States. China adopted the Obama “all of the above” strategy. We walked away from it in 2016 under “Drill Baby Drill.” We’re now paying the price because our electricity costs are two times China’s. They decided to go with an “all-in” approach, and we decided to go with a singular approach. Full stop.

Two, we’re short of the workforce to build out that energy capacity, to build out this chip capacity, and to build out the AI language capacity because we don’t have the workforce we need — from brawn to brain. Energy is going to be essential to the success, not just how small the chip is, but how much energy you produce.

Third, regarding AI, there is a cautionary note from the last 30 years. While globalization and technology worked, they didn’t work across the board. They worked for you, they worked for me, but they didn’t work for everybody. If you want a new technology to benefit society, it has to benefit everybody in the society. If it doesn’t, then you have to figure out ways to ensure there’s a better level playing field.

And we did. That doesn’t mean you could have stopped the clock and said “no Internet, no trade.” The question is, if you’re going to go forward — to quote President Clinton — how does everybody cross the bridge to the 21st century? You don’t have a queue where just some people make it and other people stand in line. That’s my cautionary note about AI — it will have an impact on productivity, and it will also have an impact on the people that lose their jobs because of that productivity.

What’s the strategy behind that technology to keep America competitive while ensuring all Americans are part of that? I don’t have it figured out yet. If I told you I did, I’d be full of crap. I know what the opportunities are. I know what the challenges are. I know how we have to start to think about it. Who has got the best thoughts on it? I don’t know.

Jordan Schneider: Two pitches for you on that. The education adoption side is the piece I’m most worried about. The productivity diffusion — the free market is going to figure out how to make workers more impactful, do their jobs better and faster. But the promise of having the greatest tutor that humanity has ever invented tailored to every single child, exactly where they are in their learning journey, is a world-historic opportunity. You’re talking about the haves and have-nots here. You fought teachers’ unions in the House. There’s going to be a lot of mess, a lot of hesitancy, and a lot of fear.

Rahm Emanuel: There’s a lot of fear. That’s not illegitimate. When I was mayor, we had the shortest school day and the shortest school year in the entire United States of America. I said, “What are we fighting about? You have great teachers. I want more time with the kids with the great teachers.”

We had no kindergarten, no Pre-K, no recess, no lunchtime, no gym time, and no arts class. I said, “What are you talking about here? It’s the shortest school day. Kids are being cheated.” I said to the head of the union, “I can’t believe we’re arguing about this. We have no recess, no arts education, reading is down to 40 minutes a day. We have no money for kindergarten, no money for Pre-K.” All the things that we eventually took care of. I said, “You believe in this? Why are we arguing? This makes no sense to me.”

Jordan Schneider: When we did our first show, my wife was five months pregnant. We now have a one-and-a-half-year-old. We spent this morning at preschool interviews for twos programs. I came out a little nauseated because, you’re right, Rahm, I have resources that not everyone has in this city. Walking through this incredible place — which is, again, a twos program — Pre-K starts for free in the US when your kid is four. They have the paints and ceramics, and literally, the ceramics are from the nicest ceramic store that you’d find in a $10 million apartment. I’m sitting here thinking, “This is gross.” It’s going to be the same for middle and high school, but it’s going to be an even bigger deal because they’re going to have access to $20,000-a-month AI tutors.

Rahm Emanuel: When I became mayor, there was no universal kindergarten and no Pre-K. We made every five-year-old get a full day across the city and every four-year-old get a full day across the city. But the biggest accomplishment was on the other end, in high school.

We did three things in high school that we haven’t changed since we first brought it along.

One, if you get a B average in high school, we made community college free — tuition, books, and transportation.

Two, we brought college into high school. 50% of our kids were graduating with college credit so they didn’t have to pay for it later on, and they got the confidence they could do college-level work.

Three — the most important thing we did — to receive your high school diploma, you had to have shown us a letter of acceptance from a college, community college, a branch of the armed forces, or a vocational school. It was a requirement. 97.8% of our kids met that requirement. When you walked on graduation day, you had to be able to show us where you were walking to.

Not just your child who is young. Mine are all grown up past those years. Two are in the military — one full time, one reserve. They all went to college. They knew where they were going. I don’t really care whether you’re going to Michigan, or to be a bricklayer, an electrician, the Air Force, or Harold Washington Community College. I don’t care. But you are not stopping when you’re 17. And that to me made my time in public life worth it.

Stanford said that the Chicago public school system was the best of the big 100 — the best. When I walked in, William Bennett had called it to the worst. But what Dr. Janice Jackson and I did in reforming the high school years was fundamental to the trajectory of these kids’ lives. 20,000 went to community college for free.

Jordan Schneider: I got one more pitch and then a final question. You talked about banning social media. The other thing to watch is AI companions. Everyone’s saying these AI are going to be better friends than people. That is a whole different thing from what Instagram was.

Rahm Emanuel: I will keep my eye on it, but I’m going to stake my battle on what I know. Chicago, under my tenure, had the most restrictive policies on tobacco sales to teens, and we took teen smoking down to single digits. As I told you, we did the same with Pre-K and kindergarten. When I was Senior Advisor to President Clinton, I negotiated the Children’s Health Insurance Program for 10 million children whose parents worked but didn’t have health care.

If it relates to kids and teens, that’s where I’m going to put my energy. It’s the future. My dad was a pediatrician — that may be my own desire regarding what I think is important. I’m not saying other issues aren’t important, but that’s where I’m going to spend my time. Given what Australia is doing, and given what I think you can do technologically to turn the algorithm into an ally rather than an adversary, that’s where I’m going to spend my time. I’m not saying the issue you raised isn’t important, but I’m not diffusing my energy.

Hot Takes on the GOP Field

Jordan Schneider: Everyone on all these other podcasts asks you if you’re running, and they ask you about all the other Dem candidates. I want to talk about the Republican ones. We’re going to just go down the list. Kalshi has J.D. Vance at 50% to be the Republican nominee. What’s your take?

Rahm Emanuel: Politics is crazy these days, but it is very hard to knock off a sitting Vice President. My guess is it’s probably right.

Jordan Schneider: Aside from electability, what do you think of him as a politician?

Rahm Emanuel: Likability is an important factor, and I think that’s a vulnerability for him. That’s all I’ll say.

Jordan Schneider: Rubio, 9% right now.

Rahm Emanuel: Part of leadership, in my view — and I’ve said this repeatedly — is you got to know why you’re doing what you’re doing and have the strength to get it done. You can infer from that anything you want.

Jordan Schneider: DeSantis, 4%.

Rahm Emanuel: That’s generous.

Jordan Schneider: Tucker, also at 4%.

Rahm Emanuel: That’s overly generous.

Jordan Schneider: And how about Donald Jr. rounding out our top five, also at 3%?

Rahm Emanuel: I can’t wait for him to do the financial disclosure form.

Jordan Schneider: Rahm Emanuel, it’s been an absolute pleasure. Thank you so much for being a part of ChinaTalk.

Rahm Emanuel: Can I say one thing?

Jordan Schneider: Yeah, of course.

Rahm Emanuel: I have three kids — 28, 27, and 25. You’re about to experience the greatest journey of life with a lot of hits and a lot of misses. But you have two parents who are role models. You’re going to be great at it, and it’s going to be a great journey. Mazel Tov. Thank you so much.

Tony Stark and Justin Mc return for Second Breakfast.

Our conversation covers…

• How strike decisions are made, and the implications for military officers,

• Why this is a pivotal point for military ethics,

• What Congress may do in response,

• Why Hegseth being the TEA breaks the impartial review process.

Listen now on your favorite podcast app.

The Target Engagement Authority

Jordan Schneider: Let’s talk about the second strike. Justin, you wrote an article on it. What’s your take?

Justin McIntosh: My hope with that article was to clarify some of the language around this topic.

Shortly after the September strike, it was revealed that Secretary Hegseth was the target engagement authority (TEA). Generally, the TEA is a task force commander or a designee vested with the authority to approve strikes.

There are two main types of strikes. Some are status-based strikes, where a person is a known adversary but isn’t actively engaged in hostile acts. The others are action-based strikes, where adversaries are actively threatening friendly forces.

The bar is lower for an action-based strike, but collateral damage estimates are still required. Strikes must adhere to the principles of proportionality and the laws of war, and avoid causing undue damage or suffering or targeting protected sites. The strikes in the Caribbean seem to be status-based until the targets are in a location where they can actively threaten Americans.

If it were a status-based strike, it had to be approved by a TEA following a briefing. Typically, there’s a period of “soak,” where you watch the target — be it a person, building, or something else — to build a pattern of life. You do SLANT counts, which tally the number of men, women, and children. If the count is unfavorable, meaning women and children are present, you do not strike.

All of that information is fed by a ground force commander or a strike cell commander to the TEA in an incredibly detailed briefing. Something like, “Sir, I want to direct your attention to this sensor, under this Unmanned Aerial Vehicle (UAV). We are targeting X. Over the last 48 hours of observation, we have this many reports from signals collection co-locating his phone with him. We had a high SLANT count at his location of 4-1-1, but it is currently 1-0-0. We know who it is. We’ve been watching him for 48 hours, and we have a window of opportunity to conduct this strike without causing collateral damage. This is how we will weaponize the strike to keep collateral damage to an absolute minimum, affecting only that person, building, or vehicle. Pending your questions.”

The TEA will then approve, disapprove, or ask for clarification, and give remarks and restrictions, including re-engagement authority. Then he will sit there and watch the strike, because he has now signed on the dotted line as the Target Engagement Authority.

The first thing that was weird about this situation was that Secretary Hegseth was the TEA for these strikes. Assuming everything happened as reported, the strike did not sink the vessel immediately, though it began to sink. There were apparently two clear survivors. 41 minutes later, there was a re-engagement. That is a long gap for re-engagement, which suggests there were discussions among the various stakeholders about whether they were allowed to re-engage. This probably included watching the vessel sink and realizing the strike was not going as planned.

The fact that the TEA left after the initial strike is important. He had already signed off and conceivably given remarks and restrictions, including for re-engaging. If he’d already authorized that, then it doesn’t matter that he wasn’t watching. The commanders below him have a moral, legal, and ethical responsibility to act appropriately, but he has already signed up for whatever comes next if he’d given that clearance.

If you say something like, “Kill them all,” as the TEA, you have technically signed off on whatever happens next, because, as the Target Engagement Authority, you stated your intent was for all targets to be dead.

Tony Stark: I have two thoughts on this. First, ownership is an issue here — I’m sure they are discussing what leadership ownership is behind the scenes. Second, the ethics here aren’t complicated. Every U.S. Army infantryman is taught a simple, non-negotiable rule — a wounded or surrendering enemy is under your care. You do not execute them. Every soldier is taught what it means to commit war crimes, and this is the baseline.

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That rule is drilled into every officer, whether from West Point or Reserve Officer Training Corps (ROTC). Everyone in that decision-making room knew the line between engaging a target and recognizing when they are under your care. This is not complex law. The idea of them debating that for 41 minutes is cartoonish.

Justin McIntosh: My task force commander — he’s now a two-star general — once refused to authorize a strike and pissed off a lot of his junior officers and Special Forces captains. The proposed target was a mosque that was a staging location for insurgents — dozens of men were seen moving weapons out. Everybody was excited about the target, but the SLANT count was in the 60s, and Kurdish forces would arrive the next day.

This commander said, “Guys, I understand why you’re proposing this. But we are going to own that terrain tomorrow, and the negative repercussions of this strike greatly outweigh any potential positive benefit. I have not seen anything that shows an imminent threat to our forces or our partner forces that warrants taking secondary risk.”

This is the nuanced distinction between action-based and status-based strikes. A guy running at you with a weapon — that’s a clear threat. But a radio operator 15 kilometers away in a building you can’t see into? That is a tough call. We endlessly debate what constitutes a valid strike. Most commanders I served with were cautious — unless a target said, “We’re about to kill the Americans,” they didn’t shoot. They didn’t know who else was in that building. Sometimes an adversary put a child on the radio, with an adult feeding them lines, to make sure you knew a kid was there.

Warfare is ugly. I allow for confusion in the heat of the moment. But as a commander, you have to see the bigger picture. Is there an active threat? How do the benefits weigh against the costs? We are seeing those repercussions.

Jordan Schneider: If the Secretary of Defense is making these calls, what happens to the mission? They publicized these strikes to look tough and scare drug dealers — to shift their risk-benefit calculus. But the second strike might cost him his job.

Initially, Congressional oversight on this campaign was surprisingly muted. Now, it’s dialed to 10. Most Americans would be deeply uncomfortable reading that article — there is political grist in that. War crimes aside, striking two shipwrecked guys was a politically dumb decision.

Tony Stark: The Democratic base sees the whole episode as illegal, but most of the country doesn’t care if drug traffickers die. That said, most people don’t care if murderers die either, but we don’t execute people in the streets. The rule of law demands we behave better than our animal instincts.

Once the House and Senate Armed Services Committees (HASC and SASC) are involved, the situation changes. Congress hates being lied to, having its funds misused, and having its power usurped. While Congress has abdicated some of its war powers, once HASC and SASC have their hooks in you, they don’t let go, especially before midterms. That will tie up the administration’s agenda.

Any new budget aligned with the National Security Strategy will be filled with restrictive NDAA items. Six months ago, officials felt immune from investigation — now they are concerned. There’s no clean escape — Congressional staffers will want to talk to everyone. I don’t know if they will need a sacrificial lamb or a leadership change, but I doubt the Senate can confirm a new Secretary of Defense.

This is like a Spider-Man meme, everyone pointing fingers at each other. They can’t change what happened, but they can make it painful. I don’t know what comes next.

Justin McIntosh: The Secretary of Defense acting as decision-maker for the strike creates a problematic chain of review. If he had delegated authority — say, to South Command (SOCOM) commander Mitch Bradley — any questions about a strike would have gone to the Secretary for an impartial review. He could have consulted his council and then absolved Bradley of any accusation.

But who can be the impartial reviewer within the department now? By making himself the decision-maker, the Secretary has removed that layer of internal oversight. This puts the department in a weird position, because now questions go to the Senate. The Secretary can’t tell the Senate he is an impartial reviewer of the events — he was the primary decision-maker.

Jordan Schneider: Why would he do it in the first place? Did he want to feel cool and tough watching explosions on TV?

Justin McIntosh: With the right access, the Secretary could have watched Unmanned Aerial Vehicle (UAV) feeds from anywhere in the world. The question is why he was supervising. Mitch Bradley was the squadron commander for DEVGRU, and commander for JSOC, and SOCOM. He was on SEAL Team Six during the bin Laden raid. His entire career was built on these operations — he knows the process and is fully qualified to make decisions without another TEA. It also doesn’t make sense to include the Secretary as a secondary backup. Bradley didn’t need that level of oversight. Or, perhaps he did.

Gray Areas

Tony Stark: More information will come out about this, though Congress is always weird about investigations during the holidays. But the main takeaway should be this — the U.S. military has not abdicated its moral responsibilities. This is not the military’s default setting. Politics aside, we are at a critical point for military ethics. What does good order and discipline look like? Do we still care about these standards?

Justin McIntosh: Warfare is full of gray areas. The Kunduz hospital bombing is a good example. The 3rd Special Forces Group team and their Afghan partners were under fire, likely from the hospital. As protected sites, there is a higher standard for strikes on hospitals, and insurgents exploit that for their advantage.

Some argue we undermine our military by allowing sanctuary sites, but in my service, I was proud that we held ourselves to higher standards than the insurgents. Those standards protect children, sick and wounded people, innocent civilians, and doctors bravely risking their lives to heal.

That said, there are big gray areas. I usually give grace to ground force commanders, who have small optics and are focused on their men under fire. They are directly encountering active threats, and imperfect decisions are understandable.

My grace degrades for commanders removed from danger — secure in a strike cell with cushy leather chairs. That is the problem here. This strike was unnecessarily messy. There was ample time to develop the target and demonstrate our incredible precision. Secretary Hegseth could have justified the first strike by declassifying evidence that they were drug smugglers.

Jordan Schneider: This will not be our last conversation about this strike.

Tony Stark: Certainly not. Some argue ethics of warfare are a new invention, but these norms are shaped by culture and past wars. The many laws that followed WWII were a response to atrocities on the battlefield. Even in the Civil War, there were standards for treating the wounded and negotiating with the enemy to recover the dead.

The question of what defines a valid target is not new. Our modern standards are an important moral evolution.

Justin McIntosh: There is a psychologically strategic advantage to humane treatment. If the enemy knows they will be mistreated or killed if they are captured — like the Bataan Death March or the slave camps of World War II — they will fight harder. If your forces are known to treat POWs well, there will be more enemy defections. That is militarily relevant.

Jordan Schneider: Hegseth is Secretary of War because he defended Eddie Gallagher on Fox News, even though Eddie’s teammates said he did some heinous things. If that is your formative professional experience outside of public service, then you’re learning some twisted lessons. In other contexts, that behavior leads to a dark place. That’s the only logical explanation for what happened in September. It’s disgusting and counterproductive.

This isn’t a sustainable strategy. The American people can tolerate a lot, but celebrating these strikes from the rooftops is a profound misjudgement of the public mood.

Tony Stark: Congress was initially quiet because the American people didn’t care — it was almost a meme. But the public debate around this will change public opinion. Midterms are around the corner — this is a bad time to try to build up support for a military campaign.

DoD will likely be looking for new mission strategies, such as hitting targets at the source — production facilities, for example, anything legally or morally straight, or off camera. If the political fallout worsens, they may even seek congressional authorization to provide official cover.

If Bradley goes down for this, other officers will see that these strikes can cost them their careers. We might reach a critical mass of officers saying, “I am not risking my career, my livelihood, and my pension for this.” Six months ago, that was not a consideration.

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Jordan Schneider: It comes back to the SOUTHCOM commander who retired early. How much did he see? Did he hear orders like “kill them all” and decide he wasn’t up for the task? It makes more sense now.

Tony Stark: Has he been called to testify before Congress yet? Bradley testified in a classified hearing this week. I am interested in seeing the former SOUTHCOM commander testify.

Justin McIntosh: I agree. That’ll be the telling moment, because it was around September when he announced he was going to retire early. The timing is weird.

Tony Stark: Congress failed by not immediately saying, “That’s weird, we should ask about that.”

Justin McIntosh: Normally, combatant commanders don’t retire halfway through their command.

Jordan Schneider: Especially when their job suddenly attracts public attention.

Tony Stark: If you’re at SOUTHCOM, you’re thinking, “Oh my God, I finally have assets! This is fantastic.”

Justin McIntosh: They’re in Tampa, so they’re trying to pull CENTCOM guys to fill those roles.

Jordan Schneider: Well, that was some real “SportsCenter for War” action. We’re closing with Grok. I asked it what regimes the paragraph from the National Security Strategy reminded it of.

It answered Fascist Italy, National Socialist Germany, and Franco’s Spain.

Apparently, Fascist Italy had a demographic campaign called the “Battle for Births,” which was intended to boost birth rates. Maybe we’ll cover that next week!

Tony Stark: That’ll really interest our audience.

Jordan Schneider: I’m really excited for the AI song I’m going to make from that paragraph.

is president of the Council on Foreign Relations, former U.S. Trade Representative, and a substacker. He joins ChinaTalk to discuss:

• Why his 1992 dissertation on détente is suddenly relevant again – and why “positive linkage” fails to change adversary behavior,

• How mutual assured destruction has shifted from nuclear weapons to rare earths, supply chains, and technology, and why the U.S. and China are stuck in a costly, uncomfortable stalemate,

• How think tanks work — salary levels, where the money comes from, and what to expect from Mike’s tenure.

Listen now on your favorite podcast app.

Détente Redux

Jordan Schneider: We’re going to take it all the way back to 1992. You did your dissertation about this idea of détente and how it evolved from the ’50s all the way through the end of the Reagan administration. Coming to your conclusion, the echoes of where we are today and that theme seem to be very striking. Why don’t you pick a quote and then kick it off from there?

Mike Froman: “To retain the support of the American public, U.S.-Soviet relations must be based on reciprocity. Détente suffered no greater liability than the public’s perception that the Soviets exploited it at the United States’ expense. To be reciprocal, however, U.S. policy must embody reasonable expectations.”

Mike Froman: I thought I was writing a historic piece. The end of the Cold War came. I put the book on the shelf, thought it would never be opened again. And yet, Jordan, there you found it and indeed have highlighted that there might be some relevance to the U.S.-China relationship today.

Jordan Schneider: I played this game with Kurt Campbell. He did his thesis on Soviet relations with South Africa and the tensions of how the U.S. navigated that dynamic. Everything’s coming back.

We’re sitting here in the fall of 2025. We have a president who is probably as far towards the “let’s do détente” mindset as you could have gotten in this political moment. What do you think are the bounds of what an American president today could domestically go towards if they were in a détente mindset?

Mike Froman: The issue of détente back in the old Soviet days was — was it a strategy to transform the Soviet Union by engaging with it, or was it a reflection that we had to engage with it because we had overwhelming common interests? Some of those are the same questions that come up today in the U.S.-China relationship. Do we think we can fundamentally change the trajectory of China, or do we just simply have to accept it and live with it, coexist with it, and create some rules of the road for managing potential conflicts?

Any president right now figuring out how to coexist with China will have to determine — where do we need to cooperate on issues of national security? Where do we have to compete around the economy and technology? And where do we have to be very careful to manage potential conflicts that could blow up and create a kinetic conflict between us — whether around Taiwan, the South China Sea, or otherwise? Balancing those different baskets of interests is the most challenging thing for any administration to deal with.

Jordan Schneider: You wrote, “The theory of using détente as a means of transformation was based largely on the misguided assumption that the U.S. could use cooperation on common interests as a source of leverage over conflicting ones. Positive linkage was not particularly effective, however, because success in areas of common interest did not easily translate into success in areas of divergent ones.”

You published this book in 1992, which is a key moment of translating that kind of — in your estimation — flawed thinking of how we went about this with the Soviet Union to the next 25 or 30 years of American policy towards China. Can you talk about those parallels?

Mike Froman: Yes. The U.S.-China relationship is quite a bit different than the U.S.-Soviet relationship, first and foremost because of our economic interdependence. Russia and the Soviet Union were never terribly significant economic players in the global economy, whereas China very much is. We have developed over the last several decades a great deal of interdependence with them.

The leverage question’s a little bit different. Could you use economic leverage — the fact that we have a common interest in maintaining strong trade relations — as positive linkage into other issues? Or could you cooperate in areas like climate change, which both sides thought at one point were of common interest, and translate that into broader cooperation in other issues?

Having said all that, you’re right to point out that it’s proved to be relatively limited. In China’s view, they in many respects separated areas of common interest from areas of potential conflict and from areas of competition, and were unwilling to allow cooperation in one area to really affect their interests and how they pursue them in the others.

Jordan Schneider: What is your sense of why the theory of the case was so directly ported over to China? The argument through the Clinton administration, Bush administration, first half of Obama was basically — we’re going to develop leverage, develop these common interests and they’ll see the light. We didn’t get that these are both two party-led systems. There are some commonalities, but there are pieces of learning that maybe folks overlooked from that experience. It felt like a brave new world. Given your view over the past 30 years of this arc, what do you think got lost in translation there?

Mike Froman: If the Cold War was defined at least in part by an ideological battle between Western liberal, capitalist, market-oriented, democratic-oriented principles and the communist totalitarian principles of the former Soviet Union, the view at the end of the Cold War was that it was much more of a unipolar moment. Not necessarily U.S. hegemony, but the hegemony of the open liberal democratic capitalist perspective.

That was embraced by China. If you go back to the days of Jiang Zemin and Zhu Rongji and the reform trajectory that they laid out, they were very much on the path towards market-oriented reforms, opening up — not necessarily democracy. Those who thought that opening up on the economic side would lead to political pluralism were probably being overly optimistic. But there was certainly a view that China was on a path towards greater integration in the global economy, which they have been, and greater market-oriented policies to help lead them there.

They were on that trajectory for quite a while. It didn’t go as far or as fast and it wasn’t as linear as people expected. The advent of President Xi, who was willing to either stop or reverse some of those reforms, was probably not as anticipated as proved to be necessary.

There was this dominance of a set of principles that we thought could bring China into the international system and bring the U.S. and China into a more cooperative relationship. What happened was that China changed course and didn’t go as far as we expected. Indeed, China reversed many of the gains that we thought we had seen.

Escalation Dominance and Stalemate

Jordan Schneider: Escalation dominance — a phrase we thought was dead and dusted in the bin of history — is now back. Is this the right mental framework folks should be using when thinking about these trade wars? What is and isn’t useful when trying to take the arms control frameworks and put them onto what you’re seeing with the U.S. and China with respect to economics and technology?

Mike Froman: There certainly is a rigorous competition between the two in technology, economics, and military. The Chinese buildup of both its conventional and nuclear forces is very much top of mind.

Where the analogy may play out — it does come from nuclear weapons, but it’s not necessarily the escalation issues. It’s really back to the notion of mutual assured destruction. What we’ve seen more recently in the U.S.-China relationship is we have leverage in terms of access to our markets and access to our technology, but China too has leverage in terms of their capacity to control critical choke points of key technologies — whether it’s critical minerals, rare earths, magnets, et cetera. That’s, in my view, probably just the tip of the iceberg of the kinds of technologies and products that they control and that they have now demonstrated a willingness to use their leverage with us.

If anything, we’ve reached a stalemate where both sides realize that neither can escalate in a costless way. Indeed, it may require them to sit down and come up with some rules of the road for managing the relationship going forward.

Jordan Schneider: There’s this misreading of the history of the Cold War that once you had mutually assured destruction, everything was cool by the 1970s, which, as you as well as anyone know, was not necessarily the case. You had both countries developing new weapons systems and wrestling for that nuclear primacy and escalation dominance.

If we are in a world now where the U.S. and China both understand that they can take big, painful chunks of GDP without going to war or doing incredibly aggressive cyber attacks, where does that lead us? Because the game doesn’t stop, right? We’re still having different moves that both sides can play.

Mike Froman: Exactly. The competition doesn’t stop. As you said, back in the Cold War, it wasn’t all sweetness and light once you hit mutual assured destruction, but it did prevent a direct nuclear exchange between the two largest nuclear powers. They had to find other ways of positioning vis-à-vis each other, whether through proxy wars or other elements that allowed them to try and gain some advantage over each other.

That’s probably true here in the China relationship as well. It’s likely to lead to a certain degree of selective decoupling, whether it’s on advanced technology issues where we’ll go our way and China will go its way. The question is for the rest of the relationship — to what degree can there be a normalization of trade and other interactions?

There is a lot of non-strategic trade. The Trump administration is evolving in its views towards — what can we actually grow or produce here in the United States and where do we actually need to import from other countries? Can we take T-shirts and sneakers and toys from China without compromising our national security? I would think so. Allowing them in at a decent rate is good for particularly low-income Americans who spend a disproportionate amount of their disposable income on the basics of supporting their family.

But there are likely to be some technologies that we’re going to want to keep out of China’s hands, and China is going to have some choke point technologies that they can control over us. Hopefully that again reaches some sort of balance.

Jordan Schneider: Say we’re in 2028 and both countries have had three years to do more economic securitization and the size and amount of the bites that each country can take out of the other one diminishes. America has a few more mines. China does a better job of making semiconductors. Is the world in a more or less safe place? Or does just the fact that each side is still going to have this leverage — if they are the world’s two largest economies and still do trade — is that still the salient thing? Does playing around the edges even mean all that much?

Mike Froman: It’s unclear at this point because it’s very much a work in progress. It’s only been in the last few months that we’ve seen China’s willingness not only to turn off access to a particular batch of technologies like the magnets back in April 2025, but demonstrate a willingness to put in place a whole export control licensing system which could disrupt global supply chains in fundamental ways. They’ve now demonstrated their capacity to do that. We’ll see how they actually go about implementing it.

This ultimately could be, ironically, a force for stability with each side recognizing that the other side has some significant leverage. But to me, the bigger issue is we’re not really dealing with the other very significant questions in the relationship. The summit that President Trump and President Xi had in Korea — the main issues were fentanyl, soybeans and TikTok. We’re not asking ourselves: how do we get to the fundamental relationship between the two economies around China’s strategy of export-led growth, excess capacity, high subsidization of critical areas? How do we deal with that and the potential ongoing tensions that’s likely to create going forward?

Whether we’re on a more stable or a less stable path, in my view, depends on whether we get to those underlying issues and try and resolve some of those. Those have not yet been put back on the table, let alone issues like Taiwan, South China Sea, North Korea, nonproliferation, et cetera.

Jordan Schneider: We just had a whole conversation about how using international diplomacy as a means of domestic transformation is a bit of a fool’s errand, right?

Mike Froman: It’s not about domestic transformation. If you remember back in the Soviet Union, the idea was if we engaged with them or took other actions vis-à-vis them, somehow their system would collapse. They would see the values of democracy, the values of market orientation and everything would fall apart. They would inevitably collapse.

This isn’t about making China collapse. It’s about seeing whether we can come up with rules of the road so that China and the rest of the global economy can coexist without undue tension. Right now we’re not really dealing with those issues.

Jordan Schneider: If we’re defining “dealing with those issues” — for my first job out of college, I covered trade policy for the Eurasia Group. I was listening to every single one of your speeches trying to figure out if this meant like the U.S.-China BIT was 7% more likely to happen.

With the second Trump administration, there are two disjunctures that we’ve seen from the past 20 years of American foreign policymaking. The biggest one is just the risk tolerance and the ability to take big swings that may end up being either illegal or backfiring horribly, which the presidents that you worked for were a little more reluctant to do, for better or for worse.

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If you’re sitting as USTR and you have the threat of putting 50% tariffs on the countries you’re negotiating with — be it China with a U.S.-China BIT or with all the allies that you were talking around with the TPP — to what extent do you think that unlocks new political economies and new negotiating paths that weren’t possible if at the end of the day you have a president who just wants to be nice to the countries that we have treaty allies with?

Mike Froman: The Trump administration’s threat and use of tariffs has created very significant negotiating leverage and has gotten countries to come to the table on a whole range of issues — whether it’s fentanyl, migration, or economic issues — and to agree to things that they previously would very likely not have agreed to. The administration in the short run has very much demonstrated that access to the U.S. market is a source of negotiating leverage and other countries have responded to it. They haven’t been happy about responding to it but that’s okay.

The question is what are the longer-term implications and whether it makes it more difficult to gain their cooperation on some other issue down the road. But only time will tell. In the meantime, if you had asked people a year ago whether we would have this raft of agreements that the administration has rolled out with anywhere between 10% and 25% or 30% tariffs on other countries — quite asymmetric agreements in many respects — most people would have said it was highly unlikely, but it has proven to be the case.

Purely from a negotiating point of view, if you have the capacity with credibility to put tariffs on regardless of your international obligations and regardless of the long-term implications, you can probably get a fair amount done in the short run.

By the way, the Trump administration’s skepticism about some of the mechanisms of engagement with China — like these big bilateral fora that we managed for years: the Strategic and Economic Dialogue, the Security Economic Dialogue, et cetera — I share some of that skepticism. They involved thousands of person-hours of work and produced communiqués which I don’t think necessarily advanced the ball that far and show the limitations of that form of diplomatic engagement.

That doesn’t mean there aren’t other forms of engagement that make sense, including ones backed up by a series of potential actions. But certainly it’s healthy to look back and say, what did these things accomplish and where can we do better?

Jordan Schneider: Looking forward, if there is a Democratic president in 2028 — a president that you would want to work for, who was less scared to play hardball the way the Trump administration has when it comes to access to the American domestic market — a president that you would be more sympathetic to in terms of their ultimate aims, where would you want to see the new leverage that has clearly been brought to the fore when it comes to domestic market access? How would you want to use those cards?

Mike Froman: Ultimately, it’s in the U.S. interest not to go it alone in a lot of areas, but to bring allies and partners into the arena. Using whatever leverage we have to get allies and partners to work with us on difficult issues — including a common approach to competition, a common approach to adversaries, a common approach to national defense, whether it’s support for NATO or engagement vis-à-vis China — those are all very important.

We don’t have to have everything reshored to the United States. If we have coalitions of the willing, coalitions of the ambitious, trusted allies and partners who we can work with to make sure we’ve got adequate supply to critical inputs that we need for our national security and for our competitiveness more broadly — I would use whatever leverage the U.S. has to bring our allies and partners to the table with that goal in mind.

Jordan Schneider: This idea of economic security is very nebulous. The Fed has this clear thing they’re trying to do — 2% inflation, full employment. It feels like all these discussions about what economic security is very quickly go into here’s what we should do for this sector, here’s what we do for that sector, here’s what we should do for this technology. But there’s not an overarching framework of what the end state we’re trying to achieve or work towards is.

I want to run an essay contest around how to define it in more concrete ways with numbers attached. How would you frame that question? If you had an answer or an equation off the top of your head, I’d be curious for that as well.

Mike Froman: First of all, you should read our recently released CFR task force report on economic security. The task force was co-chaired by Gina Raimondo, former Commerce Secretary, Justin Muzinich, former Treasury Deputy Secretary in the Trump administration, and Jim Taiclet, who’s the CEO of Lockheed. We had a couple dozen CFR members with a wide range of backgrounds in technology and defense.

I flag that because one of the fundamental sets of questions that the task force was focused on is — what are the parameters? What are the guardrails? What are the limiting principles on economic security?

For decades, the focus of economic policy really had been on efficiency — the most efficient supply chains around the world. Companies put their factories and sited their suppliers where it made most economic sense to do so. A lot of that ultimately led to China, given not just the labor differential, but also its infrastructure, its management practices, and just how efficient it was as a manufacturing floor for the U.S. We found ourselves overly dependent on one country, or in the case of semiconductors, on Taiwan and China.

What economic security fundamentally means is really proper risk management. The number one principle of risk management is diversification. You want diversified supply chains, resilient supply chains. Particularly when it comes to national security core interests — such as the materials that go into a missile or into an F-16 — we can’t be dependent on our adversary for them. Figuring out where to draw that line is the goal.

It’s easy to say missile parts, F-16 parts — we should not be dependent on China for those. But what about active pharmaceutical ingredients? What about the supply chain for semiconductors? What about PPE that we saw during COVID? Where do you draw the line?

That’s the big challenge for policymakers going forward because each of these involves a trade-off. There’s a reason the manufacturing was sited in China — it was the economically most efficient thing to do. Any other approach is going to be, almost by definition, more expensive, less efficient. That may well be worth the cost. The question is, how much are we willing to pay additional for whatever product it is in order to have more resilience, more redundancy, more diversification, and better national security?

We ought to be willing to pay something. The question is how much. Maybe we’re willing to pay a fair amount to make sure our semiconductors, our missile parts, our F-16 parts are made in the United States or in a close ally’s jurisdiction. But we may not be willing to pay quite as much to make sure our sneakers and our T-shirts and our socks are made in the United States. That’s the kind of conversation we should be having — really about trade-offs.

Jordan Schneider: My question was an implicit critique of that report because I think it skipped the base question and then went pretty quickly to this sector, that sector, the other sector.

Mike Froman: Let me push back on you, Jordan. It decided, instead of focusing just on the theoretical, to say — here are three critical sectors. We could have picked a dozen. Here are three critical sectors. Let’s see what it looks like through the lens of a particular use case. Whether it was AI, quantum, or biotechnology, those each have particular needs that need to be addressed. Everybody would agree that at least in those three areas, we need to be a leader in those technologies. How do we maintain that leadership?

Jordan Schneider: The core issue here is escalation dominance — when can China inflict enough politically visible pain on American policymakers to force them to back down?

When we define it down to even the non-perishable consumables — I am the father of a young child and hit this weird crunch where the tariffs made it such that you couldn’t find car seats because every car seat in the world is made in China, apparently. It just seems to me that there’s just so much that is going to be dependent on the two countries.

Maybe there’s some 80/20 or 90/10 principle where we’re still going to rely on China for 90% of the screws that go into the F-16s, and if they take 10% away, we’ll still have this much of our military capacity back. But closing the loop for all the things like you did in the 1960s relative to the U.S. and Soviet Union is not feasible.

It seems like there are two relevant variables here. One is the long-term GDP cut that China can make from being dominant in something. The other is how much short-term political pain can an adversary use to squeeze American policymakers to do something that they wouldn’t otherwise want to do. Is there another aspect to it? Am I missing something here?

Mike Froman: That captures it. But what you’re pointing out is very much the importance of distinguishing between the strategic and the non-strategic. That points to the broader relationship as well.

In the Biden administration, it was the phrase “small yard, high fence.” What goes in the yard for control, and how small can you keep it? They were pretty selective and pretty targeted in terms of how they viewed that. Maybe some things would need to be added, maybe some things can come out of it. But the question is: what should be deemed as strategic either from the perspective of keeping key technologies out of China’s hands or ensuring that we have redundancy so we’re not overly dependent on China? And what can go anyway? What can be sold anyway?

Even in the height of the Cold War, we were buying wheat from the Soviet Union. Wheat was seen as non-strategic and we could buy wheat from them and still be at odds over various issues. With China, where are we willing to draw that line? To me, that’s really the question for the next phase. As the Trump administration engages now, there’s been a stabilization of escalation and de-escalation. The next phase should be: how are we going to define this relationship going forward?

Jordan Schneider: The ability to cause pain to the other side is always going to be there, but what tool you use to cause pain is the question. We’ve thankfully had some great norms develop around the use of nuclear weapons. We’ve had some norms around the use of conventional forces — TBD on those. All of the cyber stuff between the U.S. and China thus far has been of the snooping, not of the blowing up power plants variety.

But the fundamental question I have around economic security is — say that China wants to retain leverage on the U.S. and get politicians to do things they wouldn’t otherwise do in their druthers. It just seems like there are so many levers that you can pull as a peer competitor in the 2000s. It makes me worried that we’re working toward an end state of being resilient if the other side doesn’t want you to be resilient. It seems like a marathon where the end isn’t even something that’s realistic. You see what I’m getting at, Mike?

Mike Froman: I do. I sense that you’re feeling overwhelmed by the challenge. But that should be our opportunity to rise to the challenge. There’s a certain urgency, I believe, in one, assessing what the key dependencies are. And two, assessing what it takes to address them. Is it a combination of tariffs, industrial policy, investment, and regulatory changes? What is the toolbox that we need?

Thinking very strategically about that — including where allies and partners can play a role because they’ve got capacity in certain areas that we don’t, or because they can supplement our capacity and help us get to scale more quickly — and building a bipartisan, ongoing consensus around what it takes is an urgent need. That helps you get to that point of saying, yes, it may seem overwhelming, but you’ve got to start somewhere.

That’s what we’re doing right now. That’s what the CHIPS and Science Act did during the Biden administration. It said we cannot be 100% dependent on Taiwan and China for the packaging, etc., of chips. We’re going to begin to rebuild chip manufacturing capacity in the United States. The question is, what additional sectors do we need to do?

Take shipbuilding. Everybody believes we need more ships, whether it’s for the Navy or for merchants or otherwise. We don’t have a huge amount of shipbuilding capacity anymore. Can we work with Japan, Korea, and Finland on icebreakers? Who can we partner with to get there?

Mission, Money, and Talent at the CFR

Jordan Schneider: You gave me a little transition there — building a bipartisan consensus for decades of policymaking going forward. That seems to double as your vision for what the point of a think tank or CFR is, particularly now. What are the KPIs we’re going to give for Mike Froman’s reign as president of the CFR?

Mike Froman: Our mission is to inform U.S. engagement with the world. There are lots of different ways to engage. Our job is to flesh out what are the different mechanisms for engaging with these goals in mind that we’ve just been talking about. What are the trade-offs involved? What are the costs and benefits of going down one path or the other and helping policymakers in their decision of how to pursue that? Also helping opinion leaders and the broader American public understand and get their input on which of those trade-offs they’re comfortable with. That’s an important part of what the Council does.

We’re focused on policymakers like most think tanks, but we’re also focused on the broader American public through broad education efforts and media efforts, digital, etc., programs around the rest of the country with the goal of getting their input into how they view the role of the U.S. in the world and to help inform policymakers accordingly.

Jordan Schneider: How are you going to do things differently? What’s the Mike Froman twist on all this?

Mike Froman: We’re taking a step back and saying, just as the Council did — the Council was founded in 1921 after the end of the First World War, after the defeat of the League of Nations — to organize around trying to push back against trends of isolationism. In 1948, it was a place where the Marshall Plan and NATO were very much being worked on. In 1991, at the end of the Cold War, there was a lot of talk about geoeconomics and bringing economics into the national security sphere as well.

This is another one of those inflection points. As a Council, we’re going to take a step back and say, where do we go from here? We’re going through a major disruption right now. Fundamental questions about the nature of the global economy, of the trading system, of alliances, of how to manage adversaries, how to compete — these are all on the table. How can we help policymakers and the broader public understand different options for pursuing U.S. national interests and the trade-offs involved in each?

It’s a major studies effort, a major research and analysis effort, but also a major education effort — engaging with more audiences, non-traditional audiences, different kinds of media to engage with the rest of the country and get a sense of their input as well.

Jordan Schneider: From an internal organization structure perspective, what do you think of the model? What needs to change?

Mike Froman: The Council’s been around for a long time and is actually well-positioned for this moment in history because we’re not just a think tank focused on trying to influence the couple thousand people in Washington that are sitting in these meetings and trying to make decisions. We’re also focused — as a membership organization, a publisher of Foreign Affairs, an educational organization that provides material to high schools and colleges — on the broader American public. We do events all over the country. We’re relatively well hedged to both work with policymakers on one hand and work with the rest of the country on the other hand.

Jordan Schneider: Let’s talk about money for a second. I assume you were on the other side of this in terms of large corporations funding various research efforts. What do you think about where funding comes from for think tanks in general, CFR in particular, and what makes sense and what doesn’t?

Mike Froman: Our funding’s obviously all public. It’s all on our website. It’s transparent. We don’t take any money from any government institution, including the U.S. government. We don’t take any money from corporations for research. Corporates can be members like other members and send their employees to our events, but they can’t involve themselves or set the agenda or influence our research agenda. That allows us to remain nonpartisan, allows us to remain independent. It’s one of the reasons that both our research and analysis and our publications are viewed highly as being independent and credible in that space.

What that means is we rely on — we’re a membership organization, so individuals pay dues. We’re blessed to have members who are philanthropic. We get money from foundations, some of the standard foundations that work in this area. That’s where our funding comes from. We have an endowment that’s been built up over the years as well, again, because of the generosity of our individual members.

Jordan Schneider: I’ve been on the other side of this, where you have a funder who is a corporation that wants you to write a certain thing. Do you think it’s unseemly? The dance is tricky, right? But without that, it would kind of only be CFR and Heritage left standing. There’s a lot of foreign government money as well.

Mike Froman: I’m not going to criticize my peers. I would just say that we’re lucky and we have a concerted strategy to make sure that we’re able to remain independent. That means no government money, no corporate money for research. That allows our fellows total freedom of speech. They can write whatever they like. As an institution, we take no institutional positions. We try to put our best research and analysis out there and make it available as broadly as possible.

Why are salaries so low

Jordan Schneider: Entry-level research associates come in with a $55K to $58K pay band at CFR. What are your thoughts on that, Mike?

Mike Froman: We would love to — we’re very lucky to have a great set of research assistants and entry-level people. There are a lot of people who want to go into the field of international relations. This is their first job. By the way, we view one of our core objectives of CFR as helping to identify, promote, and develop the next generation of diverse foreign policy expertise. We spend a lot of effort and time — whether it’s our interns, our research assistants, our junior staff, our term members — really focused on who the up-and-coming generation are, and what we can do to help them develop the skills and the expertise to succeed in that field.

As a nonprofit, obviously we’re subject to constraints, but we always look at what the market is and try our best to make sure we’re getting the very best quality people for the resources that we can expend.

Jordan Schneider: But it’s not a lot of money, right? These are really big, hard, important questions. It bums me out that we lose talent because folks who are coming out of school with debt or just see an opportunity to make 4x right out of college look at this field and say, “How can I go down this route?” It breaks my heart, really.

Mike Froman: Having been at the beginning of my career once upon a time, I can relate to that. Luckily, we have a lot of interest in the Council by people coming out of college, coming out of graduate school. There’s significant demand for the openings that we have. We have a great group of junior staff and research assistants. I’m really impressed with them, and we take a lot of effort to make sure we’re doing everything we can to develop them professionally.

But I also say, Jordan, we’d be delighted to take a major donation from you to the Council to help endow a new research assistance endowment program if you like.

Jordan Schneider: That was my next question. I am surprised that there isn’t some rich person out there who doesn’t want to have the next generation all be Mr. and Mrs. X fellows. Then they get to make $10 or $20 grand more. It’s not that much money in the grand scheme of things for all of the kudos and accolades you would get and all of these fresh young faces saying thank you so much, Mr. or Mrs. Whoever.

Mike Froman: We have been very fortunate to have some of those donors participate.

Jordan Schneider: How do you split your time? What’s the weekly daily pie chart? You’re now a take artist on Substack as well. How do you think about where your time should be spent?

Mike Froman: I live in Washington, and I spend about three days a week on average in New York and two days a week at our office here. Every week’s a little different. I travel around the rest of the country as well, doing events for CFR members and others.

I split my time between my own research and writing — as you say, I have a weekly column that I put out on Fridays that then gets posted on Substack. It’s part of our newsletter as well. I spend a lot of time working with our senior leadership team on our programming here, making sure that we are presenting a nonpartisan slate of participants here on our stage for events on all the major issues. I spend a certain amount of my time on internal management. We’ve got a great management team here, so I’ve been able to defer to a lot of them in terms of managing people and systems and things here, budgets, etc. Of course, a certain amount of time on fundraising. I do a bit with the press, a bit with the media to be helpful and out there. That fills a week.

Jordan Schneider: If you took a pill and could sleep 10 fewer hours a week, where do you think you would spend it? Doesn’t have to be on the job.

Mike Froman: On the job, I would probably spend it digging further into our research and analysis and doing more in that area. That’s the direction I’m heading in. I’ve been here for a couple years. I wanted to spend the first couple years really getting my arms around the place as an institution. Now I’m working more closely with the fellows on this big project of taking a step back — our Future of American Strategy initiative — and looking at some of these big questions going forward.

Jordan Schneider: It’s a weird time, right? Doing the work that I do in Trump one or Biden felt like the residence was much more direct to the sorts of wavelengths that the most important decision makers in the country were on. Now we’re in a brave new world. There are lots of strains of thinking in American policymaking.

Going back to the 1940s and the origin story of CFR — man, isolationism is back. We got Nazis going on the most popular right-wing podcasts. Doing things in the normal, mainstream way, trying to optimize for the solutions that you, me, George H.W. Bush would all see as reasonable goals for American policymaking is not shared by a significant chunk of one of the two parties in America.

In this new paradigm we’re in, to what extent do the bounds of thinking, the ways of working in a mainstream foreign policy think tank, have to change? On the other hand, in which ways should things stay the same?

Mike Froman: First of all, I don’t view President Trump or his administration as isolationist. You can’t be isolationist and talk about taking over the Panama Canal, Canada, and Greenland. That’s expansionist. This president has spent more of his first 10 months on foreign policy — whether it’s getting involved in particular conflicts, traveling abroad, hosting foreign leaders — probably more than just about any other president in recent memory. He is deeply engaged in the world.

As I said, our mission is to inform U.S. engagement in the world. There are lots of different ways to engage. He is engaging with it in a different way than several of his predecessors, but he is deeply engaged. For a think tank that’s focused on that, it is to say — this is the way this president is engaged. What are the costs and benefits? What are the trade-offs involved? What are the alternatives? What could be done to ensure ultimately that the U.S. meets its national interests? That’s what our role has always been. That’s what our role is now.

Jordan Schneider: What do you think are the unique challenges of this job relative to others you’ve had in your career?

Mike Froman: That’s a great question. I worked in the public sector. I’ve worked in the private sector. This is the first time I’m running a nonprofit organization, a think tank. The challenge is to maintain its position as a nonpartisan, independent source of research and analysis in what is a very partisan environment. Every day we think, how do we make sure, whether it’s our membership or the people who participate in our meetings and are put on stage or the engagement we have with the administration, how do we make sure that we are fulfilling our obligation as a nonpartisan institution going forward? That is a new and different level of challenge now probably than in the past, just because of the broader nature of the political environment.

Jordan Schneider: Do you spend much time with AI? Have you been using it to research or write at all?

Mike Froman: Not really.

Jordan Schneider: Maybe this is my pitch to you, Mike. The tools are enabling young talent to learn much faster and be much more prolific than they ever were in the past. My critique of the model that I grew up with — you have senior fellows and then you have RAs who hang out for two or three years and then go on their merry way, and most of their job is directly supporting or just serving as a research assistant to someone senior — what the research tools which now exist allow folks who are really sharp and motivated to do is just get up these knowledge hills much more quickly.

Obviously there are things that ChatGPT can’t teach you. A lot of this think tank game is one of relationships, be that with folks in Washington or in the media or what have you, or the subtleties of how to shape an idea so that it will resonate with different audiences. On the more contentful learning stuff, you can run a lot further as a 23-year-old than you could even 10 years ago. I would encourage — challenge, maybe — you and the organization to imagine raising the bar for what the top tier of young talent can aspire to do.

Mike Froman: To that point, Jordan, we started about a year ago opening the door for our RAs to publish on CFR.org in conjunction with their fellows or on their own as well, recognizing, as you say, first of all, we have a terrific group of people with or without AI tools and quite expert in their own way for their stage in their career. We wanted to give them an opportunity to develop their portfolios as well.

Jordan Schneider: Cool. Two thumbs up for that.

It’s clear that demand exceeds supply for policy analysis roles. I see this when I put job descriptions out. I’m sure you guys see it as well. There are people willing to not make a lot of money to do this work because they think it’s really interesting and really important. It seems like we, as a country, are leaving some money on the table from an idea generation perspective. The fact that we don’t just have 10 times as many people trying to understand what makes the Chinese rare earths ecosystem tick… where are we on the production curve of idea generation for think tanks?

Mike Froman: It’s probably always been more applicants than roles for these kinds of jobs. It’s probably particularly acute right now just because changes in the government mean that a lot of people who expected to go into the government or into the intelligence community are probably not seeing the same pathways that they saw before. Same thing for a lot of NGOs or nonprofits, particularly in the development field. People who are planning on going into that area are probably seeing the jobs disappear.

On the positive side, virtually every company is figuring out that they need geopolitical advice. They need to understand the impact of the changing geopolitical environment on their business. Many of them are setting up offices to bring in people with foreign policy interests and ideas into their ecosystem. That’s another avenue that didn’t fully exist five or 10 years ago and now is a much more vibrant part of the market for ideas. It’s think tanks, obviously, being one piece of it. Universities also. But then the private sector is now another place where people can go and develop careers if they have an interest in this area. Can I ask you a question Jordan? Who among the CFR fellows is your favorite.

Jordan Schneider: Oh man, I don’t know if I can choose…

It’s interesting, right, this whole think tank model, because on the one hand, you are these independent atoms, kind of like professors who can do their own thing. But I imagine also as a president, you want to see synergies develop in-house, as opposed to if one’s sitting here and the other is at Brookings.

Given that you have all these stallions who are going to want to run in their different directions, how do you think about to what extent you’re going to want to get them playing together and rowing in the same direction versus going off and optimizing their time how they want?

Mike Froman: What I hear from you, Jordan, is that we have so much great talent that you can’t possibly choose who is the best one. I appreciate that endorsement of CFR.

To answer your question, because it is timely and it is one of the things that I brought to the Council as a bit of an innovation — we’re doing a lot more collaboration among the fellows. runs our China Strategy Initiative and he pulls in a wide range of fellows from CFR, but also from other think tanks and universities into his project to answer questions — What is China thinking? What is China doing? How do we compete and how do we engage? Those are the four pillars of his initiative. It involves dozens of folks across the Council, including our cadre of China fellows.

We’ve done the same, for example, on economics. Our Real Econ initiative, which is Reimagining American Economic Leadership, now has about a dozen or so fellows who touch trade and economics in one form or another and are working together on a whole series of projects. That’s a little bit new for the Council — these clusters of fellows coming together, working on collective projects, as well as working on their own books and their other projects. As you said, it adds that synergy. It’s not about having them all pull in the same direction intellectually because we welcome the diversity of their perspectives, but adding them together and seeing what we can produce on China, on economics, on technology, on energy and climate in ways that are additional is very important.

Jordan Schneider: One person you didn’t name is Tanner Greer, in the Rush Doshi extended universe. The other failure mode, which you have thankfully avoided, is this deification of PhDs as the only way to have relevant credentials or insight that would allow you to play under the bright lights of a CFR fellowship. Tanner has had a classic China arc of living in the PRC, speaking, teaching grade school, being a tutor, and just having a blog on the side. He’s one of the most well-read and thoughtful people. He also provides a little bit of ideological diversity to the building, which is important in these trying times. I’m really excited to see what he does with those extra tools and leverage that you guys can bring to him.

Mike Froman: Thank you for raising him. He’s a great new asset for us. Of course, he’s running our Open Source Observatory, which is this effort to do mass translations of Chinese public documents and make them available to scholars and policymakers so you can read in their own words what they are actually saying, which oftentimes proves to be actually quite relevant to the policy direction they’re taking their country.

Here to discuss is of the Silverado Policy Accelerator.

We get into:

• Why this is, in Dmitri’s words, “a disaster”

• There are military balance of power implications for selling chips to China

• Why the rest of the AI ecosystem is against selling chips to China, Why Trump made this call anyway, and why SME export liberalization might be next

• Where the GAIN Act goes from here

Listen now on YouTube or your favorite podcast app.

Jordan Schneider: Let’s first toast the unfortunate U.S. Attorney for the Southern District of Texas, Nicholas Jon Ganjei. On Monday morning, he proudly issued a press release for his cool-sounding “Operation Gatekeeper,” which intercepted $160 million worth of Nvidia H100s and H200s.

That afternoon, President Donald Trump announced on Truth Social that the United States would allow Nvidia to ship its H200 products to approved customers in China. Dmitri, please make sense of this for me.

Dmitri Alperovitch: There’s no way to sugarcoat this — it’s a disaster. This isn’t only about the Department of Justice. The U.S. Attorney General’s statement highlighted how critical AI is to military applications. The President’s own AI action plan discussed how the United States must aggressively adopt AI within its armed forces to maintain its global military preeminence, while ensuring that the use of AI is secure and reliable. This technology is essential to U.S. military dominance and the successes of the U.S. Intelligence community.

You have to give the administration credit — it is doing a lot to ensure all levels of the U.S. government are adopting AI. Why we would enable China to do the same is beyond me. Are we going to sell them aircraft carriers or Virginia-class submarines? Should we let them into AUKUS? This is effectively what we are doing.

It is outrageous that Jensen Huang has been able to pull the wool over the eyes of people in government and on Capitol Hill, convincing them that arming our primary adversary — the one we are unquestionably in a cold war with — is somehow good for America. I understand it’s good for Nvidia’s sales and for him personally, but it is a disaster for our national security.

Jordan Schneider: What I find baffling is the contradiction in Nvidia’s public messaging. Jensen Huang and his company argue that their technology will revolutionize every conceivable industry, all requiring massive amounts of GPU capacity. But when asked directly about the military implications of selling these chips, Huang downplays the risk. He suggests that China’s military will acquire the necessary chips regardless and claims they are too sophisticated to use American technology for sensitive, dual-use applications. It’s ludicrous that this technology is transformative for every field except for the military.

Dmitri Alperovitch: It doesn’t make sense. AI will transform everything. Even in civilian uses, do we want China to win in automotive, energy, and everything else? Because that’s what you’re enabling by selling chips to them. The primary concern is their military and intelligence services, but we are also in an economic competition. I would rather kneecap Chinese competitors to enable our own companies to succeed. Why would you do otherwise?

This is equivalent to selling supercomputers to the Soviet Union in the 1970s. No one even considered doing that. You could make the case that it would support Soviet agriculture and feed starving people, but no one said that because those same computers could be used for nuclear weapons testing and countless other military applications. There was no debate about it — it was understood to be a bad idea.

50 years later, we’re in a cold war. This is unbelievably shortsighted — putting profit above national security. Jensen Huang said if you’re a China hawk, you’re unpatriotic and un-American. I think selling supercomputing capabilities to the Chinese military is as unpatriotic and un-American as it gets.

Jordan Schneider: Jensen, if you’re listening, you’re invited to come on ChinaTalk anytime to make your case.

Dmitri, what’s telling is that the rest of the tech industry is finally pushing back. After months of staying quiet for fear of losing access to Nvidia chips, major players like Microsoft and AWS are supporting measures like the GAIN Act. The benefit of selling chips to China is mostly limited to Nvidia. U.S. hyperscalers and AI labs now face a powerful new competitor for limited chip manufacturing, driving up prices. The upside seems narrow, especially when Nvidia’s strongest argument — that the world, including China, will be locked into CUDA — seems far-fetched.

Dmitri Alperovitch: Nvidia’s argument is knowingly false. The GAIN Act is the ultimate ‘America First’ act. It stipulates that before chips are sold to countries of concern like China, we must ensure that U.S. demand is satisfied. American companies are first in line. How anyone could argue against this is beyond me.

The Act doesn’t say, “we’ll cut China off completely to ensure their military doesn’t get chips” — we’re saying, “let’s make sure American companies have priority.” It’s a no-brainer. I’ve talked to hyperscalers who are supportive of this act, and even other chip companies are saying they agree with the concept. The fight wasn’t about the details — the fight was a push for no restrictions on sales to China, which is unbelievable.

Jensen’s argument that the U.S. wants to make China addicted to the American tech stack is ridiculous. There is no addiction — chips aren’t cocaine. You can see this today with every single hyperscaler — Google, Amazon, Microsoft with its Maia chip, and now Meta with its own custom chips — all saying they are moving off CUDA. Many already are.

The top two frontier models, Claude and Gemini, were reportedly trained on Amazon’s Trainium and Google’s TPUs, respectively. There aren’t enough chips to go around, and for cost and strategic reasons, pretty much every frontier company is now using a multi-chip architecture — CUDA, Trainium, TPUs, and others. There is no addiction. Companies were able to make that switch in months, it’s easy — this is software and APIs. You can give AI one API and tell it to rewrite it in the form of another. It’s a trivial task.

Now we’re selling China H200s. This is probably the start of a broader concession on Blackwell, and then Rubin. Jensen won’t stop at the H200 — he will want to sell everything. The Chinese want to receive the latest and greatest chips, not only the Hopper generation. We’re going to sell them these chips, and they’re going to build competitive models. DeepSeek, Qwen, and Kimi are already good — they’re at most 12 months behind. They will quickly catch up and become leading models.

China will keep investing in Huawei because the Chinese are not stupid. Jensen says that if we don’t sell them chips, they’ll invest in their own, like Huawei’s Ascend chips. They’re doing that anyway. Xi Jinping is going to demand it, which is why you’re seeing China’s response that they will restrict the importation of H200s to ensure there is still domestic demand for Huawei chips.

Huawei’s Ascend chips will eventually catch up, and Chinese companies — supposedly “addicted” to the American AI stack — will switch over in days or weeks. What will we have achieved? We will have relinquished our lead in frontier AI models, and eventually, they’ll have chips that replace Nvidia’s. It is myopic and stupid for Nvidia’s own business model. They are focused on the next quarter and the next year versus a couple of years from now when China dominates both chips and frontier models.

Jordan Schneider: If this goes through, and tens of billions of dollars worth of chips are exported to China, and the future you portend comes true, will there will be a political price to pay? This was a major talking point for Trump on his campaign — “Winning the AI race” and “American AI dominance”. A year or 18 months from now, if China is releasing crazy new AI-powered technologies that were all trained on Nvidia chips, that will be a tricky political dance. Nice calls from Jensen won’t be enough to smooth that over.

Dmitri Alperovitch: We are already there. Almost a year ago, there was a brouhaha over the release of DeepSeek. The surprise was unwarranted: it shouldn’t have shocked anyone paying close attention. But people reacted with, “Oh my God, the Chinese are catching up.” Of course they are. Deepseek was built on H100 chips, which, until recently, were not restricted. There will be another DeepSeek moment, but worse. DeepSeek was good, but it was still behind frontier models. The next models will be better.

Sam Altman is in panic mode over Gemini 3 because its capabilities eclipse his models. This will happen to all American frontier models and to the country more broadly. The Chinese will crush us with cheaper power, tons of researchers, and massive state subsidies. The one thing they were missing — compute — will now flow into China.

Jordan Schneider: The Financial Times reported Chinese companies were training models in Malaysia or Singapore. That’s not ideal and not as efficient as AliCloud’s operations in China. There, they can rapidly deploy numerous H100s while benefiting from straightforward communication, a reliable power grid, and lower energy costs.

Dmitri Alperovitch: We should have been cracking down on H100 access in Malaysia and elsewhere. Chips shipped directly to China will be prioritized for high-side intelligence and military networks. Chinese agencies can’t use public clouds in Malaysia for their classified data. But now they can grab those chips from private companies in China and prioritize them for military purposes, as they do with everything else.

Jordan Schneider: That seems like the most salient reason China would want the chips inside the country. Training models in Malaysia is annoying, but only 10%-annoying. There are also data privacy restrictions, which they can get around if they’re serving domestic consumers in China. What do they want complete control of their chips for? The sensitive stuff that they would never trust a random Singaporean cutout to do for you.

Dmitri Alperovitch: The U.S. government cannot get enough chips. Agencies have told me they are compute-dependent for inference and cannot get enough chips. Now we’re shipping part of that limited supply to China. How does that make sense?

Jordan Schneider: Let’s flip this around.

Dmitri Alperovitch: One more point. The H200 is from the Hopper generation, not the latest Blackwell generation, but it has High-Bandwidth Memory (HBM). We have a current ban on the export of HBM to China. The H200 decision calls HBM protections into question, as the technology is already being exported on Nvidia chips.

We may see a cascading failure of export controls. I am hearing of discussions about relaxing export controls on semiconductor manufacturing equipment, which would make it easier for Huawei to manufacture Ascend chips in China. I hope that doesn’t happen, but there are people in the administration pushing for it.

Jordan Schneider: A year ago, the administration was being pressured to restrict chip technology to China. First there was the H20 situation, then the Laura Loomer saga and teh “twilight of the China hawks.” Lawmakers Vasant, Greer, and Rubio even intervened right before the Xi Jinping meeting to urge against concessions. Now, only a month later, this policy has been enacted without any clear reciprocal action from China other than continued soybean purchases.

Dmitri Alperovitch: I don’t know.

Jordan Schneider: To be determined. The main thing they’ve done recently is bully Japan. That’s the only big new development. And now we’re deciding to throw this other carrot into the mix. It’s weird.

Dmitri Alperovitch: The crazy thing is that China isn’t even asking for this. It didn’t come up in the Trump-Xi meeting. This is a concession to Jensen Huang, enabling Nvidia to make money at the expense of U.S. national security. I could understand it if this were a trade to get something we desperately want from China, like rare earths or a commitment not to invade Taiwan — though they would never do that. But it’s not. We are getting nothing for it. It is a favor to Jensen, to China, and to the PLA.

Jordan Schneider: It’s not even a big favor to my 401(k) — it only went up by two and a half percent. Come on.

Dmitri Alperovitch: Nvidia is in trouble because its U.S. market is going to shrink. Its primary customers, all the major hyperscalers, are building their own chips and want to move off of Nvidia’s platform. It’s desperately looking for another market, in China and the Middle East. That is why the company is pushing so hard for these export controls to be lifted. Jensen probably sees this is an existential problem.

Jordan Schneider: Dmitri, I appreciate your energy. I am so tired of these guys. I have to give Jensen credit for his stamina in making those calls and fighting through this. He has delivered twice now.

Dmitri Alperovitch: And he killed the GAIN Act.

Jordan Schneider: The man’s on a roll — he’s scored a touchdown.

Dmitri Alperovitch: And by the way, he’s not only going after the China hawks. The entire industry — from the hyperscalers to other chip companies — is on the other side of the ledger. He’s single-handedly beating everyone in this town. It is astonishing.

King Jensen

Jordan Schneider: Last year I asked you why more rich people don’t invest their time and energy to shape political outcomes. The thesis was that if you put the time and work in, you can get results. This is Exhibit A for CEOs trying to push through initiatives that may not have polled well initially. If you put in enough legwork and time on the phones, you can make things happen.

Dmitri Alperovitch: You have to give him kudos — he’s done incredibly well at the influence game here in D.C. He is putting in the time, meeting with anyone. He even said he’ll meet with Elizabeth Warren, one of his chief critics on the Democratic side. He’s calling the President almost daily, it seems. He got this done by badgering the President, repeating, “Get me my chips, get me my chips, get me my chips.” Donald Trump finally said, “Fine, here you go.”

Jordan Schneider: This development suggests the administration dismisses both the national security and the economic arguments for restricting this technology. It ignores the reality that these chips are vital in a strategic military competition.

Economically, it also overlooks the fact that strengthening Chinese competitors will harm American industry for decades. We should be consolidating the technology that drives productivity, not ceding it to a rival.

Dmitri Alperovitch: I don’t agree. The majority of this administration is opposed to this decision and does believe we are in a strategic competition with China. Call it a cold war. I know people in the administration agree. The president was convinced that selling China American AI stack is good for American business, and that Chinese firms will be addicted to it. But it’s a nonsensical argument. Jensen lied, because there is no addiction to the stack — it’s easy to move off of it. Unfortunately, he has been able to carry the day for now.

Jordan Schneider: This isn’t selling the “stack.” Selling the stack would be Nvidia chips run by AWS or Google, running Western models. This is selling the lowest level of the stack. I guess if the semiconductor manufacturing equipment (SME) relaxations come true, we’ll be selling the two lowest levels.

Dmitri Alperovitch: This is the equivalent of selling Ford cars to China in the hope China will be “addicted” and not prefer any other car. It is stupid on its face.

Jordan Schneider: It’s not even selling the Ford car — it’s selling the axles.

Dmitri Alperovitch: That’s all it is. There are huge problems with this decision. First, this is enabling the Chinese military and intelligence services, which are adversaries we could one day be at war with. The DoD is planning for a fight with China and stressing the need to overmatch its capabilities. Second, it puts Chinese firms on equal footing with American firms. Why would we do that? It hurts American companies and the American economy.

Jensen’s argument against export controls is inconsistent with his own business practices. He claims controls only encourage strategic competitors to innovate. By that logic, he should open-source his proprietary CUDA framework to AMD, because God forbid they develop a superior alternative. He doesn’t practice what he preaches. He is protecting his technology with patents and trade secrets, like any other company. Yet, he insists the U.S. should use a different strategy at a national level. It’s insanity.

Demand for chips in the U.S. already outstrips supply. Diverting this limited resource to a strategic military and economic competitor is a self-defeating act — we are actively surrendering the Cold War. I’m not an “AI doomer” — this technology is profoundly important for economic and military power. That is why there is no valid argument for helping your main rival develop it.

Jordan Schneider: Hey, White House. Hey, Nvidia. If you want to come on ChinaTalk and make those arguments, we could hash it out here.

Maybe we’ll be saved by the Ministry of State Security, who convince themselves that this is a crazy CIA plot to backdoor hack the PLA. It’s a longshot.

An Institute for Progress chart shows the U.S. and its allies currently possess a large compute advantage over China, roughly a 13-to-1 ratio. Selling large volumes of chips to China could drastically change this balance.

The main question is how Huawei’s domestic production compares to Nvidia’s global output from its fabs. If we withhold advanced equipment and AI chips from China, we can confidently expect a continued U.S. advantage. If these sales go through, it’s unclear who will lead in compute power in next 5 to 15 years.

Dmitri Alperovitch: It will be China, because they’re going to subsidize the hell out of this and we won’t.

It’s not over. Capital Hill is upset about this. Don’t count out Congress, the GAIN Act isn’t dead yet. There will be a fight to prioritize chips for American companies and to see what restrictions are possible — maybe export control reviews by Congress. There are bills floating around.

Also, Donald Trump often changes his mind. Others may convince him to revert this decision. The good thing about Donald Trump is that you’re never done. Whatever happens today can be undone tomorrow, and we need to take advantage of that.

Jordan Schneider: That’s the great irony in all of this. Given the political hesitancy on both side of the aisle and the possibility of Trump changing his mind, Alibaba, Tencent, or ByteDance are unlikely to bet their firms’ futures on Nvidia chips. This is going to be a political football, and one Truth Social post won’t end it. The strategy of “addicting Chinese firms” over the long term — setting aside Beijing’s own goal to indigenize chip production— won’t work.

Dmitri Alperovitch: Beyond politics, this strategy fails for basic business reasons.

China won’t get enough chips. You have Jensen acting as king, allocating a scarce supply of Nvidia chips to hyperscalers and now Chinese customers. Since there isn’t enough to go around, that scarcity forces them to rely on other chips.

No one wants to pay the “Nvidia tax” or be completely dependent on a single monopolistic supplier. Everyone wants to diversify, which is why you see them all building their architectures on multi-chip designs. Committing 100% to CUDA, politics aside, makes no commercial sense.

The Magic of AI

Jordan Schneider: Let’s close on some vibe-coding. I can’t be too depressed going into the holidays. Dmitri, I hear you’ve been having some fun with Opus 4.5 recently. What’s it done for you?

Dmitri Alperovitch: It’s magic. Anyone with a bachelor’s degree, not even in a technical field, can be a software engineer within three years, if not sooner. It is so easy to develop applications. I’ve built two mobile apps in the last month and a web app for personal use. Opus 4.5 is magic. I built a mobile app yesterday in 15 minutes, and most of that time was spent on setup, authorizing it on the Apple Store, and configuring my device. The capability is incredible, and it’s improving everyday.

This is the innovation we have to look forward to, and we want to make sure our American companies, our government, and our citizens are the primary beneficiaries. We want American frontier companies to be the best, and then we can restrict these models from actors we don’t want to have access.

I’m on the board of a number of companies, and I’m telling them all to start measuring their engineers on their use of AI in development tasks. Anyone who isn’t using AI should be considered for a performance improvement plan (PIP). This is the next hammer. It’s like when hammers were discovered tens of thousands of years ago — whoever didn’t use them fell behind. This is an unbelievable productivity tool.

One of my companies has a software engineering team developing their products. They’re also pulling people from other departments, like security, to help build the next module in Claude or other models. These teams are creating prototypes, and even production-ready versions. It’s unbelievable how you’re able to raise the productivity of everyone, not just software engineers.

Jordan Schneider: I want to say the same for analysts, think tankers, Hill staffers, and folks in the executive branch. It is a superpower. We were having a debate about whether Huawei can backfill Nvidia and what the ratio of chips would be. It took me 45 minutes to build an entire data visualization with sliders for different assumptions. How much HBM will China get? How tight will the export controls be? How much will they improve using DUV? How far behind will Huawei’s chips be compared to Nvidia’s?

Beyond the fun personal applications, it’s the “bicycle for the mind” aspect that people should experience, especially for thinking through policy problems. If you’re wrestling with a knotty issue that has numbers, contingencies, or second-order effects that are hard to hold in your head, ask Claude to help you visualize it or see the other side of the argument.

The hallucination issue is almost gone. You still need to fact-check the details and trust your gut if something seems off, but the improvement has been dramatic.

Dmitri Alperovitch: It depends on what you’re using it for. At some level, it’s garbage in, garbage out. If you’re training a model on Reddit and asking about something very esoteric, you’re not going to get a good answer.

Jordan Schneider: You are doing yourself a disservice if you haven’t spent time with these models. Try to integrate them into your day job. You should be hanging out on Cursor and Claude, trying to build little tools and apps to make your workflow easier or allow you to do new things.

Dmitri Alperovitch: Building apps was nostalgic for me. It brought back the emotions I felt as a kid in the 1980s when I learned programming. It was an amazing feel coding your first “Hello, World!” program or, in my case, a simple game in QBasic. The magic of seeing it run was a special feeling, and you felt so proud and accomplished.

This took me back. It made me think, “Oh my God, this is magic.” In the ‘80s and ‘90s, you had to have technical expertise and learn a programming language. You still need some technical skills today, particularly when you’re debugging or if you don’t understand how Swift works or how to deploy iOS apps. But all of that is going away.

Jordan Schneider: It’s going away.

Dmitri Alperovitch: The accessibility of this technology changing everything. For years, we thought only nerds could access the magic of programming. Now, everyone can, and that is going to revolutionize everything. The interesting thing about AI is not that it’s going to make tasks easier and faster, but that it’s going to make other things that you would never, ever do before accessible.

The cost of software engineering iwill drop to zero. Everyone will be building dozens of apps — for their grocery list, for managing their kids’ schedules, whatever it may be — because it’s so easy. You can custom build something that would be useful only to you, with no commercial value. Even for coders, we wouldn’t spend our time building those apps it was a lot of effort. Now, that effort is gone.

Jordan Schneider: The activation energy for doing a side project has dropped to zero. What I’m excited to see created, Dmitri, is the “senior policy official simulator.” That’s a classic nerdy ChinaTalk idea.

Dmitri Alperovitch: So nerdy.

Jordan Schneider: But you read all these memoirs from government officials. Jake Sullivan said the one thing you can’t experience beforehand is being in a crisis. You can have a Tim Geithner level — all of a sudden it’s 2009, and it’s not like you’ve lived through a financial crisis before.

Having a visceral experience — a VR Situation Room meeting, a VR flight on the plane with the president trying to convince him not to sell chips to China — getting reps in those high-stakes political, personal, and commercial situations could be transformative. It doesn’t have to be for politics and national security. We haven’t had a nuclear crisis in a long time.

Having the deeper, emergent human capabilities that AI simulations of these events can provide seems like a big upside for human competence when dealing with crises in the future. I’m excited about it. Rockstar Games, if you’re out there, give me a call. We can do some cool stuff together.

Dmitri, always a pleasure. Thank you so much for being a part of ChinaTalk.

Dmitri Alperovitch: Thanks for having me, Jordan.

Mood Music

Tony Stark and Justin Mc return for Second Breakfast. In Part I, we break down the Trump administration’s new National Security Strategy (NSS).

Today, our conversation covers…

• What a National Security Strategy is, and why they matter,

• Controversial new inclusions in Trump’s NSS, including on Taiwan policy and the “reinvigoration of American spiritual and cultural health,”

• How to reconcile the document’s ambitious vision for deterrence with the reality of Trump’s China policy,

• The mixed signals this NSS sends to U.S. allies,

• What Buffalo Wild Wings can teach us about competition with China.

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

Ends, Means, and One China

Jordan Schneider: Tony, give us the 101 on what a National Security Strategy is, and then we’re all going to go around and say one nice thing about it.

Tony Stark: There are three major U.S. government national security strategy documents. The first is the National Military Strategy, which applies to the uniformed services but is rarely noticed outside the Joint Staff.

Next is the National Defense Strategy (NDS), which is the Pentagon’s primary strategic document. It’s the one most people in the field care about because it’s a Cabinet-level document, even if it isn’t overtly political. Legally, a new NDS is required every four years, and developing a new NDS takes 6 to 18 months. New administrations are given a little extra time — about a year and a half — to publish their first one.

The NDS is written at the “action officer” level, which includes General Schedule (GS) employees, field-grade officers, contractors, and think tank experts. Then it is passed up to the Deputy Assistant Secretary level in the Office of the Secretary of Defense (OSD) — their equivalents are three-star generals — and then to the commands, the undersecretaries, and so on.

Finally, there’s the National Security Strategy (NSS), which is historically the most political of the documents because it comes out of the White House, not the Pentagon. The NSS is a guiding vision of the administration’s goals and incorporates all elements of national power. Historically, this is also the blandest document — its wide scope reads more as a political statement than a defense plan. The new Trump administration just released its first NSS. While the NDS has been ready for a while, they were likely waiting to publish the NSS first.

At 29 pages, the new NSS is the right length for a public national strategy document. There are usually non-public, classified annexes and other materials.

Justin McIntosh: The document correctly focuses on economic re-industrialization and re-energizing the defense industrial base — issues we’ve previously discussed. It puts those ideas forward in its “answers” section. But…

Jordan Schneider: No “buts.”

Justin McIntosh: Okay! Yes, that’s where the focus should be.

Jordan Schneider: The straightforward questions in the document are nice. The Q&A rhythm is interesting and provocative. It’s focused. There’s a section of questions like, “What should the U.S. want overall?” and “What does the U.S. want from the world?” There’s no artifice about how transactional it’s going to be — what you see is what you get.

Tony Stark: If I were framing a strategy document for the American people, this is how I would structure it. A clear layout saying, “This is what we want. This is why we have a strategy. What are the ends, ways, and means? What does that mean?” It’s written in a clear, accessible way, without many buzzwords. Although what replaced the buzzwords wasn’t great.

Jordan Schneider: Avoiding policy jargon in this document seems to have been a conscious choice.

Justin McIntosh: But it lacks nuanced, impartial language and contains statements that our adversaries will exploit. A comment on the necessity of securing borders said that any sovereign nation has the right to control them. The PRC and Russia can easily seize on a statement like that. This is a kind of language previous administrations have avoided, because they didn’t want a quote interpreted as agreeing with the Chinese or Russian position.

Tony Stark: The document does not change U.S. policy towards Taiwan. If anyone tells you it does, they are wrong. However, it does give the PRC political and legal ammunition. They can now say, “But you said you wouldn’t interfere in the internal affairs of others,” pointing to our supposed principles of non-interventionism.

The document also says we do have to intervene sometimes. This amounts to talking out of both sides of your mouth — we reserve the right to do whatever we want. The “flexible realism” section is a fancy way of saying we’ll do whatever is convenient. Historically, that has been U.S. foreign policy in practice, but that doesn’t mean it’s what we should aspire to.

Justin McIntosh: I don’t have a problem with them laying out the “ends, ways, and means” discussion up front, but it has limitations. That linear framework is well-suited to military decision-making, but a national strategy needs to be more pragmatic and flexible. At the national level, you control all the resources. You can marshal all those resources toward any goal that is deemed important. That makes the “ends, ways, and means” calculation irrelevant because you will find a way to make it happen.

Jordan Schneider: The Trump administration’s focus on “ends, ways, and means” raises the question — how weak do they think the U.S. really is?

Reducing the U.S.’s power to an “ends, ways, and means” calculation only works in military contexts — counting ships and battalions to see how many wars you can fight. The U.S.’s power to achieve economic and national security ends is elastic. The means to those ends can grow dramatically when the president builds a consensus around them — once the nation decides something must be done, it finds the capacity to do it.

It’s a mistake to define goals downward because those goals inevitably change. Consider the border — the Biden administration didn’t prioritize the issue and struggled to find the means. The Trump administration’s intense focus on the border unlocked congressional funding and operational capacity. The resources didn’t appear from nowhere — the will to use them did. This dynamic applies globally. To believe the U.S. cannot act because it lacks on-hand capabilities is a severely limited way of thinking about our power to shape events.

Mixed Signals

Tony Stark: The document’s focus on military and economic power isn’t unique, but its goals do not align with a realistic budget. It calls for both bolstering deterrence in the Indo-Pacific and shifting our entire global military posture to the Western Pacific, which would drain resources from Europe and Latin America. We have to assume this will happen.

This creates deep concern for our allies, but that matters for the U.S. too. The Germans will be wildly pissed about how they are described in the document. Asian allies are told to “do more,” a demand that ignores their significant recent efforts. Getting allies to increase defense contributions was an accomplishment of the first Trump administration that continued under Biden. The call to “do more” is now an outdated talking point — they are doing more. Japan is considering exporting weapons for the first time.

Justin McIntosh: Worse still, when allies make the kinds of statements the U.S. wants — like Sanae Takaichi declaring a PLA incursion into Taiwan a national security threat to Japan — the administration’s response is silence. Based on the reporting of Xi and Trump’s call, it appears the U.S. did not affirm that position. Instead of backing Japan’s strong stance, the message was to “calm it down.”

The Trump administration is sending mixed signals. Does it want allies to spend more on defense, develop a stronger defense mindset, and care more about their own security, or not?

Jordan Schneider: Let’s do some reading from the scripture here.

“A favorable conventional military balance remains an essential component of strategic competition. There is rightly much focus on Taiwan, partly because of Taiwan’s dominance of semiconductor production, but mostly because Taiwan provides direct access to the second island chain and splits Northeast and Southeast Asia into two distinct theaters. Hence, preventing a conflict over Taiwan, ideally by preserving military overmatch, is a priority. We will also maintain our long-standing declaratory policy on Taiwan, meaning that the United States did not support any unilateral changes to the status quo in the Taiwan Strait.”

From that, it sounds like a good idea for Japan to make its role in deterrence transparent. How seriously should we take any of these documents?

Tony Stark: I wish Eric were here for another briefcase-carrier rant. In the 2010s, a gripe of mine was hearing mainstream national security people, the ones in the know, say strategy documents don’t matter. That is a clear indicator they either haven’t written a good strategy document or haven’t marshalled the resources and people to execute it. I’ve occasionally had to metaphorically beat somebody over the head with a strategy document.

One problem is that people don’t read strategy documents. I have been in meetings with theater-level commands who’ve asked me, “What are you quoting from?” And my response is, “The National Defense Strategy.” They’ll ask me to send it to them. It’s a public document.

Justin McIntosh: “No, no, we meant the classified annex, Tony. Obviously, we’ve read the public one.”

Tony Stark: “The super-secret one that wasn’t even fully distributed to your command.”

Justin McIntosh: The document doesn’t matter, and there isn’t a robust national security apparatus anymore — at least in this administration — it’s as if the President is the sole decision-maker. Trump has consolidated his counsel — it’s a smaller group than it was.

Another problem is that the strategy document’s promises are often the opposite of what the president himself has done. The strategy specifically addresses deterring propaganda aimed at Americans, clearly referencing China, and yet TikTok is still legal here.

When X turned on a filter showing where accounts came from, it revealed so-called Mongolian accounts weren’t Mongolian, and supposed Uyghur accounts were run from mainland China. Pro-MAGA accounts were operated from VPNs in India and China to target Americans. Where was the action on that propaganda? We kept TikTok, and no one has suggested the government force X to shut down foreign influence accounts. These goals are in the document, but the follow-through is missing.

Tony Stark: Every administration struggles with inconsistencies between its strategy and actions. That’s the nature of a democracy — it’s the nature of any government worldwide. This strategy document’s main issue is its unusual use of national security language. The strategy says the administration opposes disinformation, but what do they consider disinformation? There are direct quotes that frame concepts like “de-radicalization” and “protecting our democracy” as a fake guise — that inclusion is wild.

On foreign policy, the document critiques the U.S. for focusing too much on projecting “liberal ideology” into Africa — it’s unclear if that means big ‘L’ or small ‘l’ liberal. Let’s assume it’s both. The most stunning part is that the National Security Strategy of the United States explicitly frames the concept of “protecting our democracy” as a ruse. That is insane.

The parts of a strategy document that truly matter are the ones that diverge from the previous strategies. While I’ve critiqued previous strategies, this document is on another level.

Justin McIntosh: The large section on China is a good example. It would be great if the administration enacted many of the listed actions — I’d be all for it. The cognitive dissonance between the strategy document and the administration’s actions is troubling.

Jordan Schneider: Six months ago, the AI action plan included interesting language about new export controls on semiconductor manufacturing equipment. Those controls are paused because Stephen Miller’s current job is to avoid upsetting China. This directive came after a Chinese official was angered by a Financial Times article on Alibaba and the PLA. Stephen Miller’s Twitter banner is a picture of him shaking hands with Xi. This is hard to square with official strategy documents demanding military overmatch.

You can try to connect those dots and argue that the goal is to keep the economic relationship calm while we re-industrialize and build up our military. Okay, maybe. But that still doesn’t explain the U.S NSS includes sovereignty language seemingly copied and pasted from Putin’s playbook.

Traditional Values, Universal Wings

Tony Stark: The document is also very undergraduate. That is not a critique of the accessible language — I also try to write for a wider audience — but of the concepts themselves. If an undergraduate at the University of Texas at Austin were assigned the paper topic — what should a national security strategy be — this would be that paper.

Jordan Schneider: There are 14 bullet points where each sentence is about seven words long.

Tony Stark: What does this all mean? The language in the National Security Strategy should not shock anyone — it’s consistent with the administration’s usual rhetoric. What has changed is that this language is now the official guidance — it has leverage in bureaucratic fights. The influence may not be immediate, but it will be cumulative. The real test will be when the National Defense Strategy comes out. Someone who worked on it texted me last night and said, “Well, they set the bar low, so this is great for us.”

Justin McIntosh: They’re being pragmatic. What troubled me was the traditionalist language at the end.

“Finally, we want the restoration and reinvigoration of American spiritual and cultural health, without which long-term security is impossible. We want an America that cherishes its past glories and its heroes, and that looks forward to a new golden age. We want a people who are proud, happy, and optimistic that they will leave their country to the next generation better than they found it. We want a gainfully employed citizenry—with no one sitting on the sidelines—who take satisfaction from knowing that their work is essential to the prosperity of our nation and to the well-being of individuals and families. This cannot be accomplished without growing numbers of strong, traditional families that raise healthy children.”

Tony Stark: “We will use every means to protect our precious bodily fluids.”

Jordan Schneider: Wait, if you’re raising a disabled child, or if your child is sick with a fever, then you are not contributing to the restoration of American cultural and spiritual health? Wow.

Tony Stark: That is what RFK Jr. said — if your kid is sick, that’s not a good societal contribution.

Justin McIntosh: His miasmas are off, or whatever non-germ-theory medicine he peddles but doesn’t practice.

Tony Stark: The Midi-chlorians from Star Wars.

Justin McIntosh: That language is reminiscent of what you see from Putin and China’s family planning policies. It is the exact type of language that Xi and Putin use to justify pro-natalist policies and promote traditional families and traditional gender roles. Reading about the one-child policy in Dan Wang’s Breakneck is heartbreaking if you have children. It’s striking how similar the NSS’s language is to China’s early discussion of the one-child policy.

Tony Stark: In a reasonable time, there would be ten articles asking, “What does this mean? How is the government going to encourage people to have more kids?” Now, it’s something I don’t even want to read about.

After COVID-19, as the “China Rising” narrative was gaining prominence in 2021 and 2022, discussions began in national security circles about how the U.S. population is numerically outmatched. Although we are solving that problem with robotics, it was a talking point among traditionalists. They argued that the U.S. won the Cold War by embracing traditional values. That’s not how we won. We won thanks to Skunk Works and the Soviet Union’s economic mismanagement.

This argument has surfaced before in national security circles — it’s not a new phenomenon. The other common concern is protecting our food supply — I’m surprised it was not mentioned in the document. But, to quote a former coworker of mine, “We have Buffalo Wild Wings and the Chinese don’t. I think we’re okay.”

Jordan Schneider: That would be a great cultural export. Maybe that’s what the world needs.

Tony Stark: Are there Buffalo Wild Wings locations in Shanghai or Beijing?

Justin McIntosh: I’m sure there’s one in Taipei. [Note from Lily: Taiwan does not have a Buffalo Wild Wings, but it does have three Hooters locations.]

Tony Stark: Is the food different, or is it universal?

Justin McIntosh: It’s universal, but like McDonald’s in Japan, it’s better.

Tony Stark: Another American cultural victory. We don’t need to change anything.

Justin McIntosh: You can watch a baseball game while eating Buffalo Wild Wings in downtown Taipei.

Tony Stark: During COVID, my former American University professor, Justin Jacobs, uploaded all his lectures on Spotify — excellent lectures on the history of China and Japan. He has an episode about why baseball is played in Taiwan but not on the mainland. He discusses the Japanese occupation of Taiwan and the differences in Confucian culture and masculinity. Prof. Jacobs is an amazing resource for East Asian history.

Jordan Schneider: I asked Gemini what other regimes this resembles. It suggested Vichy France, Fascist Italy, and modern Hungary.

Justin McIntosh: I wonder what Grok would say…

, the new interim Executive Director of CSET who substacks at , makes her ChinaTalk debut. Present since the founding of CSET, Helen has had a front-row seat to the drama shaping today’s AI world — including a stint on OpenAI’s board.

Today our conversation covers…

• What it means to run CSET in 2025, and how to keep think tank work rigorous and relevant in the age of AI,

• The “good-faith” vs “dark arts” actors shaping Washington’s AI policy debate,

• What her recent trip to China revealed about how Beijing is thinking (and not thinking) about AI,

• Why AI progress might stay “jagged,” and what that means for AI policy,

• Plus: why Jordan can’t fall in love with AI.

Listen now on your favorite podcast app.

The 2026 Tarbell Fellowship is now open. You could come work with us at ChinaTalk! Apply here.

Don’t just take it from me. Take it from our current Tarbell Fellow, , on his experience so far:

“Tarbell placed me at ChinaTalk for a year, fully funded! It’s been a dream setup to report seriously on China, tech, and AI. The fellowship’s training covers both journalism and the fundamentals of AI, which makes it one of the best on-ramps for people who didn’t come up through traditional reporting or AI pathways.

I always thought about tech journalism but assumed I missed my chance after college. Tarbell gave me another shot. ChinaTalk gives me the freedom to chase questions I’m genuinely curious about in the China–AI space, paired with a team that constantly reads each other’s work, shares articles, and brainstorms ideas. You’ll be producing impactful work for a large audience, but you’ll also be learning every day.

At ChinaTalk, I spend my time digging into the semiconductor supply chain, Chinese AI models, U.S.–China relations, and whatever else I get excited by. If that sounds like your idea of fun, apply!”

Think Tanks in the Age of AI

Jordan Schneider: As the new interim Executive Director of CSET, are you excited to rip up everything they’ve created and remake it in the image of Helen Toner? What is your vision for the future of CSET?

Helen Toner: If there’s one thing that I have learned from the many friends and colleagues who’ve rotated in and out of government, it’s that your day-one mission should be reorganization. Step in, tear everything up, and change the org structure.

No, I’m kidding. It’s exciting and an honor to be in this position. After Jason and Dewey, I’m stepping into big shoes. I’ve been at CSET since its founding in 2019, so it’s exciting to shepherd the organization into a new phase.

CSET’s success is built on a foundation of excellent work, and I want to continue that. The core of our mission is to produce intellectually independent research that is driven by evidence and data.” Our data science team is unique in the think tank world — their data powers our analysis. On every project, we make sure our analysis is rigorous and driven by the best evidence we can find. We care that our work is technically informed.

One of our founding goals at CSET was to show a different way for think tanks to operate, and ideally, inspire others to follow us. I think we’ve been really successful there. You now see RAND with a huge emerging tech and national security effort, and CSIS doing more translations and data visualizations — things that were core to the CSET model and are now much more common in Washington.

That’s great, because it proves our model works. Of course, it also means we have competition, so we have to show what makes CSET unique and where we provide particular value. Our deep expertise on China is a perfect example. We have a whole range of China specialists woven throughout our team, covering everything from language to specific subject matter. I’m excited to lean into that and to keep evolving. Emerging tech never stands still, so we have to keep figuring out where we can add the most value.

Jordan Schneider: I agree that CSET has raised the bar for discourse in Washington — it’s why I gave CSET ChinaTalk’s only “Think Tank of the Year” award back in 2022. It’s been heartwarming to see your standard of using real evidence on thorny topics like chip controls, immigration policy, or the PLA’s use of AI resonate so strongly in the broader debate in Washington.

But at the same time, we’re seeing a paradox. Since 2019, it feels like facts matter less than ever. Arguments get reduced to tweet-shouting matches, and remarkably, those shouting matches are now becoming central to the actual policy debate on AI. What’s your take on these two trends happening in parallel? What’s the synthesis?

Helen Toner: I think there are multiple layers here. You have the headlines in the New York Times or the Wall Street Journal, but there is also work happening beneath the surface. The U.S. government has millions of employees, and the subject matter experts doing the work are interested in details and evidence. There’s a steady demand from them for the kind of support we provide, and they are very responsive to facts.

Another example is the discourse around recent AI legislation. Take California, for example. Last year, the discourse around the SB 1047 bill was awful. Then this year, they convened a governor’s panel, published a report, adopted its recommendations, and passed a less controversial bill. It’s a crazy turnaround. We saw something similar with the EU Code of Practice — it looked like it was going to fall apart, but then it came together. I don’t want to sound too pollyannaish, there’s a lot to be concerned about. But it’s important to remember that sensible work is still getting done.

Jordan Schneider: I started ChinaTalk in 2017, and CSET started in 2019. Back then, the intersection of U.S.-China relations, emerging technology, and national security was not a front-page topic.

Helen Toner: When we said we wanted to have a whole organization focused on emerging tech and national security, and people were like, “A whole organization? Like, four people?”

Jordan Schneider: It’s been a wild adjustment for this space to go from an idea funders would laugh at to something presidents tweet about all the time. But that shift has also brought in layers of bad faith. Back when this community was smaller, there weren’t many people playing dirty.

I think CSET has its heart in the right place and is doing earnest, yeoman’s work. But there are snakes in the grass everywhere now. There’s so much money riding on this research, and that wasn’t true a few years ago. I admire your pollyannaishness — I think it’s good for your mental health. But is the most effective option to put out good research and facts? Or are “dark arts” needed to have that research shape policy?

Helen Toner: I don’t think the only options are “put a white paper on your website” or “go full political dark arts.” There’s a lot of space in between. From the beginning, we’ve done more than publish research — we actively seek out the relevant policymakers, brief them, and work with their teams on legislation. Now, we’re also thinking about how the internet has changed what that means for us. Should we be doing videos? I’m not sure, but we should at least consider it.

Another big shift, which I know you follow, is the trend toward individual brands over institutional ones. Some of our people are eager to give that a go, while others — especially those from the intelligence community — are like, “Oh God, shoot me before you make me go on Twitter.” We’re exploring that space — finding ways to keep doing good-faith, fact-based work while operating effectively in today’s ecosystem.

Jordan Schneider: I worry that an organization where good-faith, facts-focused people are comfortable is fundamentally different from one with “dark arts” specialists. The cultures and incentives don’t mix.

Helen Toner: Will there be a ChinaTalk “Dark Arts Think Tank Award”? Who would that go to?

Jordan Schneider: Wow, I don’t know. I can’t give any names here — this is for public consumption. But I agree that there will always be an audience for grounded data, and someone needs to provide the facts.

Helen Toner: When we talk about “the Facts,” it’s not about some ideas being more virtuous than others. But if you want to accomplish something and care about results, then you need to know what the world looks like.

We worked closely with the Biden administration when they were considering outbound investment controls — asking them, “How will you implement these controls? Do you have the necessary information to do it effectively?” This isn’t about taking a holier-than-thou position. It’s about the reality that if you don’t know what’s going on, you’re going to try things that backfire — and most people want to avoid that.

Jordan Schneider: A better framing might be that it’s better to have data in the discussion.

It’s remarkable what a single researcher can do in recent years with an “individual brand”. It’s wild to think that CSET was around before we could ask ChatGPT what The PLA Daily 解放军报 says. I can now code data visualizations in two hours, which I used to assume would require a CSET-level team and budget. How do you think these new tools change what a solo researcher or a small team can accomplish? Does this change how CSET operates?

Helen Toner: We’re looking at it from the opposite side — what unique things can our larger team do that an individual still can’t? Our data team is tackling a huge data science problem called “entity resolution”. That’s figuring out that “Google London” and “DeepMind” are both “Google” in a massive dataset of text. It’s a huge, messy problem, and using language models in a carefully designed and validated pipeline, we blew past previous results.

We also analyzed ~3,000 AI contracts the PLA is buying and used language models to parse that data. As a larger team, we can do things an individual researcher can’t. We can validate our results and test different models — like when to use an expensive, frontier model versus a lighter one that’s faster and can handle high volumes. We’re doing tons of experimentation there, and the team is coming up with some really cool stuff.

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Jordan Schneider: CSET was early on important AI topics, but has remained ideologically neutral — you were writing about semiconductor export controls in 2020, but have not published an “AI will arrive in 2027” style analysis. Is now the time? Are the odds of those radical changes high enough that you need to start spending your team’s time and budget exploring them?

Helen Toner: I have a unique perspective because I have my feet in two worlds. I’m from the AI safety community, which is in that mindset, but most of my team at CSET is not “AGI-pilled.” We’ve done a lot of work on scaling and red-teaming, but not the “OMG AGI” work. We are currently hiring someone to work on frontier AI issues, and I’m hoping to increase our work in that space.

Jordan Schneider: What are you excited for this person to do?

Helen Toner: I’m excited about the “Frontier AI” framing. I’m glad RAND is now researching AGI, but the concept of AGI is messy and contested — it’s not clear what, if anything, is there. There has been a giant gulf between the AI systems we have — those we can touch and test — and hypothetical concerns about future AGI. But in two years, that gulf has gotten smaller. Now we can look at current systems and extrapolate future ones — which makes this topic amenable to CSET’s evidence-based methods.

I’m psyched for this research. It won’t be “CSET predicts AGI in 2027,” but it’s important to consider the possibility of AGI or superintelligence on timescales soon enough to matter for policy. Watch this space.

The Jagged Frontier

Jordan Schneider: You’ve expressed the view that AI progress could stay jagged. Can you elaborate on that?

Helen Toner: The idea comes from Prof. Ethan Mollick, and possibly also Andrej Karpathy. I highly recommend following Mollick’s AI work on Substack, LinkedIn, or Twitter. His idea was a “jagged frontier” — that AI is good at some tasks and surprisingly bad at others.

I recently gave a talk on this, arguing we should take seriously the idea that AI’s progress might remain jagged. Right now, most people fall into one of two camps — either they think AI is all hype and a “nothing burger” — or they’re in the “AGI by 2027” camp. That group believes powerful AI will become a drop-in remote worker or an automated AI engineer. Both are non-jagged views of the future. The question of what persistent jaggedness would look like is underexplored.

Jordan Schneider: The “jagged frontier” idea is more nuanced than mainstream discourse on AI — the Twitter brain, swinging wildly between “it’s over” and “we’re so back.” Why do you think people resist the possibility of uneven AI development — that the next model won’t solve everything? Why does the jagged idea struggle to gain traction, even though it is our current reality?

Helen Toner: Most people agree today’s AI is jagged, but they believe the future will be different. I think that’s because we use humans as a reference point — we believe that what’s difficult for us must be universally difficult, instead of seeing it as a product of our own evolution. Since the 1950s, we’ve debated — are we recreating the human mind, or building useful machines?

We’re currently far down the “build useful machines” path, but the idea of recreating the human mind is built into the field. I think this is why people expect AI to be more human-like than it is.

Jordan Schneider: There’s money involved now — the AI hype is backed by enormous financial incentives.

Helen Toner: Jaggedness doesn’t only refer to the troughs where AI struggles — there are high peaks as well. In the next 5-10 years, I expect us to exploit the heck out of those peaks. But the way we do so must account for the troughs.

Jordan Schneider: Is jagged AI more tractable for policy research? Is CSET’s work more relevant in that scenario?

Helen Toner: If jaggedness persists, fast takeoff scenarios are less likely — scenarios like an automated AI researcher that makes ten years of progress in six months. That would be a hard world for policy to operate in — there isn’t time for the government to form a commission, write a nice report, and debate it in the next legislative session. Jaggedness leads to slower AI progression, which gives us time to reflect, experiment, and adapt.

I’m not certain jaggedness will persist, but the idea is underrated in the AI community. At the same time, we should consider the possibility of non-jagged, rapid AI progress. It could still happen, although it’s not my best guess.

Jordan Schneider: There’s a resource allocation problem in AI policy research. Should we focus on a tangible, near-term jagged frontier — like AI’s impact on cybersecurity — or on the sci-fi futures of self-improving AI? People are drawn to speculative, sci-fi scenarios — a cybersecurity paper won’t go viral like “AGI by 2027” did. But there is value in working on a more probable future.

Helen Toner: There is a lot of low-hanging fruit in research on jagged development, and a lot of possible futures. What will AI be good at? What tasks will it struggle with? What does that mean for adoption and integration?

A jagged frontier means we are unlikely to fully automate complex jobs or goals. Instead, we will get powerful AI advisors and a “centaur” model of human-AI teaming, which you mentioned in the AI girlfriends podcast. Future human-AI collaboration scenarios are underexplored because predictions of super-powerful AI assume everything will be automated. They focus on abstract problems like alignment, not the messy, practical details of human-machine teaming that a jagged world would demand.

Jordan Schneider: After writing a paper on AI honeypot espionage, I decided to do some experimenting. Over the past few days, I’ve tried to fall in love with an AI, and it’s not lovable in the slightest.

When it comes to personal comfort and consolation, AI jaggedness is very apparent. There has been a lot of recent reporting about people who’ve developed close, intimate relationships with AI, but it’s not doing it for me. What should I make of that, Helen?

Helen Toner: Have you tried the Grok anime goth girl? You need to find the right one for you.

Jordan Schneider: It was bad — really repulsive. Even if I’m not the target audience for these AIs, if they were smart, they would have figured me out after 10 minutes of conversation — the way TikTok figured me out after 45 seconds of swiping. These models cannot do that — that’s an important detail.

The lack of personalized learning is a huge hurdle for AI in the workplace. Instead of learning from user input, models are trained and dropped into organizations, leaving people to figure them out. If the future of this technology depends on personalization that fits like a glove — professionally and personally — then we need to solve this.

Helen Toner: There’s a long way to go. We held a workshop in July about automating AI R&D and the potential for an “intelligence explosion” takeoff. We need to question underlying assumptions — what does progress look like? What are the gaps? How soon can we fill them? We’ll examine this in an upcoming CSET paper.

Jordan Schneider: There’s tension in our view of AI’s capabilities. It’s easy to overlook its limitations in work you do not do yourself, but in your own work, you can feel the jaggedness firsthand. You have an intuitive sense of where AI is exceptional and where it’s uneven.

Ironically, AI engineers are the most optimistic about AI’s capabilities — maybe a little high on their own supply. But the proof is in their paychecks — companies are hiring them in droves because AI cannot do their jobs.

Helen Toner: There are many sources of jaggedness.

A key source of AI’s jaggedness is the context window — how easy is it to input the organizational or practical context of a task? Some professions, like software engineering or marketing, are easily digestible for an AI because you can copy-paste the relevant code or creative brief. But most jobs can’t be reduced to a text file — their context is messy and organizational. We haven’t fully grasped how this single limitation will shape what AI can do and how quickly it can do it.

AI Debates in China

Jordan Schneider: Helen, you were in China recently. How was that trip?

Helen Toner: It was great to be back in China. In 2018, I was in Beijing for 9 months, studying Mandarin and learning about China’s AI ecosystem. But between my green card, the pandemic, and having kids, it had been ages since I was there. I went for a quick five-day trip to Shanghai for the World AI Conference, which was gigantic. You know what Chinese conferences are like — the huge stage, the flashing lights. Robots were walking around everywhere, something you couldn’t get away with in the U.S. Kids were petting little quadruped robots that were roaming the floor. It was a good time.

Jordan Schneider: Were you recognized?

Helen Toner: No, definitely not. Not that anyone told me.

Jordan Schneider: What’s your sense of the U.S.-China AI dialogue and opportunities for discourse or cooperation?

Helen Toner: People in the AI safety community often ask why there isn’t a U.S.-China dialogue on avoiding a race to superintelligence. The answer is that there is no agreement on what the problem is, or what the U.S. and China’s interests are. At a Chatham House discussion I recently attended, the Chinese organizers were divided on whether to focus only on superintelligence or broader development questions as well. Within their team, there was no consensus on the core issues. These conversations are a good start, but we still have a long way to go.

Jordan Schneider: A core AI policy question is how the U.S. and Chinese ecosystems will relate to each other. What are the other key questions that will define the field for years to come?

Helen Toner: On the national security side, the U.S.-China dynamic is a big one, covering both competition and the potential cooperation on AI. Military integration is another huge question. The focus is shifting from developing advanced AI to how it changes a military’s operational concepts and the way it fights. This is an adoption challenge.

There are also serious risks around cyber and biosecurity, but we might get lucky, and the threats are manageable. I’m personally more concerned about cyber, but I know well-informed people with access to classified information who are deeply worried about the bio risks.

Outside of national security, we’ll see more community-level issues, particularly around data centers. A narrative about their water use is gaining traction, and while the data may not show an unusual amount of consumption, the community perception is strong enough to create backlash. There are also social questions. We do not have a framework for dealing with AI companions, especially for children, and the impact of AI on labor and jobs is not going away.

AI Parenting Advice

Jordan Schneider: Do you have any AI parenting takes, Helen?

Helen Toner: I have a three-year-old and a one-year-old, so thankfully, we’re not there yet. But I worry the “engineer-brained” approach to parenting reduces child-rearing to a set of tasks. The idea that if an AI can entertain or teach a child “better” than a human, then it’s a net win, misses the point. The relationship between a parent or teacher and a child is a huge part of what it means to grow up and learn. AI should be a tool to enhance connection, not replace it. If an AI generates a story, read it to your child, but do not be too utilitarian. What are your thoughts?

Jordan Schneider: Abstracting love is a high bar for AI.

Kids are wired by billions of years of evolution to trust a warm, sweaty mammal. An AI can certainly teach them physics or math better than I can, and outsourcing that is one thing. But the biological need for connection is another. Primate studies show the same thing — the monkeys want to be held. Trying to engineer that need away is playing with fire. Maybe a robot will get there in 20 years, but you’re running hard against evolution. No offense to anyone using Midjourney for children’s books — I have that tab open right now.

Helen Toner: I think there are good ways to do it.

Jordan Schneider: Absolutely. But the sci-fi future where kids don’t need loving parents for connection or as models of how to relate to other humans seems a long way off.

Helen Toner: There is a This American Life story that sticks with me, about a single dad and his daughter. He was a physicist, and she would ask him astronomy questions like, “Why do stars...?” or “Where did the Earth come from?”. Kids love to ask “why” questions. He found answering them stressful, so one day, he asked her to write down all of her questions. He locked himself in his office and wrote up a gigantic set of answers for her. The interviewer on the show asked the girl what she thought, and she said, “I wanted to hang out with my dad.” It’s so tragic. Don’t do that with AI.

On Calling Timeout

Jordan Schneider: My theory is that CSET only exists because of Jason Matheny. The national security risks of China’s rapid AI growth were completely off the radar for these funders. It took an exceptional person they trusted, like Jason, to convince them to build a community around this idea.

Before CSET, there was no tech team with deep China expertise. I spent years trying to make the case that competition with China mattered, that AI was more than one small piece of a larger puzzle, but people were unconvinced — that idea was ’too spicy’ or too far out.

There was a brief moment during the 1st Trump administration when it became a mainstream concern. Many corporate blogs, including that famous OpenAI document, were suddenly about beating China. But that moment has passed, and it feels like the issue is becoming less relevant again.

Helen Toner: It’s an interesting time for China+AI policy. When I started in this space around 2017, people in AI would ask, “Why talk about an AI race with China?” and then give AI-specific reasons why it wasn’t a race. I had to explain that they were missing the bigger picture. The U.S. national security apparatus was orienting towards strategic competition with China. For them, AI was only one small manifestation of that competition, and the AI community’s arguments were seen as irrelevant noise.

Jordan Schneider: I remember people telling me, “Oh, but if we say this, will it accelerate the race?” Bro, come on.

Helen Toner: Is strategic competition with China still the main goal of the U.S. national security apparatus? People outside the tech world are not sure — the current U.S. policy toward China is unclear. That’s disconcerting in some ways, but it also creates potentially productive space.

Jordan Schneider: In the 1st Trump administration, U.S.-China competition was a central pillar — Jake Sullivan wanted “as large a lead as possible.” But in Trump 2.0, focus on China has waned, and now we’re mobilizing against Venezuela while ignoring Chinese boats in the Philippines.

For years, I’ve thought that the U.S.-China AI race was inevitable. In many ways, it has already happened — we now have bifurcated ecosystems for AI chips, models, and hyperscalers. These dynamics seem resilient to the day-to-day whims of policymakers. How durable is this rivalry? If the American president is not focused on this issue, do the competitive dynamics of the last decade have enough momentum to continue on their own?

Helen Toner: I don’t know how resilient the rivalry will be. The competition was never about AI — competition with China was the organizing principle of the U.S. national security apparatus, and AI was one part of that. The U.S. AI sector now uses that narrative as justification for everything from faster data center permits to avoiding AI regulation. If those arguments lose force, I’m not sure what will happen.

My own prediction has always been that China’s internal demographic and economic challenges would eventually cool the rivalry, though I thought it would take longer, maybe till the 2030s. With a president who is hard to predict and an increasingly isolationist MAGA base, and a new focus on the Western hemisphere, disengagement with China could be stickier.

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Jordan Schneider: The TikTok story is a…

Helen Toner: Hilarious episode in the sitcom that we live in.

Jordan Schneider: Exactly! This was a bill Congress passed almost unanimously, and then the president decided he was not concerned with an issue Congress had a bipartisan consensus on — that is an interesting detail. I’m not sure how illustrative that is.

Helen Toner: Another source of tension in the Trump coalition right now is between the “tech right” and MAGA. They have disagreements about whether to charge ahead with AI — whether AI is the best thing since sliced bread, or the devil, or the Antichrist. There is a lot of division, but both sides are less concerned about competition with China. The tech right wants to sell to China, and the MAGA world would prefer to slow the rate of development.

Jordan Schneider: Corporate self-interest could be a reinforcing driver. U.S. firms do not want to compete with Chinese companies on their home turf. Once Chinese EVs start taking market share, or Huawei chips threaten Nvidia, the game changes. The question will become, is access to China’s market worth giving up our own? The likely answer is no. U.S. companies will demand the same protected home base that Chinese firms have used to their advantage, which only accelerates the competition.

Helen Toner: Wait, they can operate here? I thought it was a one-way street.

Jordan Schneider: Bill Bishop often invokes a Xi Jinping quote that essentially says, “Our goal is to become more self-reliant at home and make the world more dependent on us.” This mindset was in the rare earths saga, where China’s escalation was a self-inflicted wound. It showed a willingness to compete in a way that alienates American elites. You can admire their ambition, but the U.S. will not accept Chinese competitors dominating key verticals — especially in the tech sector that underpins the U.S. stock market.

Helen Toner: We’ll see. I do not know how we can ban Chinese open-source models, which I think is one of the biggest threats to U.S. market share. Using open-source Chinese models presumably displaces API market share for OpenAI, Anthropic, or Google.

Jordan Schneider: They are not un-bannable — stopping individual downloads of Chinese software is a fool’s errand, but that’s not the real game. The real game is preventing billion-dollar companies from being built on Chinese open-source models, and the government has plenty of ways to do that. They can block Chinese models from government contracts, tie it up in FCC compliance issues, or make it a mandatory risk disclosure. If the U.S. government really puts its back into it, it can find a way.

Helen Toner: The government procurement restriction is a good point. Public company disclosures — that’s interesting. I agree, these policies can make it harder.

Jordan Schneider: Or change the incentives. Switching tangents, can you pitch some of the best recent work from CSET — what do you admire and plan to build on?

Helen Toner: One of our most exciting new papers analyzes 2,800 PLA AI contracts. The initial piece focuses on who is buying, and the key finding is that while the largest contracts go to state-owned enterprises, the bulk are awarded to “non-traditional” private companies and universities. More research is coming on what they’re buying.

Our work on DoD AI integration has also been impactful. Interestingly, our research has been valuable to government officials because it is public. Internal reports are often classified and hard to share, so a URL they can circulate is a game-changer. Our paper “Building the Tech Coalition,” which analyzes their use of Project Maven and the internal talent required, is a great example of this.

Number three is our work on AI and biorisks. The debate has been narrowly focused on controlling AI models, so our “Toolkit for Managing Biorisks from AI” broadens the conversation by outlining a full range of policy options, which has been helpful for policymakers.

Jordan Schneider: Let’s do two more, oldies but goodies.

Helen Toner: For oldies but goodies, I’d point to our outbound investment work, where we asked the Biden administration, “If you want to control outgoing investment, do you know how to do that? What data do you have, and what data would you need?” That implementation was a classic example of our work.

Our explainers have been surprisingly impactful. We published one about the differences between generative AI, large language models, and foundational models. A government agency was trying to decide which terminology to use in an influential policy document, and told us the explainer directly influenced their policy. Straightforward research like that has a good track record.

Jordan Schneider: Would you like to recommend some mood music to end the episode?

Helen Toner: The great China and AI scholar, Matt Sheehan, told me instrumental playlists are the best way to focus, so I’ve been listening to a lot of instrumental music. There’s a great James Brown instrumental album. Why not some instrumental James Brown?

Mood Music:

In the wake of Salt Typhoon, what does the future of secure telecom look like?

To find out, ChinaTalk interviewed John Doyle, a former Green Beret who spent a decade building Palantir’s national security practice before founding Cape, which calls itself “America’s privacy-first mobile carrier”. Also joining the conversation is Dmitri Alperovitch, chairman and co-founder of Silverado Policy Accelerator, founder of CrowdStrike, and an angel investor into Cape.

We discuss…

• Why telecom data is so valuable to adversaries, and what China discovered in the Salt Typhoon campaign,

• Cape’s founding thesis, including what makes Cape’s cell network so much more secure than major providers like AT&T,

• How wars are run on commercial cell networks, and how Russia and Ukraine’s reliance on that has been exploited over the course of the war,

• Other instances of telecom data weaponization, including by Hezbollah, Israel, and Mexican drug cartels,

• Taiwan’s plan for dealing with undersea cable sabotage,

• What it takes to cultivate engineering talent in telecoms, and why Huawei has stayed innovative while US providers stagnated.

Listen now on your favorite podcast app.

Thank you to Cape for sponsoring the episode.

Why War Runs on Commercial Cell Networks

Jordan Schneider: Dmitri, why don’t you kick us off — what was Salt Typhoon all about?

Dmitri Alperovitch: Salt Typhoon came to the fore in late 2024, maybe a little bit earlier, when the government discovered there was a huge compromise of major telcos — AT&T, Verizon, and others — by China. Specifically, a Chinese contractor in Sichuan that they ultimately sanctioned for this effort. They were breaking into telcos to get access to call records, sensitive information that telcos have to facilitate law enforcement operations, and voicemails of key political figures. There were revelations that they targeted the Trump campaign in particular during last year’s election.

At the time, I was serving on the Cyber Safety Review Board, which was tasked with investigating Salt Typhoon. The Cyber Safety Review Board is an executive order-created board within the government that combines private sector members with government members to investigate major national security-impacted cyber intrusions. I was actually shocked in the course of our work that the government was shocked. If you know anything about signals intelligence agencies, the first thing you would do is go after telcos. That’s where the crown jewels are. John knows this well from his military career — it’s an invaluable source of information and intelligence on your opponents or adversaries. The idea that no one had seemingly asked, “Would China do this to us?” was baffling. As we’ve seen in revelations from various leaks like Snowden’s, this is something the US intelligence community might be doing to our adversaries. Why would we be shocked that China would do this to us?

That was surprise number one. But in general, I’ve been concerned for many years — and that was one of the reasons I got so excited about investing in Cape — about the fact that our mobile devices are arguably the most valuable source of information about us. They contain really sensitive information: they track our location, have access to cameras and microphones, and contain text messages. People usually put things in text messages that they don’t even put in emails. The telcos have the location data, call records, voicemails, and they can do many things without our knowledge or control.

One of the things we investigated on the CSRB prior to the Salt Typhoon investigation was a cybercrime group called Lapsus$. It was a bunch of teenagers who broke into most of the major companies around the world — Microsoft, Nvidia, and others — with almost no technical skills, primarily leveraging a technique known as SIM swapping. They would bribe or, in some cases, threaten employees at telcos, or oftentimes resellers of telcos, to initiate a SIM swap. A SIM swap is essentially when your phone number gets cloned to another device. It’s a completely legitimate technique when you get a new phone, lose your phone, or upgrade your phone — you initiate a SIM swap where a new SIM card is activated in a new device for you.

But threat actors like Lapsus$ have been doing this surreptitiously to essentially clone your phone number and get SMS two-factor authentication on that device. This would allow them to VPN into companies if they were able to social engineer a password reset through the employee help desk, as these guys were doing. Many companies around the world are still relying on SMS-based authentication, and it seems like every financial institution, in my experience, is still using SMS and not even providing other forms of authentication that are more secure.

I was very concerned that telcos and phone makers have all this information about you and can do pretty much anything they want with it. The telcos in particular can resell it and violate your privacy. From a security perspective, threat actors can break in and tap into those sources of data, and there was nothing you could do about it. Then John came along with Cape and actually offered a solution.

John Doyle: Dmitri just gave basically the entire initial investment thesis of Cape. The Salt Typhoon story has been an enormous focus for us. Three and a half years ago, when I started the company — well first, I should give a little bit of background. Cape is a cellular network. If you’re an AT&T subscriber right now, you can switch and become a Cape subscriber. We’re a worldwide cell network focused on improving privacy, security, and resilience over commercial cellular above the industry baseline.

The Salt Typhoon story is interesting for many reasons. Three and a half years ago, when I was out trying to raise a seed round to start Cape, I would say in pitch meetings, “China has completely infiltrated the telecommunications networks. China has full visibility into what you’re doing with your phone.” People didn’t quite laugh you out of the room. We had been down the Huawei road, and people were aware of some of the vulnerabilities, but it didn’t quite hit home the way it has since the Salt Typhoon news broke. Now we’ve all learned unequivocally: China has completely infiltrated the cell phone networks and can watch everything you’re doing on your phone.

The other thing I would underscore from what Dmitri said is that in his very adroit two-minute introduction to the problem and to the company, we covered SIM swap attacks, carrier breaches, and insecure two-factor authentication over SMS. Your takeaway there is that this problem is really broad. There’s not one specific vulnerability we’re trying to patch. We’re not just trying to patch SolarWinds and then we’re done. This is a literal PhD field of study: what’s wrong with the protocols that run the global cell network, how can they be exploited by bad actors, and how do we remediate them? It’s endlessly interesting, and there’s no shortage of work for us here at the Cape team. But those are some really good examples of why this is a problem.

Dmitri Alperovitch: I should pat myself on the back by saying that I invested long before Salt Typhoon ever manifested on the scene.

John Doyle: That is true. Dmitri saw it also. Full credit.

Jordan Schneider: By way of more introduction, I want to shift the camera over to Ukraine. One of the really remarkable things about this war is the amount of commercial cell phone usage happening on both sides of the front. It has always struck me as a big puzzle because obviously, you turn a phone on and then people can find out where you are and can try to kill you. But at the same time, the utility of these phones is just so important over the course of this war that people are willing to take those risks and put themselves in situations where the cost-benefit ends up on the side of choosing to use your cell phone — and not just because you want to swipe TikTok in Bakhmut or whatever. John, why are soldiers in Ukraine using them as well? Clearly, Americans are not going to stop using cell phones, but why?

John Doyle: It’s a really important question, and there’s an important insight underneath it: wars really run on commercial cellular networks. When I was in the Army from 2003 to 2008, we were in Iraq, and I was a communications guy on a Special Forces team. I would jump out of airplanes with 160 pounds of radio equipment in a rucksack between my knees. Every single time, I also had a cell phone in my cargo pocket. Despite all that — probably hundreds of thousands of dollars worth of communications gear — the thing I knew would always work every time I turned it on was my cell phone. [A quick note from John from the future: In a minute, Dmitri is going to make a joke that made me feel like this rucksack story implied that I have jumped into combat. I want to be clear that I’ve never done a combat jump. I’ve only jumped in training. I’m being careful because I don’t want to claim more cool guy points than I’m entitled to. But I do stand by my broader point, which is that cell phones have been an informal part of the comms plan, at least since I was in the army.] That network’s only gotten better and better.

The telecommunications network is the best communications platform we’ve ever built. The iPhone is one of the best products ever built. It’s so ubiquitously adopted that you see things like Ukraine, where — as a quirk of history — Russia was invading Ukraine literally as I was checking into the WeWork to start Cape in 2022. Like everyone, we watched that unfold on TV. One of the really surprising early revelations was that the Russians were leaving physical cellular infrastructure intact as they advanced into the country. The reason we learned quickly was that they were relying on their cell phones at least as heavily as the Ukrainians were.

To this day, both sides are fighting the war primarily on commercial cell, despite the fact that they’re literally targeting missile strikes against each other based on cell phone location data. That’s how deep the adoption and — you could say — addiction to cellular devices as a communications platform runs.

We saw an interesting turn in the story in June of this year when the Spiderweb attacks happened. That’s when the Ukrainians snuck drones into Russia, woke them up, and piloted them remotely over Russia’s own commercial cellular network to hit strategic bombing targets in a really spectacular attack. When Salt Typhoon happened, everyone asked, “Why are we so surprised this happened?” Spiderweb is another moment where we thought, “Wait, of course this is a way to carry out a really spectacular attack.” It was a highly successful attack and it relied on the commercial cell networks.

Those are just proof points for the thesis we’ve had at Cape from the very beginning: even in times of conflict, even in the most acute of circumstances, people turn to the cell network first. That’s good because it’s amazing and performant, and we know how to use it — for all the reasons that we love cell phones. As long as you fix what’s broken, and that’s where we come in.

Dmitri Alperovitch: I can provide a few more anecdotes. As you know, Jordan, I’ve been pretty involved in analysis of this war and talking to folks in Ukraine on a daily basis. With Spiderweb, one of the things that’s actually been a trend line in Russia — not just with Spiderweb, but with these other long-range strike attacks on infrastructure from Ukraine — is that the Russians have been turning off cellular networks in particular regions whenever they detect a drone strike. Both cellular networks and the internet itself may get turned off regionally whenever they see a swarm of drones coming toward a particular set of infrastructure.

On the other side of the equation, the Ukrainians have been using cellular networks as part of their air defense missions. With these swarms of Shaheds coming every single night into Ukraine, they have mobile units all over the country that are chasing them, trying to track them, trying to shoot them down, often communicating via cellular networks. They have a huge network of acoustic sensors all over the country to detect the motor, which is pretty loud — it’s like a lawnmower in the sky. The Shahed drones are detected and tracked, oftentimes communicated over cell networks.

A couple of years ago, there was a major hack and disruptive attack against Kyivstar, the largest telco in Ukraine. There was speculation inside Ukraine that it was an attempt to impact that air defense network. At the same time, they were launching huge missile and drone attacks into Ukraine in a somewhat coordinated fashion. It’s very tightly linked on both sides to defensive measures against these drone attacks.

A couple more anecdotes for you. On my last visit to Ukraine, I went to visit senior officials in the Defense Ministry and the intelligence agencies. I was completely shocked that in nearly every single case, these officials — the first thing they do when they sit down — take their phones out of their pockets and put them in front of them. In every meeting, I was thinking, “Thank God you’re not fighting the United States of America, because we’d all be dead right now.” They’d identify us by geolocation, and missile strikes would go into these buildings. The lack of OPSEC at the highest levels and operational levels is just absolutely mind-boggling.

The SIGINT that’s active on both sides — on the Russian side, on the Ukrainian side, both against strategic and tactical use of cell phones at the front — is mind-boggling. The type of information they’re able to collect is absolutely insane. I’ve seen what the Ukrainians are collecting against the Russians. Hopefully, when the United States fights, there’s a little bit more OPSEC involved. I was actually surprised to hear that John was able to take his phone on missions because usually it’s prohibited in the US military, and people do get in trouble for it. But it’s hard to enforce, particularly when there are few other ways to communicate reliably, as John said.

One other anecdote I heard from folks in the intelligence services — during the initial invasion in 2022, the Russians left the cellular infrastructure intact so they could use it for communication, but they were bringing in Russian phones. Ukrainians identified Russian forces because new phones were activating on the Ukrainian networks. The Ukrainians immediately pulled every single new phone that was activated on February 24, 2022, inside Ukraine and started geolocating them. Lo and behold, they would find command posts and immediately target them with artillery strikes. A lot of Russian generals died because of that heuristic.

Jordan Schneider: Is this how they got the moms’ phone numbers to start texting them to tell their kids to come home?

Dmitri Alperovitch: I think that was done by capturing phones off the dead. By the way, the Russians quickly got wind of this tactic and instead started stealing phones from the Ukrainians to defeat it. But then the Ukrainians responded by building social media bots where you could easily submit a notification that your phone was just taken by the Russians, which would immediately flag that phone as suspect.

Jordan Schneider: I want to stay on why John brought his phone on missions.

John Doyle: Thank you, Jordan. I really like to defend myself on this point. Dmitri just low-key instigated an Article 15 investigation retroactively into my military career. The phone was switched off, first of all. Second of all, there’s a story I love to tell. When I left Palantir to start Cape in 2022, I talked to a teammate of mine, a guy who was an alumnus of what we call Tier One Special Operations Forces — the elite of the elite, the folks who really do this stuff at a high level. I told him in broad strokes what my idea was, what I was working on, and how I was thinking about the problem. He laughed out loud and said, “Man, we always had this rule — you’re not allowed to take your cell phone on the objective. And every single time we took our cell phones on the objective, because we knew if you really got in trouble and needed to get help, that’s the best way. You flip on your cell phone, you make a phone call.”

I’m not saying it’s right. I’m not going to argue that the policy wasn’t to leave your phones at home. But I wasn’t the only one toting a cell phone — and it was always off.

Dmitri Alperovitch: That’s a good point.

Jordan Schneider: Well, look, Al-Qaeda and Iraq’s SIGINT capabilities are not quite the same as the Russians or the Chinese.

John Doyle: Right. China’s capabilities were essentially the reason we were able to raise money to start this company. That was basically the market insight — the vulnerabilities in the cell phone network accrued to our benefit from a national security perspective for a long time when we were focused on counterterrorism. Everyone was happy to understand the network from that position, and it only ran in one direction because Al-Qaeda and ISIS were not technically sophisticated enough to turn the tables.

But when the Pentagon shifted focus to China and Russia as primary adversaries, all of a sudden, we were facing technically sophisticated foes. Those vulnerabilities were suddenly relevant in both directions. This problem that had been interesting for a long time suddenly became a DOD problem. Defense tech was a big booming industry, and you’re able to raise money if you’re working on important problems. There was nobody building in this space, and that’s basically how we were able to get the company off the ground.

Dmitri Alperovitch: John, good OPSEC is so hard to do. We saw this just this summer during the Iran-Israel war. Based on open-source reporting, the Iranian commanders were smart enough to know that they shouldn’t carry cell phones, but their drivers didn’t. Effectively, because their drivers were taking them everywhere, the Israelis knew exactly the locations of the meetings and were able to target them in real time. It’s just so hard to do because these things have become almost an extension of our arms. If you leave it behind — John and I know this from going to SCIFs for classified briefings where you can’t take a phone into a SCIF — you feel naked. You’re thinking, “Oh my God,” even though you’re only in there for a few hours.

John Doyle: Or the kids’ school needs to get in touch with me.

Dmitri Alperovitch: Right, exactly. It also takes you back to the Stone Ages. I remember I had a meeting inside a classified facility — you can’t bring your phone into the cafeteria — with someone once years back, and that person had an emergency and had to cancel. But I had no way of knowing. They couldn’t contact me. I didn’t have a cell phone. I couldn’t check my email. I was waiting for them until I finally gave up. It was like, “I remember this from the ’90s before cell phones” — it was really problematic. You don’t think of it anymore, how that problem got solved. Those are places where you can’t bring your cell phone, and it’s still a huge issue.

John Doyle: Yeah, it’s the classic seniority question — how long do you have to wait if someone’s not showing up? Do you give them 15 minutes? Do they get 20?

The point about the Iranian drivers is an important one, and it’s interesting to bring that home to the US. Our equivalent of that is the folks who maintain the hypersonic missile systems, or the people who go in advance to catch the bombers when they’re flying. It’s the same problem. The operational security of those folks is just as critical as the people on the pointy end.

When you realize that — as you rightfully have — and you see that the problem has gotten quite large, you need a solution. The solution is not to tell people not to use their cell phones. Even Sergeant John, who would go on to found a company dedicated to this problem, couldn’t be convinced to leave his phone at home. Not only that, but people won’t even endure a degraded user experience on their phones. If you hand them a work phone where they can only download six apps, people will just buy a burner and take it also.

The way we think about that problem is we hold as a design constraint that your phone has to work just like any premium cell service. Otherwise, people will have a shadow phone and you can’t solve the problem. That is hard. It means we have to do a lot of really technical work at the network layer in particular. But it’s also the only way to get at the root of the issue.

Dmitri Alperovitch: Education doesn’t really work on this thing — not just because of the huge value you get from a cell phone, obviously in war zones or otherwise, but also because so many people just don’t appreciate how much data is stored on them and what can be done with this data.

Another anecdote from Ukraine — an FBI agent told me that in the first six months of the war, they had all these exchanges where Ukrainian intelligence folks were coming over. They would go into the FBI headquarters building — the Hoover Building — and of course you have to leave your cell phone in the locker at the entrance of the Hoover Building. All the Ukrainian intelligence folks were asking, “What is this? Why do we have to do that?” These were intelligence community folks in Ukraine who did not appreciate that you have to do this. The agent told me that on his next visit to Ukraine, when he went into an agency building, they suddenly had lockers too.

Cartels, Hezbollah, and Call Data Records,

Jordan Schneider: John, you mentioned Russia and China. If we’re worried about them, how are the cartels with their surveillance capabilities?

John Doyle: Oh man, it’s a great question. There was a recent story out of the US Embassy in Mexico — cartels had used very technically sophisticated means and advanced tradecraft to identify who the counter-narcotics agents working in that embassy were. They went out and killed some of their sources.

To talk more specifically, the data they were getting was call data records, which are the records generated every time you use your phone. If I call you, it’s “this number called that number, the duration was such and such, and the location of the towers was such and such.” Or if you connect to the internet, you get your IP address and some of the high-level metadata. Those are called CDRs, or call data records.

The cartels were able to access them in Mexico. I don’t actually know how they did it, although I will say that data is available on the commercial market for just about anywhere in the world. If you go looking for it, you can just buy CDRs — and that’s consistent with the terms of service of your cell phone carrier, unless you’re a Cape subscriber. But anyway, they did this CDR analysis and were able to really easily figure out who the counter-narcotics agents were, and the identities of the Mexican folks who were working with them. Then they went out and killed them. The threat is certainly relevant on that front as well.

Dmitri Alperovitch: There was a similar story, I think 15-plus years ago, out of Lebanon where Hezbollah did the exact same thing with US and Israeli assets that were infiltrating Hezbollah. Through the use of tracking their locations — and where they were actually turning off the phone because they were about to go into a meeting and didn’t want to be tracked — that in itself was a signal for Hezbollah. In Lebanon, certainly at the time, they had full control of the telco network. They were able to see these weird patterns of turning on and turning off of cell phones on the network. That was an indication that it was likely an asset that was trying to penetrate them.

John Doyle: A version of that story comes up a lot, and it’s interesting both because it illustrates how ubiquitous and how always-on our phones are — that it’s an anomalous network event when you switch your phone off. It’s also interesting how frequently that turns out to be the answer: you just figure out where people are turning their phones off, drop a pin in the middle of that radius, and there’s something interesting happening right in the middle there.

Dmitri Alperovitch: Not to make John feel any worse, but when he was turning his phone off, the enemy would know he was going on a mission, right?

John Doyle: Probably. Well, I was a pioneer. We were still figuring out the rules of the road at that point. We’re talking about a Nokia flip phone. This is old school.

Jordan Schneider: On Lebanon and Hezbollah, the whole Israel using the beepers is another interesting case of, “Oh, you think you’re being cute by trying to get around this problem.” Presumably, the whole idea was they recognized that doing stuff over commercial telecommunications wasn’t going to work, so they tried to have some alternate solution.

Dmitri Alperovitch: I was talking to the Israelis about this after that operation came to light, and they said that Hezbollah did get pretty sophisticated about the use of cell phones because the Israelis had been so successful in penetrating them and using them for targeting. They consciously switched to beepers, which the Israelis were like, “Oh, great, we can now leverage that. By the way, we can put more explosives into a beeper or walkie-talkie because they’re bigger devices than cell phones.”

Part of the plan was also that the walkie-talkies in particular would be worn by Hezbollah commanders on their chests when they would go into battle. You can imagine what would happen if you rig an explosive and make it go off during a fight. The Israelis were upset that they had to trigger it early because Hezbollah was shipping those beepers to Iran for investigation — the battery drainage was too high, so they started to suspect something. But the plan was always to wait for the war to start and have these guys go into battle with the walkie-talkies on their chests and blow themselves up.

Building a Secure Cell Network

Jordan Schneider: On that smiley note, let’s come back to John with a little more of the commercial history. The dream is to build a parallel to a global functioning Verizon that anyone can use — 5G, 6G — and still be more secure than they would be otherwise. Where do you start when that’s what you’re aiming toward?

John Doyle: That’s a great question. It’s way harder than we thought it was going to be. You start like any good startup — you just start doing things and seeing what works and what doesn’t work. More concretely, you need to start in the US. Our goal from the beginning has been to build something that consumers can benefit from, that consumers value and use. But national security has been at the heart of the company from the very start — specifically US national security.

You start in the US because if your phone doesn’t work in the US, then it’s always going to be a niche “pull it off the shelf in times of emergency” solution. Frankly, the problem is just as much domestic as it is international. That was a little counterintuitive at the start, but then Salt Typhoon taught us — if you didn’t already believe it, which you should have — you knew for a fact after Salt Typhoon.

That’s a long way of saying that you start in the US. What we build at Cape is software. We build all the software it takes to run a cell network — call routing, messaging, authentication, billing. All those things are the platform we build. You have to rent towers. We were not then, and we’re still not rich enough as a company, to build brand new physical infrastructure all around the United States or own all that spectrum. We rent space on towers from major carriers. But we’re different from every other virtual operator like the Mint Mobiles of the world in that, past the tower, everything passes through our software. That’s how we have so much control over how much data we collect about you and how we protect that information. That’s where we can make all of our privacy and security guarantees.

We started in the US, and that’s been an odyssey. It’s been amazing. We have a really great network now that we’re very proud of. Consumers are signing up for it, and national security folks are using it. There’s still work to be done, but it really is becoming real.

Then you inevitably need to go international. The other half of this problem lives overseas. We’ve accomplished that expansion both broadly via aggregators that can get you access in 190 countries more or less overnight — although my engineering team would point out it’s 11 months of work to get overnight access to the global network. Then you also can go country by country. As an example, we went with the Navy to Guam in response to their being the canary in the coal mine on Salt Typhoon and Volt Typhoon. In response to that compromise, we went to Guam in partnership with the Navy and installed on top of the telcos there to test our remediation of those threats. We can do country-by-country expansion and make heightened security promises and privacy promises as we do that.

The summary is that it’s very hard. It’s regulatorily and technologically complex. But with a small but mighty team of engineers, you can get it done.

Jordan Schneider: I’m just old enough to remember when people talked about Apple as this small operating system that the hackers weren’t spending as much time focused on because there wasn’t enough value behind getting into that OS. I’m curious how you guys conceptualize the idea that everyone who is worth hacking is now going to be on the Cape network.

John Doyle: We think about that problem in a few ways. First, early on in the conversation here, Dmitri said that telcos are the crown jewels because they have so much information about you. That’s really true, except for Cape. One of the fundamental decisions we made early on was to collect as little information about our subscribers as possible to run a functioning telco and then retain it for as short a period as possible as the realities of a business allow.

In practice, what that means is we retain call data records for about three days because if we have a dispute with one of our carriers about how many gigabytes we have to pay them for, we have to be able to settle the dispute. But then after that, we just delete it. Those call data records are not linked to any detailed portrait of you as a person — your mother’s maiden name, your Social Security number, and all that data that your current carrier probably collects. We just don’t collect it. We have a really novel way of managing payment via a third-party processor, so we’re hands-off on all your payment data. Even in the event that we’re breached, there’s considerably less to steal. That’s our starting point.

Then we’ve done a lot of work around deploying in commercial cloud, which has significant security advantages. One of the stories that came out of Salt Typhoon was the cottage industry of vendors around the telcos that service and provide parts of their stack. I won’t go into a ton of detail because it’s not my information to share, but they help them accomplish some of the ancillary functions you need in order to be a compliant telco. At least some of the origin of that breach was via that cottage industry of vendors.

The Cape ethos from the beginning has been that we buy as little as we can. We build everything ourselves. There’s a little bit of hubris here, I guess, but we do a considerably better job of building it than most of the partners we evaluated in the space. We have a lot of confidence in our approach.

Dmitri Alperovitch: One of the things I didn’t fully appreciate when I was investing was — why wouldn’t Verizon, AT&T, or T-Mobile just do this? It seems like offering better security is something you could upsell to consumers. There’s value in that.

The reality is that selling customer data is part of the core business model for these carriers.

They make a ton of money by collecting call records and geolocation data, then selling it to various data brokers. They don’t want to give up that business because it’s a huge revenue stream for them.

What John is doing by focusing specifically on security and building robust security capabilities into the network — starting with the simplest principle of just not collecting data you never need — is a huge advantage over everyone else who are in the business of collecting that data to sell it.

John Doyle: That’s a really good point, and it also sets up one of my favorite topics, which is the other reason Verizon, AT&T, and T-Mobile can’t do this. Their business model, in addition to monetizing subscriber data, is centered around being big enough to own and administer spectrum.

These are enormous companies that own nationwide spectrum, which is a really expensive asset. They own this physical infrastructure, and they administer it. Then they act as systems integrators on top of that asset. They buy their mobile core software — the thing we build and deploy — from one of a couple of vendors, along with all the other pieces you need to bolt together to run a telco.

In and of itself, it’s an amazing feat and a really hard thing to accomplish, but very little of that, if any, is built in-house. Their core competency is not actually building the technology that powers the network — they just administer it. It would be a big shift for a carrier like that to start building the software internally. They don’t have that function.

Jordan Schneider: Let’s come back to the Verizon-AT&T comparison. There are many sexy things that software engineers can do nowadays. Telecom has not been one for a while. How are you thinking about recruiting and then getting up to speed on this ecosystem, which doesn’t have a lot of people tweeting about how cool it is?

John Doyle: We’re trying to change that. I would say getting from 10 to 35 on the engineering team was pretty hard. We had the hardcore early folks who were all in on the problem, and then we were trying to build a critical mass of engineering talent to come work on a telco.

A lot of attention is rightfully paid to the fact that through Huawei, China was able to take ground in the cellular network around the world via subsidized rollout — they sold the equipment as cheaply as possible to all these network operators. It’s a really effective strategy, and it’s not wrong to focus on that. Are they spying on us via Huawei equipment? Probably. Although it turns out they’re even spying on us via our own carriers.

The less appreciated part of that story is that over the last 20-plus years, via Huawei, China has built one of the most valuable companies in the world and accumulated all this capital and all this talent around 5G, which has turned out to be a critical technology area. The US just has not had an equivalent. We have not had that accumulation of talent, that accumulation of capital.

Our last great manufacturer of telecommunications equipment was Lucent, which was sold from the US to a French company in 2006 — right before the iPhone came along and really informed us that we’d all be using cell phones for the rest of our lives whether we wanted to or not. With that as background, it has turned out to be a strategic disadvantage for the United States. China has Huawei, therefore, they have people who understand the telco stack deeply. They have a huge core of really talented engineers who work on it. They have a capital base, so they can continually do R&D on this stuff. The US just hasn’t had that natively.

My long-term vision for Cape is to be that answer. Right now, we’re 85 to 87 people strong, and we’re focused on a really specific set of problems. But it’s a better engineering team than you’re going to find anywhere else in telco — I’m confident in saying that.

To the second part of your question about our talent strategy — from the very beginning, the plan was to attract really top-end software engineers and give them a little bit of room to learn telco and 5G. It’s hard on the front end, both from a recruiting perspective and from a time-to-value perspective, because people need to ramp up on what we’re building. But it’s really starting to pay off now. Literally outside my door, there’s a room full of people building really amazing stuff. They came from Palantir and Anduril and Coinbase and all these sexier companies that you’re alluding to. But now they’re building the next telco together. It’s quite cool.

Jordan Schneider: Well, let’s continue on the pitch then, John. What is fun about engineering these systems?

John Doyle: The network is deeply technical. It’s complicated. There are frustratingly legacy parts of the stack, where if you open the door, the whole thing falls apart. They can’t be touched, basically. But it’s deeply technical, really hard, and a little obscure.

Then the scale of things you build is automatic. We’re live in 190 countries, and when the engineering team builds a feature and deploys it, it goes live at that scale immediately. That’s really cool.

The other, maybe cuter example — from my perspective, when we finally got the network live and David Dunn, our head of network engineering, called me. He did the “Watson, come here, I need you” first phone call on Cape — the feeling was exactly like when you were 8 years old or however old you were and you got your first walkie-talkies. Everyone kind of remembers that sensation, the miracle of remote communication. It was like that, but it reaches all around the world and is definitely hard.

Not every single day feels like that, but there are a lot of those moments where you’re finally getting to build the walkie-talkie you wished you had when you were 8 years old.

Jordan Schneider: Cute. All right, beyond building a thing, you’ve got to sell it. What has that been like?

John Doyle: Selling to the government is famously hard. Selling to defense is famously hard. Some uniquely hard things about our business and our product include the fact that the government has been buying cell phone service for a long time. A lot happens on cell phones, but no credible alternatives to the major carriers have existed in our space until Cape.

What that means is there’s a big contract vehicle right now that the Department of Defense uses to buy all of its domestic cell phone service. If you’re a battalion commander in the 82nd Airborne and you want to buy 20 cell phones for your staff, you go to an office called Spiral 4 and say, “I need 20 cell phones” — last year’s iPhones or whatever. It’s the only place you can go to get domestic cell service.

The incumbents on that contract are the big three, and then a couple of resellers bid on it. The contract gets awarded strictly on lowest price. That’s fine. They are all roughly equivalent networks, and it makes sense from that perspective.

But Cape is a little bit premium. We’re a little more expensive because it’s expensive to build the things we build. We’ll never win a lowest-price bidding war against the big three. Plus, they have owners’ economics on their networks. The price is not the point anyway. The point is we’re solving problems that no one else has solved.

But bureaucratically, it’s legally impossible for the program office currently to buy that cell service any other way. One of the things we’ve been working on is saying, “Look, guys, if your criticism is Cape is too expensive and it’s not worth it, then that’s fine. Say that to us and we’ll go away.” But nobody’s saying that. They’re just saying we can’t technically pay for additional security and additional privacy.

We’re doing a lot of work to just try to get the rules changed. If the buyer would like not to give China full visibility into their communications and their troops’ whereabouts while they’re using their cell phones, and they’re willing to pay 10 bucks a month more for that, then they should have that option. It’s surprisingly hard to get that done, but we’re making progress.

Jordan Schneider: What was your read on the recent Hegseth speech?

John Doyle: He did a great job. The spirit is right. The intent is right. Acquisition reform has been an increasingly popular topic, and rightfully so. Commercial-first is such an important part of that. We think of what we’re doing as a commercial-first technology.

Now the hard part starts. Secretary Hegseth is not the first person to stand at a podium and announce acquisition reform is on its way. It’s famously hard to drive deep bureaucratic change at the Pentagon, but I’m hopeful. It’s a righteous mission, and I hope that he’s able to do it.

A Nightmare in Taiwan

Jordan Schneider: Commercial telecom in the Taiwan context — what’s your take, Dmitri?

Dmitri Alperovitch: Just like in all these conflicts we’ve talked about, there’s going to be huge dependence on the mobile communications network in Taiwan. There are going to be a lot of questions about resiliency.

The first thing the Chinese are likely going to do in the event of an invasion — or even a blockade — is cut the submarine cables that go to Taiwan. Those cables provide the vast majority of their communications with the outside world, but cutting them is going to have cascading effects on internal networks as well.

We know that the Internet is quite brittle. When one service fails, you can have these cascading effects that no one anticipates. We just witnessed that a few weeks ago with AWS. One service within one of their regions on the East Coast fails, and then it reverberates across the entire AWS network. Everyone using AWS experiences outages around the world as a result.

Take something like DNS — the Domain Name System for resolving domain names to IP addresses — which relies on connectivity to root servers. If you can’t connect to those root servers because the submarine cables are cut, then a bunch of things that operate even just internally within Taiwan will start to fail.

You want to have other ways of communication. The great thing about the cellular network is that you’re increasingly starting to build in capabilities to connect to Starlink and other satellites, at least for emergency messaging. iPhone and other phones are starting to offer that.

This is going to be a pretty vital way for Taiwanese forces and emergency responders to communicate with each other in the event of that contingency. Having something that’s reliable and that can’t be used for targeting purposes by the Chinese is absolutely essential. John, I don’t know how much you can talk about this, but there’s quite a bit of interest in the region generally in Cape for that very reason.

John Doyle: That’s spot on, both in terms of the enormity of the problem and the reality that backhaul off the island is really constrained and really hard.

Our opinion is that a terrestrial cellular network — whether a carrier or virtual carrier — is the perfect integration point to manage all the complexity you’re describing after the cables get cut. If you have limited backhaul off an island like Taiwan, the correct way — and the easiest way and the most robust way — to prioritize how you use that bandwidth, whether it be Starlink or other means, is over the cellular standards.

This works both because everyone already has the platform in their pocket — everyone already has their cell phone — and because if you’ve done the right things on the SIM card in advance, you can have a relatively graceful degradation of service. You can provide connectivity to an entire population with prioritization as needed for things like government officials and people doing the most important work.

We are working hard to offer support in that region. Hopefully, we’ll have some news coming out soon on that front. Certainly, if you built the company we’re building and started attacking this problem when we did — literally in the middle of the Russian invasion of Ukraine — then you inevitably wind up where we are: focused on Taiwan as a problem and thinking about what problems we would have liked to have solved in Ukraine in advance and how we can get that solution into Taiwan before we hit a crisis or conflict.

Jordan Schneider: I want to stay on the degraded Taiwan communication ecosystem. Where does the data come from in that context? Is it all from the sky then?

John Doyle: That’s a good question. Basically, yes. It doesn’t necessarily all have to be from the sky. There are other ways to get data off the island at medium range. Technology like microwaves and lasers can provide some amount of backhaul. But the real fat pipe that you want to have access to for moving large amounts of data is the sky.

Certainly, Starlink is the most famous example here and the best known. But there are other low Earth orbit constellations, and then there are other constellations — both government and commercial — at higher altitudes as well. All of those have different constraints and different qualities that make them advantageous in certain situations. But short answer: yes, you want to look to the sky, and that’s where you get most of your backhaul.

Jordan Schneider: Currently, when people think of satellite cell service, it’s SOS text messages when you’re on a mountain hiking or something. But presumably you can do more than just that now. Can you serve 30 million people? Maybe not live streaming, but phone calls and stuff? What’s the optimistic case?

John Doyle: An important constraint to have in mind: even when we finally fill up all of low Earth orbit with as many satellites as can fit, if we assume a couple of advances in antenna technology and dedicate all of those satellites to direct-to-cell service — that’s what you’re describing when you’re a hiker in the Grand Canyon and you want to get an SOS text message out; direct-to-cell is the tech that allows your cell phone to talk directly to a satellite — there’s still not enough bandwidth to meaningfully offload the traffic that passes over the terrestrial cellular network every day.

This is not to downplay how impressive and important that technology is, but it does underscore that it will always be supplementary to the terrestrial physical infrastructure. Now, to bring it back to Taiwan: assume the cables have been cut. There are still ways — and we have our own opinions on how — you can continue to operate intra-island and even maintain a highly performant cell phone carrier. People can talk to each other within the island in a relatively uninterrupted way. You need to manage your scarce resource, which is backhaul, and prioritize which traffic gets on and off the island.

Jordan Schneider: Okay. Cables that are running on Taiwan to various cell towers can still talk to each other relatively normally, but if I’m trying to stream something from Netflix, which is hosted in a data center in Malaysia, then I’m going to have a tough time.

John Doyle: That’s right.

Jordan Schneider: On the tactical and operational side of what a commercial cell network can do, we had some examples from Dmitri on triangulating where Shaheds are falling. What else makes this so addictive, even when it puts your life at risk? What logistical or operational things can you do in Ukraine because everyone has cell phones connected to commercial networks that would not have been possible in, say, 1987?

John Doyle: If Russia had invaded in 1987, if there were no cell phones or the network was taken down, the biggest difference would have been the lack of connectivity for the civilian population.

The way those folks benefited from the network remaining available was primarily in two ways. Number one is morale — just the ability to stay in touch with friends and family who have left or friends and family over distance. This turned into a really long conflict, and the political will of the population is a really critical factor in the resilience against the invasion. It’s an amazing way to keep morale high or to boost morale.

The other is crowdsourced intelligence, especially in the early days. But even now, you see civilians contributing to the intelligence picture. They’re able to do that because they’re connected to the network and connected to their friends and family who are also in the military and also prosecuting the war over the cellular network. It’s relatively seamless to pass along what they’re seeing.

Jordan Schneider: The other thing that has really struck me is these photos of Ukrainian command and control literally on Discord and Skype. Then you text the people who are out and about on Signal, right? The idea that this technology is so valuable that you are willing to be the intelligence official who walks around with a phone. What is the friction of not having that in 1987?

John Doyle: In 1987, you had to set up a radio. You had to set up a communications outpost. You had to do all this work to maintain a line of communication that you just don’t have to do now.

Signal and Discord, in a really important way, have been ahead of the networks in that Signal solved the problem of end-to-end encryption for consumer communications. You can now protect the content of your communications with a high degree of certainty using Signal. It’s an amazing messaging app and it’s a very frictionless experience.

Where Cape fits in — and what we like to say — is that Signal protects the messages and we protect the messenger. The part that’s been lagging is: while you’re out running around sending and receiving Signals, the metadata associated with your location and your activities is not protected until you have a carrier like Cape in place.

Jordan Schneider: Even in 2005, give us a little more color on those hundreds of thousands of dollars’ worth of things. Were they heavy? Did it take a long time to set up? People have this image of radio men in World War II, but presumably you were working with a little better stuff than that guy on Omaha Beach or whatever.

John Doyle: Maybe a little better. You organize your communications plan if you’re a comms guy in the military according to something called PACE. You have a Primary, Alternate, Contingency, and Emergency communications plan. If one system fails, you go to the next and the next.

Examples of stuff I had in that rucksack include radios for line-of-sight communications, and really, really good walkie-talkies with very heavy batteries that we could use to talk back to people who were a little farther away from the front lines than we were.

Further down the contingency list were things like satellite communications, which in those days meant these little foldable satellite dishes that you would unfurl and point at the sky and try to get just the right elevation. If you got a good connection, you could get pretty decent communications over satellite.

My favorite — and this is way down the PACE plan — was high-frequency communications, which is ham radio operator stuff. You measure out an antenna and you’re like, “Okay, we’re going to communicate on this frequency, so I need a 37-foot antenna,” and you roll it out on the ground. You can talk a really long way over high-frequency communications, but you’ve got to get it just right. I never had the opportunity to do that operationally, although we did a lot of training on it, and I was always fascinated by it.

But each one of those — line-of-sight communications, satcom, and high frequency — those are all different boxes. That’s a 30-pound brick that rides in your rucksack, and it’s got its own batteries associated with it and its own antennas and whatever. All that gear rides around in your rucksack, and if you need to make communications, then you just start working down the PACE list.

The cell phone is better. It’s a lot better. It’s much lighter. I love Signal, and it doesn’t work everywhere. We’re not fully replacing those boxes. Ninety-whatever percent of the world’s population is covered by cell coverage, but not that much of the terrestrial surface area is. There’s a time and place for other comms also.

Jordan Schneider: Our reported SEALs hanging out on North Korean beaches — I don’t think they’re connecting to the local telecom.

John Doyle: We haven’t tested our network in North Korea. I can’t say whether it works or not. I’ll come back for an update if we ever find out.

Zixuan Li is Director of Product and genAI Strategy at Z.ai (also known as Zhipu 智谱 AI). The release of their benchmark-topping flagship model, GLM 4.5, was akin to “another DeepSeek moment,” in the words of Nathan Lambert.

Our conversation today covers…

• What sets Z.ai apart from other Chinese models, including coding, role-playing capabilities, and translations of cryptic Chinese internet content,

• Why Chinese AI companies chase recognition from Silicon Valley thought leaders,

• The role of open source in the Chinese AI ecosystem,

• Fears of job loss and the prevalence of AI pessimism in China,

• How Z.ai trains its models, and what capabilities the company is targeting next.

Co-hosting today are , long-time ChinaTalk analyst, as well as of the Interconnects Substack.

Listen now on your favorite podcast app.

The Z.ai Model and Chinese Open Source

Jordan Schneider: Zixuan, could you introduce yourself?

Zixuan Li: Hi everyone, I’m Zixuan Li from Z.ai. I manage a lot of things, like global partnerships, Z.ai chat model evaluation, and our API services. If you’ve heard of the GLM Coding Plan, I’m actually in charge of that, too. I studied AI for science and AI safety at MIT, where I did research on AI applications and AI alignment.

Jordan Schneider: Let’s do a little bit of Zhipu AI’s backstory. When was it founded? How would you place it within the broader landscape of teams developing models in China?

Zixuan Li: Zhipu AI and Z.ai were founded in 2019, and we were chasing AGI at that time, but not with LLMs, but with some graphic network or graphic compute. We did something similar to Google Scholar called AMiner. We used that type of thing to connect all the data resources from journals and research papers into a database. People could easily search and map these scholars and their contributions. It was very popular at that time.

However, we shifted to the exploration of large language models in 2020. We launched our paper, GLM, in 2021. I believe that was about one year ahead of the launch of GPT-3.5, so it was a very, very early stage. We were one of the first companies to explore large language models. After that, we continuously improved the performance of our models and tried a new architecture. GLM is a new architecture, actually, but we’re going to explore more in the future.

I believe we became famous with the launch of GLM 4.5 and 4.6 because they are very capable in coding, reasoning, and agentic tool use. That’s more useful compared to the previous version. People may know us through Cloud Code, KiloCode, and other tools. We need to combine with these top products to gain fame.

Nathan Lambert: What does it take to transition from the models you were early to developing into things that get international recognition? I’ve known of Z.ai and your work for years, and then it’s like a snap of the fingers, and suddenly, this model is on everybody’s radar that’s paying attention. Did this feel like something that was going to happen overnight, or what does that feel like when you go through it? How do you get to that moment? There are a lot of people that want to do that at their companies.

Zixuan Li: That’s a very interesting point. In 2024, everyone was interested in the Chatbot Arena. We saw GPT-4 and Gemini performing very well there. That was our interest because we pay attention to end-users’ experience, such as deciding which answer they prefer when presented with two options. We did a lot of work on that and performed very well on the Chatbot Arena, ranking maybe sixth to ninth.

In 2025, with the launch of Manus and Claude Code, we realized that coding and agentic functions are more useful. They contribute more economically and significantly improve people’s efficiency. We are no longer putting simple chat at the top of our priorities. Instead, we are exploring more on the coding side and the agent side. We observe the trend and do many experiments on it. We need to follow the trend and also predict the future.

Jordan Schneider: Let’s talk a little bit about the talent and the internal culture that allowed you to put out GLM 4.5. What do you think is different about, or what distinguishes, Z.ai from other labs both in the US and China?

Zixuan Li: First of all, we are more collaborative inside the company. Everyone is working on a single target. We have the heads of separate teams — the pre-train team and the fine-tune team — but they are working very closely. They sit next to each other, working on the single goal of trying to build a unified reasoning, agentic, and coding model. As we illustrated in our tech report, we first built three separate models (teaching models). We then distilled those three into one single model, GLM 4.5. That was our goal, and I believe that is how we built GLM 4.5 more efficiently compared to other companies, which are very young.

Another point is the talent. I believe that nowadays, the head of the team needs to do the research and the training themselves. You cannot let others do this stuff for you. Why is that? Because things change so fast. Maybe during your training, Claude 4 or GPT-5 comes out; anything can happen. You need to feel the trend yourself. You need to combine the results from experiments and the trends — what’s going on within your competitors’ teams — to feel the move yourself. It’s super important. Even our founder does the experiments himself and looks at the papers. You need to do things simultaneously, not just set goals for people and let others do the work for you.

Nathan Lambert: It seems very fast-paced. Before we started recording, you also mentioned that there are a lot of PhD students involved. I was just wondering if these are people who are actively pursuing their PhDs, new graduates, or a mix of all of them. I work at a research institute, which is very open-source, and we have many full-time students who are part of it. When you look at other closed labs in the US, there isn’t nearly as much intermingling with academic institutions. That could be a really powerful thing if you have this, because there is extreme talent there. I’m just wondering if you feel like there’s an open door between some academic institutions and your work.

Zixuan Li: Definitely. There are a lot of ongoing PhD students here, and I believe they are simultaneously pursuing their academic goals and working on GLM, but they can combine them. If you are doing a truly innovative job, like training a unified agentic coding model, it’s one of your greatest achievements ever. People won’t say, “I need to do another research, let me finish this first, and then I’ll go back to GLM.” They will try to treat GLM as their single biggest achievement. Everyone is really devoted to this stuff. We hardly see anyone who isn’t devoted to training GLM.

Jordan Schneider: What does the talent market look like in China right now? What’s the hierarchy, what are employers looking for, and what is the talent looking for?

Zixuan Li: On the research and engineering side, companies are looking for papers, GitHub code, competition performance, and your experience using GPUs and training models. For the non-technical side, they’re looking for how you will grow the model’s performance and expand the brand. If you’re going to be a product manager, for example, your vision in this area and how you execute are very important. The requirements are pretty similar across the board.

You mentioned hierarchy. In terms of hierarchy, large companies choose people first because they have more money and can pay more, companies like ByteDance and Alibaba. For startups like ours, we need people to fight together. You need to fight against other competitors and drive yourself to finish goals because you don’t get paid as much. You need ambition. You must truly enjoy working with really young, talented people and trying to build something like GLM that seems to come from nowhere and beat other competitors’ models.

Nathan Lambert: How big would you say the number of people actually training the model is? In the US, it’s accepted that the core research and engineering staff normally doesn’t get to be more than one to two hundred people at places like OpenAI. There’s a lot of support around them in terms of product and distribution. Do you feel like this is similar?

Zixuan Li: The core small research team is similar, about 100 to 200 people. I think that’s enough because you need to be focused, right? There are other people preparing data and doing product work, but for the core team, you don’t need that many people. You need to stay focused, and these people need to be really talented; they cannot make many mistakes.

Irene Zhang: Is that different at bigger companies?

Zixuan Li: For bigger companies, there might be different groups. They have more GPUs and can do more exploration. For example, at ByteDance, they are chasing top performance not only in text generation but also in video generation, speech, and other areas. They can allocate resources to multiple teams. But inside these teams, I think the core members are still the same — maybe 10 to 20, and the other 80 or 100 people are doing the training or data preparation work.

Jordan Schneider: What’s the thought process behind so many Chinese models open sourcing in recent years?

Zixuan Li: First, I think we need to devote more to the research area. Llama’s doing this, Qwen is doing this, and Kimi’s doing this. We are also doing this. We want to contribute more to academia and the exploration of all possibilities. I think that’s our top priority.

But beyond that, as a Chinese company, we need to really be open to get accepted by some companies because people will not use your API to try your models. Maybe they deploy on Fireworks, maybe they use it on Groq, or maybe they download to their own chips. It’s not easy to get famous in the United States because people just don’t accept your API. They need to be stored in the US. I think it’s necessary to be open right now for people to use our models.

Nathan Lambert: This is what our company does. It’s like where I work — I wouldn’t be able to sign up for the API service at the enterprise level. But I distill from multiple Chinese models when I’m training. I’m using multiple models and might come across this, so it’s not surprising, but it’s good to articulate it.

Zixuan Li: We also learned from DeepSeek because our flagship model was closed source back in 2024. But when DeepSeek R1 launched, we realized that you can be really famous for open sourcing your model while getting some business return through API or other collaborations. You need to expand the cake first and then take a bite of it.

Source.

Jordan Schneider: Why is it so important for Chinese model makers to get famous in the US or achieve global adoption more broadly?

Zixuan Li: Because I think there’s a better ecosystem for developers and research still in the United States. You need to get accepted by the top researchers because if we don’t open source our models, we’ll never have an opportunity to join this conversation. It’s important because we learn from X, from YouTube, from Reddit every day, and all the Chinese tech media are also paying attention to US KOLs or influencers.

Jordan Schneider: This was very surprising, I think, to both Nathan and me — how recursive it was, where the Chinese media covers the Chinese models that the Americans are talking about. It’s a very curious trend.

Zixuan Li: Because you have people like Andrej Karpathy, Sam Altman, and Elon Musk. They not only talk about their own models but also what’s going on elsewhere. Everyone knows — if they post a tweet, everyone knows what’s going on, what models they’re picking, what preferences they have, their views on maybe Qwen versus Codex. All the social media will try to grasp their core ideas immediately. That’s very important. We also learned this from DeepSeek.

Frankly speaking, we used to neglect the importance of the global economy previously because we thought we needed to sell our products and APIs directly to Chinese enterprises. But nowadays, Chinese enterprises are still paying attention to the global brand and your global performance.

Irene Zhang: This reminded me of something I’ve been curious about. We know the conversation is recursive. We know that Chinese tech pays a lot of attention to what Silicon Valley is looking at. But is there anything about the AI debate or discourse in China that Western media tends to miss? In your opinion, are there any issues or debates or things that people are really interested in that people in the English-speaking discourse tend to not understand?

Zixuan Li: I just talked to a professor from Germany yesterday, and he mentioned some models that he knew people are talking about these days — Llama, Qwen, even Mistral — but not GLM. There are many people still unaware.

Nathan Lambert: This person’s a little out of date in the SF circles. More people are talking about GLM than Mistral and arguably Llama these days. You’ve made a lot of progress.

Zixuan Li: We’ve made a lot of progress, but we track the discussion on Reddit and other social media, and we still see a lot of people asking what GLM is. Is it a good model? Where does it come from? It comes from nowhere or similar stuff. We still need to do a lot of things because we only have 20,000 followers on X. People don’t have a very deep understanding of GLM compared to other models.

Nathan Lambert: I think DeepSeek has like a million. It’s remarkable.

Zixuan Li: Also, Mistral and Cohere get much more attention compared to Kimi and Z.ai. We still need to do better in our branding and our engagement in the technical community.

Jordan Schneider: You mentioned selling API access to Chinese companies. Tell us a little bit about adoption in China. What’s the sales process like? Do they all just have VPNs and use Claude? What’s it like trying to do enterprise sales in China?

Zixuan Li: You have two types of enterprises. One is companies that can’t use APIs because they need to deploy the model on their own chips. They cannot accept sending data to other companies — not even to Z.ai or even Alibaba. That’s a requirement for those companies. There are teams deploying DeepSeek for them — not from DeepSeek itself, but other companies can deploy DeepSeek for them. They usually build on top of the DeepSeek model with RAG, data storage, workflows, and other things.

The other type uses APIs — those are maybe tech companies and media companies. These companies accept APIs because they need to standardize their workflows. For API companies, they choose based on the balance between performance and price. ByteDance is doing great in that area. I believe ByteDance dominates the API services. Qwen is still trying to sell its APIs because Qwen 3 Max is a closed source version. If you’ve heard of it, they have open sourced some models but also keep some things closed source for selling.

For us, we have open sourced our flagship models, so we are frequently asked, “Why is your service different from the open source version? Because we can deploy the open source version ourselves.” We need a better engineering team, we need faster decoding speed. We need to do more on top of just having a good model. That might be our unique selling point. We need to do searches, we need to build our MCP. We’re trying to get a competitive advantage over other GLM providers.

Jordan Schneider: Is that annoying or fun?

Zixuan Li: It’s fun. It’s fun because I think it’s necessary to open source your models, so how you get a bite in that case is really important. We’ve been figuring it out for a long time, but recently we found that subscription is a good idea — a GLM coding plan. With subscription, your users become more sticky. They love this area because you don’t have to worry about how one prompt consumes tokens in your dialogue. Maybe inside Claude, a round of interaction will consume a million tokens, but you don’t have to worry about it. We’ll figure it out for our users.

Nathan Lambert: Do you think you have meaningful adoption there? Because in the US market, I could start using Claude, Codex, Gemini, and whatever all for free with some basic Cursor. I was wondering — are people in the US actively using this? Is this a growing market that you think you’re going to eat into? Qwen has one, and I might have tried it, but I’m always like, “Oh, I have my ChatGPT subscription.” I’m just wondering if, on the ground, it feels optimistic as something that is really shifting the needle.

Zixuan Li: It’s definitely very optimistic because we don’t have to persuade 50% of people to do this — maybe you only need 5%. But 5% is a huge market. If 5% of Claude users shift their model to GLM, it’s a huge market.

Nathan Lambert: It’s growing so fast, too.

Zixuan Li: But not just for Claude, because we’re trying new ideas like role-playing. Many people on Silly Tavern are using GLM and Janitor AI because we do very well in role-playing. We’re trying to have more markets — coding markets, chat markets. Maybe one day Meta will be using our model.

Jordan Schneider: All right, we’ve got to take a step back and explain role playing. What is it? How do you make a model that’s good at it? What are people using it for?

Zixuan Li: Before GLM-4.6, for models like GLM-4.5, we were relatively weak in role playing because we hadn’t trained on that kind of data. We needed to create some data and let the model follow the instructions. For role playing, if you have a very long system prompt and you don’t train on that kind of stuff, the model will forget who it is and forget all the instructions. It will just use its general performance to do the conversation. For a role-playing task, if given very long instructions, it must strictly follow those instructions and show more emotion or more specific behavior based on them.

Jordan Schneider: Just to be clear, this is people having a conversation, for example, saying, “I’m a Japanese pirate, I’m raiding the coast of Taiwan in 1570, and I want to plan an attack to defend the fort.” People write out like five pages of background.

Zixuan Li: We also tried something very interesting, like Family Guy. We have our own Stewie, and you just give a description of what the characher does and his history, and then you can create your own Stewie. We perform very well in text generation. If we had some speech model, we could recreate a Stewie there too.

Jordan Schneider: Was there a specific kind of pre-training data or RL that you needed to do to get this? How do you make a model that is really good at pretending to be cartoon characters?

Zixuan Li: It’s mainly post-training data.

On AI Optimism and Translating Chinese Memes

Jordan Schneider: There’s a big discussion of late in the US about people being worried that folks are falling in love with AI. There’s this whole discussion about AI psychosis, where ChatGPT, for example, convinces people who trust it too much to harm themselves. I’m curious about your broad sense of that type of discussion in China generally, and then internally in your firm, about the question of people using AI for emotional support.

Zixuan Li: I just read a post from OpenAI yesterday. They invited a lot of experts to try and train a model that is not addictive. They trained data to ask ChatGPT to say it’s an AI instead of saying it’s a human being, not letting people get attached to ChatGPT anymore.

But from a broader audience perspective, not many people at Z.ai are looking into this yet because our model’s capabilities are not there yet. If we had a model that could perform like GPT-5, then we could move on to removing the addiction.

Still, the performance is not on par with these top closed-source models, which we need to chase first. When we chase these models, we shift our focus to data collection and data preparation. Sometimes, the model behavior will change dramatically. If we do some similar things on our previous model, it will be outdated in the next version. Performance is still very relevant currently.

Nathan Lambert: I’m guessing this is somewhere in the rundown, but what is the balance of optimism versus fear of AI as a long-term trajectory in your lab versus China generally? I think there’s a very big concentration in the US of people who worry deeply about the long-term potential of AI, whether it’s a powerful entity or a concentration of power or other things. Then there are people who just think this is the most important technology ever invented, and we have to be really serious about it. I’m just wondering where on this spectrum you think the lab’s culture is, or if it’s not really something that’s debated, and you’re just focused on, “We’re building a useful thing, and we’re going to keep making it better.”

Zixuan Li: I think developers fear the most. When you use code, when you use Codex, you get that fear in a very concrete way. It can do all the tasks for you, especially for junior developers. For writers or other managers, though, I think it’s simpler because we already have SaaS and other technologies helping them. Large language models like ChatGPT are just another helper for them. So, I don’t feel fear coming from the general public, but specifically for developers and data analysts. They fear the most because they try out the new models and new products more frequently than the general public, so they can feel the power.

Many people use DeepSeek and other chatbots. DeepSeek can help you brainstorm ideas, polish your writing, or do translation for you, but they don’t believe that this work can replace them. But for developers, it’s a different story.

Jordan Schneider: What are the main fears? Is it just people’s jobs getting taken away? Or is it AI taking over the world? For the people who are worried, what exactly are they worried about?

Zixuan Li: Probably jobs being taken away.

Nathan Lambert: Those fears are pretty different than in the US. There’s definitely a huge culture — not a majority of the people, but a very vocal minority — that influences a lot of the thinking about the risks of AI well beyond just job loss. Job loss is almost an assumption for many people in the US, but there are added fears on top of this. I think that is a very different media ecosystem and thought ecosystem.

Zixuan Li: I definitely know about this because I lived there. Obviously, everyone at MIT was talking about how AI will change the world, not on the positive side, but on the negative side.

Irene Zhang: Why do you think this is? Is it that Chinese society is a little more practical, or is it just that job loss feels more imminent, or is it because it’s less of a market-driven economy?

Zixuan Li: I believe that people just know about DeepSeek. Maybe only 1 million people follow the latest trend, and a billion people do their work daily and are not impacted by AI. The more you learn about it, the more fear you have.

Irene Zhang: What is the vibe among these younger engineers you’re talking about? Specifically, the junior folks who are a little scared. I’m generally curious what gets them into this work in the first place and what makes them want to work at places like Z.ai?

Zixuan Li: At Z.ai, we lack people. There is no fear about losing jobs here because we have a lot of things to do. For other companies, especially large enterprises, they may have 10,000 people doing similar things, such as data analytics and back-end engineering work. They might think that if other people start using coding tools or agentic tools, maybe they only need 50% of their current staff.

They can do nothing, though. They need to wait for their bosses or the founders to make the decision, like what’s happening at Amazon. For layoffs, you can do nothing — you just wait for the results.

Irene Zhang: I’d like to ask about translation because Z.ai’s models are very strong in making very contextually rich translations from Chinese to English and deploying them onto social media. Could you talk a bit more about the process behind that, if you know? What is the secret sauce to translating memes?

Zixuan Li: We are doing very well in translation, especially the translation between Chinese and English. I think we are on par with Gemini 2.5 Pro. You mentioned memes — memes are one of our weapons because we prepared the data and understand the culture. We can even translate emojis. For example, if you enter a sentence talking about AI and you use a whale emoji to replace DeepSeek, we might translate this back to DeepSeek. However, if the sentence is actually about animals, we will translate the emoji into “whale.” We understand the context.

Irene Zhang: Is this because Chinese internet talk is just so cryptic?

Zixuan Li: Yes, Chinese netizens are very novel. They sometimes use emojis. People also use abbreviations, so all those things need to be translated correctly.

Jordan Schneider: I remember a few years ago there was all this discussion that it was going to be really hard to train Chinese models to speak colloquially because all the data is behind walled gardens. For example, Tencent has the Tencent data, Xiaohongshu has the Xiaohongshu data, and Alibaba has its own data. Was that a problem for you guys doing this more colloquial, internet-speak work? Or is there enough out there that you can just scrape stuff and figure it out?

Zixuan Li: We need synthetic data. We do not have the actual data — we cannot scrape WeChat, but we know what people are talking about, especially in the public area. In the open area, we can observe what’s going on on Xiaohongshu and on TikTok, for example. We especially pay attention to their comment area because people are very novel in their comments.

When the “TikTok refugees” situation happened, we actually benefited from it because more people and more software needed auto-translation. We are trying to conquer some large customers through our translation capabilities.

Jordan Schneider: Does anyone train on danmu 弹幕 data [Ed. the rolling comments that appear on top of Bilibili videos]?

Zixuan Li: Definitely. We are trying to collect memes from everywhere, especially for our vision model, because memes are always in image format. We are trying to understand them with our vision model. I think it’s very interesting and also very necessary because if you cannot translate the comment in a very accurate way, customers will not purchase your model.

It’s unlike YouTube. If you use YouTube’s auto-translation, it won’t grasp the exact meaning. People just need to understand, “Oh, this English version is about this, and I can read it in Chinese. 80% is enough for me.” But for apps like X, Reddit, Xiaohongshu, or WeChat, you need to understand 100% of the comment area.

Nathan Lambert: Is it a challenge to balance data across different cultures? Since you are marketing to Western users as well as having your domestic market, is that a technical challenge to feel like you have to do both excellently?

Zixuan Li: It is a challenge. We can do very well in Chinese and English, and we are trying to explore more in French and even Hindi. We can perform very well in, I believe, about 20 languages. Beyond that, we are still exploring the data and the software. We need to register on their software to see what people are doing out there. Sometimes it’s hard to figure out. We are trying to learn from Gemini and GPT-5 why they do so great in translation.

Domestic Training and Hitting the Data Wall

Jordan Schneider: Do you guys train outside of China as well, or only on domestic clouds?

Zixuan Li: We do the inference outside China, but all the training is going on here.

Jordan Schneider: How do you feel about Huawei chips and software? Are they going to make it?

Zixuan Li: We are going to use them because we have multiple models, like GLM-4.6 and the upcoming 4.6 Air, as well as our previous version. We need to find the best use case for all sorts of chips: domestic chips and Nvidia chips. We need to classify the use case. One customer may need 30 tokens per second, and another customer may need 80 tokens per second. For one customer or one use case, some chips are enough, and for others, we need better chips and better inference techniques.

Irene Zhang: Do you try to do any API sales or just enterprise sales in general outside the US or China?

Zixuan Li: We have two platforms. Inside China, our platform is called Big Model, which is a simple translation of “large language model.” It’s BigModel.cn. We also have Z.ai, which is our overseas platform. I’m actually in charge of API Z.ai. All of our services are hosted in Singapore. I’m an employee of a Singaporean company.

Irene Zhang: Do you see much demand for Z.ai coming from non-US countries, like other countries?

Zixuan Li: We see demand from a lot of countries — India, Indonesia, even Norway and Brazil. However, it depends on who’s using Reddit and X, because we basically grew our user base on X, Reddit, and some on YouTube. We are trying to expand to platforms like Telegram, which might shift the proportion of our users. India and Indonesia are huge markets. More revenue, however, comes from the US compared to other countries because they pay more. They buy the Pro plan or Max plan instead of the Light plan. In terms of users, India has the most, but the US market generates 50% of our overseas revenue.

Irene Zhang: Building off of what we were talking about earlier — that walled gardens didn’t matter — does Z.ai have any thoughts about doing AI search on the Chinese Internet, and what that will look like in China, where there increasingly is no unified, open internet?

Zixuan Li: That’s a challenge for us product builders. Google doesn’t have a search API, and Bing is trying to stop its search API. There are other third-party providers like SERP, which basically just scrape the data — they quickly send a request to Google and scrape the page. This is also very challenging for builders like Perplexity and even ChatGPT.

We need to rely on the technical side, nowadays using our own technology or trying to gather multiple resources from different platforms. That is very reasonable. There are other technologies, like manuscript, that just browse the Internet themselves without using an API. That’s more doable these days. When you want to see multiple resources and try to distinguish the best use case or the best resources, you need to really log into an account and see the data yourself, read the page yourself, instead of just using whatever API gives you.

Nathan Lambert: Where are you planning to take your models next?

Zixuan Li: Right now, we are exploring on-policy training and on-policy reinforcement learning. We are quite mature in off-policy reinforcement learning, but for on-policy learning, we still need to explore more. Also, multi-agents.

When you look at Z.ai chat, it actually acts like a single agent. One model does the search, comes back, does another round of search, then comes back, and it can generate slides, a presentation, or a poster, things like that. But it’s all performed by a single actor, the one GLM-4.6

Nathan Lambert: Do we think we have to change our models a lot in order to do this? So much of 2025 has been changing the training stack away from “we are a chatbot” to “we are an agent.” What do you think we should change the most about our models, given that the faster model, like the Air model, might be more useful because you can have more of them?

Zixuan Li: That’s the reason why we need to do a very solid evaluation because we have different product solutions. Currently, the single agent works very well on our platform. We need to do more to try out different ideas and see whether we can improve the speed and performance with a multi-agent architecture and other possibilities. For single agents, it has better context management because you have the best model that can see all the context ahead of the current conversation and follow the instructions up to that point. For multi-agents, however, you need to compress the context for each agent, and that might lose some context or information.

Nathan Lambert: Or the orchestration is hard. If you give four agents the same context, they might all try the same thing, and they might not work together well.

Zixuan Li: Yes. If even one agent has a hallucination, it will ruin all the research. We are also trying to make a longer context window and a longer effective context window. We all know that you can say your model can do a one-million context window, but it actually performs very well only inside 60k or maybe 100k.

Nathan Lambert: You can release whatever size of context model you want, but the question is whether or not it actually works.

Zixuan Li: Exactly.

Nathan Lambert: How much do you think it’s going to be scaling the kind of transformers that we have — making the long context better, just improving the data — versus if there are fundamental walls that this is approaching? It’s kind of the low-hanging fruit question. Do you just think there’s a ton to keep improving, or is it kind of easy to find the things to do, and you just don’t have time?

Zixuan Li: It’s not easy. We believe it’s the architecture thing. Data can improve performance, but it cannot cross the wall. There is a wall. We need a better architecture, better pre-training data, and better post-training data.

Nathan Lambert: Do you think you’re starting to hit this wall, or do you kind of see it coming already? Is this something you’re forecasting, or are you seeing, “Oh, this specific thing — data alone is not solving it for us”? People in the US who are training these models just don’t talk about it; they say, “I can’t say.” I’m curious. The models I train are smaller — I think our biggest model is about 30 billion scale. When you scale up, you start to see very different limits to what’s happening.

Zixuan Li: We need to do some experiments. GLM is a 355-billion-parameter model, but we cannot do experiments with this large model. We need to do experiments with some smaller models, maybe 9 billion or 30 billion parameters, and test our hypothesis. Ninety percent of the time, we just fail, because you cannot win every time with experiments. You need to do a lot of scientific work to finally get the right answer.

If you are talking about whether the GLM-4.6 architecture will hit the wall, there is actually a wall. We need to shift our focus and start from maybe a new architecture or a new framework for doing this stuff.

Nathan Lambert: It sounds like these bigger runs were not necessarily barely making it, but definitely stressful for you.

Zixuan Li: Yes, it’s stressful. We are going to use some engineering solutions to try to compress the text windows to make our users happy. You don’t normally need one million tokens yet. If it cannot perform very well, you can compress the context window to 60k or 30k to make it work.

Jordan Schneider: You mentioned earlier that all the inference is abroad, but training is at home. What’s the rationale behind that decision?

Zixuan Li: The rationale is very simple — we provide services to overseas customers. I think it’s a requirement to store the data overseas. That is a very strict policy for our Z.ai endpoint. We change that privacy policy every month to make it stricter and more coherent with people’s expectations.

For the training, I think it’s simpler because we don’t have many resources. We only have these resources, and we need to utilize them.

Jordan Schneider: But doing it on Azure or AWS in Malaysia or Singapore — is that too expensive, or too slow? Do you guys already have enough chips at home? What’s the thinking there?

Zixuan Li: I don’t think it’s very slow — it’s fast because we change the location of not only the GPU but also the CPU and the database. If they are all in Singapore, it is still very fast. If you have to go back from Singapore to mainland China and then go back to Singapore, it will be slow.

On the training side, I think it’s very simple. We’re not OpenAI or Anthropic; we don’t have to choose between Amazon and Google and their own infrastructure. They are doing very complicated things. For us, I think we are still in the initial stage. We don’t have many complicated structures with these large inference providers, so things are still simple here.

Jordan Schneider: For now.

Zixuan Li: For now, yes.

Jordan Schneider: Irene or Nathan, any more training questions before we wrap up?

Nathan Lambert: Only sensitive questions that I don’t expect to have an answer to: How big is your next model? How many GPUs do you have?

Zixuan Li: For our next generation, we are going to launch 4.6 Air. I don’t know whether it will be called Mini, but it is a 30-billion-parameter model. It becomes a lot smaller in a couple of weeks. That’s all for 2025.

For 2026, we are still doing experiments, like what I said, trying to explore more. We are doing these experiments on smaller models, so they will not be put into practice in 2026. However, it gives us a lot of ideas on how we are going to train the next generation. We will see. When this podcast launches, I believe we already have 4.6 Air, 4.6 Mini, and also the next 4.6 Vision model.

Nathan Lambert: A good question is: How long does it take from when the model is done training until you release it? What is your thought process on getting it out fast versus carefully validating it?

Zixuan Li: Get it out fast. We open source it within a few hours.

Nathan Lambert: I love it.

Zixuan Li: When we finish the training, we do some evaluation, and after the evaluation, we just release it. We don’t send the endpoint to LM Arena or to other analysis companies to let them evaluate it first and then release the model. We don’t have that. We also don’t have a “nano banana” thing to try and make it famous before it’s launched because we are very transparent. We believe that if you want to open source the model, the open source itself is the biggest event.

Irene Zhang: Do you try to time the release with a market event or anything?

Zixuan Li: We are trying to do some marketing from my side, and I want to make the rollout longer. I want a week for me to collaborate with inference providers, benchmark companies, and coding agents, and let everyone trial the model before it’s released.

From the company’s perspective, if open source is the most important thing, you only need to prepare the materials for the open source itself. You need the benchmarks and maybe a tech blog. It is very stressful for me because I need to negotiate with multiple partners within several hours. “We have a new model coming in two hours, maybe three hours. Maybe you are sleeping, but this is huge.” We don’t give enough time for people to connect to the model or do the integration, but we’re trying to post your tweet afterwards.

Jordan Schneider: Now, in America, we have our own thing, 002.

Zixuan Li: What is 002?

Nathan Lambert: Midnight to midnight with a two-hour break. It’s so dumb.

Zixuan Li: Hours vary a lot, even inside the company. Someone might leave the company at 7 p.m., while someone else will never leave the company. For me, I work 18 hours a day because I need to negotiate with US large firm CEOs or the founders of coding agents. I need to discuss with Fireworks, with LM Arena, and with Kilo Code CEOs. I have to follow their time and do meetings, sometimes at 2 a.m. or 3 a.m. That’s all possible.

For our researchers or the engineering team, your brains can only work maybe eight hours a day. If you feel tired, you need to get some rest. It’s impossible to ask a top researcher to work 24 hours a day. That would mean you are either working inefficiently or you are just attending meetings. But if you want to read papers, do experiments, and write code, eight hours is enough.

Irene Zhang: That’s very sensible.

Nathan Lambert: My PhD advisor always said that you can completely change the world if you do four hours a day of top technical work. Just go walk in the sun after that — you did a good job.

Irene Zhang: How do you explain the value of your work to, let’s say, high school kids in Beijing? Or your grandmother?

Zixuan Li: It’s hard. I can only say I do something similar to DeepSeek. Everyone in high school, and even in kindergarten, knows about DeepSeek.

For developers, it’s simple: we are one of the best coding LLMs you can find, especially in China. But for high school students, they always ask, “We have DeepSeek, what are you doing? Why do we need you? Are you doing a similar thing, or are you better? Are you faster?” That’s very tough.

We still need to improve the model performance. That’s the top priority. Product experience is the second. Without a solid model, nobody will pay attention to you. If we are at the same level, only the most famous one gets all the attention.

Irene Zhang: So you think the salience of AI models, generalized across society, came straight out of DeepSeek and the kind of nationalism associated with that?

Zixuan Li: There is a hype. They got so famous, even in China, so we are unknown even here. I believe a lot of students in Tsinghua University haven’t tried GLM or haven’t even heard of this company. Everybody knows the famous names, but not everyone goes to this building to visit Z.ai, right? DeepSeek is all over the news and social media, so it’s really tough to explain our contribution and our value.

Irene Zhang: Do you think Chinese society is starting to find AI to be more valuable, or is it getting scarier than valuable?

Zixuan Li: We are not there yet. AI is not so strong as to make people fear it because there is still hallucination, and it’s still not always following instructions. There are still a lot of issues to solve before it becomes more fearful or terrifying for people.

Jordan Schneider: We end every episode with a song. Does Zhipu have a theme song, or what do people listen to when they code around the office?

Zixuan Li: Actually, no. Our founder loves running, but music not so much. He is a pro in the marathon. The founder of Moonshot really loves music, but our founder doesn’t have much interest in it. For our anniversary, we have a half-marathon to celebrate.

Nathan Lambert: I’ve got to go do this. I’m going to go run the Z.ai half-marathon next year.

Correction: A section of this transcription originally recorded Zixuan as saying, “In 2025, with the launch of Moonshot’s Kimi Chat (Kimi K2 model), we realized that coding and agentic functions are more useful.” It is, in fact, “In 2025, with the launch of Manus and Claude Code, we realized that coding and agentic functions are more useful.” The transcript has been updated

After five long years since his last ChinaTalk appearance, Jake Sullivan returns to the show.

We discuss…

• Sullivan’s experience managing crises, implementing grand strategy, and cultivating leadership skills during the Biden administration,

• The art of crafting aggressive industrial policy, from chips to rare earths to infrastructure,

• The risk of miscalculation in the Taiwan Strait, and whether Pelosi’s Taipei visit was a mistake,

• Russia’s nuclear brinkmanship and the development of Biden’s posture on Ukraine,

• Whether Trump can succeed at ratcheting down tensions with China.

Listen now on your favorite podcast app or on YouTube.

A reminder: this is the conversation I wanted to have with Jake, not the one you want me to have. For other recent interviews that get more into the Biden administration around the withdrawal of Afghanistan, the pace of arming Ukraine, and America’s handling of Israel’s invasion of Gaza, see all these other shows he’s done this year.

Playing to Win

Jordan Schneider: Jake Sullivan, Biden’s former National Security Advisor, currently a professor at the Harvard Kennedy School, and my near peer in podcasting. Jake, welcome to ChinaTalk.

Jake Sullivan: Thank you for having me. Now I have a whole different vantage point on being a guest on a podcast, so I’ll spend my time silently judging you.

Jordan Schneider: Great, we’ll have an impromptu masterclass.

You’re calling your new show The Long Game. What are your reflections on how crises interact with the goal of maximizing national power, or however you want to define the long game?

Jake Sullivan: Part of the reason we’re calling it The Long Game is that it’s incredibly important for us to lift our heads up and out of the smoke of immediate crises and ask, how do we put the US on the strongest strategic footing going forward? That really is the ultimate essence of the long game — how do we marshal and husband the sources of American power in service of our national security, our prosperity, and our values? That’s the ethos behind The Long Game.

Now, to your question about the interaction between crises and the long game — it takes an enormous amount of discipline, especially in my time in the seat when we were dealing with a lot of crises and a lot of different types of incoming, to say we’re going to set aside the time, the effort, the resources, and the top-level attention to actually focus on the long game. I’m actually quite proud that through Ukraine, the Middle East, Afghanistan, Chinese balloons, and lots of other stuff, we set aside the time to really invest in our alliances, invest in our industrial base, and invest in a set of technology policies that advanced America’s capabilities and helped protect those capabilities from being used against us.

That requires discipline — a huge amount of discipline — and I tried to bring that discipline with me to work every day. I was also lucky to have a lot of people who were assigned to the long-game things and not just the crises, who had no trouble banging on my door and saying, “Jake, don’t forget we have to be working on this issue,” whether it was chip controls or infrastructure projects in Africa or what have you. Having that kind of team around you — people who keep you honest and say we’re not going to let you just get swallowed by the inbox — that was very important as well.

Jordan Schneider: Is there a design fix around this? Should there be two NSAs — the firefighter and the long-term person? Why does this need to be one job?

Jake Sullivan: That’s a great question. Maybe it’s right that if you think about the close advisors to the President, there shouldn’t be any reason you couldn’t have two people essentially dividing the job. My overall reaction is that it’s probably a process fix better done with other senior people who are devoted to specific crises, not just someone who’s like, “I come in and handle all crises.”

A National Security Advisor should actually have both the dispensation and the instinct to say, “I’m just not going to spend a lot of time on this particular set of issues. I’m going to have the Principal Deputy do that, or an envoy do that, or someone else in government do that, because I need to be allocating more of my time to the longer-term things.” That’s probably a better way to do it than formally dividing the role into two.

One thing I reflect on from my time in government is, should I have just more consciously and systematically said, “This is something I’m putting on someone else’s plate, and I will check in on it every now and again, but it’s not going to be something I’m responsible for”?

Jordan Schneider: What were the things that you decided you needed to own and drive personally very aggressively, and why did you make those calls?

Jake Sullivan: First, I felt I was unusual as a National Security Advisor in that I thought I had to be at the table as an advocate, a designer, and to a certain extent an implementer of domestic industrial policy. I thought it was important that we have the national security perspective on that and that we’d be pushing that forward on chips, on clean energy, on infrastructure. That was one thing that I put a lot of effort into, particularly in the first two years.

Second, I thought the intersection of technology and national security was going to be defining. We created from whole cloth a new directorate on Technology and National Security, and I saw it as my responsibility to stay on top of that set of issues — yes, semiconductor export controls, but also other areas, such as biotech, quantum, and as I mentioned before, the clean energy transition.

Third, I believed from the beginning that a defining feature of modern geopolitics is the competition between the US and China. I thought it was my responsibility to play a central role in the design and execution of our China strategy and in the management of the US-China relationship.

Those were areas that I felt, regardless of what else was going on anywhere else in the world, I had to be focused on. Tied to all of those — industrial policy, technology policy, US-China — were allies. That meant husbanding and stewarding our relationships with core allies: the G7 plus India, Korea, and Australia. I put a lot of thought, energy, and effort into trying to elevate those relationships so that they were in the strongest possible state.

Jordan Schneider: That is a lot of stuff.

Jake Sullivan: Yes. I didn’t even mention the war in Ukraine. Or the multiple overlapping crises in the Middle East, or the drawdown from Afghanistan. There’s a lot going on. But the things I just named — they’re also interconnected. They’re not just different piles of work. At our best moments, they were a coherent strategy that we were trying to drive.

Jordan Schneider: You were one person both pushing the long-term stuff and being the crisis manager — what are the upsides to having that all be on your shoulders?

Jake Sullivan: First of all, if you just take it from the top, the President of the United States has to do everything. There is no division of that job into multiple different units. At some point as you go up any institution, any organization, you get to a CEO or a cabinet secretary or a President or a National Security Advisor. The question is, can you have a multi-headed monster at the top of the National Security Council enterprise? That’s difficult because you’re trying to execute and run a process that allocates time, energy, resources, priority, and then unity of vision and coherence of execution across everything. At the end of the day, you need a single point of accountability for that. That’s why it has to be basically in the job of the National Security Advisor.

But I also believe that theories of delegation and relative levels of personal engagement on different issues have to be an important part of how someone in that role thinks about what they’re doing day to day.

On Age, Experience, and Getting Ground Down

Jordan Schneider: What do you think the pluses and minuses were of being the second-youngest National Security Advisor when you started the job?

Jake Sullivan: It’s interesting — I’ve thought a fair amount about this, and it may strike some of your listeners as surprising. I was 44 years old when I took the job. That’s only a couple years younger than Kissinger was when he took the job.

Jordan Schneider: He was 45 and a half. ChatGPT made us a chart. Not sponsored, by the way. McGeorge Bundy was 41, which is insane. Condi was 46. You’re not an outlier on the young side. The mean is 53.

Jake Sullivan: There are a number of National Security Advisors around my age. When I took the job, I felt very young in a way because you tend to think of the black-and-white photographs of people with gray hair. But that’s a solid list of folks in their mid-to-late 40s entering this job — in some cases not with a lot of government experience at all coming before them, in other cases, like Condi, with quite a substantial amount of government experience.

Pluses of being on the younger side include energy, stamina, the capacity to really dig in and do the job full bore, full scale, 24/7. Being willing to push the envelope and be creative and dynamic and say we’re going to do things a different way, we’re going to have a theory of the case and try to execute against it — that youthful vision, energy, and creativity matters. That’s not just the single person acting as National Security Advisor — it’s also the team they build and the dynamic they build.

In my case, I felt I was able to build a very flat structure where everyone could come in, challenge, question, raise ideas, and feel like they had a voice. There wasn’t some oracle up top with hierarchy. That made for a much better — well, first of all, it was a better working environment, just more fun to work in that way. But I also think it allowed us to develop more interesting, more creative, more dynamic strategies in critical areas.

As for downsides… having done this job for four years. I understand deeply, to my bones, the value of experience — both positive experience and hard-won experience. There’s no substitute for it. There’s actually no substitute for experience as National Security Advisor. It is a truly unique type of seat to sit in that in some ways nothing can really actually prepare you for.

Jordan Schneider: More on that then. What was year-four Jake Sullivan able to do that year-one Jake Sullivan couldn’t?

Jake Sullivan: Actually, the most interesting part about experience is that to essentially metabolize experience, you need distance. Ask me in a year and I’ll give you an answer to the question. I’m being a bit glib, but what I mean is it’s less that in year two I was suddenly able to do things I couldn’t do in year one. It’s more the accumulation of that experience and then stepping away and being able to say, “Okay, I now have lessons learned — things that worked well, things that didn’t work well.” As this conversation goes on, I’ll point out some of those, I assume.

Sometimes I think that actually the right way for someone to do a job like this is to come in for two years, leave for six months, and then come back for 18 months — or in for 18, out for a year, back. I don’t know, whatever it adds up to. Leaving even for a little while just gives you an angle on what you were doing in the trenches that you just don’t have when you’re sitting in those trenches. That’s an interesting model for how to think about this going forward: you serve for a while, then you step away for a little while, then you come back and say, “Okay, now I’ve actually had the chance to metabolize that experience.” But anyway, that’s an idle thought for others to consider down the road.

Jordan Schneider: On what dimensions do you feel like experience gets accrued?

Jake Sullivan: The first dimension is living through a crisis, and actually having to stare square in the face the hard trade-offs and the imperfect choices, the lack of clear information, the need to form assumptions in the shadow of uncertainty. You can read all about that, but until you actually have to live through it, you’re not going to fully understand what both the opportunities and limitations are. That’s one.

Second is converting vision into action. How do you actually turn the idea of an industrial strategy into results? You’ve got to go through the thick and thin of that and make progress, but also come up short, to really be able to expose and understand what the obstacles are, what the modes of operating are, and how we could have done things differently — faster, more ambitiously, more creatively. Those are a couple of examples of where having to actually do something is what teaches you what works, what doesn’t, and how to be most effective.

Jordan Schneider: What about on the management side?

Jake Sullivan: On the management side, it comes down to a combination of how do you get the best out of people. Experience can come both ways, to be honest with you. One thing that I observed over the course of my time in government is that you get ground down. Your kindness, your patience, your sense of joie de vivre just get ground down. You become more impatient. Government is hard, so you become harder. I had to constantly fight against that. That’s an asterisk, a proviso — set that aside. That’s how too much experience, too much time in the trenches can actually degrade you rather than enhance you.

But how you actually get the most out of a team, how you run a process, what works and doesn’t work with respect to trying to surface and crystallize options for the President, how to make the government as a whole all pull in the same direction — these are things that require trial and error. It’s a very human exercise. Any particular group of people is going to have its own psychology, its own operating capacity. You can take experience from one administration and it won’t map neatly onto another. But there are some broader lessons that you can learn from it.

Jordan Schneider: In 20th-century American history, we have a bit of a pendulum. On one side, we have FDR and Trump — presidents just winging it. On the other side, we have the reactions to that — Truman being like, “Man, this FDR guy was crazy, we need to create the NSC,” or the Biden administration saying, “This Trump guy was crazy, we need to bring in a Yale Law School person to organize things.” After doing this job, how do you see the trade-offs of both models?

Jake Sullivan: This is going to maybe be true to brand, but I actually think that the right answer is to try to land in the middle of that pendulum. What I mean by that is — rigorous, fair, honest process is really important to the long-term strength of the United States and to the discipline of strategy on the big picture. But I also believe that a President and a National Security Advisor need a theory of what’s really important, and they need to get after it.

I had two people that I really looked at to try to approximate — not emulate, because I couldn’t live up to these two guys — but approximate. They were Brent Scowcroft and Zbigniew Brzezinski. Scowcroft for process and for being an honest broker and for not coming in and just calling the shots, but rather teeing up the debates of principles to the President. Brzezinski, because he had a theory of geopolitics and a worldview that helped shape and drive decision-making, even as he dealt with a bunch of crises on the edges and margins of that. A blend of those two strategies is the best way to pursue statecraft.

Breakneck Industrial Policy

Jordan Schneider: Are there dimensions on which you wish you’d had more freedom of maneuver? What felt the most constraining?

Jake Sullivan: You’ve had Dan Wang on your podcast — I thought his book Breakneck was just incredibly thought-provoking and interesting. His overall thesis is that America is run by lawyers — of which I am one — while China is run by engineers. There’s a truth to that. Democratic administrations are even more run by lawyers.

It would have been great to have more freedom of maneuver to actually just build at speed and scale than we were able to accomplish, because we had every conceivable obstacle to being able to do that — from the defense industrial base to infrastructure to building a semiconductor fab in Arizona. That would be one area where more freedom of maneuver, more capacity to move fast, would have helped.

Two: The US is funny. We’re the richest country on the planet, with deep and liquid capital markets and a massive federal budget, and yet our ability to mobilize capital in an intentional way to serve national security ends, both domestically and globally, is wanting.

I would have loved more freedom of maneuver to be able to offer a value proposition to the countries of the Global South for building infrastructure and competing with the Belt and Road Initiative. It was hard to even get nickels and dimes to be able to do that.

That was maddening because for pennies on the dollar, we could have competed more effectively and can to this day compete more effectively. We’re not doing it because we can’t get that money.

Jordan Schneider: In that vein, what homework would you give researchers, future administrations, and anyone listening?

Jake Sullivan: We really need a deep and rigorous study of what the objectives of industrial policy are, what the limits of industrial policy should be, what tools work and don’t work, and then once it’s being applied, what are the obstacles to actually executing in a way that delivers results on a reasonable timeframe. To the extent those obstacles need to be adjusted, how do we adjust them?

That entire chain of questions — people are looking at some of it. Some of my former colleagues, like and , who were central to the CHIPS Act effort, are really doing a deep study of some of this today [now on substack at ]. But there is not a body of work on this, in part because industrial policy was basically considered unacceptable to work on. We’ve got to bring it front and center, and not just with the core economics profession — that’s got to be a dialogue between national security professionals and economists coming up with a range of answers to those questions that are rooted in empirics and evidence and rigorous study.

I would ask anyone out there who’s thinking about contributing to the national security literature of the future — this, to me, is a set of questions for which we need better answers than we have. Those answers will be in large measure defining of whether we’re able to pursue an effective strategy.

What If’s on Rare Earths and US-China Escalation

Jordan Schneider: The CHIPS Act is a long-game play, but there is a world in which you implemented the October 7th controls and China decided to play the rare earths card early. If you had woken up in that world, what would you have done?

Jake Sullivan: First of all, we wouldn’t wake up the next day and think about what to do, because we thought about that before we did the controls. We thought about retaliation risk. We thought about how to structure a strategy to protect our most advanced technology without getting on an escalation ladder that could end in harm to us or a downward spiral, or as we’ve just seen recently, the need for us to basically blink and back down.

We executed the controls in a way consistent with this theory of “small yard, high fence,” precisely to avoid the massive counterreaction that we have seen once President Trump decided to slap on 145% tariffs. That was a credible and sensible strategy.

Now, it’s totally fair to ask — and this gets to the point of hard-won experience — we knew that rare earths were a supply chain vulnerability for the United States. We knew that China was weaponizing it. We were explicit about that, open about that. We took steps on it. I could send you a note with a whole list of things that would all look like perfectly credible steps one would take to try to reduce that supply chain vulnerability. And yet it obviously didn’t end that vulnerability or even really, truly dramatically reduce it. Why?

I’ve reflected on this question, and there are a few reasons. One reason is that it is a new set of muscles for the government to intervene in markets where the markets have failed or where a competitor like China has taken advantage of those markets to dominate supply. We were trying to build that muscle.

Second, it’s a dynamic game. We made investments in US firms, we also made investments in allies, and China was counterreacting by cratering the price or driving a particular processing plant out of business. We hadn’t yet fully gotten up to speed in terms of that reaction-counterreaction.

The thing that concerns me right now is the Trump administration is taking good steps on this and they’re obviously motivated, but it’s still linear from where we were. We need to go really nonlinear. We need a much more aggressive strategy, in my view.

If I’d woken up the next day after the imposition of the semiconductor export controls and they’d played the massive rare earth card, I would have said drop everything — we need to solve this within the shortest possible span of time and essentially have Operation Warp Speed to get it done.

That is what the Trump administration should do. They’re moving in that direction, but now is the moment for more alacrity. I say that as someone recognizing — not enough alacrity in our administration, in the end, not enough alacrity. I’m worried that that remains the case today.

Jordan Schneider: Zooming back, we have two countries that are competing, which are deeply economically intertwined. Say you solve rare earths — it seems to me that insofar as the two countries have an enormous amount of economic interaction with each other, there will still be ways for either country to squeeze and cause the other one pain, even if it’s not commercial. We saw Volt Typhoon — “What the hell are you doing in our water treatment plants?” I’m sure you told them to knock it off and they didn’t.

It’s a game worth playing, but what does the incremental resiliency-building help the US when it comes to these negotiations? To use a wrestling metaphor — if you’re winning points in the round, but your opponent could still pin you if they really felt like they needed to.

Jake Sullivan: As far as homework — let’s fully map the vulnerabilities as far as we can see them. Let’s ask where they are. Let’s test this hypothesis you put forward that there is simply no end to interdependence and that there will be some fundamental vulnerability that can be exploited by China or, for that matter, by the United States. That is worth a deep dive, not just all of us talking back and forth about it.

I have three answers to this question.

1. There are different forms of vulnerability. Some act very fast, and the pain can be applied asymmetrically, powerfully, and swiftly. Some act much more slowly and give you time to adjust, or they act in a way that harms the country imposing that action, so there’s some degree of deterrence. That’s one answer — let’s not just have a list of all the interdependencies, but we need to isolate the examples that are like rare earths. How many of those are there actually?

2. I would prefer to have fewer vulnerabilities rather than more. If I can take some bullets out of your gun, could I still end up dead? Maybe. But if you gave me the choice between you having a full magazine and less than a full magazine, I would say let’s make investments to do that.

3. This is really important — the more a country shows it has the muscle to be able to adapt and adjust if another country tries to weaponize interdependence, the more of a broader-based deterrent effect it ends up having. Having the wherewithal to relatively rapidly identify and then close a gap, even if you know there are other gaps out there, has a knock-on effect on those other gaps too. For all those reasons, we should still have a resilience strategy, though I do acknowledge that this is a very legitimate question.

Part of the answer to it has to come down to a cost-benefit analysis of trying to deal with this resilience. In the rare earths case, the cost-benefit analysis seems to be pretty straightforward. This is not a massive market. It doesn’t require us to move heaven and earth to resolve the vulnerability. It requires some determined, concerted action, and we should take it.

On Yards and Fences 固若金汤

Jordan Schneider: The closest thing we got to a Sullivan Doctrine was given in September 2022 — “Given the foundational nature of certain technologies, we must maintain as large of a lead as possible.” There’s the maximalist version of that, where everything gets cut off, you’re Stuxnet-ing private companies. Then there’s the “small yard, high fence” version of Biden vintage, where every day you put out new export controls, and the next day we’re recording an emergency podcast talking about all the loopholes. I’m curious about your reflections on what the calculus was and what was constraining it. Was it domestic stuff? Was it political economy? Was it worries about retaliation? How did the level end up getting set?

Jake Sullivan: One element is retaliation risk. We talked that through, right? If you just say to China, “We’re essentially cutting you off altogether,” then you’re going to induce a really dramatic reaction. That’s what happened when we fired a bazooka of 145% tariffs — they fired a bazooka back.

A second element is trying to actually have some discipline about a threshold above which you have national security concerns and below which you’re just talking about broad-based commercial or consumer applications. We wanted to have the American idea that we’re not in favor of a total technology blockade. We are just in favor of focusing on those elements of technology that have genuine national security and strategic implications for us.

A third aspect is what you said about political economy — you’re trying to bring allies along, you’re trying to bring your private sector along, you’re trying to organize a government that has very different views on this.

If you and I sat down for an hour and went through ‘22, ‘23, and ‘24 — do I think we got all the calibrations right, all the levels? Of course not. First of all, in ‘22, they knocked out the interconnect and had the H100, and we had to update the controls in part because that interconnect speed criteria didn’t make sense. We were learning as we went — the stockpiling of some of the manufacturing equipment, those timelines we could walk through. But we were executing a novel strategy, trying to make sure that we were nurturing and sustaining our advantages, protecting our most advanced technologies, while at the same time dealing with this other set of considerations.

I had breakfast with a guy I respect a huge amount in the technology field who was basically like, “My only objection to ‘small yard, high fence’ is that it should be ‘big yard, high fence.’” He had an argument — we should control legacy chips, control it all. I actually think the experience of this year and how things have played out compared with the experience of the last three years is a good argument for “small yard, high fence” — for a particular style and strategy of a pretty aggressive policy that is conducted with a degree of care and precision. That was a more sustainable policy for the United States over the longer term than just letting it rip. Now, it’s hard to say for sure that that’s right. There’s no algorithm for this, but that was the judgment that we reached, and that’s why we proceeded the way that we did.

The last thing I would raise on this is, having watched President Trump do what he has done with our allies, was the right answer just FDPR — the Foreign Direct Product Rule — from the start? Basically, don’t negotiate with our allies over coordinated semiconductor manufacturing equipment controls. Just tell them they’ve got American content, you’re not selling, done. I think about that sometimes. That comes down to a question of what are the longer-term costs of treating your friends that way? I believe that there are genuine longer-term costs for that that are real and strategic and meaningful. But I can’t prove that. That’s something we’re going to have to watch over time because now we’re running a real lab experiment.

Jordan Schneider: All right, let’s talk about China. There was kind of a big yard with FDPR. Should we have been more aggressive with FDPR, for example, to really put maximal pressure on Huawei? Do you think China would have freaked out?

Jake Sullivan: The yard could have been smaller than it is, I guess. Here’s what I would say about some of these arguments — like, if only you do this extra thing on Huawei, then that happens. It reminds me of the “real socialism has never been tried” argument. Look, it’s possible you’re right — just one more crushing sanction or export control.

By the way, I’m being glib because you may be right. But the question that one has to grapple with is some of the assumptions that underpinned the Huawei controls that were put in place in the Trump administration and the statements about what would happen as a result of those controls — not the next, better version later down the line — didn’t quite bear out. We have to grapple with that, too. You may be right that just taking more steps in the Biden administration could have made all the difference.

Jordan Schneider: I identified the biggest “what if” is FDPR on equipment earlier, because the big chart is the one where SME exports double and double again and double again. It’s going to keep doubling. That seems to me to be the big fork in the road.

Jake Sullivan: It’s a big question, and I’m not sure what the right answer is. We had a thesis with respect to our allies — you work with them rather than coerce them. That obviously meant China got access to more manufacturing equipment than if we had just coerced them. But in a net assessment of the overall health, vitality, and strength of those relationships and how they would play out in — to coin a phrase — the long game, that’s a big question.

President Trump is testing that question because he’s basically saying, “I don’t buy it. I can go punish all these people as much as I like, and they’re just going to have to keep being friends because they have no other choice.” He seems to think that’ll just be how it is. I happen to think what’s more likely is you get a group of countries that were coming along with us to de-risk from China, who now are sitting there thinking, “I’ve got to do what I’ve got to do today, but over time, I need to de-risk from the United States.” In the end, that is not going to be a winning strategy.

These are the kinds of calls that you have to make in the shadow of uncertainty. I will say we didn’t have knockdown, drag-out fights about FDPR. There was a general sense that we should try to negotiate this with our allies rather than just club them over the head. There are also other ways to get at this challenge than FDPR — like timelines on implementation and how companies went about allowing the stockpiling despite government agreements and so forth. That’s for another time, maybe over a drink.

Taiwan, Pelosi and the Risk of Accidental War

Jordan Schneider: You were present at the beginning of the Xi era. What do you believe about him that’s not the consensus?

Jake Sullivan: He is more improvisational than the theory that he’s just set out a coherent strategy that they are just going to execute. He’s basically like any other leader of any other big, unruly country, and he’s got to make a lot of stuff up as he goes along.

Jordan Schneider: Accidental conflict is something Americans worry about. I’m personally skeptical that if two countries really don’t want to fight, they can trip into a war neither side really wants. Am I wrong here? Is this something I should be more scared of?

Jake Sullivan: It’s such a fair question. It’s almost like a shibboleth — the risk of mistake, miscalculation, escalation. Ships bumping into each other in the South China Sea, and all of a sudden, you’re in World War III. I share a degree of your skepticism. There are restraining factors that can allow disengagement and de-escalation.

But let me give you a hypothetical scenario, and you tell me if it worries you. As you know, the PRC is pressing closer and closer to the island of Taiwan in the air and on the sea, bumping up against fewer and fewer nautical miles offshore, right? They’re doing that with manned aircraft, they’re doing it with ships, they’re doing it with drones. At some point, let’s just say Taiwan says, “We can’t tolerate this anymore. We’ve got to fire a warning shot, or we’ve got to do a fake dogfight with one of these planes to show them that we’re not tolerating the continued encroachment.” Then one thing leads to another and those two planes splash down. You think the next day it’s cool? Does that bother you? Does that worry you?

Because that scenario does worry me. Do I think automatically we’re off to the races? No. But that kind of scenario, in an already unstable operational environment — I don’t know that the risk of a tactical mistake leading to a change in the strategic situation — I’m not at one end of the spectrum on this that you’re pushing against, but I’m not quite where you are either.

Jordan Schneider: It wouldn’t be a nice thing. You’d lose some sleep over it.

Jake Sullivan: That’s the thought experiment to me. Why would you lose sleep over it? Because you’d be like, well, there is a possibility — maybe not that immediately the invasion force comes flowing over the horizon, but rather that it leads to a change in the national conversation on the mainland. It leads to arguments that we just can’t tolerate this, there has to be punishment and so on. Can that contribute to a shift in a negative direction that raises the risk of outright conflict? It can. I don’t want to overstate the case because I take your point, but that kind of scenario worries me more in a way than the US and China bumping up against each other.

India-Pakistan is another example where I think a mistake can lead to very rapid escalation. To me, it’s a little bit more condition-specific than just in the abstract.

Jordan Schneider: But isn’t the lesson of the most recent India-Pakistan crisis almost the other thing? It’s like, okay, we have a game now and we just play it every five years.

Actually, it probably doesn’t feel like that if you’re getting woken up at 4 o’clock in the morning.

Jake Sullivan: You know what? I’ll take that point. That’s fair because I basically agree with you that at the end of the day, the two sides don’t want to go to all-out war, so there are reasons for them to end up not doing so. I withdraw the India-Pakistan example.

Jordan Schneider: Was it a mistake for Pelosi to go to Taiwan?

Jake Sullivan: Look, I want to be fair to the Speaker. I’m going to answer your question, but I want to do it in a fair way. I spoke with her about going to Taipei, and she basically said to me, “All you White House Democrats and Republicans — you’re all too restrained. I should be able to do what I want to do, and nobody should tell us whether we can go to a city.” She was pretty clear and direct in her view.

I believe that the cost to Taiwan of that visit far exceeded the benefit to Taiwan of that visit. For me, it’s pretty simple calculus.

Jordan Schneider: How so?

Jake Sullivan: Well, it led to not just an immediate reaction by China that put a huge amount of pressure on Taiwan, but it led to a change in the operational environment around Taiwan that has not gone back to the way it was before — substantive, negative changes in Taiwan’s immediate environment. On the positive side, some symbolism, I guess.

Managing the Stress of Putin’s Nuke Threats

Jordan Schneider: On the accidental risk stuff, speaking of you getting stressed out — the Putin nuclear scenario is probably the scariest thing you had a 5-10% chance of seeing, I assume. You’ve already given some reflections on this, but maybe from — we had all these NSC management questions — this is the big one. What sticks with you?

Jake Sullivan: This is fall of ‘22. The Ukrainians are on this counteroffensive in Kherson and Kharkiv, and the intelligence community at the most senior levels comes to the President and says, “If there’s a catastrophic collapse of Russian lines and Putin feels that he’s in danger of potentially losing the war, there’s a 50% chance — a coin toss — that he will use tactical nuclear weapons to avert that defeat and shore up his lines.”

By the way, this is not just people guessing out of thin air. These are people who have studied this issue, are watching everything going on, who have amassed a fairly broad-based view across the intelligence community of this judgment. You’re the President of the United States, and you’re like, “All right, we’ve got to deal with that. Can’t be paralyzed by it. You’ve got to keep supporting Ukraine, but we’ve got to deal with that.”

We gathered in the Situation Room. We ran tabletop exercises. What would happen? What would we do in response? What would they do in response to our response? Not very pleasant scenarios, all told. We communicated directly with the Russians about the consequences of taking such an action. Of course, we reached out to, among others, China to get them to weigh in as well.

But this is the kind of thing where the difference between a commentator saying, “I don’t think it’s a very serious risk,” and actually being in the seat, having the responsibility to the American people of taking very seriously what sober, senior intelligence professionals are telling you while also continuing to support Ukraine — that was very real and very challenging.

I do not believe that this was all just BS. This was a risk. If it had happened — the first nuclear use since Hiroshima and Nagasaki — the United States would have had to take meaningful action in response. That action could easily have led to a totally different form of escalation between us and Russia. It’s good it did not happen. A lot of people look at the fact that it didn’t happen and say this was all overblown. I think we had some influence over it, and events on the battlefield had some influence over it as well.

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Jordan Schneider: We’ve talked about a few different escalatory ladders — the econ-tech fights, planes hitting each other in the sky. But this is different than what they were theorizing in the ’50s and ’60s. Thoughts? What’s my question here?

Jake Sullivan: I think your question is, how the hell do you deal with that?

It raises a question about risk tolerance, right? You’re walking on a narrow mountain path and there’s a steep cliff off to one side — one side’s the mountain, the other side’s a steep cliff. The path is, call it five feet wide. Do you walk right on the edge, saying, “I don’t think I’ll slip”? Or do you walk up against the mountain?

A lot of the debates over the nuclear escalation thing is, why weren’t you closer to the edge? Why were you closer to the mountain? The right answer on this is you have to keep moving forward. You’ve got to go from point A to point B. You can’t stop providing weapons to Ukraine, intelligence to Ukraine, capacity to Ukraine. But you also have a responsibility to the American people not to fall off the cliff.

Jordan Schneider: Can you talk about psychologically, yourself and your team? It’s one thing to be in the CIA for 30 years and be thinking about Russian nuclear posture. It’s another thing when it’s the week when it’s more risky than any time since the ’80s or even the ’60s.

Jake Sullivan: One thing that I’m playing around with in my head — I don’t want to say it wrong because it’s going to sound somehow like I didn’t take my job seriously enough, and I took my job deadly seriously — is that stress and stakes and consequences normalize. What I mean by that is the human capacity to just adjust to your circumstances.

I was an associate at a law firm in Minneapolis working on commercial litigation. We had these cases that kept me up at night. I stressed out over whether we got something right or wrong. I second-guessed and recriminated, the whole thing. Then I end up in this nuclear scenario. These are night and day. But somehow human beings don’t just have an infinite level of calibrating stress. They just have their bands, and then they’re presented with things. Some of them are life-or-death situations, and some of them are life-or-death decision-making situations. You get up in the morning and you go to work and you do your job and then you go home at night and you execute your responsibility to the best of your ability to do so.

I don’t have a better answer than that, but I don’t feel like, “Oh, I was some special person.” I was just a guy who had a job. This was the problem presented in that job, and I had to deal with it. A lot of it is just about being able to inhabit that mindset and say, “I’ve got to go to work. This is my job today.” But that didn’t mean I didn’t sweat through a lot of shirts.

Jordan Schneider: It’s a good point. The Marines fought on Peleliu and Iwo Jima. You’re going to an office.

Jake Sullivan: Exactly. This is such a good way of putting it. Somebody is walking into the teeth of gunfire at Omaha Beach who, a year before, was a schoolteacher in my hometown of Minneapolis.

The ability to normalize just your situation — this is my job today. That’s so much more real than anything I had to deal with. Yet we all have really stressful and complicated situations in our lives. Even when something is objectively not that high stakes, I don’t begrudge people that they feel super stressed in that situation because they’re just operating within the range we all operate of stress and stakes based on their lived experience.

Jordan Schneider: But there have been very few humans in human history who have stared down a non-zero risk of nuclear war and managed through it. Even then, it still is a unique experience.

Jake Sullivan: It’s a lot. It is a lot. It’s heavy. The other important thing is we’re all just human beings leading three-dimensional lives while dealing with all of this — dealing with family stuff or health stuff or whatever the case may be. I talked before about how you can get ground down in these jobs and lose a certain sense of who you are. There is a way in which the stress and the stakes harden you. You don’t even quite realize it at the time.

Being vigilant for that, to try to remember at the end of the day that it’s your job to be a good and decent person, is a really important thing. That requires more discipline than often in a given day you can bring to bear.

Jordan Schneider: You said on a podcast you still don’t sleep well. Did you sleep well before?

Jake Sullivan: In Trump one, there was a period where I had a really hard time sleeping post-2016. But yeah, I would say I slept pretty well. I don’t now, because in many ways, a lot of the things that we dealt with had no perfect outcomes achievable. The outcome was going to be painful in one way or another. There were some painful outcomes, and then they happen and you’re like, “Well, what if I’d done this? Or what if I’d done that? Or what if we had done this? What could we learn from that?” You turn it over in your head, and then you do all of that with perfect hindsight, which is a super problematic thing to do because you could only make those decisions in the moment.

But I don’t know — that’s just going to be what it is for me for a while. I don’t think that’s a bad thing. In a way, the completion of discharging your responsibility in a job like I had is not to walk out the day you’re done and just go, “All right, someone else’s problem.” It’s to continue to wrestle with it indefinitely. That’s part of the service.

Jordan Schneider: You mentioned earlier that you think the thinking around AI and national policy is really poor. What are the hottest questions you wish there was better thought on?

Jake Sullivan: Let me be absolutely clear. If I said that, I don’t mean to say it’s really poor. I mean to say that we’re in the early innings. There are brilliant people thinking about this, and they’re thinking thoughts way beyond in complexity and sophistication that I could think. My concern is that we are designing strategy — and who’s the “we”? Because it’s a combination of this government plus these big private companies that are driving the frontier, without really fully unearthing the assumptions underlying those strategies.

A world in which we are rapidly approaching AGI and ASI versus a world in which it’s a boundary and jagged pathway towards greater capability — what you would do across a range of different inputs is different in those two worlds. Yet I don’t think we sit and work out what our relative confidence is in one world as opposed to the other. What are the can’t-fail or the must-dos, the no-regrets moves? Then what are the things we have to be able to adjust as we gain more information?

That’s just one example of many where getting technologists and strategists together to really go through the underlying assumptions of where all this is going is important. Most of this conversation floats above at a plane of abstraction. As a result, we pursue a policy with a lot of hidden assumptions that we haven’t fully validated or unearthed. That’s my main concern and something I’m turning over in my head and thinking about how to articulate better than I just did.

Jordan Schneider: Maybe more broadly, the process of gathering information, even though it’s under uncertainty and you’ll never get to much less 80% confidence with some of these things — how did you think about it and the sources, and how did that evolve over time for you?

Jake Sullivan: First of all, when you’re in government, access to information is amazing. My friend Kurt Campbell likes to say, “When you’re in government, the shit comes to you. When you’re out of government, you have to go find the shit.” There’s a simple, crude elegance to that. We could have senior people from the AI labs come in and actually present to us where they were and their capabilities and where they were going and what concerned them — literally in the flesh, just do it. We could also get all of the industry data and analysis synthesized by a team of people at any agency in the US government and supply it to you as well.

The biggest weakness on the US government side in terms of the consumption of information is that we tend to over-prioritize classified information over unclassified information because we somehow think it’s more special. Particularly in technology, it’s the unclassified information where you really find out what the hell is going on. But basically, all you can do is try to bring in as much as you can.

Then I believe in the debate method — basically having people on opposite sides or at different ends of the spectrum on a given question of what’s likely to happen actually debate it out, unearth it, and figure out where they agree and where they disagree and isolate the points of disagreement. That method gives you the best confidence that you’ve actually kicked the tires on all the potential perspectives. Then you just have to decide where you land, where you fall.

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Jordan Schneider: Trump two does not seem to see China as the threat that you guys and Trump one seemed to characterize it as. Two questions fall out of that — to what extent do you think, if he really tries, he can change the tenor of this relationship? How structural is the competition, basically? Second, given that this is what they’re seeing, if you had foresight into this, would the bias have been to push harder or push less hard?

Jake Sullivan: The second’s a good question. Increasingly, it’s going to be a salient question because we are going to see more swings in US foreign policy in the years ahead. Future National Security Advisors will have to contemplate dramatic departures one way or the other. We’re seeing that play out right now.

On the first question, here’s what I think — It’s structural. The United States and China are two big, ambitious, dynamic countries with proud people who want to succeed and frankly don’t want someone else calling the shots or having undue influence or having greater capacity than they have. We have two different political systems, two different value systems. Therefore, competition is a feature of the relationship.

What I don’t think is structural is that it has to be conflict. Where we have the ability to influence things is to manage that competition effectively. But the idea that you can just wish the competition away and go with win-win, peaceful coexistence and all these kinds of phrases — I don’t really buy that. Frankly, I don’t think China buys it deep down either.

President Trump can talk about the G2, and I completely agree he looks at this through an economic lens, a mercantilist lens, and not a lens of strategic competition. But at the end of the day, these structural factors will shine through. I have to think about whether it would have made us do something different. That’s a bit of a mind-bender, projecting back and then forward, but it’s a totally reasonable question.

Jordan Schneider: You talked earlier about the personal weight of all this, and you said somewhere that you almost envy the people who can have more confidence in their calls. The irony, of course, is this new book about McNamara at war. He’s the one who projected the most confidence out of any of these folks, and he had panic attacks. It was actually all a cover for all his insecurity.

Jake Sullivan: I was being a little wry when I said that. That’s understated Minnesota wryness. What I meant was I just find it so interesting that people can assert things like, “Yes, it’s this.” You’re like, “Congratulations, I’m so glad that you just know that.”

Going back to the point about hard-won experience — most of these issues do not have easy calls. They have trade-offs and they have puts and takes. I really admire the self-confidence because I could sleep at night super easily then. It’s just a hell of a lot less pain and suffering, but I don’t think it’s right.

Jordan Schneider: I have three book recommendations for you.

1. Feeding Ghosts — this one is best suited for midnight reading. It’s actually a graphic memoir. It just won the Pulitzer. It’s a personal history with the US-China arc in it that I can’t wait for you to read.

2. The Social History of the Machine Gun — it is probably the most stylishly written military history I’ve ever come across. It goes through the technology, the companies, the acquisition side, and then the human and strategic implications. Fantastic. Someone’s going to have to write the social history of the drone. We didn’t get to drones today. We’ll have you back maybe. But that book’s a real treat.

3. To Run the World: The Kremlin’s Cold War Bid for Global Power. [Ed. Check out ChinaTalk’s interviews with the author here and here].

Final thing — what feedback do you have for ChinaTalk? What do you want to put on my plate or our team’s plate?

Jake Sullivan: Actually, bringing on some more people on the future of manufacturing, supply chains, industrial strategy — all the things that we were talking about a little bit ago that deserve so much more depth. Getting folks in to really unpack a lot of the kinds of questions Dan was posing that Chris Miller has been thinking a lot about. I know you do this, but doing a dedicated series on this subject with a specific emphasis on the particular challenge China poses and what the United States should be using government tools for to deal with it, and what we should not be, so that we don’t try to out-China China. That’d be a piece of advice I would give.

Why are Chinese moving to Tokyo? Takehiro Masutomo 舛友雄大, who worked for Nikkei in Tokyo and Beijing, has written a fascinating book about Japan’s new Chinese diaspora. Through interviews with Chinese immigrants who’ve moved to Japan, he explains what draws Chinese dissidents, intellectuals, billionaires, and middle-class families to Tokyo. The book is called Run Ri: 潤日 Following the Footsteps of Elite Chinese Escaping to Japan, and it’s only available in Japanese and Traditional Chinese for now.

Today’s conversation covers…

• How Chinese intellectuals are following in Sun Yat-sen’s footsteps by creating Chinese bookstores and community events in Japan,

• How underground banking networks help wealthy Chinese transfer money beyond Beijing’s $50,000 annual limit,

• Why some middle-class Chinese families prefer to send their children to Japanese schools,

• Backlash against Chinese immigrants,

• Why Chinese immigrants are more optimistic about Japan’s future than most Japanese.

Thanks to the US-Japan Foundation for sponsoring this Q&A.

Tokyo’s New Dissidents

Jordan Schneider: Why’d you want to write this book?

Takehiro Masutomo: Back in 2022, I realized many of my Chinese friends that I had met in Beijing had moved to Tokyo. I thought this was an interesting new trend. Then, in November of 2022, there was a big protest in Tokyo echoing with the White Paper movement 白纸抗议 in mainland China. That was quite a departure from previous generations of Chinese residents in Japan.

I also witnessed the opening of some Chinese-language bookstores in Tokyo, such as One Way Street bookstore in Ginza. I thought Chinese immigration to Japan could be a new, emerging trend. That’s how I decided to look into this phenomenon.

Jordan Schneider: I remember seeing the former mainland journalist turned YouTuber Wang Zhi’an 王志安 saying he was doing YouTube from Tokyo. I wondered if he had dissident-adjacent friends there. There’s a second wave of Chinese who immigrate to Japan, who have money but are also unsatisfied with the life that mainland China can provide.

Your book walks through a number of different push and pull factors for wanting to leave China and being attracted by Japan. Since you mentioned the White Paper movement, it might make sense to start with the refuge for liberal intellectuals. Talk a little bit about what you uncovered in your reporting on this community.

Takehiro Masutomo: A good example is how we now have a lot of new Chinese-language bookstores in Tokyo. I don’t know if our listeners know how many Chinese bookstores there are now in Tokyo — as far as I know, there are five bookstores here. I heard there’s just one Chinese bookstore in Washington, D.C., which opened just last year, JF Books.

Jordan Schneider: Shout out to JF Books. I’ve been to a handful of talks there. I’m curious if it’s the same thing in Japan, where these bookstores double as community gathering spots. They hold lots of events and talks, and it’s a place for the liberal community to congregate and discuss ideas.

Takehiro Masutomo: The same here. They regularly host events — almost every weekend. Before, I don’t think there were any such activities, especially before the pandemic. But after the pandemic, I’m busy attending all these different events. There are too many nowadays.

They often have their own chat groups online or on WeChat. It functions as a community. There are five bookstores in Tokyo — the Chinese community is already dense enough to accommodate that many.

Jordan Schneider: When you talk to some folks in this scene, what do they appreciate about their lives in Japan versus in China?

Takehiro Masutomo: There’s much more space to discuss anything freely. I’m sure that’s a big plus. If it were a decade ago, I think people could have almost any kind of academic events or current affairs-themed activities in Beijing or Hong Kong, but it’s impossible these days. Tokyo provides them with this alternative space.

Jordan Schneider: How many Chinese in Japan do you think left for political reasons?

Takehiro Masutomo: Well, I don’t think it’s a huge number, but it’s somewhere in the hundreds.

Jordan Schneider: There is a fun historical parallel here with Sun Yat-sen, of course, who spent several years in Japan.

Takehiro Masutomo: I think some people started to see a parallel with the late Qing period. At that time, Japan accommodated a lot of Chinese revolutionaries, like Sun Yat-sen and others. Maybe something similar is about to happen in Tokyo.

The Retired Chinese Billionaires of Hokkaido

Jordan Schneider: Let’s maybe turn to another community — the folks who are coming there for a new lifestyle. Who are they and what are they looking for in Japan?

Takehiro Masutomo: There are different layers in terms of their asset size. I would say there are maybe three categories — super rich, upper middle class, and middle class. They have different kinds of lifestyles here. They live in different areas in central Tokyo. They really enjoy the lifestyle here, for example, going to nice restaurants. Tokyo has many world-class restaurants.

Jordan Schneider: But there’s good food in China, too.

How do the super-rich get their money to Japan? Ostensibly, you can only take $50,000 a year out of the mainland.

Takehiro Masutomo: For the case of Jack Ma and other billionaires, maybe the story is a bit different. They already had enough assets overseas for a long time. But I think the majority of those wealthy Chinese people who recently arrived in Tokyo have different options to transfer their money from the mainland to Japan.

I think a prime example is underground banking. I visited a few underground banks in Tokyo and learned that when they buy real estate properties here, they often pay in cash. They can get large amounts of cash through underground banks.

Jordan Schneider: Are we talking RMB — taking physical RMB out of China?

Takehiro Masutomo: To be precise, they first need to transfer money in RMB in mainland China from their own accounts to the seller’s account. After the bank operators confirm the money was actually transferred in mainland China, they give cash in Japanese yen.

Jordan Schneider: What do these underground banks do with that? How does it work?

Takehiro Masutomo: It’s a bit complicated. It involves not just Japan and China, but third countries. Simply put, I think it’s a parallel system together with ongoing goods trade. They need to balance their accounts, and that’s how this underground bank operation comes in.

Jordan Schneider: These underground banks are piggybacking off of other business activities that are going on. You just say, Oh, I sold a little less or had a little more revenue, and that’s how they transfer money out of China?

Takehiro Masutomo: That’s my understanding.

Jordan Schneider: What’s the motivation for super-rich people? They come to Japan for food. What else?

Takehiro Masutomo: Well, many of those super-wealthy Chinese people are semi-retired, including Jack Ma himself. They like the kind of retirement life here. Medical services in Japan are much better than those available in mainland China on average. They also enjoy traveling around Japan. I notice they like to have parties in their homes or at exclusive private membership clubs.

Jordan Schneider: What are these membership clubs? How do these membership clubs feel about all these nouveau riche Chinese people showing up?

Takehiro Masutomo: There are different kinds of private clubs operated by Chinese people nowadays in Tokyo. Some of them are restaurants, but they don’t take reservations, and it’s only for those members or the friends of those rich people. There’s another kind — for example, it’s attached to a resort office. These resorts, like the one in Hokkaido and so on, are not open to the public.

Jordan Schneider: Is there a lot of overlap and social interaction? I mean, I can’t imagine many Chinese immigrants speak Japanese, and I can’t imagine a lot of rich Japanese who are in these clubs in the first place speak Chinese.

Takehiro Masutomo: It’s not just about their own private clubs. For example, there are other Western-type clubs here, including the American Club. I think it’s getting filled with Chinese members these days. That’s also interesting.

Jordan Schneider: We’ll get world peace started at the American Club in Tokyo. By the way, if anyone wants to invite me to a secret Chinese club in Tokyo, I’ll fly out for that.

Snuffing out the Midnight Oil

Jordan Schneider: Let’s go one social stratum down. You talk a lot about families where the parents believe raising their children in Japan will set them up with different, better opportunities and less stress. For these families, Japan is a place they want to build their life and their future. First off, do the husbands come too, or is it just the wives with the children?

Takehiro Masutomo: At least for those I interviewed, they tend to come as families. The husbands also live here.

Jordan Schneider: It’s not like a place to park the family you don’t want to deal with.

Takehiro Masutomo: No, it’s having real life here. That’s maybe different. These people tend to live in the city center here in Tokyo, especially in the high-rise condominiums around Tokyo Bay. I went there for interviews many times, and the ratio of Chinese residents is going up fast.

Education is definitely a big motivator. More wealthy Chinese immigrants send their kids to top international schools here, including the American School in Japan.

Jordan Schneider: I had a Jack Ma sighting in New York City. I was walking on Central Park South one day, and he was outside the Essex House Hotel. He’s incredibly physically distinctive — he’s like 5’2”, you will not mistake this man and his face. He seemed like he was having a good time, even though it was rainy. I wish him all the best, but this is a real jet-set lifestyle that Jack’s been living. I guess he’s been back in China of late.

I think we should take a step back. Can you put some numbers around this? What has the broader trend of immigration looked like in Japan over the past few years?

Takehiro Masutomo: From the data I checked, the number of new Chinese immigrants I’m talking about today is roughly about maybe a bit less than 100,000. The number of Chinese residents in Japan now stands at 870,000. But the new immigrants I’m talking about are about up to 100,000.

Jordan Schneider: That’s post-COVID.

Takehiro Masutomo: Yes, something like that.

Jordan Schneider: From a school perspective, you wrote that Chinese immigrants believe that there are top schools in certain districts of Tokyo and that competition is less intense than it would be for the Gaokao and trying to get into Peking University, etc. Is that true? How much more relaxed is the Japanese education system?

Takehiro Masutomo: Good question. I’m always surprised when they talk about educational situations in mainland China. It’s far beyond my wildest imagination. Their kids normally study from early morning to midnight — that’s totally normal in China, according to those interviewees. It’s totally different from the situation in Japan. Kids here are more relaxed normally.

You mentioned this area in Tokyo — it’s called Bunkyo-ku 文京区. That’s where the University of Tokyo campus is located. I noticed a lot of new Chinese immigrants tend to move into Bunkyo-ku, a particular ward of Tokyo, because they believe the public elementary schools there are better than others. But it’s a myth because in Japan, the public school system is quite solid and there’s no difference among different public schools. It’s interesting.

Jordan Schneider: It’s a real estate marketing game then?

Takehiro Masutomo: Exactly.

Jordan Schneider: Is it cheaper to raise kids in Japan? Is there government daycare or other benefits?

Takehiro Masutomo: Tuition fees in Japan are cheaper than those in Shanghai or Beijing. I checked the data some time ago. If you compare the tuition fees for international schools in Tokyo, it’s half the fee in Beijing or Shanghai. Much cheaper. It’s reasonably priced in the eyes of Chinese parents. That’s partially why they want to come to Japan. Also, of course, the competition is not as fierce as in China.

Sichuanese Restaurants and Anti-Gaijin Politics

Jordan Schneider: Do the parents speak Japanese? Are there well-paying jobs open to Chinese nationals who don’t speak Japanese? What are they doing all day?

Takehiro Masutomo: One of the traits of these newcomers is that they don’t have a good command of the Japanese language, because they suddenly decided to come to Japan, and they are at least middle-aged or older. Acquiring a new language is challenging. Typically, they can only speak basic Japanese.

I don’t think there are many job opportunities for those people. But if you are a professional working in mainland China, maybe you can do something similar here. You set up your own company here, and you can open a consulting firm, a restaurant, or a real estate agency.

Jordan Schneider: There was a lot of news a few years ago of Chinese nationals trying to cross the border from Mexico to the U.S. These were lower-class immigrants coming for strictly economic reasons — not “I want my kid to have a more chill time in middle school.” I know there’s been a large influx of foreign workers to Japan over the past few years. I imagine that’s mostly from South Asian countries, but are there Chinese who fit in that bucket?

Takehiro Masutomo: The number of foreigners living in Japan has increased rapidly over the past several years, and now the ratio has reached about 3% of the total population. As you rightly pointed out, many of them are either from Southeast Asia or South Asia.

It’s a different category from those newly arrived Chinese immigrants here. The Chinese don’t do part-time jobs and so on. I would say it’s different categories. A lot of these newcomers choose Japan because Tokyo offers the best cost-effective quality of life. Inflation is mild here, and there’s this effect of the weakening Japanese yen. For them, many things are quite cheap.

Another key reason Japan is attractive to Chinese immigrants is that Japan has been relaxing its long-term visa over the past decade or so. Many recent Chinese immigrants had been to Japan as tourists in the 2010s, and then the Japanese government had been relaxing even long-term, residential-type visas. That’s why they could apply for those long-term visas and they could easily get one of those. It really makes a sharp contrast with many Western countries.

Jordan Schneider: How’s the Chinese food nowadays? Has it gotten a lot better to serve this audience?

Takehiro Masutomo: It’s more diverse these days. I sometimes go to Chinese restaurants because Chinese people want to have dinner with me there. It’s interesting — there are a lot of Sichuan restaurants and so on. It’s very authentic. Every time I go, I’m surrounded by Chinese diners. I don’t often see any Japanese customers in these Chinese restaurants. It’s completely a Chinese world.

Jordan Schneider: Let’s talk about the sort of broader Japanese response to this trend. In the most recent election, there was some xenophobic pushback specifically oriented towards Chinese nationals. What’s your characterization of that?

Takehiro Masutomo: Ever since I started to cover these new Chinese immigrants, I thought that it deserves nationwide discussions — whether or not to accept these Chinese immigrants more proactively or not. That has been in my mind for a long time. But to my surprise, during the recent upper house election in July, these so-called “foreigner issues” suddenly became a big topic.

I think it’s an accumulation of people’s frustration — there has been a lot of sensational reporting about immigrants, specifically about Chinese immigrants. It’s not written by me, but by many other tabloids, magazines, and TV shows, highlighting how these wealthy Chinese people are buying up a lot of properties here, suggesting that recent hikes in property prices may be attributed to those Chinese buying sprees. That’s one thing.

I recall that several months ago, a magazine reported that the number of Chinese students at, for example, Tokyo University has increased significantly over the past few years. Now they are close to 20% of the graduate student cohort.

Jordan Schneider: Do they pay more for tuition?

Takehiro Masutomo: I don’t think there’s a difference in tuition between local Japanese students and international students. That’s different from Western countries. In the U.S., of course, you distinguish the tuition fees between home students and international students, but it’s not the case here. Maybe for those Chinese people, the tuition fee is quite reasonable here too.

A New Golden Age for Japan?

Jordan Schneider: Can you share some more stories from your interviews? What were some interesting perspectives you heard over the course of these interviews that surprised you about their motivations, reflections on China, or reflections on their experience in Japan?

Takehiro Masutomo: Many Japanese people are quite pessimistic about their future because we are facing a depopulation issue and we are all getting older. I was surprised by how optimistic these new Chinese immigrants are about Japan’s future. Some of them even said Japan is going to enter a new golden age. That’s an interesting perspective.

Jordan Schneider: That’s so funny. The most optimistic people in Japan are recent Chinese immigrants.

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Takehiro Masutomo: Another interesting phenomenon is Chinese intellectuals gathering in Tokyo. Many interesting things are going on — there’s now even a Chinese publisher based in Tokyo. I know him personally, and he started to run a Chinese language publisher. His business has become quite successful. He’s selling his Chinese books not just in Tokyo, but also in other countries. Not in mainland China, of course, but in Taiwan or other Western countries.

What’s more interesting is that some people say these intellectuals, combined with wealthy Chinese people, could eventually become a political force, potentially challenging the CCP in many years to come. There’s a small number of Japanese scholars and diplomats now discussing whether Japan could have the second Sun Yat-sen here. That’s definitely something we should watch out for in the future.

Jordan Schneider: That’s fascinating. Who from this community should I have on the show? Who are some of the most interesting figures?

Takehiro Masutomo: You mentioned Wang Zhi’an — he’s becoming quite popular here among those newcomers. There is also a lawyer from mainland China named Wu Lei 伍雷. He’s hosting a lot of events himself, and he’s quite big here. There are also other influential intellectuals I cannot name in public.

One example I can share is Liu Xia 刘霞, the wife of Liu Xiaobo 刘晓波, who now lives in the Kansai region. She used to live in Germany.

Jordan Schneider: Are there any other little hotspots outside of Tokyo?

Takehiro Masutomo: Resort areas are getting quite popular amongst Chinese people, including Niseko and Furano (both in Hokkaido), and other cities like Karuizawa or Hakuba around Mount Fuji. These areas are also getting hot. Some people want to live there, so they are building their own villas. Some of the newly built villas in those resort areas are now owned by wealthy Chinese people.

There are also Chinese developers building hotels and condominiums. There are a lot of real estate projects going on, some of which are really big. I know there is an ongoing project where the developer aims to build up to 10,000 units in one area alone. Well, that’s a really huge project. If they eventually realize that size, it’s unprecedented because if they could build 10,000 units, that would be by far the biggest real estate project in Japan. It’s getting a bit crazy.

Our first-ever Supreme Court-driven emergency pod! Oren Cass, the founder and chief economist of American Compass, and Peter Harrell, former Biden White House official, host of the Security Economics podcast and, as of a month ago, a Georgetown Law scholar, have joined to discuss:

• Why Trump’s most arbitrary tariff impositions might be the most easily defensible in the Supreme Court case,

• Why this Supreme Court case probably has no real bearing on negotiations with China,

• The USMCA as a template for negotiating with Asia,

• What tariff negotiations can tell us about Trump’s philosophy on decoupling from China,

• How the U.S. can compel allies to take defense seriously.

Listen now on your favorite podcast app or watch on YouTube:

Litigation Day

Jordan Schneider: Oren, why don’t you kick us off?

Oren Cass: I love the case as a legal matter. While partisans on both sides will tell you this is a clean-cut decision, I think there are actually many very close legal questions, which is fascinating.

The reality is that we are almost surely going to get a decision that attempts to put down some long-term markers for how the court thinks about these questions, while on the specifics of the tariffs, essentially trying to stall. The court will probably give a bunch of new guidelines and principles and then remand the case back to a lower court to figure out how to implement them. It’s a little bit like what you saw them do with the presidential immunity question.

The result will be that everyone will have a better sense of how the court would initially decide this, but there will be more time before anything is actually resolved. In the interim, the administration will have to figure out what it wants to move on through other authorities, what it wants to keep fighting on, and what, if anything, it wants to legislate. Anyone who’s looking for a clear-cut and decisive victory or devastating loss will almost surely be disappointed.

Peter Harrell: I might disagree a bit with you, Oren, on that. I heard a majority of the court was skeptical that the International Emergency Economic Powers Act (IEEPA) authorizes at least all of the tariffs that Trump has imposed under IEEPA. While we could see a decision that holds that some IEEPA tariffs are authorized and then kicks the case to lower courts to sort out the exact parameters, I think we are more likely than not to find that at least the “universal and reciprocal” tariffs (the 20% on Vietnam, 15% on the European Union, 19% on Thailand, etc.) are not authorized under IEEPA.

I could be wrong, but I heard a fair amount of skepticism from the Chief Justice, Justice Barrett, and even Justice Gorsuch on the extent of the IEEPA’s authorization.

To your broader point, even if the court does strike down a decent chunk of the IEEPA tariffs, the administration has fallback options, as Ambassador Greer and other administration officials have said. I think we will see the administration work through other authorities to put some of the tariffs back together.

I agree with you that the decision may be narrow in some sense, as it will be about what this 1977 emergency power statute says. However, I also think we will get some broader discourse in the opinion about how the Supreme Court thinks about its major questions doctrine and about executive power versus congressional power generally. I think this is a decision that students and lawyers will be reading for some time to come because it will have broader ramifications beyond just a particular case on tariffs.

Jordan Schneider: The weird wrinkle of all this is that if the administration didn’t have “Liberation Day,” but just spent a few more months writing some Section 232 findings, or even had ChatGPT write the Section 232 findings, the standing for the Supreme Court to jump in and say, “You can’t do this,” would have been much smaller than the route the Trump administration ended up choosing. Am I wrong on that?

Peter Harrell: All of us who think about trade law are now unpacking these other statutes and thinking about what he could do under them and what their limits are. For your audience, Jordan, who may not be deep in the weeds here, the tariffs at issue in this case are the IEEPA tariffs — the universal and reciprocal tariffs, the so-called fentanyl tariffs on Mexico, China, and Canada, the tariffs on India over its oil import purchases, and the tariffs on Brazil over issues with former President Bolsonaro. It is not the product tariffs, so we are not talking about the steel and aluminum tariffs or the car tariffs here.

When I look at estimates from the Yale Budget Lab and others, roughly 70% of the tariffs Trump has imposed this term are at issue.

I think Trump has used this statute for two reasons. First, as you suggested, Jordan, the alternatives all require process. Trump has done a bunch of Section 232 investigations on cars, steel, and aluminum. But, as we are seeing with the fact that he has had a Section 232 on semiconductors for six or eight months that he has not yet completed, these things take time. Trump is not known as somebody who has a lot of patience when it comes to trade policy, and he does not want his administration to wait months and months before putting tariffs in place. IEEPA has let him avoid the time and fact-finding element that other statutes require.

The other thing is that if you really unpack these other statutes, I think he will find some substantive constraints on them. Now, a lot of these statutes haven’t been litigated much, so we will see what substantive constraints emerge. For example, Section 301, which he used to impose tariffs on China during his first term (something I very strongly agreed he was correct to do), arguably has some substantive limits. The quantity of tariffs must be tied to an unfair trade practice by the foreign country. With China, it is very easy to justify even much higher tariffs based on unfair trade practices. But if you wanted to maintain, say, a 10% tariff on Australia, a country we have a trade surplus with, it is difficult to identify an unfair Australian trade practice that merits a 10% tariff. You might be able to find something, maybe related to how they regulate our big tech companies, but I do think he would find some substantive constraint on some economies.

As I think about it, if he loses and decides not to go back to Congress, I think he can recreate more than 50% of the tariffs. But I do not think it is 100%, even after he jumps through all the hoops that these other statutes require.

Trump announcing his tariffs on “Liberation Day” (April 2, 2025). Source.

Oren Cass: I agree with Peter. I think the universal global tariff is the piece that is the hardest to justify under either IEEPA or through a Section 301 or Section 232, and it is probably the piece where you are most likely to need legislation if you actually want it to be a permanent part of policy.

The irony is that the stuff people are most frustrated with Trump over — the stuff that seems most unsubstantiated, like, “We don’t like the ad that Canada ran, so here’s another 10% on Canada” — is in a lot of respects the stuff that is most defensible under IEEPA or under an executive authority where the premise is, “Look, we’re negotiating here. We are using tariffs quite explicitly as a tool of foreign policy to try to strengthen our hand in negotiations.” You could not possibly do that through legislation. You couldn’t go back to Congress in the middle of a negotiation and say, “Hey, now we want you to do X instead of Y because that’s what we threatened at the table yesterday.”

This is where I agree very much with Peter that at the end of the day, within everything that has happened under IEEPA, there are actually just a lot of different rationales and different legal implications. That’s where maybe we disagree a little bit — I think it is very likely that the court’s take is going to be to try to draw out those strands and then send it back for somebody else to figure out. I think it is very unlikely that the Supreme Court would simultaneously try to distinguish all of these different things de novo. That would also at some point become new findings of fact that you would need to then implement. That is where I think you will see the Trump administration ultimately get some breathing room. But then, in terms of what U.S. Trade policy is going to be for the next decade, we probably and hopefully need to start laying down something more permanent than an emergency power before we look forward.

Jordan Schneider: Peter, I’m curious to what extent the specter of the fentanyl tariffs being taken off potentially impacted the negotiations between Xi and Trump at APEC.

Peter Harrell: I actually don’t think that the specter of Trump losing tariffs in court has that much of a meaningful impact on the China negotiations. I’m not even sure it has that much of a meaningful impact on any of the negotiations, but China in particular. Because there is an existing Section 301 on China and because there are other Section 301 investigations underway (an existing one from Trump’s first term and one on Chinese shipbuilding), China is the country he could most quickly and easily pivot to these other dials to re-impose the tariffs. I think it has almost no relevance to the China negotiations.

It has only limited relevance to some of the other negotiations. When I talk to European and Japanese officials, they are all watching this court case with great interest, but they also understand that Trump could recreate at least a portion of these tariffs under other authorities. They have a pragmatic view — “If Trump loses this, he can recreate some of it under other authorities, so why would we anger him by provocatively walking away from the trade deals we’ve just signed?” I do think that if he loses in court, you might see the European Union move more slowly to implement some of its commitments under the trade deal while Trump figures out his next steps, but I don’t think you would see a lot of walking away.

One final point — I do think we would have seen a pretty different case yesterday if a much narrower set of tariffs had been on the table. If the tariffs had just been on India for its purchases of Russian oil — something we’ve long used IEEPA sanctions to deal with — I think you would have seen a very different tone yesterday. But the Justices are looking at a whole panoply of tariffs, and that framed the skepticism we heard yesterday in many ways that we wouldn’t have heard if Trump had, in fact, used this more judiciously.

The question I wanted to ask Oren, sort of looking forward, is about Congress. The small-c constitutionalist in me thinks if we are going to have a reform in U.S. trade policy as big as the one we are currently undertaking, that is fundamentally a congressional prerogative. For this sort of thing, you should go to Congress and get legislative change. I’m also a realist, having dealt with Congress for many years, and I know all the challenges of getting Congress to do anything. I am interested in hearing your thoughts: Do you think there would be a path now in Congress, or over the next year and a half, to getting Congress on board with major changes in U.S. trade policy, or do you think, practically speaking, we are just not there?

Oren Cass: I think there is definitely a path forward. I divide the tariff policy question into three camps — the global tariff question, the reciprocal tariffs and negotiations with allies, and then China.

All of the reciprocal stuff going on, trying to strike new deals — do you ultimately get a USMCA that needs to go to Congress? Maybe. I don’t know what it would look like to legislate that piece of it. That’s why I’m most sympathetic to figuring out how the president has the authority to conduct what feels more like foreign relations to me.

When it comes to the global tariff, when it comes to China, I think there’s a path to move in Congress, and I think it is what we need. If you’re going to have a stable new expectation domestically and globally of what U.S. trade policy is, there is some — not a lot — bipartisan support for some sort of global tariff. If you didn’t have the incredible polarization of Trump on top of things, you could certainly see a world where Democrats would be at least as enthusiastic as Republicans about doing something here.

When it comes to China, I think there is definitely support. The main move would be to repeal Permanent Normal Trade Relations (PNTR). That is where you have very substantive and promising legislation with many co-sponsors. If you made a political push on that, it is hard to envision who exactly these days would be fighting to maintain PNTR with China.

I think those are the two places the administration should focus, and there is some potential that they could or would. Ultimately, it comes down to — can anything move through Congress? You have to be sympathetic to some extent to an administration saying, “Well, if we can’t even fund the government, it is hard to envision getting a big bipartisan win for the president on elements of the trade stuff.”

Fortress North America

Jordan Schneider: Oren, we talked earlier about how Australia should be the most excited about this ruling, not really China. You have this vision of a grand strategy of reciprocity. I’m curious — to what extent could a Supreme Court ruling back the president into the type of global trade relations that you’d actually be more excited about?

Oren Cass: I don’t know that a Supreme Court ruling could have that direct effect. I think in a world where you get the kind of ruling I think is most likely — one that signals to the administration, “You have a little more time here, but you do need a different plan” — that is probably the best prospect to then see a focus on moving in Congress, which I think would be useful.

But in terms of what the overall strategy is, that is where we’re still waiting and really need the clarity from the administration, mostly from Trump himself, on where this is all going. Is the goal to get a big deal with China, or is there a recognition that there isn’t really a deal to be had?

We are right at the point now where what a renegotiated USMCA is going to look like is very much in focus. I see that as the linchpin of whatever we are building. USMCA, as it is structured and agreed to, will be the template. The administration needs to articulate very clearly what we actually want from USMCA if we are going to not just demolish the old system (which I think needed demolishing) but actually be building something better.

Peter Harrell: I very much agree with you, Oren, that USMCA is the linchpin. We are right now getting comments due to USTR on what stakeholders want out of USMCA, and I think this is going to be the central issue. If the Trump administration is going to succeed over the next three years in building a new order, as opposed to just putting the final nails in the coffin of the old order, this is absolutely the linchpin.

There are a couple of reasons for that, not least that these are the trading relationships where we have by far the most leverage. We import 80% of Mexico’s exports. These are wildly asymmetric trading relationships in terms of our leverage. Putting aside all the strategic interests we have in North America, this is the opportunity we have from a tactical negotiating perspective to really negotiate something very new and very interesting. I certainly hope the Trump administration takes advantage of it.

I was actually quite interested two weeks ago when we got the first actual deal text of what some of USTR might be thinking from the Cambodia and Malaysia trade deals. There are actually a lot of interesting provisions in there to unpack. I give the administration quite a bit of credit for some of the details they put in those deals. But we can make those much more real and deeper in the USMCA context. That is where we can really start the process of building a new order.

Jordan Schneider: You want to highlight some of them, Peter?

Peter Harrell: Yes, we can start with the China-focused provisions of the Cambodia and Malaysia deals. A lot of this will, of course, need to be implemented, but let’s start with the promising parts.

You saw both Cambodia and Malaysia agree that if the U.S. raises a tariff or non-tariff barrier — for example, a restriction on Chinese telecommunications equipment — we can notify them, and they have committed to taking comparable action under their domestic law. If that is followed through, that is a huge win for the United States.

It was also interesting in Malaysia. One of the things the Trump administration and others worry about is what Chinese companies are doing in third countries — are they setting up factories in Malaysia and then dumping products into the U.S. market? Malaysia and Cambodia committed that if we raise concerns with them about the actions of Chinese companies in their markets that impact our market, those countries would take action. Both countries also committed to setting up an investment screening law. These are commitments we have to see implemented, but there were some very promising signs coming out of those deals.

Oren Cass: I want to jump in on the USMCA point quickly. I agree exactly with what Peter was saying about these other deals — both that they are very interesting, and that how robustly you can implement those sorts of commitments with Cambodia remains to be seen.

Those kinds of commitments in a USMCA, however, become a total sea change in the way trade policy is conducted globally. In my mind, what is so important about USMCA is, firstly — it’s where we have the most leverage. We should treat Mexico and Canada well, respectfully, and as equal partners, but they do not really have other options, creating a unique opportunity for the U.S. to define what it wants.

Then, because of the history going all the way back to NAFTA, there is a capacity to robustly implement and enforce commitments in a way that will become a proof of concept for this stuff actually happening beyond just being on paper.

Finally, if we successfully structure USMCA in a way we want, it then becomes a fallback for us relative to all other negotiations — what some folks in Washington are now calling Fortress North America.

If the U.S. were truly going it alone, you could have real concerns. But if the U.S. is going forward with USMCA, with the size of that full market, the security commitments, and the diversification that Mexico and Canada bring, the U.S. can credibly say, even to Japan or the EU, “Here are the USMCA-like terms. We would love to have you in our trading bloc. If you’re not up for that — if you are insisting on remaining open to China, if you’re not willing to commit to bringing greater balance to trade — then good luck to you, because we actually have something better than continuing to work with you in the way you have been working.” If we can get this right, the U.S. then has the foundation to build from an improvement on what the prior system has been and a credible fallback for any other negotiations taking place.

Jordan Schneider: Peter, how credible is “Fortress North America” — the trade side of the Monroe Doctrine?

Peter Harrell: I think this could be pretty credible, and I do think it creates, as Oren says, this potential gravitational pull that then gives us more leverage in our trade negotiations elsewhere. I think this is pretty credible. It will require complicated, tough negotiations, and it will require a disciplined and sustained focus on this issue over six or nine months, which has not always been the President’s strong suit. I know that his trade team — Ambassador Greer and Secretary Lutnick — see this. I am optimistic that we are going to see a very interesting deal come out of this. We are going to see a bit of an attractive fortress that other folks will start wanting to join, starting in the back end of next year.

Oren, I really enjoyed your recent piece in Foreign Affairs where you argue for a grand strategy of reciprocity. The way I read your piece, you are arguing there should be three core elements to a trading bloc — commitments to take care of our own security, commitments to balanced trade, and commitments to getting China out of our operating system. I wonder if you could unpack how you are thinking about this and how feasible you think it is as a strategy.

Oren Cass: I think it is certainly feasible, given the steps we are already taking in this direction. We are seeing in these negotiations with countries that should be U.S. Allies on all three fronts an acknowledgment that this makes sense.

It is a starting point for other countries to acknowledge that the U.S. has a legitimate concern about balanced trade. Frankly, these other countries do as well. The funny thing about Germany or Japan, which have been the flip side of a lot of these imbalances once you set China aside, is that their economies are suffering from it as well. It has been a problem for Germany and Japan to be suppressing domestic consumption and relying so much on exporting. There is a potentially mutual benefit in moving to a more balanced model.

Likewise, when you think about China, everybody enjoys the short-term sugar high of the cheap stuff from China, but everybody also recognizes the long-term danger. One of the really interesting effects of the way the U.S. has started to confront China is that it heightens that pressure on everybody else. People ask why the U.S. didn’t just get together with allies and agree to confront China together. The answer is because no one else would have been willing to do that. The Biden administration tried that for four years, and asking nicely just doesn’t get you anywhere.

Peter Harrell: Yes, we certainly talked about it.

Oren Cass: It is not a novel concept that Western democracies should confront China, and obviously, that would have been great. The reality is that for many of the same reasons the U.S. political system refused to address it for so long, other market democracies have had a real problem doing anything about it, and cajoling just did not get us where we needed to go.

Credit to Trump: when you actually say, “Fine, watch this,” not only do you prove you can do it, and obviously, this is not free — there are costs — but it has not destroyed the U.S. economy to have very high tariffs on China and to be starting to drive a real decoupling. All those surpluses then start to backwash instead into the EU, and the EU now faces a much sharper choice than they were before. At least they are really put to the choice now in a way that they were trying to avoid.

You see these model agreements, even with Cambodia or Malaysia. You have certainly seen Mexico take the need to confront China more directly very seriously. Canada is busy on its quasi-liberal fainting couch about all of this, but at some point, they will get serious as well. That side of it is painful and costly, but it is in the mutual interest of all of these countries.

The third piece, security, is the same story. Cajoling and saying, “Hey, guys, wouldn’t it be great if you actually took your own security seriously?” is not a novel concept. We tried that for a very long time, and it simply did not work. What you are now seeing within the Trump framework is much more serious commitments in Europe and Japan to actually taking responsibility for security in their regions. It is a realization that that is good for them. It is expensive, but it would be much better if Japan, Korea, and Australia could credibly deter China over Taiwan. Plus, if Taiwan actually spent on its own defense, instead of everyone looking over their shoulder, wondering if they’ve done enough homework. The same applies to the EU — if they want to deter Russia and be secure in Europe, the way to do that would be to deter Russia and be secure in Europe. By putting them to these choices, it is understandable why they are sulking and frustrated, but if you step back and look at it from a neutral perspective, it all actually makes a lot of sense.

Jordan Schneider: I did a show last night with Jake Sullivan, and “How hard could you have pushed the Allies?” was, not surprisingly, a theme. The one hypothetical he did deeply entertain was the one where you just do the Foreign Direct Product Rule (FDPR) on the semiconductor export equipment and say, “Sorry, Korea, sorry, Japan, sorry, Netherlands, we’re the hegemon. Deal with it.” I’m curious about your reflections on this. My hypothesis was that Biden went into office with the central thesis being, “We need to repair our alliances.” If that is your core principle, then doing the thing that Oren highlighted — the United States saying, “Do this and stop that,” but rarely saying “or else” — your “or else” credibility just isn’t really there.

Peter Harrell: President Biden was very alliance-focused. Going back to his days in the Senate and as Vice President, he truly believes, going back to his memories of the Cold War, in cooperative games rather than confrontational games. A clear directive from the President was that we should focus on working things out and use inducement-oriented cooperation on China, as opposed to a threat-heavy approach with our allies.

I do think one of the lessons of the Trump era that we should be taking seriously as a country is that sometimes you need to be prepared to deliver a firmer “or else” message. That is a really important takeaway.

I actually think there is another, deeper critique of the Biden administration’s trade policy — although it had a clearly thought-through geopolitical logic (“Let’s get our allies and partners on board”), I actually think the Biden administration did not have a clearly thought-through economic logic of what it wanted out of trade policy. It was too internally torn — are we now in an era where, from our own economic self-interest, we actually want higher tariffs because we are trying to onshore manufacturing to the United States? Or are we still in some version of a neoliberal world order, at least among allies and partners, where there are very low barriers?

What you saw was an effort at a trade policy purely through the lens of geopolitics and not through the lens of economics. I posit that that was never going to work. Trade policy has to be about your economic vision — what do you want economically as a country out of this, not just geopolitically. That was the more foundational challenge, though I agree that when it comes to China, there is a clear lesson — we should have been prepared to be a little bit more stick-heavy.

Chip Bargaining + Trump’s China Philosophy

Oren Cass: Peter, I totally agree with your characterization of the Biden administration on the economic side. It seems to me less that they were unclear than that it was a house divided against itself. Ambassador Tai had a very clear economic perspective, but Secretary Yellen probably had a very clear opposite economic perspective, and I’m not sure that was ever resolved.

The China question is really interesting, though, because I look at Jake Sullivan’s “small yard, high fence” formulation, the first half of which is “small yard.” It seems to me that even toward China, the view was that the relationship was going to be viewed solely through a geopolitical lens, and there was this very small set of national security concerns to be narrowed as far as possible to ensure that a hypothetical broader, constructive relationship could still flourish. I’m curious if you think that’s fair to say that’s where the administration was or how you think “small yard, high fence” translates as a China policy.

Peter Harrell: I have two responses to that. First, Oren, I agree. When I say that the Biden administration did not have a coherent economic theory of the case on what it wanted out of trade policy, I very much agree that that was probably the result of many diverse views in the administration that were never reconciled. It was a problem of getting to coherence among divergent views.

On the question about China, it is interesting because I think, on one hand, many of the senior officials in the Biden administration, including the President himself, bought into this conceptual frame of a small yard of restrictions with a high fence, where most trade and most relations would be allowed to continue. I do think the administration was both internally divided and never got to a coherent perspective on how wide that yard is.

I remember once I was in Europe, and a friend showed me a meme going around about Jake Sullivan’s speech. It was a photo of a European chateau surrounded by acres and acres of lawn, with meme language saying, “This is Jake Sullivan’s yard.” There were certainly views about how wide the yard was.

Jake, to his credit, actually did have a view that it should be narrow. I think other people thought it should be wider. This is one of the fundamental questions we as a country need to coherently resolve — do we think we should have a 20% decoupling with China? Should we have a 50% decoupling? Or do we have an 80% or 90% decoupling? We need to start with what we think the end state should be and then build from that.

I personally am in favor of a fairly broad decoupling. I don’t worry too much about furniture, shoes, and garments from a national security perspective, but I do think we should have a pretty broad decoupling from China because I think it is in our strategic interest to do so. I also think, over time, it might actually provide some strategic stability to the U.S.-China relationship to be more decoupled, because we wouldn’t have these ongoing blow-ups and concerns about rare earths and things like that. We could have a less economically dependent relationship where we could then talk about strategic issues and maintaining geopolitical stability. That is not the view in my party (Democratic) or certainly not in the Biden administration. I think there was not a view that we should be 60% decoupled — I think it was sincerely something much narrower.

Oren Cass: I appreciate you making that point about this actually being a potentially more stable relationship because I think that’s super important. The thing that drives me most nuts in these conversations is this finite, descriptive term — I won’t use “midwit,” but it’s appropriate — for the idea that, “Well, countries that trade with each other don’t go to war, and if we disrupt our trade relationship, doesn’t that ensure World War III?”

I honestly don’t know where this idea came from. We had two world wars break out among countries that were literally bordering each other and closely economically intertwined. Then we had a 50-year Cold War where we agreed to have two systems that were mostly separate, and that was a far more stable arrangement that allowed for much less hot conflict. I don’t understand why we think that trying to manage the integration of these two completely different economic and political systems, two countries that are adversaries, is somehow a more stable world than one where we actually do decouple and concede each other spheres of influence. That strikes me as a much more stable arrangement.

All that being said, you see in the Trump administration almost an inversion of what you were describing for the Biden administration, Peter. In this case, you have much more consensus on the economic picture, but much less clarity on the geopolitical side. A lot of that comes from President Trump himself, who has been too consistent on China. You go back 30 or 40 years ago, his attitude was, “We’re getting screwed, we need a better deal.” When he ran for president in 2015, “China’s screwing us, we need a better deal,” was the almost out-of-the-Overton-window hawkish position. Everyone got locked in their heads that Trump is the China hawk. They spent his first term trying to get a deal, and he got the Phase One deal, which did not resolve a lot of the fundamental issues.

Since 2015, broader economic and political views in Washington have shifted so far that “We just need to get a better deal with China” is now the sort of dovish position, almost outside the window to the other side. As far as I can tell, that’s still exactly where he is. Trump still thinks we are getting screwed by China and need to get a better deal. You see him very focused on this idea of how to get a deal with China, which makes him the ultimate China dove within the Trump administration.

There is a very clear focus economically on this idea of reindustrialization, reshoring, and balanced trade that is consistently held and articulated by Trump, by Vance, by Bessent, by Lutnick, by Greer. That is terrific. On the question of what the actual goal or end-state status quo with China should be, I don’t think we are hearing as much clarity as we need to see.

Peter Harrell: That’s a really interesting point. It does look to me like former President Biden and a bunch of his senior staff saw China as a geopolitical threat — lots of focus on Taiwan, lots of focus on the military strategic issues. Economics were important but were probably less important overall than the strategic issues.

I look at Trump, and to your point, it is very interesting — it is not at all clear to me he sees China as a strategic threat or a military enemy. He clearly sees them as a trading threat and as a country that has been ripping us off for years. But he also thinks everyone else has been ripping us off for years. It looks like he may think, “If I can resolve the trade issues with China, I’m not as worried about these strategic issues.”

Oren Cass: The two best proof points of this are,

1. He is still very interested in Foreign Direct Investment from China. You have seen him out on the campaign stump saying, “Maybe we should get BYD to come build factories in the United States.” If this is just about the economics and there is no geopolitical or strategic concern, then yes, we like that Toyota is here, so we should get BYD here.

2. The other place you see this is on the advanced AI chips. There are people trying to do this “galaxy brain” argument where, “If we can get China hooked on the Nvidia chips, this will ensure that China adopts an American AI stack.” This sounds like things people were saying about moving production to China in 1999. The actual motivation seems to be, “The goal was to sell more stuff to China. One of the things we are really good at making is advanced AI chips, so we should sell them to China.”

That is wrong, but I have more respect for it because if you only care about the economic side and you do not think about the geopolitical side at all, then it kind of makes sense. On both these issues, you see very clear, ongoing, robust debate within the Trump administration. This debate is not from a bunch of people who are unsure, but from different people with very concrete perspectives. In a sense, Trump himself is the outlier on some of this at this point.

Jordan Schneider: The weird thing is that in the Biden administration, when there were disagreements, you just kind of didn’t really have any action or decisions. In Trump world, when there are disagreements, we just change our minds three times.

Oren Cass: You get them all at the same time. Exactly.

Peter Harrell: Yes, indeed. I’m curious about the chips issue, Oren, because you have obviously been writing quite a bit about this lately. From where I sit, having seen that Trump got through his meeting with Xi without seeming to put the high-end Nvidia chips on the table, I viewed that as a very important development for U.S. national security. Credit to the team around Trump and to Trump for seeing that we should not be putting our highest-end capabilities in the hands of the Chinese, given the intense competition and where we are in the state of the race. I am curious if you think this is going to stick. There is a piece of me that’s a little worried: It was great in Asia that you didn’t do that, but are we going to see Jensen in the Oval Office in another three weeks and some revisiting? How do you think we can make sure this sticks going forward?

Oren Cass: You described the dynamic exactly right, Peter, which is that there’s a live-to-fight-another-day element here. I don’t think this reflects a resolved, finalized, “not selling chips to China” policy. But look, at the battle-by-battle level, there was a meeting where that could have gone either way, and it went the right way, and that’s great. That’s certainly better than the alternative.

More broadly, this is ultimately best understood as one dimension of the larger China discussion. That’s part of the reason I’ve become so interested in it — we’ve been doing a lot of work on it at American Compass — it is very much the tip of the spear litmus test for how you think about China because it is so clear and discreet.

To your point, yes, there’s this much broader discussion — what exactly does decoupling mean? What share of trade are we talking about? How much is it trade versus investment? What does it mean for allies? All of that is super important, but it doesn’t lend itself as nicely to a clear pro/con debate in a lot of cases. It’s really important to have clear, distinct questions that you can anchor on, which make people put their underlying assumptions on the table and say, “Look, if you believe X, you come out this way on the question. If you believe Y, you come out this other way.” That’s where something like, “Does it make sense to sell advanced chips to China?” or “Does it make sense to have BYD investing in the U.S.?” are such useful places to focus the policy discussion.

On the chip debate, I think it’s very much moving in the right direction. It’s notably a place where you’re seeing Congress be somewhat active even in the face of the Trump administration. The GAIN AI Act, which is frankly a very narrow policy — all it says is you can’t sell advanced chips to China where there is literally an American company saying, “No, please let us buy the chip instead” — even that the Trump administration initially signaled its opposition to. That did not stop Republican senators, Senator Banks, and Senator Cotton, the co-sponsors, from saying, “Sorry, we think this is important.” It’s in the Senate version of the NDAA.

That is one very important political dimension to it. Another is looking at where the tech sector is aligning around this stuff. We all know Jensen at this point, and it is genuinely bizarre to me how far out he and Nvidia have gone in ways that have just ruined for a generation their credibility as at all interested in either good-faith political engagement or the American national interest. If I were a long-term shareholder, I would be very upset that that’s the way that they’ve gone.

Jensen is trying to talk his book on selling into China even as he increasingly goes into arguments that, to try to make his case, he now has to be out there saying he actually doesn’t even think it matters who wins on AI, or he thinks China’s going to win on AI, or he thinks China wants to be a market country where American companies succeed. The arguments just get increasingly ludicrous in a way that makes it harder and harder for the administration to say they’re siding there. You’re seeing the rest of the tech sector get pretty fed up with it too. It was really notable — you had Palantir’s chief technology officer write an op-ed in the Wall Street Journal essentially calling Jensen Huang a useful idiot.

Jordan Schneider: In the Wall Street Journal, and then the next week signing a deal with them.

Oren Cass: Right, so this is then another really good example. Palantir signs a deal with Nvidia, and the way they celebrate it is to say, “We’re so proud to be working with Nvidia because Nvidia’s technology is so key to U.S. leadership in the geopolitical competition with China and re-industrialization.” It’s such an incredible passive-aggressive move.

Obviously, everybody is scared of Nvidia because they want Nvidia chips. You even had Microsoft come out publicly and say they supported the GAIN AI Act. I think everything has been moving in a good direction on this. We are winning in the present tense, the fight. But as Peter noted, and I would acknowledge, you are always one Oval Office meeting and tweet away from heading the other direction. So frankly, this is another argument for Congress to be involved, as we were talking about back in the broader trade context. The question of our export control policy toward China ultimately should be legislated, permanent, and stable. It is an issue where there is bipartisan agreement, where this is Congress’s role, and I think they should make a law.

Jordan Schneider: Two things. First, listeners of the show will have heard many guests who are in favor of strong export controls to China. What is remarkable to me is how hard it has been to find someone to talk the other side of this who isn’t directly financially compensated by firms that would make money if export controls were lifted. It’s not for lack of trying for me to get another side of the debate, but if you’re out there and you’re sharp on this stuff and you want to make the case, send me an email.

Peter Harrell: Jensen should come on the podcast.

Oren Cass: Jensen is eager to say foolish things on every podcast. I’m surprised he hasn’t called.

Jordan Schneider: I’ve sent the email.

On the second point, say you actually have legislation — does that change the sort of escalation/dominance dynamics around this stuff? If China is trying to undo something, then they can threaten X, and then Trump will have to tell his Commerce Secretary, “Don’t do Y.” But if it comes out of a bill, then it’s less easy to negotiate about. Then, trying to threaten the Senate Commerce Committee gets them even more angry and they say, “Go screw yourself.” I’m curious how you think this escalation stuff would play out if it was really Congress that took the front role here.

Oren Cass: Peter, I’m curious what you think about those dynamics generally these days.

Peter Harrell: Let me offer a couple of thoughts, first on the export controls front because we’re talking GAIN AI, and then maybe coming back to the trade front.

The way I see it, for national security reasons, we should not be in the business of offering our most advanced chips to China. I don’t think this is something we should be negotiating over as part of our trade deals. There are plenty of other things we can negotiate with China. The idea that Congress would take this particular issue off the negotiating table, I see that as being in the U.S. interest rather than against us. From a negotiating perspective, it cuts both ways. The administration can’t offer it, but again, I don’t think they should be in the business of offering it. The flip side is they can just tell the Chinese, “I wish we could talk about this issue, but I can’t. We’re going to have to work something else out.” It changes that negotiating dynamic, but it doesn’t necessarily make it an unfavorable negotiating dynamic.

On the trade front, and this was a little bit lost in the debate yesterday back to the Supreme Court case, I actually think from a negotiating escalation/dominance perspective, there is more flexibility in the other trade statutes than they get credit for. I look at Trump’s first-term trade actions on China, and he used Section 301 pretty effectively to counter-escalate when China escalated on the U.S. That use of Section 301 to counter-escalate was upheld through the intermediate appellate courts when that got litigated. So I actually think that these other tools, once an administration does its homework — certainly for more competitive and adversarial countries like China — to build the regulatory basis for these tariffs, I think they would still find these tools to be reasonably effective.

From a negotiating leverage perspective, it is certainly true that Trump couldn’t use a Section 301 to threaten 10% tariffs because he is angry about a TV ad. But, on the other hand, he shouldn’t be doing that anyway.

Oren Cass: The point about it being good to take things off the table when we don’t want them on the table is exactly right.

The one other thing I would just add about the escalation/dominance discourse is that there’s almost a “tell” in the phrase escalation dominance. It sounds super exciting and cool, and it’s what all the people who in the past would have been planning various wars are now really excited to game out. It’s not clear to me that either side here wants to do any of that. It’s a little bit like mutually assured destruction, where I think both sides accept that they can cause massive pain to the other side. Who can shoot the most nuclear weapons at the other side is at some point not an especially important determinant.

Especially because in this case, I think we’re actually moving toward a situation, you can call it a détente, but a situation where both sides actually do kind of want to decouple. If you believe the U.S. wants to decouple, then you have that side. President Xi’s policy for a long time now has been to essentially develop total self-sufficiency, to not be dependent on anybody, certainly not the United States, for anything. While China certainly enjoys being able to sell lots of stuff to the U.S., one thing we’re seeing is that insofar as China’s commitment is simply to grow manufacturing and export, they have other places they can do that. Longer run, they are much like Germany and Japan — they are going to have to address their domestic imbalances and domestic consumption.

It seems to me that both sides kind of want to be at a 40% or 50% tariff with a slow but steady and not too disruptive decoupling. The rest thus far has proven to be, and I think rationally should be understood as, a lot of theater.

Jordan Schneider: I don’t think that’s the right way to characterize the Chinese view. There are many Xi speeches about how he wants to get the world more dependent on China and have leverage. Decoupling to the tune of 20% where we are now to 50%, or 80% over the next five to 10 years is going to be uneconomical and cost billions of dollars on either side. How much near-term GDP growth are we willing to put on the table in order to have China have less leverage? Is the way you’re characterizing this, Oren, that it’s okay for the U.S. to have these economic nukes pointed at us, because I don’t know how you follow a lot of the reciprocity stuff that you were pushing without facing down the enemy getting a vote here?

Oren Cass: No, I don’t think so at all. Maybe I was a little bit unclear in what I was saying. A huge part of the decoupling is that you, in effect, disarm those nukes over time. Where you’re seeing the U.S. focus first is on, alongside the sort of just general shifting of supply chains, things like semiconductors, things like rare earths that are the immediate concerns. The point in my mind is that I don’t think the U.S. necessarily wants to or expects to preserve some sort of weapon pointed at China in this respect.

I agree with your point that obviously China would love to have leverage over countries, would love to have the U.S. dependent on it for some of these things. At the end of the day, though, that sort of isn’t up to China. China got to do that as long as everybody else was being really stupid. But if the U.S. actually takes seriously the need to rebuild a rare earths capacity, China can’t stop it from doing that. What would that even look like? It would be China saying, “We’re going to fire the gun now essentially and try to stop you from developing a rare earth’s capacity by threatening that if you try, we’re going to cut off rare earths now.” Yes, they could cause a lot of pain doing that. But as we’ve already seen over the last six months, even loading the gun just leads to more rapid commitment to building up the alternative capacity. And in firing the gun, the U.S. has a lot of guns it can fire back.

If you actually game it out, I just don’t see an end state. From either the U.S. or the China policy planning perspective, I don’t see how you could be expecting to plan for a world where you’re maintaining that kind of leverage long term. If you accept you’re not going to have it, then the question is, what’s the path from here to there? Is it worth blowing up a bunch of stuff on both sides in the meantime, or would you rather minimize the cost to your own side? I think both sides are rationally trying to do it in a way that minimizes the cost to their own side.

Peter Harrell: Jordan, my view is much less informed about Xi’s thinking than yours is, and I’m very well aware of that. It does seem to me that while Xi probably does want to keep the world broadly hooked on certain Chinese choke points, he has to be clear-eyed that if the U.S. continues to stay organized the way we have been over the last couple of years, and particularly frankly, on rare earths this year as the Trump administration has gotten very serious about it, he is going to lose that leverage at least vis-à-vis the U.S. Maybe the Europeans won’t get organized. He might be able to keep that leverage over other partners. I hope not, but he might. It just strikes me as a solvable problem from our perspective, and he strikes me as not stupid, so he has to be able to see that coming.

Jordan Schneider: It’s interesting what’s solvable and what’s not solvable. Is the world going to recreate the solar manufacturing ecosystem on the scale that China has, or the EV manufacturing ecosystem on the scale that China has? Perhaps. But rare earth seems like a much more manageable thing. We’ll see.

Supreme Court Improv

Peter Harrell: I listened to two and a half hours of the Supreme Court argument. I think this is the first one I’ve heard in maybe 10 years, and I just have some anthropological observations I’d be curious about both of your thoughts on. First off, it was refreshing to hear political discourse that is sharp and grounded, and they’re talking about facts. Second, I have this new hobby of listening to podcasts where these Orthodox or Ultra-Orthodox rabbis give their interpretations about the week’s parsha, and every eighth word is in Yiddish or Hebrew. Also, when I listen to Chinese podcasts, I understand about 85% of it. That was kind of what I felt here, where they’re just jumping around between all these cases, and you can kind of get the gist, but there is this level of arcana that is pretty impenetrable.

It did feel odd that we’re referencing people from 250 years ago, like they really matter today. There are not many other venues in society where we’re going back. It is kind of rabbinical, right, where you care about Rashi or Rambam the same way you care about Jefferson or Madison and how they thought about tariffs in 1802, or what have you.

The last thing — those poor solicitors, man, this is really stressful. They just get interrupted all the time, and they’ve got to think quickly on their feet. There was one moment in there where some judge said, “This point doesn’t make sense anymore.” After four back and forths, the government lawyer said, “Yeah, I guess so. Okay, let’s just move on.” That must be a lot. It’s very much like theater, like improv. You’ve got to know your stuff incredibly well.

Peter Harrell: Hopefully, you want to watch some more, right? Is this your future entertainment here? Instead of podcasts, you can listen to Supreme Court oral arguments.

I have a couple of reactions to that, Jordan. First of all, I agree with you. It is refreshing to hear a lively debate where you have people who clearly have an open mind and are grappling with multiple sides of an issue. I actually think this is what we want our court system to be doing. It did not strike me as particularly partisan. That’s not to say you couldn’t see Justices’ views coming into the courtroom — of course, you could. But you saw Justices grappling in a serious way with the complicated issues in front of them.

I agree it’s got to be hard for the lawyers arguing these cases. They were all, I’m sure, mooted many, many times. I’m sure they did lots of rehearsals for this. This is not something you wing it going into, but you certainly do have to think on your feet.

History — that is kind of the way our law works. You’re trying to build off of precedent. You’re trying to think about what the precedents are. You’re trying to relate the precedents to the facts in front of you. On the thing that came up that is most historical in that case—and here I’ll go a little weedy—the challenge the government has in this case is that, as you heard the Solicitor General concede, there is no other part of American law where the phrase “regulate... importation” includes the power to tariff. There’s no other phrase in American law where “regulate” by itself includes the power to tariff. The government’s argument, and it’s certainly true, is that back in the 1790s to 1820s, everyone understood “importation” as including a power to tariff. They kind of have to rely on this early historical understanding of that phrase because of the absence of more contemporaneous precedents in support of their position.

Jordan Schneider: One more question for both of you guys. Do the arguments actually matter? There are hundreds of pages written on all of this. Is the quick quip you have in response, which was only going to be about 150 words anyway, actually going to persuade a judge one way or another?

Oren Cass: I agree that that oral argument seems majestic and open-minded and the kind of deliberation we want. If this case were being heard two years ago about a Biden administration use of IEEPA to try to force a global climate agreement, do you think those nine judges would have simply been asking exactly the reverse set of questions in preparation for voting exactly the opposite way, or do you think this is how the conversation would have gone?

Peter Harrell: You would have seen a different lens. I think you would have seen a shift in the window of the debate there for sure. I actually don’t think you would have seen a radical 180, though. I think you probably would have seen the Chief Justice, Justice Roberts, and Amy Coney Barrett being a little bit more skeptical, but they had some skepticism yesterday. I think you would have seen Kagan and Justice Jackson more sympathetic to the government. But I think you would have seen them worrying about some of the presidential concerns that we saw Justice Gorsuch asking about yesterday.

And how this might play out over time. I do think it would have been a shift, but I don’t think it would have been a 180.

To your question, Jordan, about whether the oral argument does matter — I think probably in many cases it doesn’t matter. As you say, there are literally thousands of pages with all the amicus briefings and everything else in front of the court. But I do think there may be a couple of moments that I could see mattering yesterday.

For example, the strongest intuitive argument that the government has going for it — not really legal, we can talk about the legal — the strongest intuitive argument that the government has going for it is that if IEEPA would let President Trump embargo the world (and IEEPA does form the basis of embargoes on Russia and embargoes on Iran), if IEEPA would let us embargo the world, why does it not allow a tariff as a lesser measure? If it would allow an embargo, why doesn’t it allow a tariff? You could see a couple of the Justices really trying to grapple with that sort of intuitively very appealing argument.

What you heard the Oregon lawyer say, which got a laugh in the courtroom, was, “Well, it’s not that the tariff is a donut hole — it’s that it’s a different kind of pastry.” I think that is the kind of thing that will matter. If the Justices are not going to read a tariff authority into IEEPA, they will have to be persuaded that the tariff is just different from these other kinds of powers that are in IEEPA. I don’t know where that will come down, but that debate strikes me as something that you could actually see the Justices grappling with. A couple of them seemed open on the question, so maybe it will matter.

Jordan Schneider: Yeah, PolyMarket had it from 40% down to 20%.

Oren Cass: Wait, in which direction? What’s the contract for?

Jordan Schneider: There were two. I cannot believe PolyMarket hasn’t started sponsoring ChinaTalk yet I’m starting to get a little offended! The market was “Will the Supreme Court rule in favor of Trump’s tariffs?” It was at 40% when the debate started and is now sitting at 25%. Then there’s another market — “Will the court force Trump to refund the tariffs?” which started at about 8% and is now up to 16%.

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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3 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.