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Notes -
Minor update on the US-PRC tech competition.
Culture war significance: it matters for the grand strategy understanding and the narrative of the US as the Main Character of History. Personally, I had stopped regularly engaging on this forum when it became clear that the US is, in fact, not such a Main Character (at least for the moment), but just a great power with massive momentum and cultural influence. Not being American, I mainly only care about American cultural affairs insofar as they have global spillover effects. Local legislation news and woke-MAGA strife are overwhelmingly noise for the world, unless they reach some critical volume like peak woke or BLM did. Some American tech, and related politics, is very much not noise. The chip war in particular is very high-signal, so I follow it closely.
It seems something happened behind the scenes after those events in October, when the US Department of Commerce went with the Affiliate Rule, China retaliated with REE+ export controls, and soon enough, by November 1, we've got the usual Trump style Deal. (There's also a subplot with Nexperia/Wingtech, that demonstrates Chinese supply chain power and European ineptitude again, with a similar outcome of the Western actor retreating). Suddenly, on Dec 8, we get the news about Trump permitting the sales of H200 to China (context and understandable rationalist perspective here). China reacts somewhat paradoxically, if your theory of their mind is just «they're desperate for our chips» – as per the FT, «Companies seeking to purchase the H200 would need to submit a request explaining why they cannot use domestically produced chips and undergo an approval process», in continuation of their earlier scrutiny, rejections and negative publicity directed at H20s.
10 days later Reuters breaks the news – which were not quite news for those in the know – about Chinese successes with their EUV effort. The article is somewhat confused, as almost all reporting on Chinese AI and IC tech is; from my private sources, the situation has already moved further on multiple components, like optics and metrology.
What I want to emphasize here is that it's not just trivial «industrial espionage» or IP theft. Their light source project is led by former ASML head of light source technology and «Light source competence owner for metrology in ASML research» Lin Nan. I think that he returned not just for money, nationalism or career opportunities, but because China offered him a more ambitious challenge – he seems interested in solid state lasers, which ASML, constrained by market incentives more than strategic considerations, gave up on. For sure, straightforward IP theft also happens - CXMT's DRAM/HBM progress is apparently propped up by Samsung IP which was, well, illicitly transfered by former employees. And there's very substantial domestic talent pipeline, though people are prone to dismiss their patent/paper counts; they lack brand power, «Changchun Institute of Optics» doesn't have the same zing to it as Zeiss, though you may see it in the news soon.
All in all, China is moving far faster than even I imagined. Now we get reports – straining my credulity, to be honest – that ByteDance doesn't expect Nvidia to sell move than a few hundred thousand cards in China, not because of any trade barriers from either side, but because adequate domestic competition will come online in mid-2026 already. Almost certainly it'll be worse and less power-efficient, at least. But clusters with Chinese hardware are eligible for electricity subsidies, and that may be enough to tip the scales? This logic is corroborated by the surprisingly low leaked price of H200s – just $200.000 for an 8-card module (not sure if that's before of after 25% Trump Tax, but in any case very low, maybe lower than in the US proper, at least pre-tax). Meanwhile that's 5 times more bang for the buck than H20s offered. On the other hand, for now Nvidia is selling old stock; new production is being discussed, but at this rate I don't expect the price to increase. One can reasonably ask if this makes any sense, given that the demand in the US outstrips supply. I think it does, both for complex strategic reasons (mainly ecosystem lock-in, which is in fact a big deal, as I explain here) and simply because the US AI market is becoming a very convoluted circular Ponzi scheme where Nvidia de facto subsidizes companies to buy Nvidia wares. That's more of a potential market meltdown recipe than a revenue source. H200 sales to China, for what it's worth, unambiguously pull in dollars, and both Jensen's fudiciary duty and Trump's deficit-slashing mandate (and to be blunt, likely Trump's corruption) create a strong incentive to greenlight them.
Anyway, what looked like Chinese bluffing and negging at the time the sale of H20s was debated looks more and more like genuine, coherent industrial policy. China is pretty sure it'll have sovereignty in the entire stack of AI development, soon enough, that it will even be capable enough to export its AI hardware products, and the US is acting as if that is likely true – as if the competition is about market share and revenue. They are obviously compute-constrained right now, so DeepSeek V3.2 only catches up to around GPT-5 level, with the usual complaints in the paper. They don't appear to mind this enough to bow and scrape for more American chips at any cost. A large component here is that what they need, they can often rent overseas openly –
– but I think it's primarily about confidence in the domestic supply chain.
Long before all these events, in September, we had a debate with @aquota here, when the topic was selling China relatively worthless H20s. (For my previous take on H20s specifically see here).
He argued:
To which I've replied:
It seems to me that my read on the situation from back then, both the big picture and its implications for compute strategy, is now shared by both the USG and the CPC. The former is trying to regain its position and revenue in the Chinese GPU market and slow down Huawei/Cambricon/Kunlun/etc. ecosystem development by flooding the zone with mature Nvidia chips that will be adopted by all frontier players (eg DeepSeek again – they have a deep bench of Nvidia-specific talent and aren't willing to switch to half-baked Ascend CANN). The latter is more worried about preventing the US from doing that than about gaining moar FLOPS in the short run.
In conclusion, I want to congratulate Americans again with having found a true peer, for the first time since the decline of the British empire. Germans, Japanese and my own people had failed to provide enough stimulation, so Americans have grown lonely and fat at the top.
Aquota said:
I do not, in fact, "understand" this. Like, that may be the case and we'll just have Pax Sinica. I'm okay with it but I'm not Sinophilic enough to expect it. Even reduced to "just a great power", the US is poised to remain a historical force.
For now the loss of the indisputable Main Character status is being processed traumatically, with anger, denial and exaggeration of the costs of that loss if it were to really happen. But as its reality sinks in, this trauma may become fertile grounds for some cultural Renaissance in the United States. Less capeshit, more self-awareness. I may even come to care about it for reasons aside from global consequences.
…Of course, we can still entertain the hypothesis that all of the above is some interesting ephemera and this final dash of the Chosen Nation towards AGI-powered Rapture and completion of history is the real story of the times. I won't completely discount it, we shall see.
Does it even matter who wins this industrial competition? It might as well be a football game between foreign nations to me, and you. I just want to be, a swiss. To live comfortably without an overlord. If pikes no longer suffice, nukes.
When the japanese and south koreans copied and then bested american cars and german optics and swiss watches, did the americans and germans and swiss subsequently sink into poverty? No, they just got richer. It has never been a zero-sum game. Believers in zero-sum games end up playing negative-sum games.
I don't know what the Swiss thought of it, but Americans absolutely had a psychotic meltdown about Japanese competition. I think you don't get how intoxicating the sense of supremacy is. Switzerland is just a nation, its manufactures are just manufactures, it operates on the logic of comparative advantage. Americans have an ideological stake in being Number One.
Americans really need to brought down a peg in their delusions of self grandeur to the same level as the rest of humanity. Yes they'll wail and whine and throw tantrums about being seen as the same as rest of us but we have a duty to not humour them, after all, as they say: when you're used to privilege, equality feels like oppression.
The top level post below yours is uncritically discussing the following proposition: "is our culture good because it is American, or is it American because it is good". From the perspective of someone in Europe the complete non-consideration of the possibility that "American culture" may, in fact, not be good is galling. It's as if the possibility doesn't even register in these people's minds.
It's always satisfying to see the mighty brought low and while I have no particular love for China when the inevitable inevitably happens I'll bring out my deckchair and grab a bag of popcorn so I can watch and make snide quips from the sidelines.
Why do you post here? This is basically just snide at people you hate despite your alleged life being provided by that people.
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This kind of attitude probably carried more weight back when anyone still thought Europe had a future.
You'll take a break from posting apologia about how your current country doesn't arrest THAT many people for publicly noticing the astronomical rape rate, etc. etc.
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From the perspective of someone in America the complete non-consideration of the possibility that "European culture" may, in fact, not be superior to American culture is galling. It's as if the possibility doesn't even register in these people's minds.
"European culture" kinda isn't a real thing right now, as they're not sovereign in any meaningful sense and basically just act as US vassals. The postwar social engineering gave them a synthetic culture that lends itself only to this role.
The only sort-of exception is France, and even then, they only tend to exercise sovereignty in cases where it doesn't really matter.
Even in cases where it kinda looks like maaaaybe Europe is exercising some degree of sovereignty, e.g., fining big US tech companies, it's really more akin to acting as a wing of the Democrat party than an act of actual sovereignty. An act of actual sovereignty would be building their own social media site / web browser / mobile OS / desktop OS, and obviously that never happens to any degree of relevance (and when it does, they immediately hand it over to the Americans like they're supposed to).
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Where did the poster that you are responding to even suggest that "European culture" is superior to American culture?
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This is out of date if it was ever true at all. Maybe you could say this about a broad subset of the American Right when the Neocon movement was at its peak circa 2002 or so. But the Left has never really subscribed to that at all, and the modern Right is increasingly dominated by its own brand of oikophobes due to woke backlash.
The left absolutely subscribes to America being number one, its just their version of America instead of what America actually is or what the right and normies say they want. What the left wants is hard to pin down, but I'll stake it on some form of vague internationalist semisocialism that serves primarily to keep their own enemy, the right (kings, kulaks, landlords, their dad) in the ground and they themselves on top - with a similarly vague hope that everyone else who helped the leftist get on top of the pecking order will accept that leftists ascension as a fait accompli.
If I'm from Mars and landed my saucer in America to take it over, would you say that I wanted America to be number one, I just wanted this to be an America run by Martians?
"I want America to be number one" has to imply a certain amount of respect for America as it is or the idea becomes meaningless.
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I’m not sure what you and @TheAntipopulist mean by “the Left”. I’m sure actual American Marxists (all five of them) are genuinely committed to the international cause of the working classes. But the broader liberal left and the Democratic Party was already pretty nationalistic already, in a quiet polite Obama drone-strike kind of way. Then in the late 2010s they absorbed most of the never-Trump neocon right and now they are now absolutely rabid about it. That’s the quarter where the heavy American involvement in the Ukraine War came out of, and it’s also where you see most of the new Yellow Peril about the rise of China.
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Is it really oikophobia, or just political tribalism?
I still think that old proverb, "Me against my brother. Me and my brother against my cousin. Me, my brother and my cousin against the world." generally applies.
The modern right doesn't like woke progressives in "peaceful times", but I would imagine that after a natural disaster like a fire or hurricane, that most people, left or right, tend to put their differences aside and help each other out.
And I think with a truly "worthy foe", most Americans would set aside political tribalism pretty quickly, and band together against that foe. The problem is, we haven't had anything close to a worthy foe since the Cold War.
Economically, the Chinese are far ahead of where the Soviets were relative to the US during the Cold War, and the last time there was a hot war they chased the Eighth Army halfway down the Korean peninsula while at a severe technological disadvantage, so they seem plenty worthy to me.
For a more recent example/counterpoint (though still relatively ancient) look at the Chinese invasion of Vietnam. The Chinese got their asses wrecked in a month or so, where it took the US a decade to withdraw.
Americans have this funny, somewhat childish manner of scoring wars on style points. Basically it's a generalization of how tough guys in a bar in Alabama or whatever might boast. I lasted 10 years! I could go on, just got bored! One against ten! Machismo. Very impressive for scoring mates. The question is, have the objectives been ultimately achieved? What was the war even about? We don't really have a good understanding of what the Sino-Vietnamese war was about.
As for the objectives, here's the perspective from the other side:
It's similar to how Russians «lost» the Winter War. While it was a catastrophically bad, shameful operation and @Stefferi's people eliminated a much greater absolute and vastly greater relative share of the adversary's forces than Vietnam ever did, very impressively so, the question is: who got what he wanted? Who lost? Soviets achieved their minimal goals. Finns lost land.
Really? I thought it was a relatively straightforwardly punitive operation designed to punish Vietnam after Vietnam retaliated to repeated Cambodian aggression by invading Cambodia and decapitating their government (stopping the Cambodian genocide). Obviously the Vietnamese and Chinese both can claim to be the winners (Vietnam: we stopped them! China: we went as far as we needed to go to make our point!) but if the motives are obscure it's news to me. (And I would be happy to update my understanding here.)
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That depends on if the "FEMA tells employees to avoid houses with Trump signs" story was an isolated incident or not.
I think "most people, left or right, will probably band together in a disaster" is compatible with a single federal employee, who got fired for their actions, deciding not to help political opponents during a disaster.
And her underlings who complied with her directions
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Half of congress in the 80s had literally fought Japan in the Second World War, anti-Japanese hostility was far from purely economic.
China was at best a secondary antagonist in the Cold War (and no longer after 1972). Korea is little remembered, before the memory of almost all living Americans and the present state of North Korea means that most people have no idea of how involved the PLA was. So the last ‘real war’ that was USA vs China was what, the Boxer Rebellion?
It could change if Xi panics and decides to abandon the slow game for Taiwan (which would be surprising) by staging the most audacious possible invasion involving a first strike at American bases, but even in the event of a ground invasion (unlikely) I consider that relatively unlikely.
Some grand global game of competition in which AMERICA NUMBA ONE just doesn’t really exist in the minds of most Americans in the way it does for the Chinese or even for, say, the French. American identity is tied to more amorphous things that don’t really have anything to do with global affairs like the Wild West and country music. A Dane or Swiss will gladly lecture you on why Denmark or Switzerland is the best country on earth (both would be mostly correct). Americans don’t really do that except in a very tongue in cheek Team America World Police way and even that is mostly limited to the middle class.
Italians abroad will talk about Ferrari and Columbus and pasta. Americans abroad don’t really lecture anyone about Google and Microsoft and Chevron. It’s not shame in the German way, but it’s not really pride either; global economic and cultural hegemony just isn’t central to American self-conception.
Eh, the political class really does have Main Character Syndrome, in the sense that you hear things like "Venezuela is evading sanctions." Um, yeah? Venezuela is not, in fact, part of the US. US law does not apply in Venezuela.
The deliberate pretension of inability to comprehend this sort of thing is something the political class will have to come to grips with as the relative strength of US power wanes.
But US law does apply to US firms, and those firms are prohibited from assisting Venezuela in any way. The target of this statement is the former, not the latter.
The US is seizing tankers transporting Venezuelan oil in international waters close to Venezuela with neither the ship nor the cargo having any connection to the US. In plain English this isn't sanctions, it's a blockade. The US carefully avoids saying this through official channels, although Trump has used the word in social media posts.
The ship was sanctioned (for Iranian connections, not Venezuelan) and thus subject to seizure. Venezuelan oil exports are sanctioned. If you and (in particular) Europe wishes to use "sanctions" as some sort of intermediate path between pure diplomacy and actual warfare, there has to be enforcement of those sanctions. Otherwise sanctions are a farce.
The wording only matters in that a blockade is an act of war. Certainly Venezuela is free to respond to it that way. But enforcing sanctions isn't generally considered that.
Normally, "sanctions" refers to laws a state makes which restrict its own citizens, residents, businesses etc. (including foreign-owned businesses operating on its territory) from doing business with the sanctioned country, and increasingly to laws which restrict its banks from financing (even indirectly) transactions to and from the sanctioned country. (And it is effectively impossible to transact in USD without a US bank being indirectly involved, which is why US sanctions even in the conventional sense have such a powerful extra-territorial effect). Enforcement of traditional sanctions, like enforcement of the vast majority of laws, is territorial. States enforce laws against activity taking place on their own territory - even if in this case the aim is to produce an extra-territorial effect. The US has a long tradition of effectively enforcing sanctions by prosecuting US-based entities who trade with/finance sanctioned parties, and the EU has a long tradition of effectively enforcing sanctions by prosecuting EU-based entities likewise.
The passive voice is obfuscating what happened here. The US declared the ship "sanctioned" despite the ship being entirely outside its jurisdiction. (The claim that it was sanctioned for Iranian connections is a distraction - the ship was seized because it was trading with Venezuela. The US does not generally seize ships on the high seas based on vague "Iranian connections", because you are not pirates). The ship is "subject to seizure" as a matter of US law, because the US made a law which applies outside its territory. As a matter of international law, it probably isn't. (There are some technicalities here because most of the flags of convenience used by oil tanker operators are US client states - the situation where the US seizes a Liberian or Panamanian-flagged ship and the country of registration doesn't object is messy).
Regardless of legal technicalities, the policy here is seizing ships which export Venezuelan crude. That is the essence of a blockade. Is it an act of war? The Trump administration is deliberately blurring the distinction between peace and war here.
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Americans don't do that because we don't need to. We know we're number one, we know everyone else (especially the French, who hate it, but excepting the Chinese) knows we're number one, and there's no point in arguing about it.
Anyone denying America is #1 is silly
But on the other side, Americans going "we're #1 and always will be, lalalala I can't hear you" when anyone points out China's rise is equally silly.
What's the plan to stay #1? Because right now it's not looking like there is one (see: infinite US Navy procurement disasters, absolutely sclerotic internal politics, and the absolute whiplash of elected political leaders).
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Honestly, I think the "We're number 1" mentality is integral to American's self-conception, but it doesn't necessarily need to be on wealth/power. We were happily number 1 in Liberty for a long while without any corresponding wealth, and that high will sustain us long after our global dominance ends.
I wish I could agree. That is a future that previous generations would have been fine with, but modern Americans continue to value liberty less and less. See the steady attempts to carve away at the first, second, fourth, fifth, sixth, eighth, tenth, and fourteenth Amendments.
Just to mention a few.
The whole "private property cannot be seized" has to be one of the greatest missteps by the founders of the USA. There are lots of times where taking private property makes total sense (like income tax for example), even the US's current civil asset forfeiture regime leaves a lot to be desired.
What sort of actual beneficial policies would be prohibited by the 5A?
Also, it's "cannot be seized except for a public purpose and after paying just compensation". That's a fairly big omission IMO.
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You are unfortunately correct directionally, but you underestimate just how bad it can get in other places. We can remain "first" of a metric that craters globally for some time.
I agree, but will Americans still care that they’re first in liberty, or will they see that as an unfortunate holdover from earlier times? If things continue as they are, I think most Americans will see that as something in need of fixing, not something to proudly base their identity on.
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