Latest news with #GrahamAllison
Forbes
30-04-2025
- Business
- Forbes
Global AI Race: China's Cost Revolution vs US Dominance
USA vs China - The battle for global AI dominance The artificial intelligence revolution isn't just about smarter chatbots or flashy demos–it's a geopolitical chess match with trillion-dollar stakes. While Silicon Valley giants dominate headlines, China is mounting a relentless challenge, blending state-backed strategy with cost innovation. Meanwhile, a European Court of Auditors report states that Europe risks becoming a bystander in this high-tech showdown. To unpack this complex race in simple terms, my next 2 pieces will explore who's really ahead in the AI race, the different approaches taken, and the factors that determine what comes next. Imagine two students taking the same exam, but one (the U.S.) spends years mastering fundamentals, while the other (China) focuses on practical problem-solving. Recent results show both scoring similarly–but the latter does it faster and cheaper. Chinese models like Tencent's Hunyuan-Large–a language model with 389 billion parameters (adjustable synapse weights, similar to how connections in your brain strengthen with learning)–now outperform Western rivals in key tests. Take the MMLU benchmark, an "AI IQ test" covering 57 subjects from law to biology. Hunyuan scores 90.8% accuracy, edging past Meta's Llama3 (88.5%). Alibaba's Qwen 2.5 rivals OpenAI's GPT-4 in coding tasks, while DeepSeek's R1 matches top U.S. models, reportedly at a fraction of the training cost (estimates vary between 1%-3%). 'China has—thanks to data, AI, and the entrepreneur ecosystem—rapidly evolved from a copycat into a true innovator,' says Kai-Fu Lee, CEO of Sinovation Ventures and former president of Google China. And their focus on affordability could democratize AI for billions. But there's a catch. While China produced more AI publications (23.2%) and citations (22.6%) than any other country in 2023, the U.S. hosts 57% of elite researchers–for now. China's centralized approach pays dividends, despite reduced access to processor chips Picture a football team where the government picks players, calls plays, and funds training–this is akin to China's approach. Beijing designates tech giants like Tencent and Alibaba as "national champions," flooding them with synthetic data-AI-generated training material. Hunyuan-Large trained on 1.5 trillion tokens of synthetic content, dwarfing Western datasets. Harvard's Graham Allison regularly discusses the contrast between the U.S. leading the way in AI breakthroughs, but China's teamwork accelerating real-world use cases. This strategy has limits. U.S. export controls have crippled China's access to advanced chips like NVIDIA's A100, forcing reliance on Huawei's Ascend 910B–a homegrown processor, around 20% slower–nominally, like a family car racing a Ferrari. Yet Chinese firms adapt: DeepSeek's R1 uses clever software tweaks to offset hardware gaps. The U.S. thrives on private-sector dynamism. According to the 2025 AI Index Report from Stanford University's HAI (Human-Centered AI) Institute, 'in 2024, U.S. private AI investment grew to $109.1 billion–nearly 12 times China's $9.3 billion and 24 times the U.K.'s $4.5 billion.' This funds moonshots like GPT-4o's 130,000-word memory (imagine recalling every sentence from War and Peace). But fragmentation plagues progress. Martijn Rasser of the Center for a New American Security has written and spoken extensively about the fragmented nature of the U.S. AI ecosystem versus China's coordinated, state-driven approach: Europe prides itself in leading in AI ethics but lags in commercialization relative to the U.S. and China, much like a chef perfecting a recipe but lacking a suitable kitchen. The EU's AI Act prioritizes transparency, yet the European Parliamentary Research Service (EPRS) indicates an average €22 billion annual R&D gap with the U.S. over the last 5 years, which significantly stifles innovation. According to Francesca Bria of Italy's National Innovation Fund: AI guzzles energy like a thirsty giant–China's data centers consumed 140 billion kWh in 2024 (Sweden's annual usage) with projections tripling by 2035. Rural coal plants power most facilities, clashing with green goals. Chip shortages compound issues: U.S. bans forced ByteDance to use slower Huawei chips, inflating training costs by 30%. Ajit Jaokar, AI Ambassador at the of the University of Oxford, states that "while constraints on hardware have forced Chinese AI labs like DeepSeek to pursue innovative engineering solutions, these efficiency gains can only go so far in offsetting fundamental hardware gaps." Tencent's largest data center and cloud computing base in East China Recent reporting from the LA Times highlights that data centers, especially those supporting AI, are dramatically increasing electricity demand and raising the risk of blackouts in California. 'California is working itself into a precarious position,' said Thomas Popik, president of the Foundation for Resilient Societies, which created GridClue to educate the public on threats posed by increasing power use. Talent shortages add pressure–72% of U.S. AI hires come from abroad, while China graduates three times as many computer scientists (more on this soon). The ECA's 2024 report provides strong evidence that the EU's digital and AI markets are fragmented due to individual national regulations, hampering the ability of startups and scale-ups to grow across borders (27 countries with differing rules). Imagine building 27 tiny bridges instead of one superhighway. Additionally, the report notes that 'the EU is losing a significant proportion of its AI talent to the United States, particularly to Silicon Valley,' with some estimates suggesting a 52% talent outflow, so Europe struggles to compete, or even keep up. Price is now the new battleground in the AI model wars. DeepSeek's R1, for example, offers API access at just $0.55 per million input tokens and $2.19 per million output tokens, making it one of the most affordable high-performance models on the market today. By comparison, OpenAI's o1 model charges $15 per million input tokens and $60 per million output tokens, while GPT-4o's latest pricing stands at $5 per million input tokens and $15 per million output tokens, depending on the use case and context length. This dramatic price gap has set off a wave of competitive pricing across the sector. Baidu, for instance, recently cut the price of its Ernie 4.5 Turbo model by 20 percent, while Tencent and iFlytek have announced major reductions and even free access to lighter versions of their models, intensifying the race to make AI more accessible and affordable for businesses and developers. Meanwhile, Alibaba Cloud reported a 7 percent year-on-year revenue increase in late 2024, attributing much of this growth to surging demand for AI-related products and services. The message is clear: as AI becomes more deeply embedded in the digital economy, the winners will be those who can deliver both performance and cost savings at scale. In an earlier interview with Business Insider, former Google CEO Eric Schmidt stated, Stanford HAI seems to back up this changing of the guard: 'In 2023, leading American models significantly outperformed their Chinese counterparts–a trend that no longer holds. By the end of 2024, these differences had narrowed substantially to just 0.3, 8.1, 1.6, and 3.7 percentage points.' USA vs China: AI Race The AI contest isn't about who crosses a finish line first–it's about who navigates an endless obstacle course with the fewest stumbles. China's rise in cost-efficient AI mirrors its solar panel dominance, but hardware constraints and energy bottlenecks loom, and while its centralized approach enables coordinated national effort, this may limit certain types of innovation. America's private-sector brilliance fuels significant breakthroughs, yet fragmentation and local talent shortages threaten its edge. Europe, meanwhile, risks becoming a regulatory ghost town-strong on ethics, weak on execution. The true victor won't be the nation with the smartest algorithms, but the one that harmonizes innovation with humanity. Imagine a future where U.S.-designed AI accelerates drug discovery for rare diseases, Chinese models democratize education in underserved regions, and Europe's safeguards prevent another Siri privacy debacle. The infrastructure race–for chips, energy, and talent–may ultimately prove more decisive than any single algorithm breakthrough. As AI pioneer Fei-Fei Li recently stated in her opening speech at the Artificial Intelligence Action Summit in Paris: "We need to invest in far healthier and more vibrant AI ecosystems... Open-source communities and the public sector can all participate and play their critical role alongside big companies in driving this technology forward. If AI is going to change the world, we need everyone from all walks of life to have a role in shaping this change." Perhaps the most crucial question isn't who leads the AI race today, but who's building the foundations for tomorrow's AI landscape–both for the creative industries and for the more traditional AI-influenced sectors. This race has no clear finish line—only continual adaptation to an ever-advancing technological frontier. (Stay tuned for my next story exploring how talent flow has a huge influence)
The South African
22-04-2025
- Business
- The South African
Warren Hammond's Personal View: The Thucydides trap, war cometh
In early March 2025, before volatility accelerated and turmoil engulfed the investing world, Warren Hammond's issued a warning in The Personal View: Positioning for the Market Turmoil Ahead, 2025–2028, saying, 'Iran's escalating conflicts in mid-April 2025 highlight global energy security risks. Oil supply disruptions could spike prices.' It's now mid-April. This moment echoes a theme he has long discussed. In 2021, he had published Investment Themes for the Next Decade . One institutional investor, Boston-based, long-only, recently revisited that note, reaching out to discuss one idea now rising with urgency: systemic confrontation. A minor transgression, regional or symbolic, can spiral into global conflict. Asia and the West drawn in. This is the Thucydidean Trap: when a rising power threatens to displace a dominant one. Harvard's Graham Allison revived this idea in 2015 and expanded it in his 2017 book Destined for War: Can America and China Escape Thucydides' Trap? Warren Hammond's Personal View: Megatrends & The future of capital Today's war isn't always kinetic. The tech and tariff wars are structural conflicts, global powers contesting the boundaries of a new world order. The status quo is being washed away (forecast in 2016: The USA – The next 18 years ). In its place, a fiery, disruptive, and transformational era led increasingly by China and Asia. Taiwan is the obvious flashpoint in a hotter war scenario. Since 2016, Warren Hammond wrote about its strategic and symbolic weight in China's national psyche. But escalation could just as likely come from the Middle East or Ukraine. More important than the geography is the underlying structural stress between a rising China and an incumbent US. This is no longer about bilateral competition, it's about global reordering. Lessons from History Since January 2016, he has consistently highlighted that history has given us clues. In the context of the Thucydidean Trap, Allison studied 16 cases where rising powers confronted established ones. In 12 of them, war followed. Only 4 resolved peacefully. Key examples include: • Sparta vs. Athens (5th c. BCE)• Germany vs. Britain (early 20th c.)• France vs. Habsburg Spain (16th c.)• Japan vs. U.S. (early 20th c.)• Napoleonic France vs. Britain (early 19th c.)• US vs. British Empire (late 19th c.) – a peaceful transition • Germany vs. Russia (late 19th–early 20th c.)
Asia Times
17-04-2025
- Business
- Asia Times
Chinese dragon elegantly twirled around American eagle's neck
There is an image that likely increasingly haunts the minds of US strategists: a Chinese dragon, no longer just coiled in defense but elegantly entwined around the neck of the American bald eagle. Not to suffocate but rather to regulate the bird's breath. The symbolism is not hyperbole. It captures a world where China, long caricatured as the imitator, has now morphed into a systemic rival, outrunning and outgunning the United States in critical business and security sectors. From technology to trade, currency to cyber power, the Chinese state has mastered the long game. As Graham Allison warned in 'Destined for War', the Thucydides Trap is not only about the inevitability of conflict between rising and ruling powers. It's also about the erosion of assumptions that the West has long taken for granted—namely, that liberal democracies will always innovate faster and govern better. That assumption is collapsing under China's weight. Let us now turn to the strategic sectors where China has not just caught up, but, in many instances, sprinted ahead. 1. Semiconductors: from dependency to near parity Semiconductors, once China's key vulnerability, are now the arena of its most dramatic gains. Despite Washington's embargoes on Huawei and export bans on advanced lithography equipment, Beijing has poured over 1.5 trillion yuan into its domestic chip ecosystem. China's 14nm chips are now being produced domestically at scale, and according to Dr Dan Wang of Gavekal Dragonomics, an economic consultancy, 'China is only a node or two behind global leaders, and catching up fast.' This acceleration is powered by 'dual circulation'—a policy that embeds state subsidies across the entire supply chain, from rare earth mining to chip design. In contrast, the US remains fragmented. The CHIPS and Science Act is slow-moving and could be scrapped while American fabs are still dangerously dependent on geopolitical choke points like Taiwan. And it's not clear that forcing Taiwan to build fabs in the US will even remotely work due to a lack of skilled labor and relevant supply chains. 2. Electric vehicles: Tesla in the rearview mirror China's BYD, not Tesla, is now the world's top EV manufacturer. In 2023, it overtook Tesla in global sales and its footprint now spans Latin America, Europe and Southeast Asia. Why? Because China owns the supply chain. From lithium in Bolivia to cobalt in the Congo, Chinese firms like CATL dominate the upstream. They also control over 75% of global lithium battery production. As Professor Tu Xinquan of the China Institute for WTO Studies notes, 'Beijing treats EVs as the next strategic industry, not just a consumer product.' The result? China is setting the global terms for green mobility. 3. Artificial intelligence: authoritarian efficiency at scale While Silicon Valley battles over ethics and data privacy, Chinese AI firms race ahead by leveraging the scale of their digital ecosystems. With 1.4 billion citizens contributing to vast data pools, firms like SenseTime and iFlytek are training machine learning models at a rate unimaginable in the US. Stanford's AI Index 2024 noted that 'China now publishes more peer-reviewed AI papers than the US and the EU combined.' More importantly, the integration of AI into national surveillance systems—facial recognition, behavioral analytics and even predictive policing—is an institutional advantage in authoritarian governance. 4. Space & hypersonics: leaping over the Pentagon's horizon In 2021, China tested a hypersonic glide vehicle that stunned Pentagon officials. It circled the globe before hitting its target—a demonstration of capabilities that America did not anticipate and does not have. Today, China launches more satellites than any other country, and its Tiangong space station functions independently of NASA. This is not just about prestige. It's about owning low-Earth orbit (LEO) infrastructure and building an integrated command architecture. According to James Acton of the Carnegie Endowment, 'China's civil-military fusion in space tech gives it a decisive asymmetry—the ability to repurpose civilian launches into military capacity overnight.' 5. Quantum computing and cyber sovereignty China's quantum leap is not metaphorical. It has already built a city-level quantum communication network in Hefei and launched the Micius satellite to demonstrate secure quantum encryption. While the US still grapples with theoretical breakthroughs, China is operationalizing quantum networks—one step closer to unhackable communication. Simultaneously, China's cyber units under the PLA Strategic Support Force have matured into a formidable force. As cybersecurity expert Adam Segal warns, 'Unlike the US, where cyber operations must go through inter-agency review, China's centralized command is more agile, more ruthless and more strategic.' 6. Infrastructure diplomacy: steel, fiber and sovereignty The Belt and Road Initiative (BRI) was once dismissed as 'debt-trap' diplomacy. Yet in 2025, it has morphed into a network of real-world influence. Over 70 ports, 150 countries, and countless rail links are now locked into Chinese logistics systems. Malaysia's ECRL and industrial parks under the 'Two Countries, Twin Parks' initiative are cases in point. In contrast, America's Build Back Better World (B3W) never took off due to a lack of institutional backbone and material delivery. 7. Financial innovation: dollar dependency, yuan strategy Though the dollar still dominates, China's Cross-Border Interbank Payment System (CIPS) now clears over US$400 billion in yuan-denominated transactions annually. As Professor Eswar Prasad of Cornell observes, 'CIPS, when coupled with the digital yuan, offers China a way to de-dollarize bilateral trade without directly challenging the dollar's global reserve status.' Even in ASEAN, Indonesia and Malaysia have signed local currency settlement agreements with Beijing. The implications are serious: the US no longer controls the plumbing of international finance unilaterally. 8. Pharmaceuticals and public health diplomacy Sinopharm and Sinovac may have drawn Western skepticism during Covid-19, but they reached over 80 countries. China became the pharmacy of the Global South, capturing new health markets. Meanwhile, China controls up to 70% of active pharmaceutical ingredient (API) exports—vital for antibiotic and chronic disease drugs. Even the US Food and Drug Administration has flagged this as a national security risk. 9. Maritime dominance: steel leviathans in Asian waters The People's Liberation Army Navy (PLAN) is now the largest navy in terms of number of vessels, with China launching new destroyers, frigates and carriers at an unmatched pace. According to the International Institute for Strategic Studies (IISS), China's naval shipbuilding capacity exceeds the US by a ratio of 3:1 annually. This has strategic consequences: with militarized reefs and carrier-killer missiles, Beijing is remaking the Indo-Pacific naval order—challenging the US Seventh Fleet's dominance. Conclusion: The end of complacency, the beginning of multipolar discipline The Chinese dragon did not roar its way to supremacy. It studied the American system—its think tanks, capital markets, academic networks and defense-industrial base—and replicated a version of it with Chinese characteristics: centralized, agile, state-backed and global. This is no longer a contest of ideologies. It is a contest of capacities. For Malaysia and ASEAN, the time for strategic hedging has reached its limit. As Professor Lee Jones warns, 'Neutrality in a bifurcating world must be underwritten by genuine resilience—economic, technological and political.' China's dragon does not need to strangle the eagle. It merely needs to squeeze at the right moments. And in that tightening grip lies the uncomfortable truth of 21st-century power: it is no longer about who dominates, but who endures. Phar Kim Beng, PhD, is professor of ASEAN studies at the International Islamic University Malaysia. His analyses have been published across Asia and Europe, with a focus on strategic diplomacy, interdependence and power asymmetries.
Washington Post
14-04-2025
- Politics
- Washington Post
Can a trade war lead to a shooting war? Trump and Xi, take note: Yes.
In 2014, eminent political scientist Graham Allison published an influential book called 'Destined for War: Can America and China Escape Thucydides's Trap?' The subtitle referred to a famous passage in Thucydides' 'History of the Peloponnesian War': 'It was the rise of Athens, and the fear that this inspired in Sparta, that made war inevitable.'
South China Morning Post
07-04-2025
- Business
- South China Morning Post
US-China war ‘likely' but not inevitable, warns top political scientist
A prominent international relations scholar warned that war between China and the United States, while not inevitable, was probable, but their interdependence in areas such as the economy and climate could help them avoid conflict. Advertisement 'War between US and China, inevitable? No. Likely? Yes,' said Graham Allison, the founding dean of Harvard University's John F. Kennedy School of Government. Allison, who served as assistant secretary of defence under former US president Bill Clinton, made the comments on Sunday at the Harvard College China Forum. Allison is known for popularising the phrase 'Thucydides trap' – the idea that a rising power and an established hegemon are destined for war. The term is named after the ancient Greek historian who chronicled the war between Athens and Sparta. Beijing has viewed the Thucydides trap as a key framework for examining China-US relations . Many of China's elites, including President Xi Jinping, have made reference to the idea, though they do not see it as inevitable. Allison's speech came after US President Donald Trump imposed an additional 34 per cent tariff on China last week, which provoked a tit-for-tat response from Beijing. Advertisement This latest round of duties – the third since Trump returned to the White House in January – has raised the total tariff rate on Chinese goods to 54 per cent.
