China, China, China
Enter WAICO and the new Chinese AI order
The US-Iran war has restarted, rattling the global economy. But strangely, the global spotlight is on China. The endless tug-of-war, whether to draw China closer or to block it, has reached a critical juncture.
In the United Kingdom, British Steel has been nationalized, effectively kicking out Chinese control as London seizes strategic assets, like commodity makers. In Europe, France and Germany are designing a “roadmap” to take on China, a massive shift for Berlin after decades of opening the door to Beijing. In Asia, Kazakhstan has signed $13 billion in deals with China, reasserting China’s footprint in Central Asia, fast replacing Russia as the central artery connecting Asia and Europe. Globally, Moonshot, one of China’s leading AI companies - part of China’s 6 “AI Tigers” - has unveiled Kimi K3, a new AI model with 2.8 trillion parameters, making it the world’s largest open-weight system. Meanwhile, China has said that the US may return Hong Kong’s special trade status, a sign of the US-China pendulum swinging yet again from hot to warm. And surrounding all of that, US President Donald Trump has accused China of meddling in the 2020 election and stealing a whopping 220 million voter files.
All of this has taken place in just over a week, throwing geopolitics in flux (yet again).
The UK is effectively on a collision course with China after the nationalization as the Chinese government warns of retaliation. Might China nationalize the operations of a British firm, tit-for-tat? The same goes for Europe, which has been trying to avoid an all-out trade war with China amidst a record heat wave. Yet, if the Paris-Berlin roadmap is cemented, the EU faces nothing short of an economic war with Beijing in the medium-term. The strange nuance: Europe is seeking to establish what French President Emmanuel Macron calls a “third pole” from the US and China. Yet, by fighting with China, the EU is aligning itself more with Washington, limiting its sovereign options. In tandem to all that, Trump’s accusation of Chinese election meddling - the same election that the US President claims he won - paints a dark stain over US-China relations. At least it should, in theory. The US has outright accused China of jeopardizing its democratic processes. However, in what is becoming common in geopolitics, where governments throw punches and embrace warmly simultaneously, Trump may very well cast aside action as he prepares to host Chinese President Xi Jinping in September, the second time both leaders would meet this year.
However, while all of the above is substantial, none of it compares to the “other” shift that took place. At the annual World AI Conference (WAIC), held in China, 29 nations have joined hands to launch the World AI Cooperation Organization (WAICO), including Kazakhstan, Russia, and Indonesia. WAICO is led by China, and represents the single biggest push by Beijing to set the global AI rules. It is no coincidence that WAICO sounds eerily similar to WTO (World Trade Organization). In the 20th century, the US sought to shape the rules for trade with WTO. In the 21st century, China is seeking to shape the rules for AI with WAICO. And “rules” is rather vague, because AI is multi-layered. There is development, deployment, trade, R&D, funding, training, skills, human capital, infrastructure, and data - all of which together make “AI” possible.
With WAICO, China is moving on all those fronts at the same time.
This is the true start of a Chinese-led AI order, what I warned about in my 2018 book “Geopolitics of AI.” This is a global fracturing between the Western order and what China is building. Some of the world’s largest economies are integrating into AI structures built and run by China, not the US or even the world. This should keep the lights of the White House on for weeks. It is even more significant than the IEA’s recent warning that China’s curbs on rare earths threaten $6.5 trillion in global production. WAICO is one of the first actual attempts by China to usurp America as the leading shot-caller. Either the US stamps out WAICO or builds an equivalent. Regardless, the geopolitics has shifted so profoundly that now, it is America who is trying to “catch up” to what China is doing, not the other way around.
It is no coincidence that all of this is occurring as the Iran war rages and the Middle East shakes. Governments across the world are seeking to shore up their “geopolitical security.” To do that, China is either in or out. And besides the West, who has always been skeptical of Beijing, for most of the world, China is not only in - it is becoming the new North Star.
(*Geopolitical Security is a concept/expression of Abishur Prakash)
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Macron's whole pitch was a 'third pole,' free of both. Squaring up to China just shoves Europe deeper into Washington's orbit — that's not independence, that's picking a side.