Ian Bremmer on the Risks America Poses to the World

28:36and he could let the neo-Nazis back onto the platform. And so you have like one of these central spaces of political information and sentiment construction has gone from toxic to unbelievably toxic. And that was the big social investment of the richest person in the world to do that to us. And, but I think this is true across a bunch of them. I think - And you and I, I think would both agree that this was not an actual social investment for the betterment of the people of the country. I don't believe, yes. I am not a huge fan of the way Elon Musk is trying to shape American and global politics.

29:09But I think that he believes he is trying to save us from the woke mind virus and collapsing fertility. But I think that sentiment is a complex system. And what has happened is that there are enough things that have tipped badly that we've entered into a negative feedback loop. And it's very, very hard to get out of a negative feedback loop because there's no one thing. If wages go up, it's actually not enough, right? People's view, for instance, of crime. Crime is really low in America right now. Compared to where it was in the 90s, for example. Yeah, or frankly - I posted on that just the other day and people are surprised.

29:41Like, that's gotta be fake news. People still feel very upset about it, right? And one reason is that - Murder rates, particularly, yeah. And so I think what you have is a situation where there's no one thing, but basically lots of negative sentiment get like slingshotted forward on algorithmic media. This is AI, this is everything else. And there's just a generalized sense that things are bad. I mean, Donald Trump is scary to a lot of the country, but even to the people who like him, he's not doing a great job. He's not doing what he said he would do for you, right? And it's chaotic and it's crazy.

30:13And he is making you afraid of the other side. Again, it's grievance-based. It's grievance-based. Yeah. But not just grievance, right? It's conspiratorial. It's scary. It's people trying to destroy the country if you don't like them. And in some cases, right, the stakes are very high. Like, I do think Donald Trump is destroying significant parts of at least what the country has been. And so I think there's always this effort to create an underlying material reality to sentiment. And it's always true that sentiment has some underlying material reality, and there's a lot wrong with the material reality and the way American politics works.

30:46But I think sentiment has become a little bit free-floating now. And one reason it is not responsive to the economy getting better, one reason it is not responsive to things changing, one reason it has diverged so much from the macro data, particularly since the pandemic, my wife, Annie Lowry, just wrote a great piece on this in The Atlantic, is that there is something happening in the system of attention. Like, I think now a system that has just moved into its grammar is angry. So look, I think that we do need, there's an interplay between the independent and the variable here to get really wonky, right?

31:20In other words, you have underlying issues that come from free trade, robotics, innovation that hollows out a whole bunch of the middle class in the United States and in Europe to the advantage of emerging middle classes in China and India and the so-called global South, the former emerging market. But I just want to stop on that. What does it mean to have hollowed out the middle class if the middle class is purchasing power, et cetera, is higher than it's been in the past? This is where you have something tricky happening. I could give you my explanation, but I want to hear yours of what you mean when you say that.

31:53What I mean when I say that is you have large numbers of communities that no longer have the same industrial base, the same civic connection, the same institutions around them, the Robert Putnam bowling alone. So this, I think, is much more specific. And I wish people would talk in this language. We didn't hollow out the middle class. We hollowed out places. Places. Yes, places. But places that have community and civic engagement and citizens. But this is important. It's super important. And we don't talk about it correctly, in my view. That's a fair point. But those are the precedents. Those are the antecedent conditions that then lead to a population that is mostly male, that's doing pretty well economically, and they're not all white.

32:35Some of them are Hispanic. Some of them are black. They're living in poor urban areas and rural areas that are doing, again, really feel very differently and are going down compared to where they were. And they're the ones that are voting for Trump, not once, but twice. And the idea that this can be driven by something that is vibe-based as as opposed to real antecedent conditions. I reject that. But once you have that, there is a flywheel. Once you have that, suddenly those other, the algorithmic conditions really matter. And here I want to really get into the macro, structural for a second, which is that I had this, the first big book that I wrote back in 2006 was called The J-Curve.

33:16And I doubt you even remember it, right? It's a long time ago. Who doesn't remember The J-Curve? Yeah, exactly. It was a small thing. for the time was big for me. And it was about how countries did and didn't fall apart. The J is the relationship between openness and stability. And that you have some countries that are stable because they're open, some that are stable because they're closed. Stable because they're open, the United States, Japan, the Nordics, stable because they're closed, China, North Korea, Saudi Arabia. Countries that are stable because they're closed want to stay closed because if they open up a little bit, the country can suddenly fall apart.

33:53Countries that are stable because they're open are more stable than countries that are stable because they're closed. And the reason I bring it up is because it was not only something that was really, really like kind of promoted at the time as, wow, this is a breakthrough. It's also completely wrong today. It no longer applies because the world has changed. And the thing about the world that has changed is what you just got at. It's technology. Technology back in 2006 was actually advantageous to more open societies. It was the communications revolution. It was bottom up. It's what got us the Arab Spring.

34:27It's what got you the colored revolutions in Eastern Europe and the former Soviet Union. People that suddenly were interconnected that could learn more about their fellow citizens and what they were doing and organize, learn more about their governments and their predation and their corruption, even though the government didn't want them to necessarily know about that. It undermined authoritarian systems and it strengthened liberal societies, open societies, right? Then you move from that system to one where technology is top-down. It's a surveillance-based system. It's a data-based system. It's algorithmic nudging of people by other people and even by bots.

35:10It's attention-based, it's addictive, and it benefits closed societies, and it undermines open societies. And it's creating a level of stress, it's creating a level of anger, and it's a level of outrage, but it also has a political gravity to it. And it's weakening the United States. And it's much worse in the U.S. than it is in a place like Japan, or even than it is in Europe, though it's coming in Europe too. But the Chinese don't have this problem at all because they're able to actually control and nudge what patriotic behavior is. Let me try something here because I think this is, I want to build on this in a very certain way and get at a difference between China and America.

35:48But let me take what you just said in a different direction. I think one of the fundamental problems in the country is that we have broken the relationship between technology and places. And so we just said a second ago that the problem is not just that we've hollowed out this abstract concept of the middle class because I can show you like the disposable income of the middle class on a graph and it does not look hollowed out compared to 1980. Got it. Like they're richer. But these communities did get hollowed out. And you sometimes hear, you know, self-satisfied Democrats, right? This was Hillary Clinton after the 2016 election say, well, the places that voted for me represent whatever it was in two thirds or something of the GDP growth in this country, right?

36:29So, okay, so there is a redistribution of opportunity to these cities. Superstar cities like New York, NSF, in Los Angeles and Boston. They've gotten richer and richer and richer and richer and richer. In the past, what that would have done is create a new engine of opportunity. You move to San Francisco and you're a firefighter, you cut hair, you do, you know, you work in some job and then your kids are there and they get richer and so on, right? This is what is happening in China. In China, the cities are getting richer. And there is this huge movement into them. In America, those cities made it impossible to build housing.

37:08And Silicon Valley, I was just driving around the other day where the part of Silicon Valley, Santa Clara area, where you have Meta and NVIDIA. And it is so crazy to me that you do not have places for people to live. It's just, it's strip malls and it's single family homes. We've not built huge towers next to them, right? Like you look at what Shenzhen looks like. And here where we've invented AI, it looks like an office park. And this, I mean, this is a major part of abundance, obviously, but this is the destruction, the literal destruction of when we talk about social mobility, how did social mobility actually work?

37:51What it actually did was places got rich and people moved to them. But we have really, really good evidence now that that doesn't happen. And in fact, what's happening is richer people move to richer places and poor people move out of them because, and this is why there's energy in stepping in front of, you know, Ken Griffin's God knows how expensive apartment in New York is that the thing is you can't afford to live in New York anymore and raise a family. And so Ken Griffin, sure, he's here and they've spent a lot of money here. And I'm not saying New York's housing problems are Ken Griffin's fault.

38:23I don't think they are. But the feeling that it has not benefited you, it's actually true. We know this is true. We know that what used to happen is that it used to be that people would move from the poor areas to the richer areas, and now they move out of the richer areas and into the poor areas. Because they can't afford it anymore. Because they can then afford a home. They're angry about gentrification, completely. It's not just gentrification. It is just they cannot afford to live there. And I just want to harp on this for a minute because I do think it's really important and a thing we miss.

38:48We hollowed out a huge number of communities in this country, and then we gated. We gated the places where the opportunity had moved to. And so that has killed mobility. It's not some nature of the technology. It's not what they've done in China. And we've done it because the way you used to do this is you built where there's money and opportunity. And instead, they've made it very, very, very hard to build where there's money and opportunity. Let's not lionize China for a second. Because the only way you get into a city in China is a huku system where the state actually gives you the right to actually move there.

39:24They've overbuilt in some places and the real estate crisis is massive. All of those things. And you remember, that's not just about cities. It's also about experiences. Again, the Disney piece that was done in the New York Times a few months ago. Do you want to describe this? Where they followed this woman who was working class, and she had saved up an enormous amount to be able to get to Disney with her kids. And she did. And it followed how expensive it was and how difficult her experience was and how Disney, which used to be the great equalizer that everyone would go, everyone would be a part of it.

39:59And her experience compared to someone that just flies in and pays for the skip the line experience and everything else. And so even a place like Disney, which is the magical vacation that all Americans get to come and have the same experience has become completely stratified. And so much of corporate America is stratifying every experience you have, not just place, literally every experience, every ball game you go to, every every airline you fly on, every experience Americans have, if you can make money out of stratification, you will do that and you will do much less to commodify. And of course, the danger and the concern is that when that happens with AI, and so the people that don't pay for AI are the ones that get the ads and have substandard AI that's the for you feed and the wealthy people can actually be super empowered and become more than human because they have AI that's giving them real information that's actively curated for them, then can help them to accomplish things that will improve their lives.

41:01Almost every dystopian, near dystopian novel and movie in the United States right now is about some form of that shifting of America into haves and have nots where there is no mobility between the two. And again, it's a lack of mobility that comes down. You can't have an American dream. if you can't make it. I grew up in the projects and I feel like I was the American dream, but I know how close I was to not actually making it and how kids I grew up with that were smarter than me in high school and in grammar school didn't make it. And most of the people, and I still, I'm Facebook friends with a lot of them.

41:39I go back to Chelsea every once in a while. The kids that I know in those neighborhoods now will not make it to the same degree. That lack of ability to achieve mobility in a super stratified society, technologically enabled, capitalistically enabled. That, I think, is what subverts the American dream more than anything else that we've done. And this is where I think a lot of our measures of inequality do not capture the modern experience of inequality. You just mentioned how real world experience is stratified. Digital experience is stratified. You turn on TikTok, you turn on Instagram, and it is feeding you people living better lives than you.

42:19All the time. You are watching the billionaires. You are watching the influencers. You are watching all these people succeeding in a way you're not. Or you're seeing people who are like drafting off of the anger that creates, right? Those are both there. You're watching people who are better looking than you. I mean, it is the kind of comparison it has. I'm going to speak for yourself on that one. But I mean, you know. Maybe better looking than me. I take that. But the constancy of comparison and the size of the world you're comparing yourself to, and also the falsity of it, the way you're comparing yourself to fake versions of other people's lives, right?

42:57Not their real life with the diapers they have to change and the fights with their partner, but like the fake curated life. So there's that, right? I think that's a contributor to all this too. But there's also just like the wealth you see that you are not part of. And then I agree with you on AI. This is also why I think that people need to think a little bit differently about the data center moratorium questions, because it sounds like a good idea if you're not confident in AI, if you're worried about what's about to happen, to try to just slow down or shut down the data centers. But what you're going to do is make compute much more expensive.

43:30We already do not have enough compute for how much people want it. I think a lot of people on the left who have sort of told themselves a story that AI is not powerful. It's not a real technology. It's overhyped. It's bullshit. So then it doesn't really matter if people don't have access to it, because why would you want access to the hallucination machine? But actually, at its upper levels, it's a very powerful technology now. And if it's something that the rich can afford, and as you're saying, we get a new digital divide where, you know, the rich get these amazing AI agents that are giving them incredible information and doing all this on their behalf and making sure they get the best deals on everything.

44:05And they're out there, you know, sorting the Internet for them. And then what everybody else can afford is manipulative, crappy, hallucinating. And you would never even meet those people, right? I mean, like in other words, they won't even be part of your experience because algorithmically they'll be sorted out. So you would never date one. Right. I mean, again, 50 years ago, 30 years ago, a lot of people would meet people from different classes in their community, in their schools, in different institutions. And you got intermingling that way. That's already not happening because of the gated community issue, not already not happening because of corporate stratification.

44:41AI will end that if it goes in the present direction. AI as agents for the rich and erotica and the simulacrum of companionship and entertainment for the poor is a very, very dystopian world. And I think people underrate its possibility. I completely agree. And yet, again, the Chinese are doing this completely differently. How are they doing it? They don't believe that AI is going to be such a huge advantage for the population as a whole. They really don't like the TikTok model, which is one of the reasons why when Trump was so interested in having it, they let him have it without doing other big parts of the negotiations to make that occur.

45:23Their focus, and they also are deeply concerned about what it means to have people in China hallucinate on the back of AI models. Like if you're going to hallucinate, it better be pro-CCP stuff. It can't be GPT, right? And yet the Chinese are all in on using AI for defense purposes, all in on using it for industrial purposes, all in in innovating and inventing, making sure that all their strategic sectors are at and their government is as fully integrated with the most advanced technologies as humanly possible, because that's how they project power. That's how they get growth. So in the United States, it's exactly the opposite.

46:02The United States is we're going to build these massive LLMs and they're going to create the singularity and artificial general intelligence. We're going to treat intelligence as a utility and human capital will become supplanted by token capital. That's what you're really going to need. But who's going to have token capital? It's not going to be most Americans. And so, again, the J curve used to be this idea that more open societies became more stable because they were open. But that is facilitated by technology that makes that system work well. Suddenly, when you have AI driving more stability for a closed system like China, at the very least, you would say that J today is a U.

46:42That there are no longer structural advantages to the stability of a country by being open if you're technologically empowered. And if this trend continues, there would be structural advantages to closed systems as opposed to open systems. It's the opposite of what you want to see.

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48:17I want to talk about the China-U.S. relationship here, because one of the things that, as Donald Trump rose in 2016 and then in 2024, that he was the most insistent on was the threat to America was China. And the way in which American policy had to change was we had to contain China. We had to stop faffing around in the Middle East and we had to be focused on getting over free trade and recognizing that all of this system had been used for China to rise and to allow America to begin to fall. And he was gonna change that. we just saw the trump xi jinping summit what did we see at that summit and and how does where we are now reflect this sort of argument he's been making for years well no faffing around the middle east there's now lots of faffing um and china's the big threat to now china's the leader that he treats with the greatest respect he talks about a g2 with china it was a strongly positive summit from China's perspective.

49:19They consider it historic. They consider it a big win. It helps to solidify their prestige on the global stage, acting as equals with the United States, which is much bigger, much more powerful. Trump failed on April 2nd, Liberation Day. The intention of the second term was very much a continuation of the first, that the Chinese were the big threat, and he was going to put heavy tariffs on the Chinese, whose economy was not performing particularly well, and that was going to force them to capitulate, force them to bend the knee. He was wrong. He failed. And when they hit back, they hit back hard, not just on reciprocal tariffs, but also then took critical minerals and rare arts, put a gun on the table and said, we will literally shut down your industrial production.

50:09Describe what that was and why Why were they able to do that? So for some 30 years now, the Chinese have been investing in exploitation of critical minerals and rare earths around the world that are essential for a lot of military and industrial purposes, energy purposes, other infrastructure that we all rely on. And the Americans were not investing in it, thinking, well, it's cheaper coming from these Chinese sources, so great, we'll just buy it from them. Kind of like the way the Europeans decided to get a lot of their cheaper energy from Russia, kind of the way all of us decided to get our semiconductors from 100 miles off of the Chinese coast, all of which is true if politics don't matter.

50:50If politics matter and you don't trust those countries and maybe they might act to make vulnerable your just-in-time supply chain, suddenly you have a problem. And the lock that China had globally from 30 years of these investments, including in the processing of these critical minerals inside China themselves, suddenly they said, if you want to get them, you need a license. You need to apply for a license to China. If you're not considered on the right side of the law with us, we're not going to provide you with those critical minerals. And you had suddenly CEOs of big companies going to Mar-a-Lago telling Trump, you better cut a deal with these Chinese because otherwise, like literally our factory floor is going to shut down.

51:29And so the Americans had to buckle, had to suddenly say, okay, we got to do a deal with these guys. We can't afford a trade boycott. We got to sit down and figure out Like, you know, they give us some on fentanyl and we give them some on tariffs and let's talk about Taiwan and the rest. And that was a complete climb down, turnaround of the sort that we've more recently seen with Trump's war goals in Iran. Once the Iranians broke glass, pull emergency lever and shut down the Strait of Hormuz, which he thought they wouldn't do. In both cases, Trump's eyes were bigger than his stomach. He has a big punch, but also a glass jaw.

52:05Can't take one hard from another side. And the Chinese are now in a position of much greater leverage. So the summit that you just had was two leaders sitting together and saying, we must find a way to work together constructively. You may not like us, you may not trust us, it's vice versa, but we will ensure that we work together constructively so we don't get into a fight that does a lot of damage that you don't wanna see done. And that was what happened. So how would you rate this as a substantive outcome? Because you could say either Donald Trump was right about the danger posed by China. And so this is a problem as he's moving into this more conciliatory climb down posture.

52:51Or you could say, you know, many of Trump's critics on this, you're being too belligerent. These countries need to work together. and maybe he fumbled himself into a reasonable outcome, which is constructive dialogue, a relationship between the two leaders and the recognition in a world of global challenges like AI and climate change and pandemics. It actually is important that we have good relationships. And so, you know, you wouldn't count this as a win from Trump's rhetoric, but should we be happy with where this has ended up? Well, we should be happy that it turns out that Trump does not have the ability to commit suicide on the global stage.

53:35If he had persisted with his intended policy, which was we will force these Chinese to capitulate to us, the Americans would have been in a massive recession and so would the world. He backed out. So is that a win? Of course it's not a win. There are big wins under Trump. They're foreign policy wins. I mean, for example, in his first term, USMCA, which at the time he said was the best deal ever. Now he says it's a horrible deal. But I don't care what he says. The reality was USMCA was a significant improvement over NAFTA. The reality is the Abraham Accords were a big win in creating more stability in the Middle East and the Gulf.

54:17Yeah, boy, does that look like a stable region of the world to me now. It does not. But at the time, it was something that no one thought could be doable. And it was a stable, it was a much more stable region until Trump decided to go in and actually blow up the Iranians with Israel. So, again, I can point to plenty of places, Venezuela on balance, a win and perceived as a win by most populations across Latin America. Because Venezuela had been exporting a lot of instability and now it looks a lot more stable with a government that is a lot more tractable and focusing on long-term economic development.

54:51Those are all wins. China is not a win. China's a loss. China's a loss because Trump's intended policy, which is we need to beat these guys and here's how we're gonna do it, completely failed. And at the same time, he was pursuing policies to support himself individually. Again, TikTok, he got TikTok. That doesn't help the country, that helps him. It's advantageous in the same way that Elon owning X Is it politically advantageous for Trump? It doesn't help the country. You and I agree on that. So what you have is a more stable environment with a China that rightly feels like they have more leverage over this guy and this government.

55:34So one of the dimensions of competition here and one that you all emphasized in that early 2026 paper on risks is energy. Yeah, definitely. And the way you put it is that America's become largest petrostate in a way I think a lot of Americans have not tracked. It's really a quite remarkable story from fracking to where we've ended up as a huge exporter of energy. We produce so much more oil than any country in the world. Yeah, we produce more than Saudi Arabia. So much more. We used to talk about energy independence. We got it. Yeah. But we got independence on the old structure of energy and that China is becoming the largest electrostate.

56:15You have a tremendous chart. I say tremendous in sense that I found it really shocking to see that China's exports of green energy technology are much larger now than our exports of oil and gas. that they're sort of exporting the infrastructure of the 21st century while we're exporting the energy of the 20th century. And theirs is becoming so much cheaper at scale. So tell me about that competition because the energetic foundations of countries are important. Like Trump has really doubled down on America's petro state. Tell me about that competition. I have no problem with Trump doubling down on America's petro state.

56:54I think that the United States has the ability to be more effective on efficient regulations, on expanding production to have cheap energy for Americans and to export around the world. The resources are in the United States. It makes sense. Mark Carney in Canada leaves Justin Trudeau in the dust and he's running the Liberal Party and he's actively trying to ensure that Canada can be more effective as an oil producer and transiting and exporting nations. Smart for them, right? But what Trump is also doing is saying, I don't want the new energy. I don't actually want wind. I'll shut it down. I don't want solar, which is insane.

57:43I don't want electric vehicles, which is crazy. I mean, so, you know, again, go to Iran for a second because it's important. One of the biggest long-term implications of Iran, the war in Iran, is that OPEC is over. that UAE left OPEC in the middle of the Iran war when they aren't actually able to produce or export much of anything, a little bit. Why did they do that? Because they understand that they're gonna have stranded resources long-term because there's not gonna be as much of a market for their oil. So they wanna get as much oil out as humanly possible as soon as the war is over, as soon as the blockade is done and the strait is open so that they can then get on with being a modern, technologically empowered city-state.

58:27They're doing at a small level, and we should be very happy that OPEC is gone because it is a cartel monopoly over oil. That's not good for the United States. It's not good for anyone globally to have a cartel except the people that control the cartel. They're doing at a small level what the Chinese are doing at scale, which is they want to be dominating the investments in energy that will power compute, that will power AI at scale and cheap. And they want to do it for their own country and they want to export it. Now, Texas understands this, right? Red State, Texas, at least for now. Let's see where Tallarico goes, right?

59:03Paxson, whatever. Point is, they are driving more renewable energy production than any other state in the United States. They're also driving more petro production than any other state in the United States. That is the appropriate response for the world's most powerful country is we should be able to do both of those things. But I want to clarify one thing here because we're talking here about the production of energy. Yeah. China's control, the thing they're exporting is not sunshine. Right. The thing they're exporting, which we are way behind on, and that's true for Texas too, is what you use, the physical machinery that turns sunshine into energy.

59:42And so that thing, right, which the Biden administration is very concerned about, this was a big part of their plans to try to reshore some of the supply chain. But what China has is the infrastructure of how any country becomes an electrostate. You buy that infrastructure from them. And so what is the power of that? Not just of the energy the two states are producing or the kinds of it, but we are... They're driving in on energy production, but they're driving in on energy electrostate infrastructure. Yeah. So in the same way that the critical minerals gives you that influence, because if you don't have them, you can't allow your economy to grow.

1:00:21And if you don't have the infrastructure that allows your energy to be built at scale and cheaply from China, then your economy won't grow. And you can't have AI if you don't have the ability to drive energy for compute at scale. So China wants to be at the commanding heights of where the global economy is going. Now, I mentioned before, we are very short term in the way we've thought about these investments. That's why the Europeans got into trouble on gas. That's why we're all in trouble on semiconductors in Taiwan. You can fix these things. We're doing it with critical minerals right now. late, but the Americans are now saying, okay, well, now we need to start investing.

1:01:04The Pentagon needs to invest in these companies. We'll do it in the U.S. We'll do it in Chile, in Brazil, anywhere around the world that we can find the critical minerals we're going to go in. And by the way, the fact that the Chinese have put that loaded gun on the table, once you do that, you can't do it twice. So now we've seen, oh, they've got this leverage. That's dangerous. We'll invest. And within five to 10 years, they will no longer have that key chokehold over the United States in all of these minerals that we need. And we need for, by the way, for our defense capabilities. So the Chinese, if they were ever to get into a fight with us, the first thing they would do is shut that down because it would strangle our ability to continue to build the military industrial complex.

1:01:46You're not going to fight a war effectively. People worry about Taiwan. If there were a fight like that, you'd be very vulnerable given all of that. The same thing will happen on energy, but the longer we wait for it to happen, the greater the Chinese lead. And right now we're digging a hole for ourselves by investing as much as we can in the energy technologies that are not getting cheaper at scale and politically saying that we oppose the technologies of the future that will be essential for growth of our populations. and essential, most importantly, for AI compute? America's a lead in AI. It's not a huge lead, but a lead of, you know, let's call it six months, something like that.

1:02:29We have the best chips. The Biden administration put export controls down on that. Trump has sort of unwound those. And Trump personally has done that because his administration mostly opposed it. Well, let me ask you what you think of that decision because I have found myself a little bit more conflicted on this than many people in the public discourse. The argument for keeping him back is that if China doesn't have the best chips, we will maintain a lead in AI. The counter argument is that if we deprive them of the chips, they will accelerate and be able to accelerate their chips industry. And we have all these dependencies on China.

1:03:01And China being dependent on NVIDIA chips would create a dependency on us. And so the idea that you're not going to stop their AI because they have so much energy, they have infrastructure we don't have, right? There's a lot they can do to sort of supercharge. But this lead we imagine ourselves having a couple months is that really so worth making Huawei chips eventually as good as NVIDIA's? Well, that argument, the second argument you just made, was a reasonable argument before the Biden administration starts putting all the export controls on. Once you've done that and you've shown the Chinese, you've got to invest in your own semiconductors because we will crush you, then they do it.

1:03:43It's just like when the Chinese say, we're gonna force you to have licenses for rare earths. At that point, the Americans say, OK, that's unacceptable. Now we're going to invest. So the idea that holding back H200 chips from NVIDIA is going to make the Chinese unsee what we have already done to them, that's a spurious argument, right? So once you're involved, once you've declared a cold war on semiconductors, then you should be consistent with that policy. Then all you're doing with the H200s is letting them catch up when they're spending They are moving as fast as humanly possible in the constraints of their economy to catch up with the Americans on semiconductors.

1:04:24It also matters a little bit less in the sense that if they have really cheap energy, you can run the same AI with more semiconductors just is more energy to actually make it work. So it's not like you get better AI with better semiconductors. It's just less efficient. Same AI. Same AI. So that is the point. Well, I do think it's both as best I can tell. So, I mean, I know people who were just on this big trip and talked to a bunch of Chinese AI firms and every single one of them said what is binding them is compute, that if they had better compute, it is true that you can just run more energy through more lower quality chips and in some way like get to the limit.

1:05:02But the people I know who actually do AI don't think that's quite true, that having access to the best chips and those chips getting better does seem to keep you or help keep you a little bit ahead. Everyone I know in Silicon Valley were surprised by how advanced DeepSeek was when they released it. So you're right that the gap between the United States and China is less great than a lot of the American AI, you know, sort of leaders were talking about three years ago, five years ago. My core point here is that NVIDIA is pressing an issue that is of sole interest to NVIDIA. It is of no interest whatsoever to the country.

1:05:45It is not aligned with U.S. policy towards China. It is not aligned with a China that is working as hard as possible to build that semiconductor capacity. And they will get there. They will get there. So what has happened since Trump lifted the export controls? The Chinese are still, they're trying to promote as much nativization of Chinese chips as humanly possible. They clearly have a whole bunch of companies that would much rather have access to the H-200s, but unless it is a big breakthrough for them, it is not necessarily worth accepting a quid pro quo that would clearly be necessary to the United States in saying, oh yes, that's a big give that you just made to us.

1:06:27So right now, the big argument here is about how fast the Chinese are capable of catching up when that is their overwhelming desire. And that's the only place where they're behind. In terms of the capability of their talent, they're producing an awful lot. In terms of the coding that they have, they're world class. And in terms of the energy and the ability to build and direct, they're there.

1:07:13One of the arguments of Trump and the people around him is we need to focus on China. We need to focus on this competition. Instead, what the U.S. government is focusing on is Iran. I am myself, as somebody who has covered this and talks to people here, confused about what is happening. Like, it's like the Schrodinger's war at this point. Is the war alive? Is the war dead? How would you describe the state of America's war with Iran? I actually posted, I think it was last week, a graphic that I put together that showed Strodinger's Iran agreement. Like, is it a ceasefire? Is it a peace deal? Great minds cliche-like.

1:07:55I know, exactly. I mean, because he says different things inside the same post, right? Right. Look, the reason we don't know if it's dead or not is because Trump is desperately looking for an off ramp. But he also wants someone to blame and he wants the off ramp to look credible. And it doesn't. He understands that right now it looks bad for him, that the outcome, if he accepts what is on the table today, he'll reopen the strait. But Iran will arguably be in stronger geopolitical position in the Middle East. What is on the table today? On the table today is the Qataris would unfreeze Iranian assets that would be given to Iran in a lump sum in return for the Iranians ending the tolling of the strait and the Americans ending the blockade.

1:08:51and then the two sides would negotiate the nuclear issue. Probably worth noting here that Trump has repeatedly and very loudly denounced Biden and Obama for allowing Iran to have access to money that was frozen. This has been a big critique Trump has made. Many, many times. So in other words, at least at this stage of the deal, you would clearly say that the only thing better about the Trump engagement with Iran over Obama is that it was Trump that did it. That's the only thing that Trump supporters would have to point to, well, that's my guy, because you're in much worse position. The strait had been open before the war.

1:09:33They didn't have that leverage. They wouldn't have gotten that money. And their nuclear capacity is still sitting there. So, I mean, are they still gonna have the nuclear dust, as they call it? Well, that is to be negotiated. Do you trust them? Do you think in some future period, in 60 days, that they're going to engage proactively with you and the inspectors when the ships are coming through and they're exporting and you're exporting and you need it and you know that it can be shut down again. It's an incredible own goal. It is by far the biggest foreign policy mistake of the Trump administration.

1:10:06Frankly, of any administration since the Iraq war. I think you could say that. Why have they failed so badly? And the thing I hear Trump being confused by when I hear him speak is, look, they pounded Iran with bombs. They killed many of the senior people. I think he would have thought by now either the regime would have toppled, that was clear what he wanted at the beginning, or it would be so desperate that it would be suing for peace, willing to give up things it would never have given to Barack Obama. Just like China after April 2nd. He thought they were going to sue for peace because their economy was so much weaker than America's.

1:10:41So what did he get wrong about Iran? Why is Iran not desperate for an off-ramp, but Trump is? Well, one, he and the Israelis actually assassinated the leadership. So the reason that they had never tried to close the strait before, which they clearly had the capacity to do, the military capacity, the drones, the rest, is because they feared that if they did, that would be the end of their regime. People would come after their leaders. The people making the orders would get killed. Well, then you went ahead and killed their leaders. So they broke glass. They pull lever. Right. That is what actually happened.

1:11:21So Trump thinking that they were going to sue for peace like Venezuela when in reality they said, no, no, no, no, no, no. You just broke the whole thing. We don't trust you. So killed the equivalent of the people he handed power to in Venezuela. Exactly. Exactly. Even if they hadn't, I would have been very surprised if this strategy would have worked out. This was incredible overconfidence born of the Venezuela success and also born of Trump's previous history with Iran, where they talk big against the United States during the 12-day war. In his first term, when he killed Qasem Soleimani, he ordered the assassination, then they didn't do anything.

1:11:59Well, this time you actually went and blew up their regime. And so, yeah, they're going to it's essentially suicidal response. But anything you can do to try to to regain deterrence, to try because, you know, you can't trust them for diplomacy. diplomacy so there's no credibility with the Americans saying okay we're going to be Mr. Tough Guy if you don't do x y and z I've seen Trump Trump has posted that in the last couple months I'm going to really be tough guy no more Mr. Nice Guy I don't once you've assassinated the leadership yeah once you've assassinated the leadership I don't think you can say no more Mr.

1:12:34Nice Guy I think that analogy should be off the table for you so he's gotten himself in an enormous jam. And the only way he can resolve it is by undoing all of his war goals, all of them, all of them. It's there's no more rescuing the Iranian people. There's no more ending the ballistic missile capability that's for the region to deal with. There's no more ending support for proxies, the military capabilities, the missiles they still have, the drones they still have. They've blown up a lot of the Navy. I mean, almost everything they have tried to accomplish, they have failed. And meanwhile, the United States has driven an incredible economic consequence for the entire world.

1:13:19And he is to blame. So allies and adversaries of the United States, they're looking at oil prices and fertilizer and food. Can you describe this for a minute in detail? Because I think that people don't quite realize, we have suffered some economic pain from this war here at home. The fact that it is much worse elsewhere, I think is not fully penetrated. So paint that picture a bit. Yeah. Well, I mean, so I mentioned before I was just in the DR, Dominican Republic, right? And I mean, you know, this had a huge effect on approval for the leader, their oil importers and the subsidies are much harder to do.

1:13:55Inflation is way up, The United States, as a major oil producer and exporter, is much less affected in the near term by this conflict. You have Asian economies who have to ration and the energy that's available for industrial uses because they can't get what they need through the strait. You've got the global plastics industry, petrochemicals. What's it come from? Oil. Where's it come through? The strait. Most of that is Asia. That production is getting squeezed. Those prices are way up. Those industries are under severe distress. You've got countries like the Philippines that are under a condition of national emergency right now.

1:14:43You have sub-Saharan African countries that may enter financial crises because they can't provide. They don't have the fiscal space to provide the continued support for their populations, given where prices are going. And that's before the food crunch, because the fertilizer has missed the growing season now, but you haven't passed that through to food until the growing season leads to vegetables and fruits and grains that then are exported. The Americans and the Europeans and the Japanese, they'll get the food. It'll just be a higher price. countries in the global south, a lot of those will not even have access to that food.

1:15:20People will starve on the back of this. Is there an estimate of how big this will be? I've heard from members of the United Nations that are involved in global food distribution that the impact on the global GDP next year could be as much as one and a half percent. Again, the United States will be much lower than that, but some of these other economies will be much higher. And look, the danger, every country you talk to, every leader you talk to sees President Trump individually as uniquely responsible for this economic downturn. And every day that the strait remains closed is a day that the Americans are responsible further for that.

1:16:04And I think that the impact of that on the trust and the reliability of the United States. As the Americans tell the Saudis, well, if you don't do an Abraham Accords deal, maybe we're not going to support reopening the strait. The impact on the Saudis are, why are we working with these guys the way we used to? Why don't we engage more with the Chinese? Isn't the Saudis, there's been a bunch of reporting, I'm curious what you think of it, that the Saudis were, along with the Israelis, pushing us into this war. I would say that the UAE, along with the Israelis, have been much more interested in the war continuing to ensure that Iran no longer has that capacity.

1:16:42That's very different from the Saudi view, which is aligned with Pakistan and Egypt and Turkey, much more of an Islamic bloc that will find a way to engage in a peace settlement with the Iranians after the war is over. Now, I mean, the Saudis are not hurt as much economically because they're moving 7 million barrels a day across their east-west pipeline through the Red Sea, which doesn't need the Strait of Hormuz. You've got other countries like Kuwait, for example, Qatar, that can't get anything out unless the strait is open. So very different perspectives inside the Gulf itself to how this war should be responded to.

1:17:22But with the exception of Israel and the UAE, and the UAE, by the way, did not like this war when it started. and but now that they've taken these existential threats i mean if you're going to hit the or try to hit the burj al-arab you know if you're going to try to if you're going to hit their airport suddenly your entire model is is at threat because they've got 10 million people 1 million emiratis and they're not a regional player they're a global player they're like a city state they're like singapore but they're only like singapore if the middle east can be like europe if the middle East is like the Middle East, suddenly the Singapore analogy doesn't work very well, right?

1:18:00And so they've got real problems and they don't want to leave the Iranians with this level of strength. Literally every other country in the world is saying this is an unmitigated disaster and it needs to end. There was no reason for it. It was a war of choice. It's gone badly. And we want this over now. So Trump is saying, and his administration is saying, there will be no end without a resolution of the nuclear file? The nuclear file is, I guess, the new term of art on this. Will there be a resolution of the nuclear file? Well, what they are presently negotiating is not that. They are presently negotiating reopening the strait that will then lead to discussions on the nuclear file.

1:18:42Trump has publicly softened his approach on the nuclear file. He was saying that all of that enriched uranium had to be removed and had to be sent to a third country, preferably the United States. Now he's saying, doesn't matter where it goes, can be any other third country. He's made it much easier for the Iranians to eventually get to, yes, I could make an argument that long-term, the end of OPEC and the shift of the global economy to a much faster degree towards post-carbon energy as a consequence of this war is a really positive thing. I mean, it's a huge amount of short-term economic hardship, but absent that, it was moving more slowly.

1:19:30We're gonna move to electric vehicles faster. We're gonna move to solar and wind and nuclear faster. Donald Trump, a climate president. Donald Trump turns out to be the guy that has done more to ramp up that shift than any other move except for the Chinese leadership. No question. That wasn't his intention, but that is the long-term outcome. That is a good thing. The planet has a better shot as a consequence of that. Is that really true, or do you just have everybody building more pipelines to make sure they don't need the state of Hormuz as much? No, no, it's really true. I mean, both will happen.

1:20:04Don't question it. But the fact that oil and gas in the Middle East is this vulnerable, so much comes from this part of the world. Yes, you can move pipelines that'll have more go through the Red Sea. the Houthis can disrupt the Red Sea. They haven't. They've been bought off by the Saudis. But in a world where drones are becoming so much more cheap, do you really want to have choke points that can be hit that easily? I mean, today's problem in the Strait of Hormuz could be tomorrow's problem in Malacca. Given that, do you really want these global choke points on oil and gas? Or do you want to invest in 21st century technologies?

1:20:39Like if this were to get the Americans ass in gear on renewables, that would be an amazing thing. Instead, the Americans will fall further behind for now, the way the U.S. is now starting to catch up on critical minerals and rare earths. But leaving that aside, in terms of the short-term impact for this administration, one thing we haven't even talked about yet, and we have to at least mention it, is the Iranian people are completely screwed here. Remember, this was like the whole argument at the beginning. It's back in January, the believed to be tens of thousands Iranians that were brutally murdered by their own regime.

1:21:20And Trump said, I'm coming to rescue you. He doesn't talk about that anymore. This regime is in place. This regime is so confident being in place that over the last week, they even had military leaders for the first time since the war started, all showed up publicly for a memorial service. They wouldn't have done that two weeks ago or a month ago. So Trump has completely failed in the humanitarian ostensible purpose of the war. And on the nuclear file, after having blown up, obliterated, as the administration said, their nuclear capabilities, which have been set back, that's certainly true. But now getting the Iranians to a place of we will actually allow for the end of enrichment beyond civilian purposes with inspections, we're very far from that.

1:22:17So I would argue that not only are all of the macro concerns made much worse by near term by Trump's war, but even the narrowest vision of we're going to do a much better deal than that horrible deal that Obama did with JCPOA. At this point, that looks unlikely. So does all this anger from our allies from other countries actually matter for us? And the reason I ask is that I remember in the Bush era being told America's standing in the world will never recover. Then Barack Obama was elected president and it seemed to recover. Then it was Trump won and they'll never trust us again. Then Joe Biden took office and, you know, bygones seem to be bygones.

1:23:03This has been a lot worse. But does it matter? It does matter. But we need to we need to be modest. in the expectations of what that means. So the Europeans today really mistrust the United States. That is not making them trust the Chinese more. China has, the one part of China's economy that is really going gangbusters is not the domestic economy. It is their export of manufactured goods around the world, which is a dumping strategy that is here truly hollowing out industries countries in other countries like in Europe. And so it's not like the Europeans are suddenly saying, we're going to work with the Chinese and that's going to be our principal alliance and it's no more NATO and that's not going to give them influence with the U.S.

1:23:58So in those big picture ways, I don't suddenly see this being a Cold War, two blocks, and the Chinese are picking off a bunch of countries. I think it's much more complicated than that. The Japanese don't suddenly trust the Chinese. In fact, they're in a big fight with the Chinese right now over Taiwan. And the Chinese are cutting off their tourism and not buying the seafood anymore. It's gotten much worse. So the Japanese are closer to the United States, despite feeling that the Americans are acting in an extortionate way. And their top leaders have told me that directly extortionate in how badly the Americans have mistreated their best friend, the Japanese.

1:24:36Now, having said all of that, we are seeing things that are going to matter long term. I'll give you an obvious example. The Europeans are now spending real money on defense. The Poles, the Germans, other countries, especially the frontline countries. The Canadians are spending a lot more on defense, but they're not spending on American military industrial complex. They're spending it on themselves. They're building it out. And that is money that used to go directly into the U.S. and U.S. jobs. And going forward, it will not. India is building out their military to a much greater degree. They're moving away from Russia.

1:25:11First Trump term, the Quad, moving more to the United States. Now, much more with the Europeans. That is a long-term move. These are legacy systems that will have parts and service and training that will last for decades. That is money that is not coming to the United States. The EU-Mercosaur trade agreement. And Trump deserves credit for EU-Mercosaur, Can you just say what EU Mercosur is? EU Mercosur is like the big trading group in Latin America. So the Free Trade Association in Latin America. And the EU is the EU. And so now there is an agreement for the EU and Mercosur. It's bringing those tariffs down that will facilitate greater trade flows between the Latin American countries and the European countries, which will mean less trade flows with the United States.

1:26:01Trump deserves credit for that. It would not have happened without him, without the tariffs that he put on unilaterally towards all the American allies. And I can give you so many other examples of those things happening, all of which individually are small. Collectively make the United States a smaller piece of indispensability with other countries. And that means less money to the US, less money through the US, less jobs in the United States. Those are own goals that are near-term irrelevant, but long-term, and Trump cares about the near-term, but long-term will have real costs for a United States that is the biggest engine of global growth still in the world.

1:26:43— Earlier in this conversation, we talked about the Thucydides trap. You've made an argument that that's the wrong trap to think about. So what's the trap that's been on your mind? — The trap that's been on my mind is the Gracchi trap, which was when the Gracchi brothers, who had policies of grievance that believed that there was no more mobility and that the poor Roman citizens were never going to have their due, started breaking. They had their own political revolution and started breaking the norms and the laws of how Rome was run. And the allies of Rome no longer saw Rome as dependable. The enemy was inside the house.

1:27:25It was the political dysfunction of Rome that was defeated the first time, defeated the second time, but ultimately led to the collapse of the Roman Republic. Again, internal political revolutions that failed, but that weakened the system. and that also allowed people to get used to those norms getting violated so that when they were violated a second time and a third time by different leaders, they weren't so surprising, right? And that is what I see happening in the United States right now, that the U.S. is unilaterally withdrawing from its alliances. It's saying we don't want to be dependable.

1:28:01We don't want to be there for the Ukrainians or for the Europeans in helping Ukraine. We don't want to be there for Taiwan. We'll make that a negotiation with the Chinese. We don't want to be there for the Japanese or the South Koreans. You guys should be doing that stuff yourself. We're not going to be the architects of free trade. Everybody else should have to come and invest in the United States because we're the big power and you guys have been taking advantage of us. And we don't even want to have the best talent from all over the world because we already have the Americans, right? And that's what really matters.

1:28:33And so you guys just do whatever you want. Those things are what is driving the geopolitical risk in the world today. The United States is the principal driver of geopolitical uncertainty in the world today. President Trump and the Americans are driving it. They're driving it with tariffs and industrial policy. They're driving it with the war in Iran. They're driving it with the lack of predictability with the Europeans. they're driving it with the change to the structures and the rules and the norms inside the world's largest market it's not china china has huge problems they're not the ones that are driving the change when when trump put together the board of peace which we don't even talk about anymore because there's no money for it right no one really cares and again davos he was there on stage and he had all these big countries like paraguay and azerbaijan show up with them right The Chinese didn't show.

1:29:29He invited them. Chinese didn't show. They said no. Why would they say no? Well, because the Chinese were like, well, if you guys are going to pull out of the UN, we'll just be the most powerful country influencing the United Nations. You guys are pulling out of the World Health Organization. We'll increase the amount we donate every year to WHO. We'll be the people making those decisions. They're not creating alternative architecture. They're becoming the most important country influencing our architecture that we don't care about anymore. That's not a city's trap. That's the Americans withdraw.

1:30:01That's the U.S. acting in a unilateral way and other countries trying to find ways to continue to ensure that we have governance. I think that is a good place to end. Always our final question. What are three books you'd recommend to the audience? Three books. Well, first, I've got to start with The Hitchhiker's Guide because when I was in high school and college, there were basically three kinds of kids. There were the Tolkien kids that were way too dorky. they were the Ayn Rand kids who you don't trust to run anything. And then there were the Douglas Adams kids. And those were kind people. They were curious.

1:30:35They were interested. And that was a universe that really appealed to me. I love this typology. Do you really? There's no book I've reread more than The Hitchhiker's Guide. Is that true? Yes, no book. Have you said that publicly? Probably not. You've got something new out of me. Interesting. My favorite book growing up. My favorite book growing up. Absolutely my favorite. Actually, maybe The Dragon Riders of Pern, which I reread obsessively when I was like 10. but after that, The Hitchhiker's Guide and I just, and I continue to reread it. And it was the kind of thing that if you meet people when you're younger that really love Hitchhikers and the series, you knew you'd like those people.

1:31:06Like those are your people. That's your tribe, right? And I would say more people like that that like actually like on the global stage, certainly on the American stage in Washington would probably help us, right? Secondly, I was gonna say A World Appears by Michael Pollan. I don't know if you've read it yet. He's been on the show. We had a great conversation. Oh, cool. So just this idea, I mean, I've liked him for a long time because he talks about issues that are not super fashionable, that are really important to human beings. I really appreciate him doing the work and making us think about what identity is in this, because it's changing so quickly now.

1:31:41The nature of where humanity begins and ends seems to me very fluid in ways that people aren't thinking about. And then finally, I was going to say The Chronoliths by Robert Charles Wilson, which was written back in 2001, but which I went back and I read recently. And I wanted to see if the book still held. And it was by, again, kind of neardewell intelligent folks, but who aren't really succeeding in society, who, by virtue of being in the right place at the wrong time, witness something from the future coming back that has the potential to rip apart the society or that they can fix it. And the book is all about this.

1:32:24This is before AI becomes like a real thing. And yet it's the same exact thing. Ian Bremmer, thank you very much Thanks, Seth

1:32:58The show's production team also includes Marie Cassione, Kristen Lynn, Emma Kelbeck, Jack McCordick, Marina King, and Jan Koble. Original music by Carol Saburo and Pat McCusker. Audience strategy by Shannon Busta. The director of New York Times Pending Audio is Annie Rose-Strosser.