rewrite this title How China Could Quietly Upend the AI Race

I’ve been pounding the table about how important the US-China trade war is to the future of AI.

Nothing is more important than America winning the AI race.

Yet the escalating trade war puts our lead at risk.

After President Trump placed tariffs of up to 145% on Chinese goods, China retaliated with 125% tariffs on U.S. products.

And even though the Trump administration said on Saturday that it would exempt technology products like the iPhone, PCs and computer chips…

These extremely high tariffs make trade between the two countries economically unviable.

Why did these tariffs happen in the first place?

Trump argues that they will boost US manufacturing and protect jobs.

But his tariff policies also appear to be aimed at isolating China economically.

And it seems like the primary goal of rolling back tariffs for other countries last week was to rally these nations to align with the U.S., or at least to avoid retaliatory actions.

So far, that doesn’t seem to be working.

China responded by calling for global solidarity against what it describes as U.S. “trade tyranny.”

And now Beijing is reaching out to Asian nations and the European Union to engage in trade talks that emphasize multilateralism and free trade.

In fact, China and the EU have already started negotiating to get rid of tariffs on Chinese EVs.

What does all this have to do with artificial intelligence?

Here’s the thing…

Everything I just described is happening out in the open.

But I’m concerned that Beijing is playing a quieter game. One that might be much more dangerous for the U.S. as we race towards artificial superintelligence, or ASI.

After all, China can retaliate in ways that are hard for us to see.

The Trade War’s Shadow Front

China argues that it’s less dependent on American consumers than it used to be.

And with a massive domestic market and deep-pocketed state banks, China is hinting that it can ride out this trade war.

In fact, they intend to come out stronger.

After all, China has not only fired back with their own tariffs, they’ve blacklisted U.S. companies and restricted exports of rare earth minerals that U.S. companies can’t get elsewhere.

But I believe they have an even more powerful weapon at their disposal.

China can steal our ideas.

You see, for years the U.S. has accused China of stealing American intellectual property (IP) to build up its own industries.

Whether it’s software code, trade secrets or patented inventions, our ideas are constantly at risk.

That’s why entire sections of U.S. trade policy have been built around trying to stop IP theft.

China, for its part, insists that it’s made progress in stopping it. In a recent government white paper, Beijing laid out a long list of legal reforms meant to prove it takes IP seriously.

The Chinese government says it has put in place stronger laws around trade secrets, new rules to fight counterfeits and tighter penalties for cyber-infringement.

They’ve also launched thousands of enforcement actions and promised to keep foreign companies’ business information safe.

On paper, this sounds great.

But actions speak louder than words. And the U.S. government keeps finding evidence of Chinese IP theft.

Source: House Committee on Homeland Security Subcommittee on Counterterrorism and Intelligence

In February, a Chinese national named Leon Ding was indicted for allegedly stealing AI secrets from Google.

Last December, Yinpiao Zhou was arrested for allegedly using a drone to take photographs of Vandenberg Space Force Base.

And up until recently, China’s approach to IP protection has been seen by many critics as spotty at best.

Programs like “Made in China 2025” openly aimed to leapfrog foreign tech by any means necessary, including forced technology transfers and state-backed copying.

That’s why I’m especially concerned with what’s happening today.

With a trade war heating up and global tensions rising, China could choose to strike back without triggering more tariffs or causing any additional financial chaos.

It could simply fall back on old habits.

Because unlike tariffs, IP theft doesn’t show up on an invoice. It’s hard to trace, harder to punish and nearly impossible to measure in real time.

A single stolen chip design or AI algorithm might take years to show up in a competing product.

And by then, the damage is done.

Of course, Beijing would deny it’s happening. It could point to its shiny new regulations and say all the right things.

But during this trade war, the pull of gaining a strategic advantage might be too strong to resist.

Here’s My Take

At the risk of sounding like a broken record, my biggest concern is making sure the U.S. achieves ASI first.

I believe this is a race we can’t afford to lose.

I’m happy to see that China hasn’t shut the door on tariff negotiations. I also believe Beijing is aware that blatant IP theft could backfire internationally, pushing other countries to take sides.

But as pressure builds, the U.S. may need to prepare for more than just tit-for-tat tariffs.

We need to be diligent about IP theft.

Because we have to protect our lead. Especially as we enter the final leg of the race to ASI.

As you know, I believe we’re fast reaching that point today…

And I’m convinced it will trigger a massive melt-up in certain AI stocks.

That’s why I posted an urgent online briefing last week where I was joined by a special guest whose team built an amazing software tool. It’s designed to help you spot the most promising winners and avoid the potential losers in the race to ASI.

During the briefing we talked about a new model portfolio he and his team built with their top 10 AI stocks…

And how you could make up to 10 times more money from those stocks by making a simple tweak to your investments. All without dealing with options, futures or anything extra risky.

My publisher is insisting that we pull this presentation down at midnight tonight.

But you still have time to view it… if you hurry!

Click here now for my Final Race to ASI briefing.

Regards,

Ian KingChief Strategist, Banyan Hill Publishing

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