The Global AI Race: National Security Expert Maps US-China Competition and Defense Strategy

A national security expert with diplomatic roots reveals how China's DeepSeek breakthrough reshapes the AI landscape and what America must do to maintain technological leadership.

China's DeepSeek AI model, trained with fewer resources than US competitors, signals a new phase in the global AI race where technological leadership determines world power dynamics.

Key Takeaways

• China's DeepSeek model performed on par with leading US foundation models while using significantly less compute and cheaper hardware, shocking the AI community
• Historical pattern shows technological leaders become global powers—from Roman roads to British steamships to current US dominance through semiconductors and internet infrastructure
• The US must maintain leadership in six critical technologies: semiconductors, AI, 5G/6G, biotechnology, financial technology, and Internet of Things to preserve strategic advantage
• Defense Department faces massive integration challenges with $280 billion annual acquisition budget but struggles with procurement processes, talent acquisition, and technological adoption
• AI creates new cybersecurity vulnerabilities through autonomous malware generation, sophisticated phishing campaigns, and accelerated development of chemical/biological weapons by non-state actors
• Track 2 diplomacy with China remains essential despite deteriorated relations, requiring trust-building between scientists and policymakers to prevent accidental escalation or conflict
• Swing states like India, UAE, and Saudi Arabia invest heavily in AI capabilities while maintaining relationships with both US and China, requiring careful alliance management

Diplomatic Origins: War as the Dumbest Solution

Growing up in a diplomatic family during the Soviet-Afghan conflict, with grandfathers who fought on opposite sides of World War II, shaped a fundamental worldview that war represents humanity's least intelligent method for resolving conflicts.

• Living near the Afghanistan border during the Soviet invasion provided firsthand exposure to war's human costs and refugee displacement. An Afghan refugee camp in the family's backyard during childhood created direct personal understanding of conflict's impact on civilian populations.
• Having grandfathers who fought on opposing sides of World War II demonstrated how intelligent people can find themselves in destructive opposition. This family history illustrated that even well-meaning individuals can be drawn into conflicts that serve no one's ultimate interests.
• Direct observation of war's effects motivated a lifelong commitment to diplomacy and peaceful conflict resolution. Early exposure to violence and displacement created conviction that diplomatic engagement, however difficult, offers superior alternatives to military confrontation.
• Personal experience with refugee populations highlighted the importance of humanitarian considerations in foreign policy decision-making. Understanding war's impact on innocent civilians influenced perspectives on the moral dimensions of international relations and security policy.
• Witnessing conflict zones firsthand provided practical understanding of how regional instability affects global security and economic systems. Early exposure to geopolitical complexity informed later work on technology policy and international security cooperation.
• The combination of German and American family heritage during wartime offered unique perspective on how allies and adversaries can change over generations. This background emphasized the importance of long-term thinking and relationship building in international affairs.

This foundation explains the emphasis on diplomatic solutions and cooperative approaches to managing technological competition and security challenges.

The DeepSeek Shock: China's Efficient AI Breakthrough

China's DeepSeek model fundamentally challenged assumptions about AI development costs and capabilities, demonstrating that technological leadership doesn't always require the largest resource investments.

• DeepSeek achieved performance comparable to leading US foundation models while using significantly less computational resources and training costs. The breakthrough surprised AI experts who assumed massive compute requirements created insurmountable barriers for competitors.
• The model was developed by a company founded in 2023 with only about 100 employees, contradicting assumptions about necessary scale for AI leadership. This small team size demonstrated that innovative approaches can overcome resource disadvantages through superior methodology and efficiency.
• Chinese engineers trained the model using chips just below export control thresholds, proving that restrictions on cutting-edge hardware don't prevent breakthrough achievements. This finding revealed limitations in current export control strategies that focus primarily on the most advanced semiconductor components.
• The development cost significantly lower than comparable US training runs, suggesting different approaches to resource allocation and efficiency optimization. Chinese teams may have developed superior training methodologies that achieve better results with fewer computational resources.
• DeepSeek represents broader Chinese strength across multiple AI application areas including computer vision, surveillance, sensing, autonomy, drones, and advanced manufacturing. The foundation model breakthrough reflects systematic capabilities across the entire AI technology stack.
• The surprise timing of the model's release and performance evaluation highlighted intelligence gaps in understanding Chinese AI development capabilities. Western observers underestimated both the pace and sophistication of Chinese AI research and development efforts.

"Never count out the Chinese" becomes the key lesson from DeepSeek's demonstration that innovation can overcome resource constraints through superior methodology.

America's Critical Technology Domains: The New Battleground

Maintaining global leadership requires dominance in six specific technology areas that serve as building blocks for economic prosperity, military capability, and soft power projection worldwide.

• Semiconductors form the foundational building block for all other advanced technologies, making chip manufacturing and design capabilities essential for national competitiveness. Control over semiconductor supply chains determines which countries can develop and deploy advanced AI, communications, and defense systems.
• Artificial intelligence represents the general-purpose technology that will drive innovation across every sector of the economy and national security apparatus. AI capabilities determine advantages in everything from financial services to military operations to scientific research and development.
• 5G and 6G communications networks provide the infrastructure rails on which all connected technologies operate, from Internet of Things devices to autonomous vehicles. Control over communications standards and deployment determines which countries can offer secure, high-speed connectivity for critical applications.
• Biotechnology offers dual-use capabilities for both medical advancement and potential security applications, requiring careful management of research and development priorities. Biotech leadership affects both public health outcomes and potential defensive capabilities against biological threats.
• Financial technology determines the economic rails through which value transfers globally, affecting both commercial transactions and international sanctions effectiveness. Fintech capabilities influence monetary policy implementation, cross-border payments, and economic statecraft tools.
• Internet of Things encompasses the sensing and connectivity infrastructure that enables smart cities, industrial automation, and comprehensive data collection capabilities. IoT leadership affects both economic efficiency and surveillance capabilities across civilian and military applications.

These technology domains interconnect to create compound advantages for leading nations while creating vulnerabilities for countries that fall behind in critical areas.

Running Faster: America's Innovation Acceleration Strategy

Beyond export controls that attempt to slow competitors, the United States must dramatically accelerate its own innovation capabilities through targeted government action and private sector support.

• Electricity permitting represents a fundamental bottleneck preventing rapid data center deployment and AI training infrastructure development. Current processes take years to approve power generation and distribution for the massive computational requirements of advanced AI development.
• Basic research and development funding has declined dramatically from Cold War levels when the US invested up to 2% of GDP in scientific advancement. The Chips and Science Act allocated $170 billion over five years for R&D, but chronic underfunding prevents full implementation of research priorities.
• Cybersecurity support for AI companies requires government assistance with insider threat detection, information sharing protocols, and competitive intelligence protection. Current laws prevent companies from warning competitors about fired employees who pose security risks, allowing threats to move freely between organizations.
• Coordination mechanisms between government and private sector remain underdeveloped compared to the scale and urgency of technological competition. Better coordination could leverage America's innovation ecosystem more effectively while maintaining competitive dynamics that drive breakthrough research.
• The nuclear energy analogy highlights the need for government oversight and security support as multiple companies develop potentially dangerous dual-use technologies simultaneously. AI development parallels nuclear technology in terms of potential benefits and risks requiring coordinated safety measures.
• Investment in research infrastructure and talent development requires sustained commitment beyond individual political cycles to maintain long-term competitive advantages. Short-term budget constraints undermine the multi-decade investments necessary for technological leadership in rapidly evolving fields.

The goal involves creating conditions where American companies can innovate faster while maintaining security and safety standards appropriate for dual-use technologies.

Pentagon's Innovation Challenge: Bureaucracy vs. Technology

The Department of Defense struggles to integrate cutting-edge AI capabilities despite having a $280 billion annual acquisition budget and urgent operational needs for technological advancement.

• The Pentagon employs over 3 million people with an $850 billion budget but remains far behind the cutting edge of technological adoption and integration. This massive scale creates both opportunities for impact and challenges for implementing rapid change across the organization.
• Procurement processes designed for traditional military hardware prove inadequate for software-intensive AI systems that require rapid iteration and continuous updates. Traditional acquisition timelines measured in years conflict with AI development cycles measured in months or quarters.
• Talent acquisition and retention challenges prevent the military from competing effectively with private sector technology companies for skilled AI engineers and researchers. Compensation structures, bureaucratic constraints, and career advancement limitations make it difficult to attract top technical talent.
• Cultural resistance to experimentation and risk-taking inhibits the iterative development approaches necessary for successful AI integration and deployment. Military culture emphasizes reliability and proven solutions, conflicting with AI development requiring continuous experimentation and failure tolerance.
• The Defense Innovation Unit has evolved through multiple iterations to bridge Silicon Valley and Pentagon cultures, but remains small relative to overall DOD scale. Success stories exist but represent incremental rather than transformational change across the broader defense establishment.
• Special operations commands and other forward-leaning military units provide entry points for new technologies before broader institutional adoption. These early adopters serve as proving grounds for capabilities that can eventually scale across traditional military hierarchies.

"Every Secretary of Defense that I've ever interacted with has tried to reform that process and oh boy it's not easy."

AI Security Threat Multiplier: Cyber, Bio, and Autonomous Weapons

Artificial intelligence amplifies existing security threats across multiple domains while creating entirely new categories of risk that require coordinated defensive and offensive responses.

• Cybersecurity faces fundamental transformation as AI enables autonomous malware generation, sophisticated phishing campaigns, and adaptive attack methods that evolve faster than human defenders. Current security approaches based on human analysis and response times become inadequate against AI-powered threats.
• Chemical and biological weapons development becomes accessible to non-state actors through AI assistance that provides PhD-level expertise to novices seeking to create dangerous materials. The democratization of advanced scientific knowledge through AI creates new proliferation risks beyond traditional state-based threats.
• Autonomous weapons systems create escalatory pressures as AI-controlled systems can respond faster than human decision-makers in crisis situations. The speed advantage of AI fighter pilots over human pilots incentivizes "shoot first" approaches that undermine human-in-the-loop safeguards.
• Nuclear command and control systems face new vulnerabilities from AI-enabled cyber attacks while also benefiting from AI-enhanced detection and response capabilities. The Biden-Xi agreement to maintain human control over nuclear decisions represents crucial guardrail against AI automation in this domain.
• Surveillance capabilities reach unprecedented levels through AI analysis of ubiquitous sensors, benefiting both intelligence gathering and authoritarian population control. The same technologies that enhance democratic security also enable oppressive surveillance by authoritarian regimes.
• Information warfare and disinformation campaigns gain sophistication through AI-generated content that becomes increasingly difficult to distinguish from authentic human communication. Traditional verification methods become inadequate as AI-generated text, images, and videos reach human-quality levels.

The challenge involves developing AI-enabled defenses against AI-enabled threats while preventing escalatory dynamics that increase rather than decrease overall security.

Building Trust Across the Pacific: Track 2 Diplomacy

Despite deteriorated official relations, scientist-to-scientist communication and informal diplomatic channels remain essential for preventing miscalculation and building cooperation on shared AI safety challenges.

• Current US-China relations lack the military-to-military communication channels that helped prevent escalation during the Cold War with the Soviet Union. Chinese leadership resists direct military communication, preferring that the US simply withdraw from contested areas rather than establishing crisis management protocols.
• Track 2 dialogues between non-government experts provide crucial relationship building and information sharing when official diplomatic channels remain frozen. These informal communications help each side understand the other's concerns, capabilities, and red lines without formal government commitments.
• Personal relationships between scientists and policy experts create the foundation for crisis communication when tensions rise and misunderstandings threaten to escalate into conflict. Trust built through repeated interaction enables phone calls and informal consultation during critical moments.
• The nuclear weapons analogy suggests that formal arms control agreements may require years of preliminary trust-building and shared crisis experiences. The first meaningful nuclear limitations didn't emerge until 1963, requiring the Cuban Missile Crisis to demonstrate escalation risks to both sides.
• Safety testing cooperation through institutions like the UK AI Safety Institute provides concrete focal points for technical collaboration that serves both sides' interests. Shared testing protocols and safety research create common ground while addressing legitimate security concerns.
• Cultural and scientific exchange programs maintain human connections even during periods of political tension and economic competition. People-to-people relationships provide resilience against complete breakdown in bilateral relations during crisis periods.

The goal involves creating sufficient trust and communication channels to prevent accidental conflict while maintaining appropriate caution about technology transfer and competitive dynamics.

Alliance Strategy: Winning Hearts and Minds of Swing States

Success in AI competition requires building coalitions with countries that prefer maintaining relationships with both the US and China rather than choosing sides in a new Cold War framework.

• Swing states include major powers like India, as well as resource-rich nations like UAE and Saudi Arabia that invest heavily in AI while maintaining relationships with both superpowers. These countries resist binary choice between US and Chinese partnerships, preferring strategic autonomy and diversified relationships.
• Economic incentives drive swing state behavior as China serves as the largest trading partner for 120-130 countries worldwide, making complete decoupling economically painful. Unlike the Soviet Union's self-isolation, China's deep global economic integration creates different competitive dynamics requiring nuanced approaches.
• India represents a crucial swing state with significant engineering talent, strategic AI thinking, and plans for national compute resources that could serve broader alliance purposes. Indian capabilities in AI development and implementation offer partnership opportunities that benefit both countries without requiring exclusive relationships.
• Middle Eastern states like UAE and Saudi Arabia invest massive resources ($100+ billion AI funds) in building domestic capabilities while maintaining relationships with all major powers. These investments create both opportunities for partnership and risks of technology transfer to competitors.
• Geographic diversification of AI infrastructure could leverage allies' natural advantages while reducing single points of failure and political vulnerability. Iceland's geothermal energy could power data centers while maintaining alliance control over critical AI training and deployment infrastructure.
• Forcing binary choices risks pushing swing states toward competitors rather than building cooperative relationships that serve US interests while respecting partner autonomy. Overly aggressive alliance demands may backfire by driving potential partners away rather than creating sustainable cooperation frameworks.

The strategy requires balancing security concerns with relationship building to create sustainable partnerships that advance shared interests without forcing unnecessary confrontations.

Economic Leadership as National Security Strategy

Technological competition succeeds through economic strength and innovation leadership rather than purely military or diplomatic approaches to international competition and alliance building.

• The United States remains the fastest-growing large economy on earth with an innovation system that continues to outperform global competitors across multiple technology domains. This economic dynamism provides the foundation for both military capability and soft power projection worldwide.
• AI productivity gains could add trillions of dollars to GDP over the next decade according to analysis by major consulting firms and technology companies. These economic benefits provide resources for both domestic investment and international engagement while maintaining technological leadership.
• Global economic leadership enables the US to set standards, attract talent, and shape international institutions in ways that pure military power cannot achieve. Economic attraction draws the world's best minds and creates dependencies that support broader strategic objectives.
• Innovation ecosystem advantages in Silicon Valley and other US technology centers create compound benefits through network effects, venture capital availability, and cultural support for risk-taking. These advantages prove difficult for competitors to replicate despite significant resource investments.
• Labor productivity improvements through AI adoption could offset demographic challenges and maintain economic growth rates necessary for global leadership. Technological solutions to aging populations and workforce constraints provide alternatives to immigration or reduced living standards.
• Alliance building becomes more effective when based on shared economic opportunities rather than purely security concerns or ideological alignment. Partners prefer relationships that offer mutual economic benefits over those requiring sacrifice for abstract strategic purposes.

Economic leadership provides the foundation for both military capability and diplomatic influence while creating positive-sum opportunities for international cooperation.

Future Scenarios: Coexistence vs. Confrontation

The optimistic path forward envisions US-China coexistence as two great powers that compete economically while cooperating on global challenges rather than military confrontation and economic decoupling.

• Successful coexistence would allow both countries to reduce military spending and redirect resources toward domestic priorities like healthcare, pensions, and infrastructure investment. Military competition wastes resources that could address pressing domestic challenges in both countries.
• Collaborative approaches to climate change become possible when the two largest economies can work together rather than undermining each other's efforts through political competition. Climate solutions require cooperation between the world's largest polluters and technology developers.
• Scientific and technological collaboration could accelerate innovation in areas benefiting all humanity while maintaining appropriate security boundaries around sensitive military applications. Shared research on medical advances, energy efficiency, and environmental protection serves everyone's interests.
• Economic integration through controlled trade relationships could benefit workers and consumers in both countries while maintaining strategic autonomy in critical technology domains. Selective cooperation allows economic benefits while protecting national security interests.
• Reduced tensions would enable better relationships with swing states that prefer not to choose sides in superpower competition. Alliance building becomes easier when partners don't face pressure to completely abandon relationships with major economies.
• The alternative pathway of continued escalation risks military conflict, economic decoupling, and global instability that serves no one's long-term interests. Confrontation scenarios create risks of catastrophic outcomes while offering limited benefits to either side.

"Unless you put a big positive goal out there you'll never achieve it" summarizes the importance of working toward cooperative rather than confrontational futures.

Common Questions

Q: How did China's DeepSeek model achieve comparable performance to US AI systems with fewer resources?
A: DeepSeek used more efficient training methods and chips just below export control thresholds, suggesting innovative approaches that overcome resource constraints through superior methodology rather than brute force computation.

Q: Why does the US need to maintain technological leadership instead of sharing AI benefits globally?
A: Technological leaders control the values embedded in systems that become global infrastructure, making leadership essential for preserving democratic values and human rights in an interconnected world.

Q: What prevents the Pentagon from adopting AI technologies despite massive budgets and urgent needs?
A: Procurement processes designed for traditional hardware conflict with AI's rapid iteration cycles, while talent acquisition challenges and risk-averse culture inhibit the experimentation necessary for successful AI integration.

Q: How does AI amplify cybersecurity threats beyond traditional hacking methods?
A: AI enables autonomous malware generation, sophisticated phishing campaigns, and adaptive attacks that evolve faster than human defenders, while also democratizing advanced cyber capabilities to non-state actors.

Q: What role can Track 2 diplomacy play in managing US-China AI competition?
A: Informal scientist-to-scientist communication builds trust and understanding that can prevent miscalculation and create foundations for formal cooperation on shared safety challenges over time.

The global AI race represents more than technological competition—it determines which values and systems will shape humanity's future. Success requires combining innovation acceleration with alliance building, security measures with diplomatic engagement, and competitive advantage with cooperative solutions to shared challenges.