TRANSKRİPT 🔗
WEBVTT
1
00:00:16.440 --> 00:00:20.620
I'm John Betts with Gordon Chang, and our conversation was
2
00:00:20.660 --> 00:00:24.280
Steve Yates touching on the APEC meeting forthcoming, the G20
3
00:00:24.300 --> 00:00:28.230
meeting before the end of the year, and the contest
4
00:00:28.359 --> 00:00:31.129
between the People's Republic of China and the United States
5
00:00:31.230 --> 00:00:34.750
for supremacy in all matters, but especially when it comes
6
00:00:34.810 --> 00:00:39.090
to the highest end, which is artificial intelligence. The moon
7
00:00:39.130 --> 00:00:43.820
race replaced by the chip race. And The Jensen Wang,
8
00:00:44.000 --> 00:00:47.679
Alice Wang scandal spilling out over headlines over these last days.
9
00:00:48.320 --> 00:00:51.280
The question is what is to be done with the
10
00:00:51.869 --> 00:00:55.729
clarity now that the Chinese Minister of State Security, that's
11
00:00:55.750 --> 00:01:00.149
the secret police, have targeted one of the leading industrial
12
00:01:00.250 --> 00:01:05.439
names in artificial intelligence. Jensen Wang is described by his
13
00:01:05.519 --> 00:01:09.980
investor class as irreplaceable. He is the man who created
14
00:01:10.459 --> 00:01:16.180
the conditions for the graphics processing unit, the GPU, to
15
00:01:16.219 --> 00:01:20.079
be so advanced that the United States, through the offices
16
00:01:20.140 --> 00:01:25.450
of Donald Trump, have denied export to China of the
17
00:01:25.510 --> 00:01:29.930
highest-end NVIDIA chip, which is made on a machine created
18
00:01:29.989 --> 00:01:33.849
in Europe by ASML and then made on a machine
19
00:01:35.150 --> 00:01:42.180
installed in Taiwan, TSMC. Those three companies, ASML, TSMC, and NVIDIA,
20
00:01:42.640 --> 00:01:47.299
describe the sun, the moon, the stars of the present
21
00:01:47.519 --> 00:01:52.319
manufacturing ambitions of the United States and China. And yet, Steve,
22
00:01:52.359 --> 00:01:54.000
I come to you. I won't tell any more of
23
00:01:54.019 --> 00:01:58.439
the story. But this appears from the headlines we have
24
00:01:58.489 --> 00:02:01.510
now to be a hostile act by the People's Republic
25
00:02:01.530 --> 00:02:04.989
of China. Will Xi Jinping pay a penalty for this?
26
00:02:06.530 --> 00:02:10.990
Well, John, there's a lot of, I think, head scratching
27
00:02:11.050 --> 00:02:14.449
and disagreement about what to make about all that is
28
00:02:14.650 --> 00:02:17.729
in this soup. And it comes from a lot of
29
00:02:17.750 --> 00:02:22.620
different quarters. From my mind, there has been this ongoing
30
00:02:22.719 --> 00:02:26.460
debate that really has been led in a way by
31
00:02:26.479 --> 00:02:30.819
NVIDIA and its CEO that for America to win the
32
00:02:30.960 --> 00:02:35.810
AI race, we need China to become addicted to American chips.
33
00:02:36.930 --> 00:02:40.590
And so they want to sort of populate the Chinese
34
00:02:40.750 --> 00:02:44.530
ecosystem in a way that
Load full transcript
they become as dependent on
35
00:02:44.849 --> 00:02:48.490
our chips as we have been exposed to be dependent
36
00:02:48.569 --> 00:02:51.669
on them for rare earths in recent times. It's an
37
00:02:51.810 --> 00:02:55.400
elegant argument on paper. The problem with it is that
38
00:02:55.409 --> 00:02:59.960
Xi Jinping has particularly and publicly made clear that they
39
00:03:00.159 --> 00:03:05.419
are reducing dependencies and advocating national brands. And I don't
40
00:03:05.460 --> 00:03:09.039
think that there is a path to achieve this vision.
41
00:03:09.719 --> 00:03:12.159
There's another thing that's been going on that's somewhat debated
42
00:03:12.180 --> 00:03:15.460
about whether China is catching up because of their ability
43
00:03:15.539 --> 00:03:19.610
to invent and adapt and innovate because they have a
44
00:03:19.629 --> 00:03:24.469
tremendously educated workforce in this area and they have scale
45
00:03:24.509 --> 00:03:27.169
in a number of different ways. But I think the
46
00:03:27.229 --> 00:03:30.729
evidence is pretty clear that the American system is beating
47
00:03:30.830 --> 00:03:35.490
the Chinese system as long as we don't stupidly help them.
48
00:03:36.669 --> 00:03:39.810
And I think that's exactly what we've done. In essence,
49
00:03:39.849 --> 00:03:42.229
what they do is try to draft like a NASCAR
50
00:03:42.289 --> 00:03:45.569
driver behind the lead car. And as long as drips
51
00:03:45.689 --> 00:03:48.250
come out that allow them to be good enough and
52
00:03:48.289 --> 00:03:52.370
advanced enough, they can out-compete us in some key areas
53
00:03:52.409 --> 00:03:57.120
and increase these dependencies. And so the big allegation in
54
00:03:57.159 --> 00:04:00.979
this to me is who knew that that they were
55
00:04:01.159 --> 00:04:07.770
actually enabling the diversion of controlled chips and technology to
56
00:04:07.789 --> 00:04:11.349
a competitor that has proven a willingness to use leverage
57
00:04:11.389 --> 00:04:15.090
against us and in a space that is front and
58
00:04:15.229 --> 00:04:19.000
center in the revolution in military affairs that is reshaping
59
00:04:19.120 --> 00:04:23.019
what the global battle space looks like. And I think
60
00:04:23.060 --> 00:04:25.779
that these advanced technologies, chips, and even some of the
61
00:04:25.819 --> 00:04:28.879
software have to be treated the way nuclear and missile
62
00:04:28.899 --> 00:04:32.790
technology has been treated in times past. It's a strategic good,
63
00:04:33.269 --> 00:04:37.110
and it is very, very central to survival in a crisis,
64
00:04:37.850 --> 00:04:40.480
theories of deterrence, and it is front and center in
65
00:04:40.509 --> 00:04:44.459
mutual assured destruction, whether it's mutual assured economic destruction or
66
00:04:44.500 --> 00:04:48.399
mutual assured real destruction in a classical war sense. So
67
00:04:48.420 --> 00:04:51.139
I think that's front and center. And the company that
68
00:04:51.360 --> 00:04:55.120
this woman was a part of is central to this.
69
00:04:55.220 --> 00:04:59.500
There's copious research that seems to indicate some pretty strong
70
00:04:59.579 --> 00:05:03.029
evidence of the diversion. And it goes back in time.
71
00:05:04.149 --> 00:05:07.370
I can't know who did what with whom. But my goodness,
72
00:05:07.430 --> 00:05:12.610
there's a lot that says this is definitely worthy of investigation.
73
00:05:12.829 --> 00:05:14.129
And there's a lot to answer for.
74
00:05:14.449 --> 00:05:15.290
Gordon, you have a question.
75
00:05:16.649 --> 00:05:19.300
Steve, just to pick up on your last point, both
76
00:05:19.360 --> 00:05:23.120
Bloomberg and New York Times reporting from Monday would indicate
77
00:05:24.300 --> 00:05:30.209
that there were crimes committed by various parties. And I
78
00:05:30.259 --> 00:05:33.790
think that that reporting is going to, after people sort
79
00:05:33.810 --> 00:05:36.610
of get over the shock and are no longer willing
80
00:05:36.649 --> 00:05:39.610
to talk about the spy aspects of this, I think
81
00:05:39.649 --> 00:05:44.060
we're going to have a national conversation on what Bloomberg
82
00:05:44.079 --> 00:05:45.740
and the New York Times reported on Monday.
83
00:05:46.529 --> 00:05:47.930
But I will restrain myself.
84
00:05:49.550 --> 00:05:53.879
And I want to just sort of ask you, when
85
00:05:53.920 --> 00:05:57.000
you look at Congress, do you think that there will
86
00:05:57.100 --> 00:06:01.399
be legislation restricting chip sales to China?
87
00:06:02.259 --> 00:06:05.139
I think that it is too easy and gratuitous a
88
00:06:05.180 --> 00:06:08.600
move for them to resist, in a sense, because you
89
00:06:08.660 --> 00:06:11.170
have a new majority and And this goes front and
90
00:06:11.230 --> 00:06:14.629
center to a key thing that I think that majority
91
00:06:14.689 --> 00:06:16.449
is going to want to fight back on. And that
92
00:06:16.649 --> 00:06:21.129
is the general political sense that President Trump has led
93
00:06:21.430 --> 00:06:26.740
a reorientation in America's dealings with China, largely in the
94
00:06:26.759 --> 00:06:31.779
direction of competition and some degrees protection, increasing the American
95
00:06:32.040 --> 00:06:35.139
ability to meet this rivalry. And that sort of is
96
00:06:35.180 --> 00:06:39.000
a narrative that began in 2016 through that campaign. And
97
00:06:39.079 --> 00:06:41.939
through his first term, it is dulled a little bit
98
00:06:42.110 --> 00:06:45.149
with the perception of what the summitry has been so
99
00:06:45.189 --> 00:06:49.750
far in the second term. But 2025 was certainly filled
100
00:06:49.879 --> 00:06:53.180
with big tariffs and sort of the reset of things.
101
00:06:53.740 --> 00:06:56.639
And Democrats have wanted to regain a bit of the
102
00:06:56.720 --> 00:07:02.079
public mojo of competing economically and being somewhat hawkish on
103
00:07:02.120 --> 00:07:04.959
these things. And so I think that they will move
104
00:07:05.100 --> 00:07:07.420
in that direction. There's been a lack of consensus on
105
00:07:07.540 --> 00:07:12.439
outbound investment, where to draw the lines. The key deterrent
106
00:07:12.560 --> 00:07:16.600
to actually drawing these lines comes out of the hugely
107
00:07:16.800 --> 00:07:21.839
Democratic base on the Pacific coast. And that is where
108
00:07:21.920 --> 00:07:24.939
the tech bros are not majority Republican. There are a
109
00:07:25.019 --> 00:07:27.980
lot of Democrats. And one of the leading voices of
110
00:07:28.100 --> 00:07:31.740
that is Ro Khanna. He is a very senior Democrat
111
00:07:31.819 --> 00:07:34.170
who may chair the select committee if it continues. But
112
00:07:34.670 --> 00:07:37.069
under all circumstances, will be a pretty big voice in
113
00:07:37.089 --> 00:07:38.829
the Democratic caucus where they go on this.
114
00:07:39.810 --> 00:07:43.350
I'm watching, Steve, right now, the understanding of Washington to
115
00:07:43.389 --> 00:07:47.029
this threat. Are they tossing it off as what you'd
116
00:07:47.050 --> 00:07:50.410
have to say, man of the world? it happens every day,
117
00:07:50.490 --> 00:07:54.170
no big deal? Or are they digging in about the
118
00:07:54.269 --> 00:07:58.870
threat from China? How does Washington, there's always a sense
119
00:07:58.930 --> 00:08:01.740
of how you're supposed to conduct yourself at luncheon in Washington.
120
00:08:01.800 --> 00:08:02.519
How are they doing it?
121
00:08:03.639 --> 00:08:07.959
Well, I think, unfortunately, not to be too prudish about this,
122
00:08:08.019 --> 00:08:11.579
but the ooky factor among Republicans and Democrats going back
123
00:08:11.660 --> 00:08:14.959
for far too long has been that people in politics,
124
00:08:15.259 --> 00:08:22.149
Wall Street, tech, whatever, They have been easy targets for
125
00:08:22.310 --> 00:08:29.060
the honey trap or salacious activity. It's repugnant at a
126
00:08:29.079 --> 00:08:33.039
number of levels. It's irresponsible when you have national security,
127
00:08:33.179 --> 00:08:37.480
commercial security, tech security responsibilities. But I think it's a
128
00:08:37.500 --> 00:08:39.519
glass house where few can throw stones.
129
00:08:39.519 --> 00:08:43.700
30 seconds, Steve. So glass house meaning it happens every day.
130
00:08:45.190 --> 00:08:47.830
I think the better target for them is the export
131
00:08:47.870 --> 00:08:52.629
controls or outbound investment controls, because when it comes to
132
00:08:52.700 --> 00:08:56.820
the spy scandal, there are Republicans and Democrats who have
133
00:08:56.840 --> 00:08:59.820
made themselves vulnerable on that front. And I think that's
134
00:08:59.879 --> 00:09:02.779
why they'll be uneased to pursue that conversation too much.
135
00:09:03.159 --> 00:09:06.330
Steve Yates of the Heritage Foundation, Gordon Chang at Gordon G. Chang,
136
00:09:06.850 --> 00:09:10.129
the podcast of our conversation about the upcoming APEC and
137
00:09:10.169 --> 00:09:14.850
the unknowns of NVIDIA. Available to Apple, Amazon, Spotify, Spreaker,
138
00:09:14.889 --> 00:09:17.269
and other distinctive venues, I'm John Batchelor.