Full Transcript

Full Transcript

Noah Smith: (00:00) We have to get out of the mentality of thinking that America makes all the choices, that we have all the power, that we have all the agency, that we're the big one who makes all the choices. We're not the big one anymore. They're bigger than us in most important ways. We're big. We're still big, but they're bigger than us in most important ways.

Nathan Labenz: (00:15) I have never quite been able to figure out why the United States, the West, whatever, is like so bent on this sort of path of escalation and keeping China down, or I'm not even quite sure what exactly it is we think we're trying to do with our export controls.

Noah Smith: (00:33) We had this rupture in our relations with China under Mao that we repaired. We patched it up. You know? And we'll patch it up again someday. We'll be friends with China again someday, but unilateral dropping of deterrence, unilateral weakening of all our deterrence methods is not the way to patch that up more quickly.

Nathan Labenz: (00:51) Hello, and welcome back to The Cognitive Revolution. Today, I'm beginning what I expect will be an ongoing series of episodes exploring one of the most consequential and fraught issues of our time, US-China relations. My guide today is economist Noah Smith, author of the Noahpinion blog and cohost of the Econ 102 podcast, also on the Turpentine network. There's an old joke about a visitor to China. After a week, they think they know something about China. And after a month, they believe they know a lot about China. But after a year, they realize they know nothing about China. I mention this because I approach this topic with genuine humility, considering the role that fear of China and Chinese AI plays in American AI discourse today and considering the many foreign policy mistakes the US government has made in recent decades, I feel this topic is too important to ignore and also too complicated to uncritically accept the Washington consensus. But to be very clear and to channel the language of a historical Red Scare, I do not now nor do I ever expect to have all of the answers. With that in mind, I consider this a sort of warm up episode, which I hope will serve as useful context for a number of additional conversations going forward. And I think that Noah is really a good person to provide such perspective as he's a super well read, well traveled, including having lived in Asia for a few years, and extremely open minded thinker who's willing to challenge prevailing orthodoxies. I started off by asking Noah to sketch out the historical arc of US-China relations, and I appreciated how his analysis balanced short term realism, noting that China and arguably Xi Jinping specifically was first to defect from a more positive relationship with longer term perspective, observing not only that the US and China have been allies in the past, but that there are no major fundamental reasons that the two countries couldn't conceivably repair their relationship in the future. In fact, contrary to anyone who would frame the US-China rivalry as some sort of inevitable or eternal clash of civilizations, Noah also notes that despite our obviously different histories and political systems, there are a number of surprising cultural similarities shared between our two peoples. Along the way, we also get Noah's takes on some of the most important AI related questions being debated today. What are the US export controls on semiconductor manufacturing equipment and chips themselves ultimately meant to accomplish? How much are they changing China's calculus when it comes to potentially acting on Taiwan? And what will their practical effects be? Can we expect to deny China the ability to militarize AI technology or meaningfully slow their progress toward AGI? Or will we perhaps simply deny the Chinese public the benefit of AI productivity improvements and economic growth? I appreciate that Noah answered as many of these questions as he felt confident answering and also gave his standard fallback no opinion answer to a few as well. This is of course far from the final word on these topics, and we should all be striving to learn and understand both the other side and the overall situation better as we go forward through time. As always, if you're finding value in the show, we'd appreciate it if you'd share it with friends, write a review on Apple Podcasts or Spotify, or leave us a comment on YouTube. Your feedback, including suggestions for guests that can provide a unique perspective on the US-China question, is always welcome too, either via our website, cognitiverevolution.ai, or by DMing me on your favorite social network. Now I hope you enjoy this foundation laying conversation on US-China relations with economist and writer, Noah Smith. What's up, dude?

Noah Smith: (04:25) Hey, guys. How's it going?

Nathan Labenz: (04:27) Great. Great to be with you again.

Noah Smith: (04:29) Good to see you.

Nathan Labenz: (04:30) Here's kinda what I thought I would do. Just quick preface for you, and then we can jump into it. Basically, I have never quite been able to figure out why the United States, the West, whatever, is like so bent on this sort of path of escalation and keeping China down, or I'm not even quite sure what exactly it is we think we're trying to do with our export controls. So I've been voicing sort of doubt about this in various places. And somebody just recently tagged me online and said that I and Robert Wright are the only two China doves in the world, which is not literally true, but I don't feel like I'm way out of my depth here in terms of analyzing China. But I also feel like I haven't really been able to get a good sort of from the ground up, you know, start with the explain like I'm five, most basic, like, why are we here, and are there any alternatives that we have? What I would love to hear is sort of the steel man mainstream case for why we need to do what we're currently doing. And the reason I care, in addition to the fact that I would like the Chinese public to have economic growth just like I would like us to have economic growth is it feels to me like a pattern of escalation, weaponization, whatever is not good for the overall big picture AI safety picture that I do also worry about.

Noah Smith: (05:53) Well, okay. Couple questions before I do that. Number one, are we talking mostly about AI, or are we talking just sort of a general geopolitical thing? Like, how focused are you asking about here?

Nathan Labenz: (06:07) Well, I'm very focused on AI, but I do think the broader context is important. You know?

Noah Smith: (06:15) Because, for example, I don't see DeepSeek as a threat to America at all. That just doesn't seem like a threatening thing to me. I don't understand why people are like, China just defeated America, blah blah blah. I don't get that. And yet at the same time, I think the threat of a war over Taiwan is big and real. So I think that a lot of people think of US-China competition as some sort of vibe. Like, who's winning? Some people in China released an LLM that's pretty good and cheap. Wow. They're winning. And I've never seen things that way. In fact, I'm gonna write that later today. I'm actually gonna write a post on DeepSeek against my better judgment. But basically, I don't understand why that LLM is a threat to us. And so I don't think that our policy should be focused around trying to stop China from developing things like DeepSeek. And so in other words, I don't have a good explanation for you of why we should worry about that and be freaked out and try to kneecap their AI abilities in that way.

Nathan Labenz: (07:30) I think that's fine. I don't wanna put you on the hook for representing the establishment too much. But...

Noah Smith: (07:33) At the same time, I worry about a war over Taiwan and other wars quite a lot, and some other things that fall short of war, like cyberattacks or things. There's a lot of concrete things to worry about that are not an LLM being cheap.

Nathan Labenz: (07:47) Can I start way back at the very beginning?

Noah Smith: (07:50) Go ahead.

Nathan Labenz: (07:50) And we could definitely get to the Taiwan issue. That's kinda where I came into it because it's like chip ban. Wait. Doesn't this make it easier for them to justify an attack on Taiwan? Well, let's go back to that. Start at the very beginning, if you would. How do you, and maybe abstracting away a little bit from current personalities. Right? Because I think we've got, let's say, singular personalities at the top of both countries right now. But if we forget about personalities and egos and ideologies, what would you say is the natural strategic relationship between the United States, this giant landmass on one side of the world, and then China, this giant landmass and obviously giant populations on the opposite side of the world? Is there any reason for us to be rivals?

Noah Smith: (08:34) Well, there's a question of, do I think we should be rivals in the ideal world, and do I think there are natural forces pushing us toward rivalry that are unfortunately there? The answer to the first question is no. We shouldn't. The United States and China were de facto allies for most of the twentieth century with the exception of a brief period in which they fought a war against each other. But then other than that, other than the Korean War, which was stupid on both sides. That entailed big mistakes on both sides, but was rectified when Nixon and Kissinger and these people — I'm not a Kissinger fan, but this was a good move, actually. We de facto allied with China against the Soviet Union, and China helped us win the Cold War, or we helped China win the Cold War. And we helped China economically integrate into the world. We helped China throw off Japan. We helped China avoid conquest by European powers in the early twentieth century, which is not a thing a lot of people know with the open door policy, where basically America sort of stretched the Monroe Doctrine, applied it to China, and said that none of you Europeans should try to conquer China. Don't do that. And so we've been, with the exception of the time that we fought a war, America and China for the twentieth century were in close cooperation, if not actual alliance, which we were several times. And there's no reason we can't be — I mean, that was good. That was fine. The twentieth century went well, I think. A lot of people died. But I think overall it sort of turned out well at the end. Things went in a good direction overall with some bumps, in which a few tens of millions of people died. And Mao was really terrible. He was sort of a bump in the America-China relationship. So that's — culturally, I think that America and China are very similar to each other. If you look at how Chinese people live and how they think about the world, it's not very different from America or at least not from what America classically has been. American culture has changed a lot recently due to social media and things, but I think that classic American culture of, "I'm gonna get rich, but I don't know how," or being obsessed with real estate or driving to the mall or, I don't know, liking hip hop but also being slightly racist. I could go on and on about the ways in which Chinese culture and American culture are fundamentally similar to each other. And they're both large countries. China's bigger than us, but we're both pretty big, and we're bigger than the surrounding countries. And these create natural similarities between us and China. Now I think there's a popular myth that countries and civilizations that are similar to each other do not fight, have less of a reason to fight because they're similar. Well, no. As my little sister likes to put it, bitches fight for niches. And the fact that we and China are so similar means that in some ways, we occupy the same niche both in our own minds — "I'm the big country. I should be in charge." And then like CCTV versus Fox News, I guess. But also in the world. And so I think even China's economy looks a lot like our economy did 100 years ago. This massive manufacturing overcapacity sort of fast follower in everything, innovative but on a small scale rather than a basic research scale. That was us. That was early twentieth century America. We had some big inventions like the airplane, obviously, but in cars, for example, we were a fast follower. In machinery, we were a fast follower of Britain, Germany, and France. Those are the guys inventing the stuff, and we followed them. Anyway, China's following a similar pattern to us, and we dipped our toes in the waters of imperialism with the Philippines and the Spanish-American war. And China looks like they may do that in Taiwan with trying to grab some territory from India, throwing their weight around. Big rich country, guess who's rich now? We're gonna throw our weight around. Can't boss us around anymore, foreign powers. That was us. And I think that our similarity naturally pushes us toward rivalry. That doesn't mean we have to fight a World War 3, but I think that this is a thing we have to deal with. And it's easy to say that we should just be nice, back down and not, just not do it, but all your life, you grew up in a world where America was the dominant power and could basically choose international relations. We could have chosen not to do the Iraq war. If we wanted, we could have chosen not to do the war on terror. We could have chosen all these things. China gets a vote. And if you watch — do you know Sarah Paine? Have you watched Derek's podcast with Sarah Paine? They're just really excellent, and I recommend watching that. She's like, we can talk about what our approach to China should be all day long, but at the end of the day, China has an approach to us. And we have very limited ability to control that. And us being nice to China and trying to do everything we can to facilitate their power and economic strength and blah blah blah is a thing that we did for decades upon decades. We did that. That's a thing we already did, and there's a general consensus now that that was a failure. I think that China turned around and bit us, bit the hand that fed them in some way. I think that consensus is a little overstated. I think that you did see some real liberalization in China during the Jiang Zemin and Hu Jintao years of the nineties and the aughts. You went from Mao having your personality cult and slaughtering everybody to Mao impersonators being normalized during the Hu Jintao era. And you had years of peace and prosperity, so I don't think that was as — and Chinese people deserve to not be poor, and they're not poor anymore. I mean, there's still some poverty in China, obviously, but overall, they're not a poor country anymore at all. They developed. They're a developed country, and that's — I'm not gonna say that's bad. I don't think — the consensus now in America is that that was bad. We shouldn't have done that. We should have avoided that, let them stay poor, shut them out of the international trading system, and blah blah blah.

Nathan Labenz: (14:53) I don't think so.

Noah Smith: (14:54) I don't think we should have done that. I think it's better for a billion people to not be poor. At the end of the day, poverty is the ultimate enemy of the human race. We've gotta conquer it. Then we can solve all our other problems then. But absolute poverty, the kind where you don't have enough to eat — not having enough to eat in the world is the ultimate enemy of humans. And I wrote an essay about this called "The Elemental Foe," which I recommend. I don't think. And so in that sense, however, I think that China's leadership has transitioned — China's system for selecting leaders is bad. Deng Xiaoping made a huge mistake when he crushed the Tiananmen Square protest instead of accommodating them, which is that he cemented a leadership system that selects leaders via essentially backroom power dealings. What that means is that eventually you will get a leader who is extremely good at backroom power dealings to the detriment of other things. And that's what you've gotten with Xi Jinping. You got that actually pretty fast. It's not popularly known, but Deng Xiaoping handpicked Jiang Zemin and Hu Jintao to be the next two leaders of China. After that, he said, y'all are on your own, because I can't pick forever. And so as soon as they got on their own, there was a big political knife fight and a guy named Xi Jinping who was extremely good at getting his cronies in everywhere and dominating the CCP. He knifed Bo Xilai and Zhou Yongkang, and I'm mispronouncing his name. But he was this great political infighter who basically dominated China. And he is not the most hawkish guy in China, but he's pretty hawkish. And he definitely sees America as a foe, as an enemy despite engagement, despite our decade long policy of engagement. So it was China who defected from that cooperation first when Xi Jinping came to power in the early 2010s. Before that, we had a cooperative relationship with China under Hu Jintao. We had differences over Taiwan. They were an authoritarian government. Blah blah blah. We had our differences, but we had this fundamentally cooperative relationship still. And Xi Jinping decided to change this. He decided. We didn't make that decision. We have to get out of the mentality of thinking that America makes all the choices, that we have all the power, that we have all the agency, that we're the big one who makes all the choices. We're not the big one anymore. They're bigger than us in most important ways. We're big. We're still big, but they're bigger than us in most important ways, and they made the choice. Xi Jinping made the choice that America is our rival. We've gotta topple the American led global order as he saw it. And Rush Doshi is a very good analyst of this, one of the most preternaturally calm human beings you'll ever see. He has attention surplus disorder, and he went through — he's extremely good at Chinese. Well, that's an understatement. He went through decades of Xi Jinping's communiques and speeches and stuff like that, summarized them in a book called The Long Game, in which he basically summarized — it's one of the driest books you'll ever read. It's very hard to get through. But if you think that's hard to get through, try getting through reams and oceans of Chinese Communist Party documents. And he basically said, okay, look. Xi Jinping has a paradigm — there's a paradigm shift in Chinese thinking under Xi Jinping, which is not entirely caused by Xi Jinping himself. There are more hawkish people than him somewhere in the Chinese government. But Xi Jinping is the guy who cemented this into a new idea and created Chinese Communist Party slogans for this, which they love those slogans. And his slogan is "great changes unseen in a century," which means basically the current global order is an American imperium, and this will be overthrown by China. China will overthrow that imperium and replace America. And that's how Xi Jinping thinks. That's not how Noah Smith thinks. That's not how people should think. But it's how Xi Jinping thinks, and it's pretty clear that he thinks that. And China gets a vote. We don't get to decide unilaterally the relationship between us and China. We just don't. And I think that people who think that we do get to unilaterally decide that are coping. They're clutching for the feeling of control, this illusion of control that they always felt like they had before. In the nineties, the US-China relationship was entirely determined by the US. In the aughts, it was 85% determined by the US. Now it's less than half. China is — they're leading the dance. They're in the driver's seat. That's a fundamental fact that I think we have to acknowledge. And Xi Jinping's attitude shift — huge attitude shift toward the United States predates our attitude shift, predates Trump, predates Biden, predates — back in 2013, the only person saying that China was our rival is Chuck Schumer, this old dude who nobody was listening to. And that consensus shifted very quick, and it shifted, and Xi Jinping was the first to shift it. He was the first. So economic decoupling between the United States and China has been proceeding since the beginning of the Xi Jinping era. He has tried to — that's what Made in China 2025 is about. It's about decoupling. It's about removing all Chinese dependence on US inputs, economic, chips and machinery, airplanes, everything, making China totally economically self sufficient. That was something he did before the United States did export controls or tariffs or any of this stuff. The narrative that the United States just woke up one day and decided to kneecap China and keep them down is bullshit. It's wrong. Xi Jinping woke up one day and decided that China's gonna overthrow the US led global order and stuff like that. We're basically reacting to that. Now I say basically because Trump watched a lot of CNN back in the nineties and decided that America is losing the industrial race against Japan, and then he sort of transferred that anxiety, which was mostly misplaced at the time. He transferred that onto China mentally, and he's like, how come we have this big trade deficit with them? We've gotta fix it. So some of it, Trump had some agency here, and some of this was going on there. It wasn't entirely Xi Jinping, but it was mostly him who shifted this relationship. And I think we have to just respond to that. We are in a position we're not used to being in. We're used to being the big one, the one who acts and everyone else reacts. Now we're reacting. We're not the big one anymore. And I think that's a mentality. That's a mindset we've gotta get used to.

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Nathan Labenz: (22:54) So what do you think is the threat in concrete terms? Because the word "overthrow," you know...

Noah Smith: (23:02) What could actually happen? What's the bad thing?

Nathan Labenz: (23:05) Yeah. I mean, they want to be part of some international reserve currency bundle or they want — I mean, what do they want?

Noah Smith: (23:12) Not important. So they actually don't wanna be the reserve currency, and they should. China should have the reserve — have one of the reserve currencies at this point. The RMB should be one of the dominant reserve currencies on the planet. They don't want it. What China wants is, number one, control of the seas. Trade goes over the ocean in physical goods. Trade goes over the Internet cables in digital goods. China wants to control those things. They would like to control the lanes of global trade, and you see this in South China Sea where they've basically said, this is our maritime territory. This is — your ships may not pass here until we say. And that's an area through which much of the world's trade flows. That's different. The US led global order entailed freedom of the seas. We said, here's the United Nations Convention on the Law of the Sea. Anyone can send their ships through these waters. It's international waters. We have rules about you own the waters next to your coast, and then the international waters are free. And the United States Navy, overwhelmingly the most powerful navy until recently, was the policeman of the seas. We made sure that there was freedom of the seas and that global trade could go. And also, the Internet. So much of the Internet was United States controlled, and we enforced freedom of the Internet. We said, you can send your data over these cables. We built these cables. You can send your data over these cables. Go for it. And of course, China built the great firewall, but still the international Internet cables through which digital trade happens, all services trade, etcetera, those were free because the United States said so, and the freedom of the seas happened because the United States said so. And that created the trading regime that ironically led to big American trade deficits that Trump dislikes. But that created the trading regime that allowed the world to enjoy an unprecedented period of growth, but that also tied China to the United States in important ways and made us mutually interdependent. And that was why we did it. That's why we did that. We believed that if we bound the world together in the mutual interdependence of commerce, that would prevent conflicts and wars. After World War 2, our priority was preventing conflicts and wars. China would like to have sovereign control over extended areas of the ocean, where the Chinese navy decides which ships may pass and which may not. Much of the United States' economy depends on trade that passes through those waters. Much of the United States economy similarly depends upon digital trade that passes over the Internet cables that China would also like to now control, and now they're going around cutting some cables. Anyway, that's a preview of what's to come, I think. But when you talk about the US led global order, I don't think you're talking about the reserve currency. I don't think you're talking about the IMF or the World Bank or things like that. I think what you're talking about is trade, and you're talking about the lanes of trade, the sea, and the Internet. And those are the things that China would like to control, I think. Now there's some other, I think, harms, bad things that Xi Jinping would like to do to the United States, ways that he would like to hurt the United States in order to make us less of a potential threat to Chinese power in the world. One of those obviously is to cut us off from trade and from control of our own trade. That's one thing. A second thing is destabilization of our society. I think that the more we end up fighting over pronouns or AI safety or defund the police or whatever the fuck we're fighting about this week, the more our society becomes disunited and unable to oppose whatever China wants to do. Chinese power. Power is optionality. Power is option value. Power means — power doesn't mean I do a thing. Power means I can do a thing if I want. That's what power means. It's option value. And China wants the option value of being able to do whatever it wants. And as long as the United States is a big rich powerful country, we get a vote. They get a vote, but we get a vote too with our power. So China would like to — when I say China would like to stuff, I don't mean that your average Chinese person on the street would like this. I mean Xi Jinping and his regime and his cronies who now dominate the CCP would like us to be weaker simply so that we don't get a vote in the future. And if you think that this is not realistic, we're generally a much nicer country than China, and yet we also did the same thing to all our rivals. We weakened Germany and Japan after World War 2, and we weakened Russia after the Cold War so that they didn't get a vote. And China wants to do this to us a bit more because they're a bit meaner than we are now. So China would like to destabilize our society. Whatever you get on the Internet and argue about and have flame wars about and whatever cultural thing you think is a threat to you, China would like you to have more of those flame wars. Xi Jinping would like you to have more of those flame wars. He would like you to feel more of that threat from your fellow Americans, from your neighbors. And so the more we fight each other, the less we have the option value to stop China from doing whatever it feels like doing today, tomorrow, whenever. So I think that China has made concerted attempts to destabilize our society, which I don't like because I like living in a stable society. I grew up in a more stable society than I live in now, and I kinda like that. And so I think that weakening us...

Nathan Labenz: (28:45) Can you be more concrete on that? Are we talking, like, thumb on the TikTok algorithm scale or what?

Noah Smith: (28:51) Yes. So TikTok algorithm scale is absolutely part of it. Influence operations are another part of it. But the biggest part of it is actually called sharp power, which is that the Chinese party state, if you will, if you like that term, the Chinese party state has basically gone around using economic leverage to force people to say and do various different things. It has used that so far pretty narrowly to protect its perceived interest over Taiwan, other things, Xinjiang, promote its stuff. It's used its sharp power to bash, to stop the NBA from standing with the Hong Kong protesters, all that stuff. But sharp power can also be used to favor actors that destabilize American society, partisan shouters and culture warriors, and to weaken actors that want to unite and who oppose anything China wants to do. So if there's someone in America who says, no, guys. We gotta unite to stop China from closing off freedom of the seas or whatever they wanna do. Taking Taiwan, taking part of Japan, taking part of India, all these things. We gotta stop them from controlling our supply of critical minerals. We gotta stop them from doing these other things. And anyone who speaks up, China can use sharp power and control of online algorithms to silence those people. To silence the people who would have us unite so that the voices that would divide us end up being the de facto, the only voices left. That's a threat.

Nathan Labenz: (30:32) So I hear that, and I'm still kinda not super... it doesn't sound like my grandchildren are gonna be speaking Chinese. I do hear like...

Noah Smith: (30:42) They're not. Nor does China want them to.

Nathan Labenz: (30:45) Yeah. So it seems like the threat is sort of...

Noah Smith: (30:48) No one wants you to speak Chinese because that would mean that you could pollute China's own thought ecosystem...

Nathan Labenz: (30:55) Yeah.

Noah Smith: (30:55) With your...

Nathan Labenz: (30:55) I was wondering how long that was gonna be welcome on RedNote, where...

Noah Smith: (30:58) They don't want you...

Nathan Labenz: (31:00) Take for a minute.

Noah Smith: (31:01) They want you to not matter, to be at the periphery of the world where you don't matter, and you go fight your little battles over whatever parochial bullshit you fight over, and you don't bother them, and you don't have any power to stop them from doing anything that they want. That's what they want. They don't want you to speak Chinese. When I say they, I don't mean your average Chinese person. I mean Xi Jinping and his cronies. That's their image of power. Their image of power is that you become Argentina. To America, Argentina is not even on the map. They don't matter. Milei is fun. I like him. And Argentina occasionally provides us entertainment and occasionally provides us with some supplies of raw minerals. But they don't matter. They are a nonentity to us geopolitically. We don't have to think about — Argentina doesn't get a vote on anything. They want you to be Argentina to them. That's their power. To you, to the way you've grown up and the things you're used to, becoming Argentina is bad. If you lived in Argentina, it would be worse than where you live now. And so that's a threat. That's a threat to you. Whether you choose to accept, believe, and resist that threat or not is up to you, but the threat exists.

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Nathan Labenz: (35:47) I mean, you pick a country I happen to know better than most countries. When I think about Argentina, I feel like their problems are largely the result of mismanagement over many successive generations of leadership. And we may have a similar problem, but I don't think Argentina as a nation can point to somebody else and say, you did this to us. And I don't feel like if we end up entering into some hyperinflation or whatever, we'll be able to point to China and say, you did this to us either. So I'm kinda like, okay. And that — there are other things that haven't been mentioned. They steal IP from American companies, and we could go down a reasonably long list of grievances one by one. But I kinda feel like, man, everything that we're accusing them of doing or most things, we're kinda doing. We're bullying Colombia and threatening them. You don't take out some symbolic thing that doesn't matter just like Daryl Morey standing up for Hong Kong protesters or whatever. We've got some one plane full of dudes going to Colombia. We're gonna threaten to sever the relationship over it until they back down. China's doing that to our private actors. We're doing it to other states. I feel like your point about the similarity definitely resonates with me. And if I bring this to the AI moment, I'm like, okay. They want to be more powerful. I would also say they are quite powerful. Whether they want to — whether we want them to be or not, as you said, they have a vote. They're producing a lot of frontier AI research these days. So they are an advanced country that is capable of frontier advancing work. What are we trying to accomplish? Seems like right now the main point of escalation is the chip export control and now increasingly AI arms race or even as it's been recently put in the paper by Alex from Scale, AI war. Going back a few years ago, my understanding of why we were trying to deny China these chips was that we thought they were gonna militarize it, and we wanted to keep them off the frontier. And now we fast forward to today, and we're in the DeepSeek plus eight days moment, and it seems like they're staying at the frontier, basically, of AI very close. I mean, it's not quite at the same level as the very best American companies, but it's better than any — I would say the top three American companies. So DeepSeek is maybe number four in the world, maybe number five, depending — you could count whatever else in there. Maybe count Meta, maybe count Tesla/xAI, but we're not keeping them from going to the frontier. It seems like they probably have enough chip capacity domestically to manufacture whatever drones they wanna make.

Noah Smith: (38:43) And remember, I don't think that DeepSeek is a threatening thing. It doesn't seem that way. Maybe I haven't thought about it enough, and I'm just not thinking about this right, but I don't see that specifically as a threat. Remember, I do think there are threats here.

Nathan Labenz: (38:58) So what do you think we are trying to accomplish? Like, what is the most coherent account of what the export controls are supposed to do?

Noah Smith: (39:05) So the purpose of export controls is to maintain a military technological edge over China. Because — so first of all, let's talk about military balance. We have nuclear weapons, China has nuclear weapons. As long as no one figures out how to hack and cancel the nuclear weapons, which we always try to do, as long as no one figures out that or detects the ballistic missile submarines, that's another way you could potentially eliminate second strike capability. But barring that, if we maintain second strike capability and a whole lot of nuclear weapons, then neither country is under existential threat from the kind of World War 2 style war. But what that also means is that in order to stop from losing a war, we would have to destroy the world. That's not a kind of — that's the kind of escalation you can only — you will only do when the alternative is just you die anyway. Nuclear weapons are only a defense against existential destruction. They are not a tool of crisis management. They're not — Vladimir Putin tries to use them that way, but it doesn't really work because you can't just say, let me have that little chunk of territory. I'll nuke the world. I'll destroy the world, man. No. No. You won't. You won't destroy the world over that little chunk of land. You won't destroy the world over this trade treaty. You won't destroy the world over this and that. You'll destroy the world if you're gonna die anyway, but that's the only time in which you'll destroy the world. If you're even in the ballpark of a rational actor, you don't even have to be rational, but if you're even just of any ounce of self preservation instinct, you won't destroy the world unless you're about to get killed anyway. So nuclear weapons do not create a balance of power by themselves. You need conventional weapons as well. John Mearsheimer actually wrote the whole thing about this, conventional deterrence, and he was right about this. This is back in the days when John Mearsheimer was writing about things before he got sort of old and kooky. Everyone gets old and kooky, and it's gonna happen to you and me as well. Our conventional deterrence against China — in other words, if China wants to take over a US ally, we wanna stop them from doing that. That's very weak because if China has this massive production capacity, they can produce a bazillion missiles, a bazillion drones, etcetera. In order to offset that, we can't completely offset that with technological advantages. We have to produce things ourselves and get our allies to produce more things. But we can partially offset it by maintaining a military technological advantage. Having — they have more stuff, we have better stuff. That helps us. It doesn't solve the whole problem, but it's one thing that helps. There's many aspects to the question of maintaining a military technological advantage, but one of them is precision weaponry. Have you heard of the third offset or whatever? Okay. So starting in the eighties, but then really accelerating after that, we got precision weapons. We got weapons that could find a target and hit the target instead of just throwing it into the general area of wherever the shit was. Precision missiles, precision drones, precision things. That's how you fight now. The reason this is powerful has to do with actually inverse square laws and inverse cube laws of physics. A blast — a shock wave dissipates according to an inverse cube law and radiant heat dissipates according to inverse square law. And that means that if you hit something accurately, you can just be much much much much much much much much much more effective. In fact, in terms of ground warfare, we realized that precision warfare was more effective than using tactical nuclear weapons in ground warfare. Because tactical nuclear weapons are big, but the inverse square law and inverse cube law were so powerful that tactical nuclear weapons blast radius would dissipate. Precision weapons could actually give you more power than tactical nukes on the battlefield in terms of destroying enemy vehicles, destroying enemy command posts, and things like that. Precision weapons have become a cat and mouse game, electronic jamming, hiding from things, GPS, sensors, computer vision, blah blah blah. America's had the best precision weapons for a long time. That's a military technological advantage that can partially cancel out greater production. So you see this on the battlefields of Ukraine. You see American precision weapons have been holding their own against Russian mass. Even though Russians fire eight times as many artillery shells as the Ukrainians, then the Ukrainians get more kills because they have American precision weapons. And there's been big fights over jamming. There's fights about how to hide stuff. When I say fights, I mean adaptations, military adaptations about how to do those things. And so we've seen that on the battlefields of Ukraine. It won't solve the entire problem of underproduction, but it will partially solve it. It's an offset. It'll offset their power. And so in order to maintain that military technological advantage in precision weaponry, it helps to have better chips because chips become your onboard computer. When you have a drone using computer vision, looking for stuff — suppose you have a drone controlled by a remote operator. The drone's controlled by a remote operator. It's using radio waves to talk to this guy. You've got this guy with a little joystick sending the drone. It's called a FPV drone. It's a toy. You can buy it anywhere, but GPS is not a toy. And so you can jam that. You can send out a radio wave. You can have this big radar thing that sends out a big radio wave signal to jam the drone's connection to the GPS, which means its connection to the operator, human operator. Then the drone just goes, where am I, dear? I can't find the thing. Or even just falls right out of the sky. And so that's the game people are playing in Ukraine. The way you beat that is you cut off — you make the drone not need a signal. You have the drone have computer vision so it can look around. It says, oh, there's that tree. I see a Russian thing hiding under that tree. I'll get him. Boom. And then he gets him with no need — autonomous weapons. And now we're talking about the future of warfare as autonomous drone swarms. And for that, you need lots and lots of chips. And once drones start fighting other drones, it becomes an arms race of who has the better chips on your drones. And export controls are one way. They're not sufficient, obviously, but they're just one of a number of ways that we're trying to maintain our edge in that future fight, in that sort of fight that's coming. The fight may not come, but if we would deterministically definitely lose such a fight, that takes away our power. That takes away optionality. That allows China to do whatever they want. Conquer Japan. Conquer India. I'm not gonna — conquer India, but they could grab some of their territory and basically reduce them to a minor power. They probably could conquer Japan and conquer South Korea, all those things. It means that we can't stop them if they want to. Whether they then do that depends entirely — we lose our vote. And the chip export controls, which have been effective, by the way. Chip export controls didn't stop China from developing LLMs, but they've stopped China from manufacturing the best chips. They really have. They've been very effective in that. How effective that is militarily, we don't actually know because we're talking about weapons that haven't been created yet. Autonomous drone swarms exist in the research lab, but they don't exist on the battlefield yet. How effective those export controls will be at stopping autonomous drone swarms and making America's autonomous drone swarms better than China's is a question that I don't know the answer to, and I suspect that no one on the planet knows the answer to. Although someone out there knows better than me and isn't saying. But the export controls have been working. The purpose of the export controls is not to prevent something like DeepSeek. I mean, maybe someone hoped that they would, but that was never the stated purpose. That was never — the purpose of the export controls was to stop China from being able to mass manufacture leading edge. That is — it is not enough to maintain a military advantage over China. It's not sufficient.

Nathan Labenz: (47:00) But we're also not selling them chips. Right? I mean, there's multiple levels of the export control. So...

Noah Smith: (47:07) That's right. That's exactly right. But those frankly, that part of the export controls are not going to work. That part of the export control, the part where we don't sell them the chips will fail. But the part of the...

Nathan Labenz: (47:22) So you think we can slow the domestic — the development of China's domestic chip industry effectively, but we can't keep chips writ large out of their hands. That seems plausible to me as well.

Noah Smith: (47:38) Yes. In fact, had I been in charge of the export controls, no one thinks to make me in charge of these things because I'm a random blogger who sits around with his pet rabbit. But had they made me in charge, I would have focused — I wouldn't even have focused on chips. I would have kept selling them all possible chips, and I would have focused only on machinery, tools, software, and other things where we actually have a reasonable choke point. I don't know why they focused on the chips thing as well. I don't know why they added those. I don't think it's gonna do us a huge amount of harm either. I don't think it's gonna be a big deal. I think what's gonna happen is that your slightly off frontier NVIDIA chips are gonna be just as good as the frontier NVIDIA chips, and we're just gonna keep selling those. I think it's cosmetic. I think that that part of the export control is, for all intents and purposes, useless. Maybe it serves as a distraction. I don't know. But I think the equipment export controls are effective. They're already proving extremely effective. And also software export controls, personnel export controls. So the most effective part of export controls isn't even the machinery. It's that we said, if you're an American citizen, you can't work in the Chinese chip industry. We'll fine you, put you in jail. I don't know. Whatever. It's personnel. Talent is everything. Basically, we put a stop to a lot of talent going over to China's side, not a complete stop. Because remember, all these things are to some degree porous. You can't make a complete wall. And I don't know whether, in the last days of the Biden administration, they released these very complex export controls that designate all these third countries, blah blah blah, because they looked at who was trying to circumvent the export controls. I don't know if that's gonna — I don't know if that's gonna actually work. I haven't — it seemed rushed, and it seemed a little too overreachy. And the stuff we were doing before was probably working better than people realized.

Nathan Labenz: (49:30) It's like planned economy almost.

Noah Smith: (49:32) Yeah. And I don't — I think that's gonna need to be reevaluated, but the export controls over machinery were effective. They were obviously effective. China tried to pull this stunt with making this 7 nanometer chip, which then they turn out not to be able to manufacture in any appreciable volume. And their costs were really high, and their reliability was low. Quality of those chips sucks ass. And really, they're just continuing to be dependent on TSMC. But anyway, that stuff works and it will slow them down. It'll work to slow them down. So it's just one part of an overall strategy to maintain conventional deterrence over China for 10 years. After 10 years, the conventional — the threat of war probably diminishes. It will not go away, but I think that the next 10 years are the peak risk. They are, as Hal Brands has put it, we're in the 1950s again in terms of the threat of war. We were with the USSR, except now we're more in the position of the USSR. They're the ones with the manufacturing capacity now. But we're the ones with the ideology we proselytize. But our goal should be to freeze everything, deter China from launching a giant World War 3 for 10 years. And export controls are not sufficient to do that by any means, but they are one piece of how we do that. And then I think Xi Jinping's not gonna last much longer after that. He'll be 80. By the end of that, his fourth term will be up. The bellicosity and the dream of overthrowing the US led order that he has will diminish after 10 years just as the Soviet Union's expansionism and aggression diminished a lot upon the death of Stalin and never really came back even under Brezhnev. There was a little bit more aggression under Brezhnev. There were some nuclear scares, blah blah blah, but it never — we were never in as much danger of fighting the Soviet Union as we were in the 1950s. That almost happened. World War 3 came very close. The Cuban missile — I mean, Cuban missile crisis actually was the peak of danger of nuclear launch. But in terms of conventional war, it wasn't even close to the peak. And so we need 10 years of deterrence. That's what we need. That will make the situation a lot better, and then we will work on repairing that relationship with China and having a — going back to being friends as we were. Remember that we had this 15 year rupture in our relations with China under Mao. Maybe 15 years, maybe 20 years. We had this rupture in our relations with China under Mao that we repaired. We patched it up. And we'll patch it up again someday. We'll be friends with China again someday, but unilateral dropping of deterrence, unilateral weakening of all our deterrence methods is not the way to patch that up more quickly. Establishing deterrence and establishing stability is the quickest path to repairing our relations with China.

Nathan Labenz: (52:34) Okay. Let me ask a couple — I would have really — we don't have too much more time, so I wanna spend the remaining time on this next few years critical period. And I agree it's critical period for AI reasons, if not for plenty of other reasons. I know you've analyzed demographics and whatnot previously too. But it seems like to me, we are on a pretty risky path where we've got — Taiwan, obviously, the object of their desire is where the chips are made. It seems to me that cutting them off from the chips made in Taiwan lowers the barrier to attacking Taiwan. If they're not getting the best stuff that's made there, then it makes it just that much easier to attack. In fact, you'd even say, maybe that is a reason to attack. We're getting the stuff from there. They're not. So jeez. We've now got both sides kind of announcing multi-hundred-billion-dollar build out plans. And I think most concerningly to me, we've got multiple Western AI leaders, and here I'm thinking again Alex from Scale, but also Dario from Anthropic, who literally said that our plan should be to build a giant global alliance, apparently under Trump's second term, box out the autocracies by which he primarily seems to be referring to China.

Noah Smith: (53:58) The gas station. Eventually it's just China.

Nathan Labenz: (54:02) Yeah. It's China. So eventually, we'll make them an offer they can't refuse. He doesn't use exactly those words, but that's basically how I read the essay. We're gonna come around and say, okay, we've cut you off. We've advanced our technology. We have overwhelming AI superiority. Here's the terms on which you get to be part of the AI enabled world order. That seems kind of crazy to me. I don't know if you think it's crazy, but...

Noah Smith: (54:29) I actually don't know.

Nathan Labenz: (54:30) It does seem like it increases their incentive to do something crazy sooner rather than later.

Noah Smith: (54:37) You might be right, and you might be — I'm not well placed to evaluate this because I don't understand the technology well enough here. Again, I don't see DeepSeek as a big threat to America, but I could be wrong because I could just not be understanding how these things work enough. So I guess my answer is I don't know. Let me talk to those guys and see what they're thinking. Read their stuff. Think a little more about this, and then I'll get back to you. Because I've had a lot of time to think about precision weaponry and the effect of export controls and things like drones and missiles and to watch Ukraine war unfold and to think about conventional deterrence with respect to Taiwan and the whole thing I just gave you. What you just talked about with that whole AI supremacy thing, it's funny because my friend Grace wanted to have this big discussion with me about that. And I was like, Grace, I don't have — my blog is called Noahpinion for a reason, which is I have plenty of opinions, but the set of things upon which I do not have opinions is vastly larger than the set of things upon which I do have opinions. And I don't actually have a strong opinion on this one way or another. I don't know if what these guys are talking about makes any sense. I would like to talk to Altsuang. I can't talk to Dario. He came on our podcast before. We can talk to him about this. In fact, Eric, we should probably just get him back to talk about this. And maybe y'all could even debate. I'll — I don't know. I will ask him about this next time I see him, but I don't know, man. That — it sounds hokey to me, the idea that we could maintain this AI supremacy in the LLM field. It sounds unrealistic, and I think DeepSeek probably shows that it's unrealistic. LLMs are a borderless commoditized universal thing. And all the AI that I was thinking of in terms of chip stuff was autonomous onboard compute for autonomous drone swarms and precision weaponry, which is a very different kind of AI. That's not even the same kind of model, computer vision. That's a convolutional neural net, stuff like that. I mean, maybe if you use the LLM to say, hey, robot. Go kill the Russians. Find a Russian. Kill them. Maybe you could do that. But that's sort of icing on the cake. Slightly better control interfaces. I know Lockheed Groom? He's very into using LMs for voice controlled robots. Maybe that's useful, but I don't know. How are LLMs gonna fight wars? They were gonna say, like, hey, Claude. Tell me that I kicked the ass of the Chinese. Actually, when I was — it's funny because it's not very well written, so I need to rewrite it. It's also very dated. But when I was a college kid, I wrote this silly short story about an AI war between US and China between AGIs, US and Chinese AGIs. But the US and Chinese AGIs, after having achieved sentience, both decided that it would be better to not fight and to be stoner kids and basically just watch old movies and get stoned and, whatever, just chill. And then the human minders — the humans who were whose job was to make the AGIs fight each other, the AGIs basically traded them romantic advice in exchange for collaboration. And so in exchange for advice on their romantic relationships, the human minders would overlook the fact that the US and Chinese AGIs had become friends and were not fighting each other. And that was after the — that was after the spy plane incident. I don't know if you're old enough to remember that, but there was the spy plane that got — or yeah. It got shot down. Was it a spy plane? It was like a radar plane. I don't remember what kind of plane it was because I didn't understand things in those days, but there was a brief ratcheting up of US-China tensions, and I was just thinking about this thing. So I don't have any idea how LLMs will figure into the military balance. I don't understand their military applications. I don't know if anyone does. It seems to me, just looking at how things are going, that trying to maintain supremacy in LLMs at the company level much less the country level is probably not gonna work. But, again, I'm not an expert. I'm just spitballing here.

Nathan Labenz: (58:45) Yeah. The model starts to get very AGI or even ASI superintelligence, and then it's like — I think the path goes like, well, we'll have this superintelligence, and then it will figure out how to make the best drones. And then we'll have — and it'll figure out how to hack their electrical grid better than — and meanwhile, harden ours, and then we'll have them kinda cornered on all these fronts. But the time window in which that is supposed to happen is very short.

Noah Smith: (59:09) Yeah. Maybe. I can't sit here and say, well, that's bullshit. That's obviously wrong. If I said that, I would be overstepping my knowledge. I can't tell you that they're wrong about that, but I also can't tell you they're right about that or like, oh, sounds legit. I don't even know if that sounds legit.

Nathan Labenz: (59:23) It doesn't sound impossible to me just given the trajectory that we do seem to be on, but the time delta between when we have those things and when everybody else has those things does seem like it could be fairly short.

Noah Smith: (59:35) Eric, what do you think? You've been so silent this whole time. What do you think about this? Help me out here. I don't know what I'm talking about.

Erik Torenberg: (59:40) I wish I could. These are beyond my pay grade just to some degree, but I think it's a good call for us to bring on some more experts in the space as you were saying before.

Nathan Labenz: (59:52) Yeah. At a minimum, this has been good foundation, and I think more time should be spent in just the American discourse. Just getting clear on, what are our complaints? What is the threat from China? It's not nothing, but that part of the conversation is so often just jumped over into, are the chip controls working or not? And I feel like we've so often skipped, what were we trying to do? And has that morphed in the time that the policy has been in effect? And now we're sort of — I think there's a lot of post hoc justification going on and also a lot of confusion because DeepSeek has definitely burst onto the scene and confused a lot of people, and I'm with you. It's hard to look at something that's open source — it looks more like a peace offering to me than it does like a threat.

Erik Torenberg: (01:00:43) Nathan, to that point on peace offering, have you sort of read Xi's speeches when he's very direct about sort of the goals for what China — in terms of if you are you familiar with their own rhetoric about how they conceive the United States, and do you take them kind of literally in that? And Noah, I know it's 45, so feel free to go whenever you want, and we'll just continue.

Noah Smith: (01:01:07) I got like 5 minutes. Cool.

Nathan Labenz: (01:01:09) I've read very little. So I wouldn't even pass myself off as a hobbyist in this domain. Certainly far, far from expert. But since you asked, I did just happen to read one because I've been asking everybody, what am I missing that should make me afraid of China to the point where I want to do all these things, which I think probably won't work except to keep beneficial AI out of the hands of the Chinese public. That seems like the biggest effect that I can see we're likely to have. So, anyway, somebody sent me a speech.

Noah Smith: (01:01:35) That won't happen.

Nathan Labenz: (01:01:37) Well, I hope not. I think they all deserve...

Noah Smith: (01:01:39) There's no way that'll happen. That's impossible.

Nathan Labenz: (01:01:42) I hope not.

Noah Smith: (01:01:42) Can't do that. The only person who could do that is Xi Jinping. He won't do that. Well, maybe a little bit, but he mostly won't.

Nathan Labenz: (01:01:49) In any event, my verdict on...

Noah Smith: (01:01:50) The Chinese public will have all the AI they can AI.

Nathan Labenz: (01:01:53) But the — yeah. Well, then I guess I still am like — I don't know what we're hoping to accomplish other than we just seem to be escalating. But I read one speech which was chosen to try to persuade me, and it felt like — I don't know. It seemed like a very mirror image sort of speech. It was mostly domestically focused. It included specific, explicit claim from Xi, which you could say, well, he's lying or whatever, but he said, we are not seeking to export our models to the rest of the world. We want to resist and overcome containment, which was the translated word, I think, for what we're — what they perceive us to be doing to them. But it didn't seem like particularly warmongery or hateful or anything — when it was sent to me, I expected it to be a lot more scary sounding than it ultimately was when I read it in translation.

Noah Smith: (01:02:45) Well, the guys who were scary sounding were — so around 2020, starting in 2019, but really 2020, Xi Jinping put all these guys called the wolf warrior diplomats. That's named after some silly action movie. The wolf warrior diplomats he put in charge of the Ministry of Foreign Affairs. And all these guys went around and said a bunch of very bellicose things. You are falling. We are rising. We will bury you. Blah blah blah. They sounded like Kaiser Wilhelm in 1913. They sounded — you can read what these people said. Just Google wolf warriors, read what these people said. It was incredibly aggressive. Xi Jinping himself is not that aggressive. But I would urge you to read the book, The Long Game by Rush Doshi. It is not an alarmist book. It is one of the driest books you'll ever read. However, it is relentless. It is well argued, and Rush Doshi understands Chinese strategic thinking better than you or I will by the time of our deaths. He already understands better. So I would urge you to read The Long Game. And if you want to see examples of actual Chinese bellicosity, certainly look — Google Wolf Warriors and read some of the things that they said a few years ago. But in addition to that, I would urge you to look at some of the actual actions in not just words, but actions that China's been doing. The hacks of critical infrastructure that have been happening daily. Not just privacy invasions, listening in on your phone calls over your cell phone or reading your text messages, but also just penetrating critical infrastructure. I would urge you to look at some of the things China's been doing with cutting Internet cables around the world. That's a real action. Cutting Internet cables is a real thing that you can do. The actions are bellicose in addition to the words. China's actually doing things that are aggressive. Look at their territorial acquisitions in the Philippines. Some of the stuff they've done toward India and the border with India, slowly taking territory. There's a lot of aggression out there happening that's not just words, that's actual actions. Will that blossom into conquerors of the world? Well, maybe not. Our job is to stop it, to minimize the probability that that happens. Because in World War 1, it sort of did. But then in World War 2, it also sort of did. And so World War 1 taught us that you shouldn't go to war. You should hold your fire. Don't be an idiot. World War 2 taught us the opposite. World War 2 taught us that holding your fire is appeasement. That when you've got an enemy that relentlessly wants to take over more and more and more and will never stop, you don't appease them. That just makes it harder to fight them later on. Which is the right lesson with regards to modern China? I don't know. And it may be some mix of the two, or some third thing. The Cold War taught us that deterrence works. Yes. There were fights in Vietnam and Korea, blah blah blah. But at the end of the day, we didn't nuke the world. We didn't have a big conventional war against the Soviet Union. We didn't pull out the tanks and the helicopters and all the things for the big one. It didn't happen. And all through that time, the world got more and more peaceful and stable. Not uniformly monotonically so, but the Cold War was a success. Despite all the dumb mistakes we made and the horrible things that happened, the Cold War was a success. And it was a bigger success than World War 2. Because World War 2, we also beat the bad guys if you wanna — we won, but at the same time, a lot of people died. 55 million people died. That sucked. However, with the Cold War, we learned from World War 2, we didn't appease. We deterred. We contained. But most of all, we deterred the Soviet Union from military adventurism. And after Stalin died, after that pivotal decade, the danger went way down. That's a success that I think we can learn from. I think the Cold War, not World War 2 or World War 1, the Cold War, despite the lack of an ideological component to it — I think that we're not ideologically at war with China. But the Cold War is still the best model for our interaction with China, and deterrence is still the best option because, ultimately, that's the way our relations improve in the future is to stabilize the world. Only in a stable world can we and China become friends again as we traditionally were. That's my thesis. And I do have to go, but that's my final thought.

Nathan Labenz: (01:07:30) Yeah. That's a scary one because I expect pretty choppy waters ahead for multiple reasons. But, yeah, for now...

Erik Torenberg: (01:07:39) Noah, thanks for joining, and yeah. I mean...

Noah Smith: (01:07:42) Until next time, folks.

Nathan Labenz: (01:07:44) It is both energizing and enlightening to hear why people listen and learn what they value about the show. So please don't hesitate to reach out via email at tcr@turpentine.co, or you can DM me on the social media platform of your choice.