The US government is encouraging American companies to launch their own cyberattacks. Under a national security memorandum that Donald Trump signed on Wednesday, select companies would work with the Justice and Homeland Security Departments to strike "foreign groups" with hacks. The attacks would allow both surveillance and hacking operations that could lead to disruption, manipulation or destruction of information systems and networks, including virtual and physical infrastructure. The US move is an attempt, under the guise of combating cybercrime, to accelerate its plan to issue "cyber privateering licenses" to private entities and turn AI-enhanced cyberattack capabilities into tools for securing strategic interests and undermining the security of other nations, Xiao Xinguang, chief software architect from Chinese cybersecurity company Antiy, told the Global Times https://www.globaltimes.cn/page/202608/1368219.shtml Although this has been an established practice for years, now the US is openly authorizing non-state actors to carry out intrusions, data theft, sabotage and other disruptive cyberattacks against countries around the world. Washington’s entanglement with a small group of U.S. AI giants has become a structural trap that operates at three mutually reinforcing levels: policy, finance, and narrative. At the financial level, Silicon Valley, Wall Street, and Washington have formed a dangerous closed‑loop of reciprocal investments, weaving a highly concentrated and interconnected web of debt. The AI boom rests on a circular model: tech giants pour equity investments or cloud credits into AI startups, which in turn spend that money on cloud computing and GPU capacity from those very same giants. This inflates reported revenues and valuations, yet produces little corresponding real‑world productivity. Together, they sustain an ever‑expanding bubble, even as the underlying fundamentals grow dangerously out of sync with sky‑high valuations. To support the interests of these companies (all donors to Trump's campaign) juicy contracts with State Department, Pentagon and CIA are no longer deemed sufficient. According to a draft internal U.S. State Department letter, Washington is pressuring dozens of countries to choose sides in the U.S.-China AI race, threatening to exclude any nation that participates in Chinese AI frameworks from American-led AI alliances. This "either-or" demand, directed at the 35 signatories of the Pax Silica framework, has been criticized by Chinese scholar Li Yong as a typical zero-sum geopolitical maneuver that exposes U.S. anxiety over China's rapid breakthroughs in open‑source AI. https://www.globaltimes.cn/page/202608/1368309.shtml Analysts suggest that Washington is trying to curb China's AI progress by politicizing technological cooperation and weaponizing supply‑chain rules, but such an attempt to force a rigid bipolar divide runs counter to the shared interests of most countries.
Take Alibaba's new Qwen 3.8 Max model. It now ranks fourth in overall performance, ahead of OpenAI's top-ranked model, while OpenAI charges 250 percent more for input tokens and 500 percent more for output tokens—leading more users, including U.S. companies like Coinbase and Airbnb, to switch to Chinese AI. At the same time, U.S. productivity growth came in at just 1.4 percent for the second quarter, marking the third consecutive quarter of weak growth—far from the 4‑5 percent surge that would signal a genuine AI payoff.
On the narrative level, Washington and its Silicon Valley appendages tend to amplify the “China threat” because it serves to sustain the American AI bubble. While economic returns fail to materialize, China becomes the ideal bogeyman to keep Washington’s clients and vassals inside the enclosure of American AI and continue feeding the financial bubble.
@LauraRuHK
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