Digital Embassy

In light of the unfolding crisis in Iran, we've decided to open-access today's dailies — which include detailed analyses of reactions by Beijing, Moscow, and Brussels. 1/ BRUSSELS DAILY highlights the patchwork U.S. approach to pre-notification: daily.digitalembassy.net/p/brussels-dai…

Just before the White House is set to unveil its new Executive Order on AI safety, it was great to join @CNBCi Squawk Box Asia to discuss U.S.-China competition in AI services. Thanks to hosts @cherykang and @Manisha3005 for having me on the program.

🦁 Into the lion's den! In a guest essay for @AsiaPolicy's Center for China Analysis, I lay out a defense of the U.S. "small yard, high fence" approach to U.S.-China tech competition. There's never been a more important time to restrict China's compute. centerforchinaanalysis.asiasociety.org/p/americas-tec…

What the hell is going on with H200 chip sales to China? A bizarre confluence of internal fights within the U.S. and Chinese governments has led to an extremely confusing situation—whereby China may graciously “agree” to import the Nvidia chips its AI labs desperately need, while also framing this as some sort of “concession” the United States should be thankful for. Here’s what’s actually going on: Chinese AI labs desperately need American compute, which is why they’ve been renting or outright smuggling huge numbers of Nvidia-designed chips from third countries. A lack of computational power continues to materially constrain Chinese AI labs’ ability to train frontier models and serve them to global publics. But not every part of the Chinese Communist Party cares equally about the plight of the country’s AI labs. In fact, different segments of the CCP are optimizing for different security and development objectives: While economy-promoting organs like the Ministry of Commerce (MOFCOM) and the National Development and Reform Commission (NDRC) generally want labs like DeepSeek and Alibaba to succeed in building and selling more capable AI services, cadres in the Cyberspace Affairs Commission (CAC) and across the Chinese security services are deeply wary of importing U.S.-designed hardware, fearing U.S. chips might contain back-doors or location-tracking features that could jeopardize China’s national security. Still some other offices—and, I believe, Xi Jinping personally—worry primarily about accelerating China’s indigenization of every part of the semiconductor supply chain—and would rather see Chinese AI labs eat the bitter medicine (吃苦) of temporary chip scarcity, so long as it helps to create a captive market for Chinese chipmakers in the medium-term. The U.S. government, for its part, has had its own disagreements about the wisdom of export control. While it would seem truly idiotic to sell Chinese AI labs the single resource they need to build AI systems that threaten the United States or compete with U.S. companies like @OpenAI, @Anthropic, and @Google in international markets, some parts of the Trump administration are—like parts of the CCP—optimizing for a different objective: A prevailing faction within the Trump administration believes it can disrupt Huawei’s position within the Chinese chip market by keeping China “dependent” on American hardware. Under this worldview, successfully persuading the Chinese government to approve the import of Nvidia’s H200s would be a “win” for American industry. This has led to a bizarre situation where different sets of officials across both governments simultaneously view the sale of H200s to China as a “concession” to be fought for and/or guarded against. USTR Greer’s comment that the import of H200s would be China’s own “sovereign decision” suggests to me that the United States probably asked China to approve their import, CCP security services refused, and the United States opted not to press the issue further. At the end of the day, China’s AI labs remain compute-constrained and will continue desperately trying to gain access to American chips, regardless of whether they may be imported legally—and this will be broadly tolerated by the CCP. Though it probably did not mean to, China has managed to accidentally achieve the best of both worlds: a captive hardware market protected from competitive U.S. exports, and a software industry quietly empowered to rent or smuggle whatever resources it needs to chase the American frontier.

.@SecScottBessent is correct that now is the right moment to reopen conversation with Beijing on AI—Chinese models are only becoming more capable. I fully expect the U.S. and China to establish a formal working group to coordinate on AI security. The hard part will be ensuring whichever interlocutors are selected to maintain that channel actually have some sway over setting their country’s AI policy. At least in the United States, we’re learning in real time that AI is a team sport—it touches every part of U.S. government. That makes it hard to have a meaningful and productive conversation with whoever is supposed to speak for China.

Here is my best assessment of what the U.S. and Chinese sides will both ask for when Trump and Xi inevitably talk about “AI” at next week’s summit. There seems to be a narrow path to “coordination” that is both possible and desirable. choosingvictory.com/p/ai-coordinat…

In super simple terms: I want DeepSeek, Qwen, Moonshot, and Zhipu to coordinate their model releases with China’s CERT, just like our labs are doing with the U.S. CAISI. This is in both America’s and China’s interest. China's probably going to end up doing some version of this, anyway. Let's make sure we are on the same page about it — and actually call them out when they release easily-jailbroken exploit-generators.

Amid the frenzied food fight in Washington to define which AI risks are real and how seriously to weigh them, the U.S. interagency is breaking—quickly and visibly— toward treating AI as an abnormal technology. Next week, it will ask China to do the same. choosingvictory.com/p/ai-coordinat…

Every administration that has sought to cooperate with Beijing has faced that bizarre-but-familiar confluence of pressures: an incentive to claim success even when there is little to show for it, and an inability to acknowledge when Beijing is cheating. Under these ordinary circumstances, China can typically get away with just going through the motions or even defecting from the letter of a bilateral agreement with the United States. But pressing that luck now could prove fatal to the entire project. The reality is that the current space for negotiation is fragile enough that even the appearance of China’s non-compliance could easily shatter it. Ahead of next week's Trump-Xi summit — my analysis from January: choosingvictory.com/p/american-res…

This Thursday: Join AEI's @RyanFedasiuk and WSJ China Bureau Chief, Jonathan Cheng, for a discussion on Mr. Cheng’s new book, Korean Messiah: Kim Il Sung and the Christian Roots of North Korea’s Personality Cult. RSVP here: aei.org/events/korean-…

Congratulations to @RepBaumgartner and all ten bipartisan cosponsors on the MATCH Act's movement through @HouseForeign, by a wide margin — 36-8. It's so important that 🇺🇸 move to restrict the import and servicing of 🇨🇳's advanced lithography machines. aei.org/research-produ…

Great to speak with @PunchbowlNews' @Dareasmunhoz about the MATCH Act—one of several pieces of legislation due for markup by @HouseForeign on Wednesday—which would require companies to apply for a license to provide maintenance service to their lithography machines in China. I told Punchbowl about our recent research at @AEIfdp diving into the SME supply chain. Julia Torres and I estimate that, absent U.S. action, the hundreds of deep ultraviolet lithography machines imported by Chinese companies will be more than sufficient to manufacture huge numbers of cutting-edge AI chips in the years ahead. On the other hand: “If you take away the parts and prevent them from being serviced, then Huawei is going to be sitting on tens of billions of dollars of wasted investment—unable to make chips at a really critical moment in the trajectory of the global AI industry,” Ryan Fedasiuk, a fellow at @AEI, said. Grateful to @RepBaumgartner and @BrianMastFL for their leadership on this important issue. punchbowl.news/article/tech/m…

Look, a lot is being written about export controls on semiconductor manufacturing equipment (SME) by people who haven't gone deep on the science of immersion lithography or chip supply chains. I'm out with a new report today with @AEI's Julia Torres on this exact question. Here's the deal: Huawei and other Chinese chipmakers spent 2023-2024 importing hundreds of older-generation "deep" ultraviolet lithography machines from the Netherlands that fell below the level of American and Dutch export controls on "extreme" UV. These are the machines needed to "print" circuit patterns onto silicon wafers—the basis of a modern computer chip. We thought controlling high-end printers would be enough to stop China from printing high-end chips. But China has steadily upgraded these "older" lithography machines, effectively jailbreaking them to print more sophisticated logic chips than previously thought possible—by having them run over the same patch of silicon multiple times, a process called "multipatterning." It's a super inefficient process that is causing Huawei to struggle with yield rates—they can't make as many chips as efficiently as TSMC. But the bottom line is this: The hundreds of DUV machines already imported by China are more than capable of (expensively) printing the millions of logic dies Huawei needs to build huge quantities of cutting-edge AI chips. These are the chips that will power China's frontier AI systems in 2027-2028. And, unless we do something about it, these old machines will allow Huawei to print—by our estimate—*millions* of high-end (7nm and better) logic chips in the coming years. That would allow Huawei to actually start competing with U.S. chip giants like NVIDIA and AMD in global markets—threatening our goal of exporting the American AI Stack. Thankfully, lithography machines are hundred-million-dollar pieces of equipment—so large and complex, they need to be shipped in 40+ freight containers and serviced constantly by engineers from the single Dutch company that makes them, because their scanner optics degrade over time, and Chinese engineers are working them round-the-clock. Obviously, Chinese chipmakers know they are vulnerable, so they are working on their own optics and lithography equipment to break free of their dependence on ASML. That's why everyone freaked out in December when @f_potkin reported a lab in Shenzhen made its own DUV prototype. China's eventually going to succeed at building its own lithography industry. But a really easy way to hamstring Huawei and frustrate its logic chip production for several years (right now, during the heat of the AI race) would be to stop these older "DUV" machines from being serviced in China, and to stop selling them new ones. We just need to get the Netherlands on board with blocking older equipment sales and servicing. (Het spijt me, Dutch friends). That's what @RepBaumgartner's MATCH Act does. The @HouseForeign will vote on it Wednesday. aei.org/research-produ…

Even if Mythos-class AI capabilities remain gated behind large amounts of compute, we're still in for a much less secure online world. In my first-ever piece for @TheFP, I lay out what you can do to stay safe from online threats—AI-enabled or otherwise. thefp.com/p/the-ai-cyber…

Kremlin aide Ushakov: Washington has made "interesting offers" on Ukraine — the first explicit Moscow acknowledgment of substantive U.S. proposals since talks stalled in mid-March. No details, but the Kremlin is signaling openness. daily.digitalembassy.net/p/moscow-daily…

Zelenskyy: Russian satellites photographed U.S. bases at Diego Garcia, Prince Sultan, Al-Udeid, and Incirlik three times each in the days before Iranian strikes on American troops. He claims 100% certainty Moscow was feeding targeting intelligence to Tehran. daily.digitalembassy.net/p/kyiv-daily-1…

My own tangos with state actors have taught me a few important lessons about modern cybersecurity. After yesterday's unveiling of Mythos Preview, here's a short synopsis of what's coming—and a guide to surviving the age of ubiquitous cyberattacks. choosingvictory.com/p/practical-ad…

Good to see China’s annual tradition of sending unmanned underwater vehicles to be dredged up by Indonesian fishermen is alive and well. This one likely belongs to the Haishen family developed by China Shipbuilding Industry Corporation (CSIC). From 2021: cimsec.org/leviathan-wake…

The @abcnews is out this morning with a disturbing story: The IRGC is actively making use of detailed satellite imagery and analysis published by MizarVision, a Chinese geospatial analytics company — and has used this data to target American, Australian, and allied forces in the Middle East. This is a fluid and fast-moving situation and I want to be clear about what we know so far. 1️⃣ It's clear U.S. forces in the Gulf are operating in an environment that is very different from any other they have encountered previously. Commercial satellite imagery collected by foreign companies is now available at a quality and frequency that is good enough to put U.S. combat forces in harm's way. This is ultimately why U.S. collection platforms like @vantortech and @planet chose this weekend to suspend their coverage over the Middle East. Unfortunately, predictably, foreign competitors like MizarVision see no reason to censor their own product offerings. 2️⃣ The implications are grim: ostensibly private Chinese AI companies are directly helping the Iranian regime target U.S. and allied forces in the region. The ABC has information that the IRGC is striking U.S. facilities "within hours" of MizarVision publishing them. I told @henryzwartz that this would effectively amount to Iranian forces outsourcing targeting data to a Chinese company: It is "the greatest degree of support we have seen China provide to a proxy force against the United States" — there is really no other way to read it. 3️⃣ If the Chinese government wanted to rein in the actions of MizarVision and other imagery providers, it could. And it should. Spokespersons from @MFA_China have so far attempted to downplay the significance of this development. I'm willing to buy that Chinese officials haven't been aware of the importance of this particular imagery or the extent of its use by the IRGC — but China should recognize this is an extremely serious development. We're talking about Chinese enterprises directly supplying actionable intelligence to wartime enemies of the United States. MizarVision has spent weeks zeroing in on U.S. forces and bases in the region and publishing their activities on its Weibo account. It hasn't done the same to Iran. It's very clear what is going on here — and it is unacceptable. This doesn't have to be a story about China. It's clear the United States is also learning about the battlefield potential of commercial sat imagery in real-time. Beijing should understand that U.S. concerns at this moment are deadly serious. I expect the U.S. government will do everything in its power to defend its personnel. China should mirror the U.S. suspension of commercial satellite imagery collection over the Middle East. abc.net.au/news/2026-04-0…

NeurIPS — the flagship AI research conference — apologized to Chinese academics after a boycott over its compliance with U.S. sanctions policy. Where AI research decoupling stands now: enforcement friction reaches even the conference circuit. daily.digitalembassy.net/p/beijing-dail…

Pentagon has drafted plans for a weeks-long ground operation in Iran — including a potential Kharg Island seizure or coastal raids. Trump hasn't approved yet. Risk to U.S. troops deemed too high. But the plan exists. @washingtonpost daily.digitalembassy.net/p/tel-aviv-dai…