China Morning Missive So, the proverbial penny has dropped for Sam Altman. After months of publicly ignoring the very issue that was staring the man straight in the face, he has decided to come out and state – openly – that China is a competitive threat in the AI space. What I found even more surprising is that the decision by OpenAI to release an open weight model last week – which was universally panned by the LLM community – was the outcome of the aggressive Chinese open-source drive throughout this year. The fact remains. Altman is boxed in, as are all of the American AI models. You can either go for a platform which prioritizes profitability or a platform which seeks to achieve scale. You can’t do both. There is also the issue of applicability. A host of Chinese industries have deployed DeepSeek for the expressed purpose of enhancing productivity. It has been a slower process throughout America. And all of this has transpired in the span of less than one year. Altman is correct to be concerned. I’ve not even highlighted the issue of hundreds of billions of CAPX being thrown at the AI complex in America. There’s a saying that money can’t buy taste. I’d add that money, too, can’t buy – or build – a competitive moat. Not anymore and especially not in our digital world. https://www.cnbc.com/amp/2025/08/18/openai-altman-china-ai.html

China Afternoon Missive “A person often meets his destiny on the road he took to avoid it." - Jean de La Fontaine. This would be a very apropos quote based upon a series of geopolitical decisions made by Trump over the past week. We need no reminder, too, how overly obsessed Trump has been when it comes to the BRICS organization. I’d also just add that there is no such thing as a coincidence when it comes to geopolitical maneuvering. (B)razil: An executive order levying 50% tariffs on imports plus political demands placed on Lulu (R)ussia: Rather self-explanatory. Russia bad. Threats of additional sanctions now imminent. (I)ndia: The threat of 25% tariffs and a not so thinly veiled condemnation of ongoing ties with Russia. (C)hina: The Main Event …. and the recent Stockholm meeting ends in a stalemate. A deadline looms large. (S)outh Africa: The Oval Office clash and now Trump signaling that he won’t be attending the G20 meeting. For each of the points raised above, there have been individual media reports highlighting the details of each. I’ve yet to see any reporting that connects what are, to my eye, very obvious dots. With a number of announced trade deals (frameworks?), Trump is now clearly emboldened and with that has made the decision to shift focus and take on the BRICS. In doing so, however, what these individual actions actually achieve is the full vindication of the entire raison d'être of both the BRICS organization and, more informally, the Global South. These groups were created to build a community of nations aligned in the purpose of countering increased American intimidation, primarily economic coercion. With a few strokes of an Executive Order pen, Trump demonstrated just how prescient that thinking was. Disable access to the dollar SWIFT system. Appropriate hundreds of billions of FX reserves. Now we have the application of tariffs as a pressure tactic on nations to act in ways that are against their own sovereign interest. To mix my metaphors, this is a bridge too far and a bell that cannot be unrung. Honestly, if left alone and not provoked then fissures among the BRICS membership countries would have ultimately surfaced. It is no secret that these nations all have real, not to mention numerous, issues with each other. Patience, if applied, would have won out in the end. Patience, I’m afraid, is just not in the American vernacular. What is it that America can expect? Basically, steely determination by all Global South nations under the guidance and coordination of Chinese leadership. Bravo President Trump. While your aim in targeting BRICS is to maintain USD hegemony, actions such as these only increase the probability of the very outcome you are seeking to avoid. https://www.bloomberg.com/news/articles/2025-08-04/trump-says-us-to-hike-india-s-tariffs-over-russian-oil-purchases

China Morning Missive Trump is about to go nuclear on China. Apoplectic rage. Sure, there were comments made by both SecTres Bessent and Trade Rep Greer stating that the parties were on a solid footing to reach a deal. From experience, however, I can tell you that when the foreign party makes such statements publicly, the Chinese return with a requested change of the tentatively agreed to terms. For years I’ve advised clients, very large global companies, to expect last minute changes to deals that were considered all but completed. This is just a very normal practice among the Chinese. And why not. For 30 years this tactic has been applied and for 30 years the foreign parties capitulated rather than push back. Oh, they will complain incessantly, but they capitulate. So, here’s what you should expect. Behind the scenes, the Chinese are pushing for some sort of change in the terms negotiated in Stokholm. I suspect it has to do with the hardline approach Trump and his team are taking on purchases of Russian/Iranian oil. Bessent and Greer would have been operating under the assumption that this was already settled during last week’s meeting. The Chinese will respond by saying, actually we only agreed to consider the American position. All of this will be communicated to the Oval Office and, with the China deadline set for next week – August 12th – expect a tirade from Trump. The threat of massive +100% tariffs returning will be all over the headlines. This will be temporary. Trump and his team know that don’t have even a modicum of leverage in these negotiations. I have honestly seen this all play out before, multiple times. Never did I expect to see it play out on the global stage though. Fascinating to watch. https://apnews.com/article/china-russia-iran-oil-trump-trade-tariffs-a21b0d791007fe0984b38ae3c9087f26

Learned a long while back that orange pilling is akin to tilting at windmills. Also, to mix my metaphors, the road to hell is paved with good intentions.

Gentle reminder for all you history buffs out there. History is written by the winners. Advise keeping on this in mind while going down any specific rabbit hole.

Here’s a prediction. If Trump is able to run the board in the midterms, which he looks to be trying with all the fiscal stimulus, he will then seek to pressure a Republican Congress to do something similar as was done here in El Salvador.

China Morning Missive Watch this space closely. You know what the Chinese did with EVs. Pure domination in just a handful of years. Expect the very same with the robotics industry. This entire shift to the fourth industrial revolution, with nearly all segments dominated by Chinese players isn’t being nearly addressed in traditional media. For the likes of the States and EU nations, those economies will receive a massive one, two punch. China and AI. Could be a very rough decade ahead. https://www.bloomberg.com/news/articles/2025-08-01/robots-emerge-as-new-driver-for-china-s-tech-rally-with-75-jump

It’s spreading now that Bill Gurley has entered the chat.

China V America in the AI space race.

China Morning Missive Called it yesterday. It will be the TikTok for Taiwan trade deal. So transactional, and so transparent, is Trump that the Chinese side knows how badly he wants to acquire the American TikTok platform. There’s also the issue of all the political contributions made to Trump by the very same American investors which actually own TikTok. If there were any proof needed, here it is. The Taiwanese President has just ben denied a stop over visa to the United States. This will be framed as a decision made to ensure smooth negotiations which are ongoing in Stockholm. There is some truth to that. Still, what I am all but certain is underway is an agreement whereby Trump agrees to the Chinese terms of publicly recommitting to the original – and still in place – 1979 normalization of relations “One China” policy. In return, Trump gets TikTok. The talking heads in Washington are already up in arms over Trump’s decision to permit Nvidia to resume sales of the H20 chips into China. Somehow this has been viewed as an egregious short sightedness by Trump. The fact of the matter, however, is that Trump had no choice. No Nvidia chips, no rare earths. And it was the American side that was suffering acute dependencies on access to rare earths. The Chinese would definitely want the H20 chips but were doing just fine without access. I can’t even begin to imagine the outcry when this TikTok for Taiwan agreement is made. https://www.ft.com/content/21575bec-5cdd-47ee-9db2-3031c4ea7ca7

You’re being quite generous on the timing. Just look at the perennial leverage hoarder Coreweave. Recently was granted a loan of $2.6bn solely off its future business prospects with OpenAI. https://www.datacenterdynamics.com/en/news/coreweave-closes-26bn-in-secured-debt-financing-facility/

Finally back LIVE on Bloomberg HK. Great hosts. They ask the right questions and are open to topics which US business media outlets only dance around.

China Evening Missive First there was Modi calling Lula yesterday. Now we have Xi and Putin getting on the phone. Personally, I have doubts that Trump and Putin are actually going to meet up as is being reported. https://amp.scmp.com/news/china/article/3321253/chinas-xi-jinping-holds-phone-call-russias-vladimir-putin

China Morning Missive Going with another quote this morning. The old reliable Macbeth, “it is a tale told by an idiot full of sound and fury signifying nothing.” Thing is, while there is certainly found and fury, this time is does signify (inadvertently) something. Enormous fissures in the American led rules based international order. As I was saying just the other day. Recent moves made by the Trump team have ultimately played directly into the hands of the Chinese. While it may be the aim for Trump to take direct aim at the leaders of the BRICS organization, doing so – at this point in time – will be utterly fruitless. Much as is discussed on this platform, the only product America produces is currency, US dollars. A commodity that we all know is being debased at an ever-increasing rate. Countries such as China and Brazil produce actual commodities or critical end products all of which are in demand across the United States. The thinking in Washington is that, somehow, the American market is so valuable that it can be used to weaponizing trade to achieve non-economic geopolitical ends. The reality is now becoming quite clear. The Global South has seen this movie numerous times before. Only America’s “allies” have demonstrated a willing to bend the knee and capitulate. Those countries deemed “adversaries” have found a voice and are announcing to the world that they are unwilling to submit. You should all expect to see more of these sorts of moves in the coming weeks, and – quite frankly – throughout the course of the Trump presidency. https://www.bloomberg.com/news/articles/2025-08-07/modi-to-speak-with-lula-plans-xi-meeting-as-ties-with-us-sour

China Evening Missive Well, actions have consequences. Trump goes to the paint on India. In return, Modi announces a first trip to China in seven years. Expect more of these sorts of developments as the US maintains a “you’re either with us or with the terrorists” and China sits back and laughs. https://www.reuters.com/world/india/indias-modi-visit-china-first-time-7-years-tensions-with-us-rise-2025-08-06/

Thanks for that. It’s all like watching a slow motion train crash. Both the Trump geopolitical moves made, and the sheer hubris among the American AI tech “titans”. Be well.