Dmitri Alperovitch: Winning the Tech Race vs China - Chips, AI & Biotech
World of DaaS with Auren Hoffman・62 minutes read
The US-China conflict is escalating into a new Cold War with preparations for war in various spheres, like economics, military, and diplomacy. The competition includes trade disputes, arms races, ideological struggles, and the potential invasion of Taiwan by China as a crucial strategic move in the region.
Insights
- The US-China conflict is escalating into a new Cold War, encompassing economic, military, ideological, and space-related competition, with both nations preparing for potential conflict.
- Taiwan's strategic importance lies in its challenging terrain, distinct identity, and economic significance, making it a focal point in China's goal of unification, with potential invasion speculated between late 2028 and 2032, impacting global trade and security dynamics.
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Summary
00:00
US-China Conflict: New Cold War Looms
- Dimitri Alperovich, co-founder of CrowdStrike and author of "World on a Brink," discusses the US-China conflict as a new Cold War.
- He highlights the global competition for supremacy between the US and China in various spheres like economics, influence, diplomacy, and military.
- Both countries are preparing for war, with the Department of Defense in Hawaii gearing up for conflict with China.
- The economic war includes trade disputes, export controls, and sanctions on Chinese companies like TikTok.
- An arms race, both conventional and nuclear, is ongoing, with China modernizing its nuclear arsenal significantly.
- A space race is evident as both countries aim to send humans to the moon and potentially Mars in the next decade.
- An ideological struggle exists, with China spreading its authoritarian ideology to compete with democracy.
- Both countries are establishing military bases in strategic locations like the Philippines and Cambodia.
- China faces border disputes with every neighboring country, indicating its weaker position compared to the Soviet Union.
- Taking Taiwan is crucial for China to dominate the region, establish global security and trade rules, and project power effectively.
14:48
China's Potential Invasion of Taiwan: Implications
- States like Armenia, Uzbekistan, and Kazakhstan are under Russia's influence due to proximity and lack of choice.
- Some countries, like Iran, have managed to balance relationships with other nations to counter Russia's influence.
- If China dominates Asia, it could expand its power globally, impacting US trade and influence.
- American power historically began with naval expansion in the 20th century, securing trade routes.
- Taiwan's difficult terrain and history make it challenging to invade, with a small military and limited training.
- Taiwan's defense capabilities are being revamped, but they are still behind in preparation for a potential invasion.
- China's potential invasion of Taiwan is speculated to occur between late 2028 and 2032.
- The political calendar, including Chinese leadership re-election and US elections, influences the timing of a possible invasion.
- A small number of US troops on Taiwan may not be enough to deter a Chinese invasion, requiring significant buildup.
- Full-scale invasion is seen as the only path for China to achieve its goal of unification with Taiwan, despite low public support for unification.
28:55
Taiwan's Identity, Chip Dominance, and Global Markets
- Taiwan has developed a strong sense of identity and pride in being Taiwanese over the last 30 years as they transitioned to democracy.
- Taiwanese prioritize their Taiwanese identity over being Chinese, with a minority not being ethnically Chinese.
- Taiwan's culture and history are distinct from China's, leading to a lack of desire for voluntary unification.
- A blockade scenario against Taiwan is considered, but it is unlikely to lead to mass starvation or surrender due to Taiwan's agricultural self-sufficiency and tropical climate.
- Blockading Taiwan would harm China's economy significantly as Taiwan produces 90% of the world's chips.
- Taiwan could retaliate by blockading China's ports, causing global economic turmoil and pressure on China to end the blockade.
- China's dominance in foundational chip production poses a threat to global markets, with the potential for dumping products at low prices to establish a monopoly.
- China's tactics involve state subsidies, preferential loans, and grants to drive out competitors and maintain leverage over markets.
- The Chips Act aims to stabilize the decline of the US chip industry but will not lead to complete independence from Asian chip producers like Taiwan.
- TSMC's leadership in advanced chip production is supported by a partnership with Apple, ensuring Apple's priority access to new chip technologies.
42:42
Challenges and strategies in US-China relations.
- Building in the US is challenging due to high labor costs, lack of expertise like welders, and stringent regulations.
- China's economic growth has slowed significantly due to mismanagement, a real estate bubble, and negative sentiment.
- China faces issues like 15% youth unemployment, foreign direct investment withdrawal, and a population collapse.
- China's population decline may impact productivity growth as rural migrants move to cities.
- Fear of detention in China has deterred some executives from visiting due to arrests of Western businessmen.
- China's aggressive prosecution of Chinese espionage and potential hostage situations are concerning.
- The conflict in Ukraine lacks a clear definition of victory, with Russia aiming for control and Ukraine seeking security.
- Ukraine's strategy involves impacting Russian infrastructure and economy to wear them down.
- Negotiations with Russia are currently challenging due to their leverage, but building leverage is crucial for future talks.
- The US foreign policy establishment needs to focus on winning Cold War II with China, prioritizing military and technological dominance.
57:02
"US Energy Security Threatened by China"
- Space is crucial for various applications, with Elon Musk and Amazon leading in communication, navigation, surveillance, intelligence, and reconnaissance.
- Green energy, including batteries, EVs, wind, solar, and nuclear power, is essential, but China dominates in this sector.
- The US needs to transition off fossil fuels, but China's dominance in energy supply poses a national security risk.
- Critical minerals like Rare Earth, lithium, cobalt, and nickel are vital for energy and manufacturing, with China controlling 90% of Rare Earth processing.
- The US has a Rare Earth mine in California, but Chinese dumping of processed minerals threatens its operation.
- Writing a book involves long timelines, with publication dates set far in advance due to printing and promotional constraints, making timely updates challenging.
