Jensen Huang reportedly instructed his team at Nvidia "never to think about" planning for a Taiwan contingency. Despite the fact that their business is reliant on TSMC. The Jensen-Megaspeed mess really puts these incredible — and barely-noticed — details from Stephen Witt's The Thinking Machine in a new light: Huang refuses to consider the impact on his global business if China were to blockade or invade Taiwan, despite the regular threats emanating from Beijing to do just that. “To my great surprise, Nvidia had done no contingency planning for this eventuality,” Witt writes. He quotes Deb Shoquist, Nvidia’s executive vice-president of operations: “If something happens to Taiwan and TSMC, the ramifications are so large it’s almost like asking me what I’d do if California fell into the ocean.” Huang had instructed her “never to think about this question.” —from my @nybooks essay earlier this year on Nvidia and American policy toward China: —more thoughts from me today:

Huge: The Chinese government moves to place registration and licensing requirements on frontier AI model weights, chip designs, and other key AI technologies. A registration requirement is effective immediately, with a public comment period over the next month before the more expansive regulations are finalized. The draft includes a range of prohibitions and licensing requirements that could shape the evolution of the Chinese AI ecosystem. It also provides simplified pathways for certain open-source releases and a range of excluded areas. This is a major step and could give Beijing substantial new leverage over the global spread of Chinese AI. But there are lots of questions about the practical consequences: —How much will model companies reshape the definitions, thresholds, and processes during the "consultation" period? —What will firms actually start doing to comply in the coming days? —Will implementation materially restrict the global spread of Chinese models, or chiefly give Beijing greater visibility into—and discretion over—how they spread?

The fraught relationship between the Chinese government and China’s AI companies is one of the most undercovered stories in the wider AI race. Not because of any doubt about the ultimate balance of power. In China no one questions who will ultimately win the struggle between state and corporate power. The new probe of DeepSeek and Moonshot over distillation-linked data breaches is the latest example, and one of the highest-stakes instances yet. ( As Dan Wang and I wrote in the NYT over the summer, we tend to think about AI as a race between the United States and China, but there is another contest unfolding inside both countries: between the public power of governments and the private power of ambitious AI companies. ( That contest looks very different in China than in the United States. Beijing is much more capable of compelling its companies to comply. But that does not mean the relationship is frictionless—or that the eventual shape of Chinese AI regulation is settled. Chinese AI companies are acutely aware of what happened to fintech and the broader tech sector beginning in 2020. Beijing, meanwhile, wants both rapid AI development and much tighter control over the risks it creates. That is the tension to watch. Xi Jinping has long insisted that development and security are "two sides of the same coin" and can reinforce each other. AI may force it to confront the possibility that, sometimes, they don’t.

New from me: Some argue there is no point in pacing the AI frontier until China cooperates. But Beijing is unlikely to take American calls for restraint seriously unless Washington is willing to restrain itself. If the United States wants effective AI diplomacy with China, what it does at home may matter as much as what it says at the negotiating table. I’m delighted to partner with @ReadTransformer for my first-ever cross-posted Substack essay—a look at how Beijing is approaching U.S.-China AI diplomacy, and what Washington needs to do to make that diplomacy more credible and effective.

I haven’t seen much attention to this new China Daily editorial today. But it offers a revealing look at Beijing’s response to calls for an AI slowdown. It explicitly connects the calls from @DarioAmodei, @sama, and @elonmusk with Anthropic’s recent report alleging illicit distillation by Chinese companies—portraying them as parts of a coordinated effort to protect American firms from Chinese competition. Sam Altman says Trump and Xi could win the Nobel Peace Prize for an AI agreement: “I don’t think this is hard. This is like a one-page document.” But that's wrong. Upcoming AI talks will be "hard." And this editorial shows why. The headline really sums it all up: "'Dr Frankenstein' alarm cries of US' AI elites a self-serving bid for profit." A few key quotes from the China Daily: –"The [distillation] report, and the corporate 'alliance' that followed it, amounted in essence to a coordinated play — a response to Chinese competition and to the regulatory pressure coming from Washington. Its aims were threefold: to blunt China's AI advance, to win a favorable policy environment at home and to keep investors' enthusiasm for US AI alight." –"The distinction between a security measure and a competitive moat can become blurred when the companies building the moat are also allowed to define 'illicit distillation.'" –"The proposed coordination [to 'pace the frontier'] among the three companies sounds rather like a club whose membership rules have been drafted before the guest list is announced. A global AI-safety framework that excludes China is not quite global." The editorial doesn't rule out diplomacy but is trying to set the terms for upcoming talks. For more on China's response to "Pacing the Frontier":

New from me: Is Trump really giving Xi a state visit 40 days before the midterms? Presidents ordinarily have strong incentives to avoid honoring a deeply unpopular foreign rival on the eve of a close national election. Trump appears entirely untroubled by that risk. Is he signaling that he believes he has mastered the politics of U.S.-China relations? Or does he simply not care? Here's a guided tour of the strange theater of U.S.-China presidential diplomacy—from oversized Chinese flags on the White House grounds to the toasts, pop-star performances, and protocol slip-ups that have defined past visits. Read it here:

Some thoughts on Zhu Rongji (1928-2026): Zhu is an often-misunderstood figure. He reflected the paradoxes of reform-era China: – the pursuit of rapid economic growth paired with enduring political control, – the desire to gain the benefits of markets and trade while limiting chaos and vulnerability, – engaging with the international system but always on China's terms. Zhu was a technocrat whom Deng Xiaoping elevated to the center of China's economic policymaking in the 1990s. “Don’t think that a planned economy is definitely socialism and a market economy is definitely capitalism,” Deng wrote in a 1991 commentary that Zhu helped coordinate along with Deng's daughter. “Both are means [to an end], and the market can also serve socialism.” (I discuss this further in Never Turn Back Deng reportedly said, “The current leadership do not know economics. Zhu Rongji is the only one who understands economics.” Yet that's only part of the story. Zhu confronted challenges at home and abroad—from handling China's large rural workforce to navigating American political opposition to China's WTO accession—to which Deng had offered no clear roadmap. And his way of handling them was very different than the economic policies of the 1980s, as @YashengHuang has shown. It's equally important to reckon with the fact that American portrayals of Zhu as a liberal reformer were often too broad, emphasizing his enthusiasm for markets while overlooking his commitment to a strong state and Communist Party rule. Zhu himself bristled at Western efforts to fit him into familiar liberalizing archetypes. Zhu once exclaimed, “I’m not China’s Gorbachev. I’m China’s Zhu Rongji.” Even on the economy, he firmly ruled out the widespread privatization of SOEs in ways that some Americans did not grasp: In one awkward exchange with former President George H. W. Bush, Zhu noted that China was not privatizing state firms but simply turning them into modern corporations, but Bush winked and replied confidently, “We know what’s going on.” Zhu Rongji's legacy for both China and the United States is more complicated than it appears. Internationally, his greatest achievement was steering China into the WTO with American support. At the time, he skillfully framed the WTO question as about the future of the United States rather than the benefits to China. “President Clinton said that if we don’t approve [the China trade deal] now, [Americans] will probably regret it 20 years later,” Zhu said in March 2000. “I can add that it’s not just 20 years later. I’m afraid that thousands of years later, when the American people look back on this history, they will also regret why they made this mistake at the time and sigh.”  The irony today is that many American leaders "look back on this history [and] sigh" precisely because their predecessors did approve the deal. More on that in a new book I’m writing. Yet his legacy remains malleable even inside China—standing, for some, as a symbol of a more reformist and outward-looking era in China's past, very different from the country today.