I think part of it, at least vis a vis US/China competition, is that US and western chattering classes find it hard to believe that the market-driven outcome of frontier AI could possibly be right. They basically believe, in their hearts, that the Chinese system, with its “industrial strategy,” has eclipsed capitalism. So they harbor the same inferiority complex toward the Chinese system that many Americans once harbored toward the EU’s system. Their heuristic is that the industrial strategists of China have grasped the whole picture of the technological competition in a way that US industrialists, with their “profit maximizing incentives,” could not possibly have matched. And so any outcome in the economy that is not the result of “strategy” is therefore prima facie worse than what the “strategists” have concocted. They also believe the Chinese strategists possess awesome powers of foresight and the ability to evade all tendencies of financial and economic gravity, due of course to “strategy,” really it’s almost a kind of orientalism.
Meanwhile the U.S. industrialists are making new advances in math and science, and the fastest-growing businesses in history, by spending hundreds of billions of dollars on high-margin chips whose legacy is in rendering video games, cramming them underneath tents if need be, and investing generational capital into new energy generation technologies as they do it, and perhaps even colonizing space as an instrumentally convergent result. But none of that is “strategy,” you see.
I find it so interesting how persistently unable the strategic classes of free society are to analyze AI well. So many keep getting stuck in these basins of delusion. I was at a conference where it was not just asserted but taken for granted that Chinese models have dominant global inference market share.
The 2024/early 25 version of the delusion was “mode collapse/data wall” (even after reasoning models!), then it was “AI is plateauing and a bubble” for most of 2025, now it’s “Chinese OSS is good enough.”
The share of people in the strategic classes who think this is gradually declining, but it is still sufficiently common that you can attend a prestigious conference and encounter a room principally filled with basin-dwellers.