The Peter Zeihan Podcast Series - The AI Race: U.S. vs. China || Peter Zeihan

Episode Date: September 29, 2026

The AI race is in full swing. China is chasing digital sovereignty, but there's a glaring hole in that plan...it doesn't have the advanced manufacturing capabilities to achieve it. Here's the real kicker: nobody does. Join the Patreon here: https://www.patreon.com/PeterZeihan Full Newsletter: https://bit.ly/46FmVbK

Everybody, Peter Zine here, coming to you from the top of Little Castilla, taking advantage of a break in the wind to answer a question from the Patreon crowd. Oh, by the way, that's Ash Mountain over there. And all of that is the Turner Ranch. Tia Turner, or I guess as a state, is the single largest landowner in the country. And that's where he used to party. Anyway, the question is, is how is China's artificial intelligence program coming along? they clearly don't have any of the ethical restrictions that the United States has,

and is that given them an edge? Is this something we need to worry about? Number one, I would argue that if you're comparing the tech bro culture of Silicon Valley to China and the idea that one of them is morally superior, you need to do a little research. Silicon Valley, and especially the folks that are involved in AI, really don't give a rat's ass about your personal privacy and are perfectly willing to pillage your data in any possible form. In fact, oh, hey, I got a little visitor here.

Hey, buddy. Yep, never mind. He's gone. Anyway, point being that if you are on Facebook or, what is it now, meta, whatever, any sort of social media whatsoever, all of your data is being mined actively in a way that the Chinese honestly sometimes have trouble keeping up with you. And while the Chinese certainly do it with a little bit more flare, the AI kings in the United States, the data kings in the United States have no problem getting all of the information that they need from you already. So the info influx really is not much of an issue. There used to be a moment when things had to be manually entered in and the Chinese had an advantage of that for the numbers, but now AI has reached the point that it can self-process.

So again, that's gone away too. So the structural issues really are not relevant. It really comes down to hardware. Now, the Chinese are under export restrictions. So they cannot import the hardware that is necessary to make high-end semiconductors, specifically the extreme ultraviolet machines that come from the Dutch company ASML. And without those, there's no way that you can make anything that's really under 7 nanometers reliably. That means that they're reliant on importing chips and there are export restrictions on anything coming out of the United States or Taiwan or Japan or Ireland or any of the countries that make high-end semiconductors. that limits them to approximately a 4 to 5 nanometer ceiling.

Now, it's not that those are bad chips at 6 nanometers. I mean, they're fine. But if you want to do AI, it's all about the number of computations you can crunch per chip and the power that takes per computation. And right now in the rest of the world, the high-end chips are in the 2 to 4 nanometer range, and we are now starting to get chips that were designed with coolant topography in mind. Let me spell that out what that means for an operational system. If you have a one gigawatt hyper-scaled data center, you probably have about a half a million

GPUs. On top of that, lots of CPUs, lots of DRAM, lots of NAND, different sorts of processing capacity, lots and lots of hardware. But the 500 GPUs are the core of it because large language models, and when we're talking about AI today, that's what most people are discussing, use those chips. exclusively and the better they are the more computation