
Episode 4986: AI Race Is Becoming More Of A Battle; Competition Of AI ...
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Steve Bannon
Is remaking American culture by sheer force of will. From the Kennedy center honor to UFC fights at the White House, to control over museum displays and defunding public broadcasting. But here's the thing. The president can take these actions. He can cancel events, he can take over museums. But you can't force cultural change. Can't people simply reject it?
Donald Trump
Before I entered office, 100% of all new net jobs were going to migrant workers. Think of that. 100% of new jobs were going to migrant. These are government numbers, by the way. These are not Trump numbers. These are government numbers because they say, well, did Trump come up with these numbers? No, I didn't come up. I'm just. Migrant workers and illegal aliens got 100%. But since I took office, 100% of all net job creation has gone to American citizens. How about that.
Now? How about that? Even I will give myself a hand.
Dave Brat
Now.
Chris McGuire
Think of it.
Donald Trump
100% went to American citizens before. 100% went to people that came into the country illegally again, many of them from prisons, many of them gang members, drug members. Trende Aragua. More Americans are working today than at any time in the history of our country. I've also announced a permanent pause on third world migration, including from hellholes like Afghanistan, Haiti, Somalia, and many other countries.
I didn't say all. You did.
Chris McGuire
A bad vision, like a really dumb vision and a destructive one for world peace.
Unidentified Foreign Policy Expert
Nikka. Over the last eight decades, 80 years since the end of World War II, the Cold War, the United States essentially had a fairly consistent farm policy, the rule of law, balance of power, working through allies involved in institutions, promoting democracy and human rights. Where we could. This is a massive, massive departure.
Chris McGuire
Yeah.
Unidentified Foreign Policy Expert
It is the most radical foreign policy vision put forward by any administration in 80 years. This is essentially the end of the post World War II, post Cold War American foreign policy. As you say, a big emphasis on the Western Hemisphere above Europe, Middle East, Asia, big emphasis on promoting commercial interests above, above all else, dealmaking. Russia gets treated with kid gloves. China, the same toughest treatment of Europe. Europe's treated like an Ivy League university, which is woke and needs to be attacked. Really dismissive of Europe, hostile about the.
Steve Bannon
The.
Unidentified Foreign Policy Expert
The European Union. No, no sense that the European Union, by the way, for all of its flaws, yeah, it overregulates. I get it. But it's the reason that you've had peace in Europe in part for the last eight decades, because it brought together Germany and France, which had fought wars and wars and wars again and again and again throughout. Throughout history. So there's no appreciation, I think, of what's been. What's been accomplished.
Donald Trump
It's a.
Unidentified Foreign Policy Expert
It's a. Let's be honest. It is a radical document. It is a radical departure. And it'd be one thing to do a radical departure if we failed over the last 80 years. But the last I checked, yeah, we've avoided great power war, we won the Cold War, ended peacefully on terms that were pretty good for us. Our economy's done okay. Not perfectly, but okay. The average person lives longer, a lot more freedom in the world. So we're basically junking something that's worked pretty well for something that is radically different.
Donald Trump
I love this Elon Omar, whatever the hell her name is, with a little ching, the little turban. I love her. She comes in, there's nothing, but she's always complaining.
She comes from a country where. I mean, it's considered about the worst country in the world, right? They have no military. They have no nothing. They have no parliament. They don't know what the hell the word parliament means. They have nothing. They have no police. They. They police themselves. They kill each other all the time. I love it. She comes to our country and she's always complaining about, the Constitution allows me to do this, the concert. We ought to get her to hell out. She married her brother in order to get in, right? She married her brother.
Can you imagine if Donald Trump married his sister? Beautiful. She's a beautiful person. If I married my sister to get my citizenship, do you think I'd last for about two hours, or would it be something less than that? She married her brother to get in, therefore she's here illegally. She should get the hell out. Throw the hell out. She. She does nothing but compl.
Steve Bannon
Send your back.
Dave Brat
Send your back.
Donald Trump
Together we're repairing four years of disaster by the radical left Democrats in Congress and by the worst president in the history of our country. He is. I mean, it's not a question about that. He's just the worst president in the history of our country. What the. The damage. He. Thank you very much. The damage he's done to our country is something we can never Forget after just 10 months. Our border is secure. Our spirit is restored. Inflation is stopped. Wages are up, prices are down. Our nation is strong. America is respected again, and the United States is back.
Dave Brat
Andrew Breitbart said politics is downstream of culture. And I think Trump has always innately understood that, that he is shifting the culture. He is shaping the culture. Will it swing back when he's gone? Maybe, but a Lot of that stuff we're down the road on. I mean.
Steve Bannon
Yes, but you know what? When you try to force a cultural shift, you open the door for massive public rejection.
Dave Brat
Well, I hope you're right.
Steve Bannon
I don't know. We'll soon find out.
This is the primal scream of a dying regime. Pray for our enemies because we're going medieval on these people. Reasons I got a free shot on all these networks lying about the people. The people have had a belly full of it. I know you don't like hearing that. I know you try to do everything in the world to stop that, but you're not going to stop it. It's going to happen.
Dave Brat
And where do people like that go.
Steve Bannon
To share the big lie?
Dave Brat
MAGA MEDIA I wish in my soul.
Steve Bannon
I wish that any of these people had a conscience. Ask yourself what is my task and what is my purpose? If that answer is to save my.
Donald Trump
Country, this country will be saved.
Dave Brat
War Room here's your host Stephen K. Ban.
Steve Bannon
Wednesday the 10th of December, the year of our Lord 2025. Welcome to the morning edition of the War Room. We have have both Dave, Brad and Joe Allen is going to join us a moment in our command module in the Imperial capital. President Trump goes to Scranton and it's not that he ever lost his mojo but you can see the connection with maga, that great crowd in Scranton. I want to thank Ernie Priet and all the Real America voice team yesterday for getting us a great run up to the speech. Dave Brett joins me. Dave first first off Kristi Nome number two pral get number two principle Ilhan Omar I think the president has said over and over again get her the hell out. What are we starting the denaturalization process asking for a friend. Dave Brat president went up there for the affordability and he didn't fall into the affordability trap of The Democrats. The 20 some percent inflation in fact I think Scott Bessant rates it now is like 40% inflation but the inflation, cumulative inflation under Biden he talked about growth, he talked about jobs, talking about investment, higher wages, taxes that are tax cuts targeted to the working class and the middle class. What's your overall assessment of and boy if this is how it's going to be, I say do one bilat in the White House a week with economics and nationalism and then get on the road and do more of this. Your thoughts, Dave BRAD.
Dave Brat
Yeah, well that's the right setup. You know it's unfortunately debate right now is basically God versus no God, truth versus no truth. Right. And so the Federal Reserve is getting ready to lower rates. Why, why is the Fed federal runs federal funds rate been up? Because we had 21% inflation under Biden and most people don't know even if you got 2 or 3% inflation now, it's not down. Right. Prices aren't down. Trump's got the inflation rate way down from where it was under Biden, but it's still a 3% addition to 21% every year. So when the people say they're hurting, they're hurting, but we gotta tell them who did the hurting. And so, you know, unfortunately the narrative right now, here's the New York Times today, front page, right above the fold. A price blitz puts Trump on defense. A price blitz puts Trump on defense. They don't substantiate anything. In fact.
All the economists have been looking to link tariffs to higher prices. They can't. The San Francisco Fed Federal Reserve bank did a major deep dive and showed that in the short run the tariffs have actually lowered prices. And they got some other politics in there I don't like, but it can't be found. And then on the other hand, the Atlanta Fed now has real gdp, real GDP growth after inflation, real GDP going up by three and a half percent. If you would have told me that a year ago that we'd be at that rate after the Biden economy, I would have been highly skeptical. Right. Everybody knows I've been putting up the downward productivity charts forever. The long run stance hasn't changed. Except for Trump jacking capital into this country. That's the number one cause of economic growth. He's doing all the right things. It takes a while, but he's just gotta get out. When he does the Ian Omar or whatever, you know, he can do it. But we saw these races in Georgia and whatever the folks downstream from Trump better learn about culture and how to do it. Cuz when Trump does it, he knows how to do it. But at these state level races, whatever, there' syou're fighting against the mainstream media still as a, you know, as a state delegate kind of thing. And Trump can't help everyone. And it's time for the parties in Virginia and Georgia to get a pulse.
Steve Bannon
So last night was, was Miami, I don't think that's as big as deals. What happened in Georgia, we'll get more into detail later. But basically a state House that President Trump and they had actually worked the districts, President Trump won, I don't know, by 12:15 in November in a loss last night. This is one that ought to be taken apart. The Democrats are clearly enthusiastic. That's what President Trump fighting back last night. And, and they didn't use the stats. Go back. I want, I want the, I want the tariffs versus inflation because that's a bald faced lie in the Federal Reserve of San Francisco is proving that. Also Atlanta, remember the Atlanta Fed is the one that really takes care of our leads and doing macroeconomic analysis about GDP growth. They're saying post kind of any inflationary move, it's three and a half percent. That's the type of number, as I've said, you got to get to three and a half, maybe even 4% to outrun these deficits. Those are huge numbers. As President Trump just said right there, those are government numbers. That's Fed's numbers. Those are not Trump numbers. They say, no, Trump's just making things up. Hit this, hit it again quickly. Because I want the audience to understand that the serious people that look at this are actually not praising Trump's economic policy because they would never do that, but they're putting out a set of math that praises President Trump's economic policies.
Dave Brat
Yeah, no, that's absolutely the Atlanta Fed. Now, it doesn't do, you know, 2026 forecasts, but it says third quarter of 2025, three and a half percent GDP growth. I've been putting up charts right for years on this show. We got a productivity problem going down 70 years in a row. CBO has productivity at 2%, 1.7% for the next 30 years. And in the midst of that, you know, stagflation, stag, stagnant economy. Trump is able to pull off a rising stock market and 3.5% GDP growth in the face of Biden inflation. And if I was Trump, I would not let go of that. Right. It takes, there's a year and a half lag on monetary policy, at least a year lag on fiscal policy. So every economist, if they're telling you the truth, will say we're still squarely in Biden's economy. Trump's doing all the right things to pull us out. It's going to take a year or two. But he ought to be congratulated and the rest of the party better follow his lead or we're going to be in deep trouble coming up soon.
Steve Bannon
But it's not that he's to be congratulated because they're never going to congratulate. It's Trump. Yeah, Trump derangement syndrome. What we have to do, because the MAGA movement is very sophisticated when it comes to the economics of this. Right. And they understand he's turning around an aircraft carrier. We have to pound this wash, rinse, repeat and do not fall into the trap. Everybody says, oh, you just got to talk about affordability. Yet you must address it in the actions you're taking, what you were handed, the specific actions you're taking to alleviate that. But you got to focus on the main thing. The main thing is growth. The main thing is growth in jobs and particularly high value added jobs. Also wages, an increase in wages. Remember the golden age of Trump? The first time was the fall and Christmas season of 2019 when it all came together and all clicked. And you know who understood that? The Chinese Communist Party. That's why they let a a pandemic bioweapon bomb hiss to try to chop black President Trump. Short commercial break.
Man, a lot going on today in the world. Stick around.
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Dave Brat
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Donald Trump
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Dave Brant, Joe Allen's joined us also. We'll jump to Joe in a second. Both of them are in the command, at the command module. Brad, I want to continue with you today. The Fed, of course, talking about the last of the rate cuts and his forecast for next year. What's going to happen? I think give me a minute. Our bigger complaint is that the Fed, we have said now for the last couple of years, it's the calculation really of how we set interest rates. And I think this is why President Trump refers to him as too late powder the next Fed chair, I think the first thing and Scott Bessant, he's got that magnificent series and I'll put it back up later today on get her so you can read it in the Wall Street Journal. And the I think there was the International Journal of Finance where he goes to a detail of how really the Feds become part of the deep state. Kind of the Liz Truss right pitch about the bank of England and that they, they, they don't take, they're trying to do so much, most of it woke, most of it related to DEI or globalism and not take care of business, which is about the currency and about employment. And maybe having a dual mandate is not a thing. I recommend they don't focus on employment. They should focus on just the currency itself of which I think they do a terrible job. It's one of the reasons gold is on fire.
Chris McGuire
Right.
Steve Bannon
And you do that by going and talking to the folks at Birchgol, Philip Patrick, the team, your thoughts on interest rates. But also, you know, back to the centerpiece of what President Trump has tried to do. And we need to say this over and over and over again. We made two huge bets, bets about the United States of America. And the United States of America is an industrial power and not just nationalism, but what's in the best interest of the American people. And this is about us returning to be a manufacturing superpower with high value added manufacturing jobs. We're not China, but the United States is the centerpiece of this because our elite sold us out over a 30 year period to ship everything to China. Joe Allen's going to join us. We're going to talk today about chips and AI and the whole Fight there. Well, it looks like our elites are trying to do it again for the second time to shift to basically give China the tools to defeat us. President Trump's two bets are the big beautiful bill, the supply side tax cut is about giving some incentives to capital to invest in a massive way here in plant and equipment. The whole redoing of the commercial relationships of the world, which folks are only in the first six months of this, these trade deals alone with Japan and Korea in the past took three to five years to do and go on and on and on. President Trump is trying to quick march that, to change the commercial relationships, to incentivize the foreign manufacturers to relocate, relocate here to the United States of America. Now, I am one that's not exactly ever super happy about foreign capital come to the United States because I think it brings too much control. However, in the current economic system we have, you know, if they're going to bring their manufacturing back, they're going to bring their cat, they're going to, you know, lead with their capital to do it. So we will have to work through that. But that is a high class problem. Dave, Brad, your sense of where it's going and you could tell last night from the audience reaction, the audience wants to hear President Trump address these things. They love it when he starts talking about this. I mean he, he that and it was perfect. Alexander Priet, the people, Susie Wiles and the people at the White House to pick Scranton for the first one I think was absolutely brilliant. Your thoughts, sir?
Dave Brat
Yeah. Well, Scott Bassent is doing Herculean work. His best phrase a year ago was, you know, Wall street has had its turn, now it's time for Main Street. We have to make that happen real quick. So last 30 years of federal Reserve policy with a Greenspan put has always favored Wall street and the rich and they can time things and the Federal Reserve System, I hope someone is cleaning that out because they're part of the problem. Right. Goes without saying, 21% inflation because they validated $2 trillion spending deficits from the government. They validated that. They said, okay, right, we're going to print you enough money so you guys can put the United States out of business. The only thing that gets me nervous about the Fed now and treasury is it's getting so complex now no one can understand it. Right. I did a PhD in economics, studied monetary policy. Some not an expert in monetary. But I can't follow some of this breaking news, right. On the, on the new monetary innovations and what's going on. We need to simplify. Milton Friedman, if you want to help the average person, the average person doesn't know yet. And you know, as a Calvinist, you know, we're not known for our feelings. But when I get really ticked off inside, when I know what happened, what we just did to the middle class, right? And the working class is working for 10 bucks an hour, 20 bucks an hour. They don't know that 21% inflation, the purchasing power of their entire retirement account, if they have one of their lifetime savings just went down by 21% in four years. They don't know that. They think it's just like the grocery basket where you're at the supermarket and food prices are a little high. No, it's way worse than that. And so you know, Milton Friedman, it was pretty simple. Print M2 goes up the same percentage rate as GDP goes up, right? There you go. That's enough money to accommodate the growth in the real economy and that's it. And quit doing all hiring. All these economists who are all woke and they're studying everything under the sun except for median the average person's wages, they're not doing anything there. They're just doing all woke politics on the left.
Steve Bannon
The other thing that President Trump is doing also, and he hammered last night, is immigration. And this is all immigration. I mean, essentially Axios has a piece up. Please go together. This is where I put my stuff up, is that Axios has very smart piece today that says essentially President Trump really from the shooting, and hey, maybe it should have started day one is essentially stopping kind of all immigration right now. And we recommend this if you want wages to pop. It's not just the H1B scam which has to be eliminated. We need to stop bringing in the world to compete with workers in the United States. And don't sit there and tell me, oh, they're better, they have more entrepreneurial drive. The people in the United States or America have plenty of entrepreneurial drive. They just need a shot to execute. And so stopping immigration, a huge part of this. You can see already with wages, working class people stopping the illegal alien immigration, which was what Wall street wanted, the reason they backed Biden, they wanted to drive wages down among the working class, particularly Hispanic Americans and African Americans. Right? And so one point, stop that. He stopped that. Over 2 million have self deported because they understand the rules of the games that change. Now you need to get into what I call the legal immigration, which is also all a scam. You got green cards, the whole thing's a scam. You got to, you're going to have to take a decade, half a decade at least, to think all this through and see how it benefits the American citizen while it's benefiting the country. Dave.
Dave Brat
Brad yeah, and yeah, one point on that. What, you just immigrate? It's hard to keep up with all the, all the corruption, right. The Federal Reserve has hundreds and hundreds of economists, really smart people, right? University of Chicago, Harvard, all the top brains, but the brains don't have courage and they don't have any moral convictions. And economics is supposed to maximize human happiness. How's that going? The guys that study economics, they just take all those initial assumptions and ignore the basic point. They're supposed to be maximizing human happiness. So when you have 20 million illegal immigration, immigrants, a border invasion, and no Federal Reserve economist has studied that phenomenon, hey, guys, you think that might affect the economy? I mean, the US Government, right? All of the budget committees. Have any of the economists covered the damage done to the American worker? No, because that's run by the speaker's office and the leadership office and the donors control those offices. So the three mega issues that we've been on, right, the economy, the border invasion, the past two wars were $17 trillion. Any economic articles on the opportunity cost? Right. That's the first term you learn in an intro book of that 17 trillion. And we have a $7 trillion government budget right now. Hey, economists out there, what is the productivity on government spending? Just, I haven't seen it lately, right? What's the productivity? If GDP growth is 2, what's the productivity on the $7 trillion in government spending? Haven't seen a study on that, guys. Because if the American people found out what that number was, you know, and it's not Republican, Democrat, we're spending like drunken sailors, too. And so we got to get our heads on straight here. This, this is a total waste of money we're stealing from the next generation of kids. I was with kids yesterday in the White House working on education and Maha and all that stuff. And if you, if you love the kids, you better get this spending and economy going for them. That's the only hope they have.
Steve Bannon
Give me a quick. We're going to come back from a break in a few minutes. We're going to have Chris McGuire, an expert on, on, on chips, on over counsel on foreign relations, join us with Joe Allen. I want to go to Georgia real quickly. Everybody's making a big deal about Miami. I thought the invasion, I thought Marco's invasion of Venezuela was supposed to take care of us there. But let's put a pin in that. Enough people are yelling about that. Although very low turnout in Georgia. Now this is a House of Delegates or House of Representatives seat, not, not for Congress but for the Georgia General Assembly. But it is a Trump district and once again I think it, to me it reinforces what happened in New Jersey in the governor's race and in the Commonwealth of Virginia. If you run these basic Rhinos or even conservative Inc. Republicans with no energy and their whole program is just tax cuts and size of government that you got to do more than that. And this guy got beaten last night on something that was a shocker to people. But you've got give me 30 seconds. You got some inside information on this?
Dave Brat
Yeah, yeah, yeah. One of my good buddies, African, African American, small business pastor is just so fed up with the Republicans. They're in the brawl in House brawls there between the squishes and the Rhinos and the Patriots, there's no energy in the Republican party just like in Virginia. It's just totally brawl broken. No energy. No. And yet as a candidate at the smaller seats, you're fighting the mainstream media. So it same predicament and you can't rely on Trump. I heard Newt Gingrich might be coming in with some ideas and maybe he can help fix Georgia. He did some great work with a contract. It seems to me we need a new.
Steve Bannon
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Okay, Brad, we're gonna talk more about the rate cut that should come this afternoon, what it means in a little while. Joe Allen, back from your travels, Joe, you've been working non stop. Of course the, the AI amnesty got pulled from the second. This is embarrassing. This is why the President's being poorly advised. Sachs and these guys tried to jam it in again to the ndaa. Of course the audience and article three and Grace with Bill Blass. Everybody got up on the ramparts and got that pulled and now they're working on the EO we're going to have. We'll talk more about the EO later. But what's the sense you've been going around now given more of your talks? Give me a sense of things, sir.
Joe Allen
Yes, Steve. Among the public, I don't know anyone who is for the federal preemption. I know a few experts and accelerationists who do. But the public want to keep the power in the States. You know, I just got back from San Francisco and I was meeting with mainly transhumanists and you might say former transhumanists turned doomers. The cultural landscape is astounding. I attended a Forsyth Institute conference in an old Christian Science church, what's now the Internet Archive. And as we all sat in pews listened to lectures on how gene editing will lead to the curing of all disease and maybe immortality, how the advancement of AI will both enhance and replace and perhaps destroy all the human race and of course all the ways in which brain emulation will lead to the possibility of uploading your brain so you can live forever in a data center. So that's the short version of I went into the viper's den, got bit and I'm trying to shake off the venom.
Steve Bannon
We would love to say. We would love to say that this is science fiction, but it's not folks, this is why we brought you over years ago and what the book Dark Gayan's about. Joe, just hang with me for a second. I want to bring in Chris McGuire. Chris is over at the Council of Foreign Relations, former member of the National Security Council, an expert on chips and technology in the CCP and I wanted him to kind of give us some details today. We've heard the strategic side of it and the reason is our beloved Murdoch Wall Street Journal. Trump's shift on the video chips bolsters China's AI ambitions. And it's a pretty brutal article about what has been done. Chris. I make the argument that the President to a large extent is just hearing, when he hears about China technology, he's just hearing one side of it because he's got all these guys in Silicon Valley, all the oligarchs, and they always pitch this doesn't make sense. If we're at an inflection point and we're having a Sputnik moment and we can't have any controls over the frontier labs, in fact, we have to turn over the weapons labs and the national labs to them. The to have them work on AI.
At their direction with no controls. Like I said, there's more controls on it. You have more regulations about launching a nail salon on Capitol Hill than you have on the Frontier labs. We have no earthy idea what they're doing. And at the same time, they said it's all about China. You have to do this because China, and I do disagree with some of my colleagues in this preemption. If we had some sort of apparatus, like the Atomic Energy Commission on nuclear weapons, if we had some part of regulatory apparatus, I think federal rules actually be more logical. The states are doing this, Desantis is doing this. Other states are doing this because there is nothing right now. And they're not prepared to have their citizens just be at the whim of the, of the accelerationist. Then, on the other hand, we're now in a situation where the Chinese Communist Party would be nowhere if we didn't give them capital, equity, debt, the ecosystem, train them, educate them, and most importantly, give them the mother's milk of artificial intelligence, which is these advanced chips which had come from American technology. So can you walk us through what exactly has happened over the last 48, 72 hours? Why is this so big? And what should this audience understand on the technical side, sir?
Chris McGuire
Sure. Thanks for having me, Steve. So yesterday or two days ago, President Trump announced that the Nvidia H200 chip could be exported to China. So this is not Nvidia's most powerful chip, but it is their second most powerful chip. It's the best chip of the previous generation, and most importantly, it is substantially better than anything available in China. It's six times better than the best chip that. That is the best US Chips that's there now. It's better than any Chinese chip that they're going to make for the next two years. And up till this point, the US Policy has been to Export control, very, very advanced AI chips to China because these chips are the most important thing for the development of AI. You need very large numbers of them to develop, develop and run the most sophisticated models. And obviously the most sophisticated models are crucial to national security, to economic prosperity. I mean, the entire US stock market is basically being propped up by the spending on the creation of data centers to, to run these chips, mostly for AI inference, but, but also for training inferences, the process of running the models. So up until this point, the US policy had been to maintain as large of a lead as possible over China by number one, maximally slowing China down and number two, investing maximally at home. And the only way the United States has to slow down China's progress is export controls on AI chips. And fortunately the United States is much, much better than China is at developing AI chips. It's actually across the entire rest of the air stack, it's more or less awash. If not China's ahead. Their people are as good as ours. They develop really good algorithms, they have access to as much data, if not more. They're really good at making electricity. But the one thing that they really can' do nearly as well as us is make chips. So therefore the United States has leveraged this maximally to our advantage and said we're not going to let the most chips go to China. And that has had an impact on AI capabilities. It's why our labs are ahead of theirs. It's why the best models come from US firms and not Chinese firms. It's why data centers around the world are not from Chinese companies, they're from US companies. The Chinese have this belt and road initiative around the world, but there is no AI belt and road. There is no, there is, there's no competitor to Microsoft data centers to Microsoft, Microsoft cloud providers. And that's great for American business and it's great for American technology. And it means that the world will use the USA is act because the Chinese can't, can't make it and can't provide it. The administration changed this policy and they said that, that we're basically, instead of having as large of a lead as over possible as China, we're going to have a relative lead over China and we're going to be willing to give them maybe not our best chips, but are our second best chips and we think that's, that's acceptable. There are enormous risks in this. Like even though they're not the best chips, the game with AI is not about whether you have the best single chip or not it's about how much computing power in aggregate can you pull together into a data center, into a training run and use to make and then run models. And you can actually use large numbers of less advanced chips to replicate the performance of comparatively slightly smaller numbers of the most advanced chips. So the US advantage over China is predicated on us having very, very large gaps on computing and them have not having access to any chips that are anywhere near the frontier in the most advanced. That's why previously the US policy was to draw a line in the sand and say you shall not cross this. Now that that policy has been upended is much more difficult for China for the United States to leverage its advantages over computing power over China and AI and therefore the over China and I almost certainly will decrease if not evaporate.
Steve Bannon
This has come from, look David Sachs and address a lot of people, but principally Jensen Wong. Let's focus on that. So Jensen Huang has told us over the last couple of weeks and look I'm quite harsh on him. I say he's a agent of influence for the CCP and an arms dealer but he's, he said things like it doesn't matter if China wins the race, we're all benefit. It doesn't matter if a Chinese company wins the race, will all benefit from it. What is Jensen, let's take his side for a second. What is the pitch he actually makes and Andreessen and Sachs make to the President to try to say hey let's get these export controls over because then what we want is complete dominance in the American stack and China using it. Give us the, give us a sophisticated version of what Jensen Huang is telling the President. Sir.
Chris McGuire
So I think there's two main arguments that they make. The first is that if we don't export the chips to China, China will make the chips themselves. So therefore US companies might as well make money rather than having the Chinese companies make the money and also have the same capability. That's wrong for reason. I'll go to a second. The second one is that by exporting their technology it's, it's sticky and it becomes difficult for the Chinese to move off of their ecosystem and actually they'll be incentivized to not make the advanced chips and, and there dominance will reign for a longer amount of time. I think both are incorrect for two different reasons. On the second one it's just very straightforward to address. I think number one, China has never been satisfied to be reliant on the United States for any sophisticated technology ever. And particularly not advanced semiconductors. They've been very, very clear that they're going to not be reliant on the US and also the US up to this point has been very clear that we are going to use this as a choke point to constrain them. So if you're the Chinese, there's no putting the toothpaste back in the tube. There's no way that we could ever convince the Regardless of whether you think they're full out on Hang on.
Steve Bannon
And there's very specific as we talk about all the time In May of 2019, after two years of hard negotiation with Leith Navarro the deal, the seven the deal to take care of all the problems with the Chinese economy, integrating the world economy. They not only said we're not going to do that, they also said we're going to decouple from Western technology. This is. They do this all the time. They will not. And the reason Wan Xishan and Xi didn't agree to the deal on the economy and then further took it for and then they went after their tech entrepreneurs are not being tough enough is they will. They don't see a system where they have to kowtow to the foreign devils as a system that works. They will always try to decouple from our technology. That is just their pattern over time, is it not sir?
Chris McGuire
Absolutely. Absolutely. They are 100% incentivized to do this and they're moving as fast as they can. Was in the White House working on this when we were debating, you know, what's the Chinese response going to be and is it going to accelerate Chinese indigenization? We thought about that and our thinking was Chinese indigenization on advanced semiconductors is already at the maximum their pedals already on the floor. They, they, they know that they need to really reduce their reliance on us for this. Any logical country would and it's consistent with all of their past practices. So they're going to do this. The other thing I would also argue just from a technical perspective is this, this technical argument that well it but it makes it really difficult for them to off of chips is actually not that hard. And the reason, you know, it's not that hard is that the big USAI labs have done it. Anthropic has done it. Google has done it. The big labs are actually moving away from this sticky ecosystem, either away from Nvidia chips or from the kind of software that they use, the CUDA software that Nvidia argues gets people hooked to their, to their ecosystem. But if you have a lot of resources. If you have a lot of resources, like a US AI lab does, like they have already done it, they've been able to leverage those resources to do it. The Chinese Communist Party, the entire state backed apparatus and all these sophisticated Chinese companies also have large amounts of resources and also will be able to break through that. So the point there is there's not a moat there. There's this kind of relying on them not being able to figure out how to get off of our chips at some point in the future is not a technically accurate assessment. So if that's being pitched to the President, I think that's incorrect. And then a separate question if you want to go into it on the production side.
Steve Bannon
Yeah, I want to hold you through the break. Before we go to break, we got about a minute.
Coming on the same day that the Justice Department says they got this black market operation of industrial espionage that was selling the exact same chips for showing it does show that they're desperate to get the chips and try to somehow recreate them. Correct. Not just the chips they can steal, but also recreate them. That's part, that's, that is an active part of their program, is it not?
Chris McGuire
Absolutely. Yeah. They're trying to steal the chips. And actually look, there are loopholes in controls that should be closed separately. I will say that, you know, there's things that the Biden administration, while they pushed this forward building what the Trump administration did, there were loopholes. The Trust station should close. Chinese companies can, they can, they can get chips from third countries. That should be stopped. Chinese companies can access US Chips via the cloud. That should be stopped. But to actually sell the chips instead is the complete reversal. And, and we should be moving completely the other direction in terms of closing loopholes, not opening giant new ones. Back up.
Steve Bannon
Chris, can you hang over a second? We're taking a shortcut. Chris McGuire joins us. Joe Allen's in the house. We're going to talk about the executive orders, a bunch of executive orders now floating around. They're going to try to go a different direction. Direction then you've killed the putting into the NDAA the AI amnesty of stopping the preemption or not stopping for anyway. Short commercial break Chris McGuire, Joe Allen, Dave Brat on the other side.
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Chris McGuire joins us. Chris, just so we get a level set here, because I'm going to go the argument of why you can't have any state regulations and really no federal regulations, the accelerationists not just have to be accelerationists. My concern is that they're just going to do what they're going to do and accelerate and we just have to live with it. How close now, given Chinese Communist Party capabilities, are they really, let's leave this deal aside. Are they really in mounting a true competition for us in the area of artificial intelligence, given the entire ecosystem of Chinese technology, training, education and capital? Sir.
Chris McGuire
Yeah. So I think the Chinese are close. They're probably months behind us, which is a problem and is really concerning. It means that they're very close to us in developing sophisticated military capabilities will be linked to this from capturing a big percentage of the projected $16 trillion in economic value that AI is going to generate. So they are close. Where they're not close is in the production of the chips and infrastructure in order to do it. The reason they're close is because they still have access to our computing power, either because of smuggling or because of loopholes and controls. Without that, they wouldn't so they, you know, if they were forced to build the infrastructure themselves, they would probably fall far behind to years relatively quickly, which in AI is an eternity.
Steve Bannon
And so that gets us back to these chips. Now, one of the arguments Silicon Valley is making is that, hey, once the west gets accommodated to Chinese technology and Chinese use that. All the people that threw up these arguments before turn out they're wrong. Is that correct? Isn't there some examples, particularly with Huawei, where it actually proves our case, sir?
Chris McGuire
Yeah, I mean, I think the key thing here, where I frankly think that the. Based on the Bloomberg reporting that says that this decision was linked to saying Huawei is actually really capable, I think that they're frankly not. And this is actually one of the few things that the Chinese really do lag at. And it's important to kind of draw out the distinctions here. It's true that Huawei can make a chip that is slightly worse on paper than this H200, but they can't make that many of them. And that's what's important, because you need to be able to aggregate very large numbers of these chips. Right now, the total number of chips that the Chinese can make or the total amount of AI computing power that the Chinese can make is probably in the 1 to 2% range of what the US can make. If you're really generous to the Chinese and you assume that their production is much, much higher than the estimates we've seen to date, it's. It's no more than, say, the 5% range. And actually the best U.S. chip right now is about 25 times better than the best Chinese chip, which is pretty good. That is projected to increase to about 20 times better in just two years. And the reason for that is that our chips are getting better and better. They're using more advanced technology that the Chinese don't have access to. And Chinese chips are more or less stagnating. So the gap between the United States and China on this is projected to radically increase. That means that our export controls and our ability to actually restrain China's AI capabilities is going to go up as long as we don't give them the chips themselves to actually, to actually develop the AI that's so dangerous. Right. So if, if we actually stay the course, the policies will probably start to have a pretty significant impact on the Chinese. But by reversing them, we run a huge risk that actually the gap between us and China will close in AI, and that will have massive impacts on our national security and economic prosperity.
Steve Bannon
One of the biggest breaks we had with the, with the globalist and Foreign Policy Establishment 16 was the confrontation with China. In certain aspects, there's continuity from what President Trump did and the team did in his first term and what Biden did. If you were able to sit with the President Today and just say, hey, look, I got a couple of thoughts. What would that be? To the President, United States?
Chris McGuire
Yeah, I think that's worth emphasizing that really this is in a bipartisan policy that Trump administration started with the restrictions on semiconductor manufacturing equipment in 2019 and 20, and then the Biden administration continued. I think we should, number one, semiconductor manufacturing equipment is the foundation of this, the ability to produce the chips. The Chinese are very restrained, but not fully restrained. We should be blocking the export of all semiconductor manufacturing equipment to China that's capable of any advanced production and just basically make sure that they have no chance of having an advanced chipmaking industry. I think our controls have been effective, but they really need to be maximally effective and shouldn't have zero risk. So I also think we should basically stop the Chinese from making, buying or renting AI chips. So that means no semiconductor manufacturing equipment, it means no sales of AI chips, and it also means no Chinese access via the US Cloud. If we're going to be in a competition with China and AI, then they should use their own chips and their own infrastructure in order to fund to fuel their own models. That's the way that we can best ensure American competitiveness. If we have leaks in any part of that stack, making, buying and renting AI chips, China is going to be able to leverage the single greatest asset. The US has, the most advanced technology in the world to produce the very technology that they want to use to overtake the United States. It's dangerous and we shouldn't let them do it.
Steve Bannon
Chris, last. You know these guys and the way they negotiate and the way they think. If the Chinese, if the roles were reversed, what would the Chinese Communist Party do to the United States of America in this regard?
Chris McGuire
Sir, there is absolutely no way that the, the Chinese Communist Party would ever let the United States have advanced AI chips if they were the only ones in the world that made them.
Steve Bannon
It's Chris, that's that simple. Sir, where do people go? To find out more about you and more about your thinking and writing on this topic.
Chris McGuire
On Twitter, I'm at Chris rmcguire I am the, I'm at the Council on Foreign Relations as the Senior Fellow for China and Emerging Technologies. We will have actually I mentioned some of the production numbers on Huawei. We're going to have a report on this either today or tomorrow, kind of going through these numbers in detail and really looking at the assessment on US and China compute capabilities. So mostly CFR and Twitter. But I will be speaking on this until we get this policy to a good place. So thanks for all your help on this, Steve.
Steve Bannon
No, thank you. And we will push out all of those reports and studies and make sure that the War on Policy has a full understanding of this. Thank you much.
Chris McGuire
So, sir, appreciate it. Thanks.
Steve Bannon
It's ironic that we leave today's the first hour with the Right stuff, A masterpiece by Tom Wolf as a book. The movie is a masterpiece by Philip Kaufman. The score is a masterpiece by Conti. And it was about.
The last time I would say we had a race with an enemy, with their, with the Soviet Union, about the space program, nuclear weapons, all of it. And we had the right stuff. Our focus was on total and complete victory. Total and complete victory. Chris McGuire just said it. If the Chinese Communist Party, the roles are reversed, there is zero probability that they would assist the United States of America in anything.
And that's what we have to do. The Chinese Communist Party is very simple. We must win this race. We will win in this race as we've won others in the past. But we cannot give them a helping hand at all. They're a murderous dictatorship that is a threat, existential threat to Lao, Beijing, their people, and a threat to every nation on earth. Short Break Foreign.
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Date: December 10, 2025
Host: Steve Bannon
Guests: Donald Trump, Dave Brat, Joe Allen, Chris McGuire
This episode focuses on two primary themes:
Steve Bannon leads an in-depth discussion with Dave Brat, Chris McGuire (Council on Foreign Relations), and transhumanism analyst Joe Allen, combining economic policy with geopolitical strategy and technological threats.
On Cultural Power:
"You can't force cultural change. Can't people simply reject it?"
– Steve Bannon (00:20)
On AI Export Controls:
“The US advantage over China is predicated on us having very, very large gaps on computing…”
– Chris McGuire (36:10)
On Silicon Valley’s Influence:
“Jensen Huang… has told us over the last couple of weeks… it doesn’t matter if China wins the race, we’ll all benefit.”
– Steve Bannon (37:11)
On Chinese Policy:
“There is absolutely no way that the… Chinese Communist Party would ever let the United States have advanced AI chips if they were the only ones in the world that made them.”
– Chris McGuire (50:11)
On National Will:
“We must win this race. We will win in this race as we've won others in the past. But we cannot give them a helping hand at all.”
– Steve Bannon (52:06)
The episode maintains an urgent, combative, and nationalistic tone. Bannon and panelists assert policy prescriptions in direct, sometimes rhetorical language that emphasizes existential struggle, American exceptionalism, mistrust of global institutions, and a need for uncompromising action both at home (culture, economy) and abroad (AI, China).
For listeners seeking to understand the intersection of U.S. domestic policy, economic philosophy, and the global race for technological dominance—especially the pivotal role of artificial intelligence and semiconductor policy—this episode offers an in-depth, unsparing analysis. The core message: America must reject compromise, maintain a sharp lead over adversaries like China, and focus government, industry, and culture on total victory to secure national sovereignty and prosperity.