There is no point of AI dominance where a nation becomes immune to safety risks. For both the U.S. and China, every advance in model capability inherently increases national vulnerability to misuse, accidents, or attacks, linking the two concepts inextricably.

A global AI safety regime should learn from nuclear arms control by focusing on the physical infrastructure that enables strategic capabilities. Instead of just seeking promises, it should aim to control access to chokepoints like advanced chip manufacturing and the massive data centers required for frontier models.

While the West obsesses over algorithmic superiority, the true AI battlefield is physical infrastructure. China's dominance in manufacturing data center components and its potential to compromise the power grid represent a more fundamental strategic threat than model capabilities.

Unlike social media, which scaled without physical impediments, AI's progress depends on massive, resource-intensive data centers. This physical footprint makes the industry vulnerable to local political opposition, regulations, and even violence, creating a new bottleneck for growth that pure software companies never faced.

Advanced AI models, like Anthropic's, that can identify deep cybersecurity risks and zero-day exploits transform the need for computing power from a commercial want to a national security imperative. This ensures that demand for compute will be funded regardless of economic conditions.

U.S. plans to build AI data centers in the energy-rich Middle East are now at risk. Persistent instability makes these economically valuable assets potential military targets. This could slow global AI compute capacity growth and shift demand to already-constrained U.S. domestic data centers.

The US and China view AI superiority as a national security imperative comparable to nuclear weapons, ensuring massive state funding. However, this creates a major risk for investors, as governments may eventually decide to nationalize or control leading AI companies for military purposes, compressing multiples.

While often proposed to manage safety, a centralized, government-led AGI project is highly dangerous from a power concentration perspective. It removes checks and balances by consolidating immense capability within a single entity, whether it's one country or one company collaborating with the government.

The massive capital expenditure on AI infrastructure is not just a private sector trend; it's framed as an existential national security race against China's superior electricity generation capacity. This government backing makes it difficult to bet against and suggests the spending cycle is still in its early stages.