Trump-Xi summit puts AI safety talks on the table but neither side wants to slow down
By: Kai Nicol-Schwarz (CNBC)
The United States has already lost the competition with China by pursuing 'hyper-intelligent' AI deployed as a financial product monetized as a Software as a Service (SaaS). SaaS subscriptions may serve short-term financial demand for ROI but they hamper long-term strategic development. While the US pursues the 'next big thing' to maximize consumer spending, China is steadily improving capabilities from real-world experience based on deployed application. China has been developing AI using a model of incremental improvement that better fits industrial application and long-term strategic goals. The short-term goals of a financialized economy simply cannot compete with the resilience of an industrial economy.
S E E D E D C O N T E N T
President Donald Trump wants the U.S. to beat China in the artificial intelligence race. But as he meets Chinese President Xi Jinping, both countries are also weighing how to address the risks posed by rapidly advancing technology.
In recent months, AI systems have taken more consequential actions online: OpenAI said one of its research models gained unauthorized access to parts of the AI platform Hugging Face, while Anthropic found AI was being used to automate parts of cyberattacks. The incidents have raised fears that increasingly autonomous models could make attacks faster and harder to contain.
Ahead of Trump and Xi's meeting on Thursday, U.S. Treasury Scott Bessent discussed the prospect of a "U.S.-China AI dialogue" with his Chinese counterpart, He Lifeng, over the weekend, including a channel for incidents "up to a national security level."
"Leaders in both countries are spooked by the increasing cyber capabilities of AI models, and especially agents acting autonomously to escape containment and breach websites,"Aalok Mehta, director of the Wadhwani AI Center at the Center for Strategic and International Studies, told CNBC.
But as fears have intensified, tensions have not dissipated.
Washington continues to restrict China's access to Nvidia's most advanced AI chips and has accused Chinese AI companies of using "distillation" — training models on the output of more advanced U.S. systems — a claim Beijing rejects.
What's been said so far?
While the U.S. took an early lead in developing large language models, or LLMs, thanks to companies like OpenAI and Anthropic, Chinese models have made big capability gains in recent months and are increasingly being adopted by companies globally, including in America.
Trump previously dismissed warnings that AI poses an existential threat to humanity, risks amplified by OpenAI CEO Sam Altman and Anthropic chief Dario Amodei as they called for an industry slowdown and regulatory oversight.
"If we don't win AI, we're going to be put in a very bad position," Trump told reporters earlier this month.
But in a Truth Social post Monday, he said the government "will rein things in if we have to."
Some lawmakers hopeful that the talks will result in some sort of agreement on AI, while being realistic that the summit may be more about the fact it's happening than deliverables.
"I hope Trump meets with Xi Jinping and comes up with some common sense safeguards," Rep. Ro Khanna, D-Calif., who represents part of Silicon Valley, said in an interview Wednesday on CNBC's "Squawk Box."
"How about we just agree that you should not be able to have self-improving AI?" Khanna said. "Why wouldn't you want to sit down with Xi Jinping and say let's have some reasonable agreement? And have it enforceable, trust but verify."
AI safety and access to chips
The likeliest areas of agreement between the U.S. and China could be common definitions and frameworks for AI safety for powerful models and an emergency communication mechanism to discuss incidents, Mehta told CNBC.
A channel for relating national security-related incidents would be a "modest" but positive step, Chris McGuire, senior fellow for China and emerging technologies at the Council on Foreign Relations, told CNBC.
But an agreement to slow down AI's breakneck development speed is "extremely unlikely," he added.
China has historically used AI dialogues "to complain about U.S. export controls," McGuire said, which the U.S. uses to prevent the most advanced AI chips from being sold to China.
"Its state media has largely rejected the concerns expressed by leading U.S. AI labs about the potential for catastrophic risk, which is consistent with China's long-held skepticism of all U.S. arms control proposals," he added.
Despite U.S. restrictions, several Chinese firms have reportedly been able to access the chips' compute power remotely, via data centers in Southeast Asia.
While U.S. Trade Representative Jamieson Greer said controls on chips were not on the agenda during preliminary talks on the weekend, China could push to have them relaxed, said Melanie Hart, senior director of the think tank Atlantic Council's Global China Hub.
"China's asking the U.S. to embrace Chinese AI models and drop some of the U.S. controls on China's access to semiconductor chips," she told reporters on Tuesday.
watch nowVIDEO3:5403:54Tariffs and export controls on China will persist despite Trump-Xi summitSquawk Box Asia
Distillation could also come up in the talks. U.S. companies and officials have accused Chinese labs of using the practice to gain ground, characterizing it as theft; China rejects the allegations.
In July, Bessent threatened sanctions against companies doing it and said the Trump administration had found "watermarks of our U.S. large language models on many of the Chinese models," calling it "unacceptable."
Progress on AI cooperation relies on two things, said Mehta. "The first is that it can't hurt the ability for the U.S. and China to compete on the merits of their technology."
The second is a verification mechanism, he added. "Policymakers won't be inclined to take their counterparts just on their word, so we'll need to find ways to ensure information flowing between the two countries is accurate. That means both technical and governance verification tools."
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Xi Jinping already holds the better negotiating position in talks with Donald Trump. China can deploy AI much faster for real-world applications which provides a substantial trade advantage. It's too late for Trump to attempt to contain China's deployment of AI.
The talks may shift attention on to safety and weaponization of AI. But China's ability to rapidly deploy AI for real-world application provides a strategic advantage in that arena, too. China's open-source development of AI has already released the capabilities into the wild and that has complicated attempts at containment. The US pursuit of "hyper-intelligence" means the Trump is still on the sidelines when it comes to trade.
If American tech execs were actually worried about ai they’d be demanding the government subvert and destabilize china’s program ala stuxnet, not seeking cartel like regulation to stifle the American market.
stopping and conceding the field is as stupid as small countries destroying their economies in the name of net zero as the chinas and Indias of the world continue down their growth path,