The State Department says countries cannot be trusted partners in Pax Silica, the U.S.-led artificial intelligence supply-chain group, while substantively engaging in initiatives that advance a competing vision for "super intelligence," the Associated Press reported Sunday. The condition, which AP describes as implicitly aimed at China, raises the stakes for governments that have tried to work with both powers, and for the companies building data centers and deploying AI inside their borders.
What Happened
AP's analysis, published by Fortune, describes two blocs taking shape. Washington leads Pax Silica, built around securing AI supply chains. Beijing backs the World AI Cooperation Organization (WAICO), which launched with 29 initial founding countries, including Pakistan and Russia. "Super intelligence" is the Trump administration's new preferred term for AI.
Kazakhstan shows the pull in both directions. Its AI minister, Zhaslan Madiyev, went to Washington in June to join Pax Silica, then signed in Shanghai three weeks later to make the country a WAICO founder. Kazakhstan signed an investment deal worth up to $10 billion with Nvidia earlier this year for a planned data center hub, while local officials say Chinese direct investment hit a record $2.8 billion in 2025.
Others are hedging, too. Indonesia has joined WAICO, and Mari Pangestu, vice chair of its National Economic Council, told AP the country should be able to belong to both and choose the best system. Singapore, where Anthropic is opening its latest Asia office, is weighing WAICO membership. Japan, closely aligned with Washington on security, will not rule out cheaper Chinese models for lower-risk uses, Kyoto University of Foreign Studies professor Takahiro Tsuchiya said.
China's embassy in Washington said AI "should not be owned by major countries."
Why It Matters
For boards, the condition turns geopolitics into an operating question. Companies that place computing capacity in a hedging country, or build products there on Chinese open models, could see their host government's bloc choices affect partnerships and access to U.S. technology.
Kyle Chan of the Brookings Institution told AP that Beijing must court third countries to build its coalition, while Washington already has a broad network of allies, which hands "swing countries" bargaining power. Aalok Mehta, director of the Wadhwani AI Center at the Center for Strategic and International Studies, said many governments "don't want to pick a side" because each technology stack involves trade-offs. Carnegie Endowment for International Peace analysts Anton Leicht and Sam Winter-Levy argued that countries without frontier models of their own, such as Britain and Germany, depend on choices made in Washington and Beijing.
Beijing's reach is wide. AidData, a research lab at William & Mary, counts Chinese official grants and loans for AI-related projects in at least 77 low- and middle-income countries, AP reported, and the Pew Research Center has found people in middle-income countries growing more trusting of China on AI.
Context
The line follows a run of U.S. moves against Chinese AI. The Primary Wire reported this month that the Department of Homeland Security ordered civilian agencies to remove DeepSeek's AI, and that Treasury has proposed broader limits on U.S. investment in Chinese AI. U.S. officials and AI companies also accuse China of "distillation," or extracting capabilities from American frontier models, which Beijing denies. Trump said last month that "whoever wins AI, wins."
What to Watch
Whether the State Department spells out what counts as substantive engagement, and whether any existing Pax Silica partner, such as Kazakhstan, is asked to choose. Singapore's WAICO decision will signal whether close U.S. partners in Asia see room to join both groups.
