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This editorial represents the author's personal analysis and perspective on the geopolitical AI war. While based on historical events and current developments, the views expressed are subjective interpretations and do not necessarily reflect those of any institution or organization. Readers are encouraged to critically engage with the ideas presented and form their own conclusions.
You must have heard the saying, "The USA innovates, China replicates, Europe regulates."
Sayings almost always come from empirical observations.
The United States has a long history of investments in business and talent, something that drives businesses toward innovation through competition and strategic government support.
The frontier mentality allowed the country to develop, from its very founding, a culture of risk-taking, entrepreneurship, and self-reliance. The Westward Expansion of the 19th century reinforced this culture, as settlers had to innovate to survive and prosper.
At the same time, minimal government intervention in the economy encouraged private investment and competition.
In the following century, the country attracted scientists, engineers, and entrepreneurs fleeing persecution or seeking opportunity. Two of the most prominent examples are Albert Einstein, whose warning to the U.S. helped spark nuclear research, and Sergey Brin, who co-founded Google.
This inflow of talent created a diverse, high-skilled workforce, which helped accelerate innovation.
During the 19th and 20th centuries, laissez-faire economic policies allowed businesses to take big risks and reap big rewards.
In this sense, two key developments shaped the modern entrepreneurial and financial framework of the U.S.: the New York Stock Exchange (founded in 1792), which helped build a robust financial system, and the rise of venture capital in Silicon Valley (from the 1950s), which made it easier for startups to secure funding.
Two other aspects are meaningful in understanding the modern USA: the strategic role of the government and the post-World War II era.
U.S. governments have historically promoted private-sector investments, but they have strategically funded high-risk innovation:
- Massive defense funding led to breakthroughs in aerospace, computing, and nuclear technology during the Cold War.
- The foundation for the internet and AI research was due to DARPA (founded in 1958).
- The National Science Foundation and NIH funded pharmaceutical and biotech research.
As for the post-World War II era, the U.S. emerged as the dominant capitalist power, and to maintain its leadership, it invested heavily in business, technology, and education.
In summary, the U.S.’s focus on investment was shaped by its free-market culture, immigration-driven talent pool, government-backed innovation, and Cold War-era competition.
China, which built its economic rise on a mix of government direction and market-driven growth, took a different approach. While full governmental control and centralization did not foster free competition, it allowed the country to focus on what it needed to become a world power. Much like an infant industry protected by the state, China observed global innovation, replicated successful models, and strategically shielded key sectors to accelerate its growth. It didn’t start from scratch.
China actually has a long history of strong centralized rule. Since the Qin Dynasty, a precedent for state control was set, while the Ming and Qing dynasties established a massive bureaucracy to manage the economy, taxes, and society. From 1839, China suffered at the hands of foreign powers, and Western colonialism weakened the country, leading to a belief that strong state control was necessary to prevent external manipulation.
After winning the Chinese Civil War in 1949, the Communist Party, led by Mao Zedong, implemented state-controlled socialism. From 1978, Deng Xiaoping’s reforms opened up markets but kept key industries under state control. The Chinese Communist Party (CCP) still remains in full control while allowing strategic capitalism. In short, the Chinese government believes centralization prevents instability and external interference.
China’s focus on centralization stems from its imperial history, response to Western exploitation, Communist ideology, and belief that strong government control ensures stability.
As for Europe, a plurality of states, which had to cooperate while staying united, needed regulation by its very nature. Moreover, its history led to a regulatory approach that balances free competition with safeguards against both monopolies and excessive state control.
The current competition laws of the European Union are meant to prevent non-state monopolies, and all countries need to move within certain boundaries to compete fairly.
Unlike the U.S. or China, Europe has always been a collection of different nations with different economies, laws, and cultures. This forced European countries to develop cooperative regulatory frameworks to ensure stability—from the Holy Roman Empire to the creation of the European Union.
The Industrial Revolution led to exploitation, poor working conditions, and monopolistic abuse, but perhaps the most defining aspect of the EU’s regulatory system is its deep-rooted fear of authoritarian control, which inevitably leads to strict regulations.
Nazi Germany and Fascist Italy showed how state and business power could be abused. After the war, European nations prioritized preventing extreme control—whether by governments or corporations. For instance, Germany strictly regulates corporate power and enforces strong labor rights.
The EU’s foundation was built on rules to ensure fair economic competition between nations, and the relatively recent GDPR, the world’s strongest data privacy law, was created to protect consumers from corporate data abuse.
Basically, Europe’s focus on regulation comes from its history of fragmented states, fear of monopolies, reaction to authoritarianism, and commitment to social welfare.
In short, the history and nature of these three entities shaped their decisions.
All of this has led us to where we are today. It should be obvious that history shapes nations, decisions, and people. Yet, globalization and technology have fostered an illusion—that we exist only in the present, facing challenges that can be solved in isolation, as if the past holds no weight.
And now, the latest obsession: artificial intelligence.
Let me be blunt.
We’re witnessing the sudden rise of a Chinese open-source AI model that no one saw coming, the frantic scramble of U.S. tech giants trying to contain the damage, and the EU finally waking up to the fact that AI isn’t a passing trend—it’s an arms race.
LinkedIn is flooded with posts tearing into the EU—not enough investment, too slow to act, too many rules to ever produce something truly groundbreaking. But let’s not forget that Europe was the middle ground when two superpowers were at odds—and it managed to emerge stronger and diplomatic. Once again, history reminds us that geopolitical entities act according to their nature.
The AI war has once again exposed the deep fault lines between the U.S., China, and Europe.
In the U.S., the biggest AI companies dominate, announcing the Stargate Project as if it were the Manhattan Project of our time. In China, a single open-source AI release erased billions from the stock market and forced a fundamental restructuring of the entire tech sector. Meanwhile, the EU responded with bold investment promises—but only after making it clear that their AI models would prioritize security and data protection over pure technological supremacy.
AI is no longer just a tool. It has become the new nuclear weapon—except this time, no one will hear the explosion.
With the rise of DeepSeek, China has proven that it is no longer in its infant industry phase—further proof of its ever-evolving and calculated approach. It takes nothing more than a strategically timed release to wipe billions off corporate valuations and send Western tech giants scrambling. The U.S. is beginning to realize that competition is no longer just internal—it’s global, ruthless, and accelerating. The EU, caught in the middle, knows it must keep pace—but on its own terms, without abandoning the principles that define its vast economy.
The AI war isn’t coming. It’s already here.
Who will push the button?
