Watch What They Do
It was never about China. It was about getting you to pay for AI without receiving any actual benefit from it.
Pay more for power. Let the data centers plug into a grid you built and cannot stop them from using. Absorb the higher bills, the strained supply, the tax breaks handed to the richest companies in the world. Do all of it without complaint, because there is one reason that overrides every objection: we have to beat China. If we don't build it, they will and that would be bad!
David Sacks was the White House AI Czar, he said it directly:
If the U.S. were to lose the AI race, the repercussions would be significant, and it would alter the balance of power in the world in a very unfavorable way.
This argument is how they turn a rising electric bill into a patriotic duty.
This argument is the one Kevin O'Leary ( building the world's largest proposed data center in Utah) made to Tucker Carlson:
If they don't think my motivation is to beat the Chinese, they're wrong. I am going to beat them.
This argument makes the cost sound like a duty instead of a bill. It’s the only way for them to get us to subsidize a technology that they’ve told us is going to put millions out of work. Fear of losing does the work that no promise of gain could do. It manufactures your consent.
But look beyond their words and you will quickly find that they don’t believe their own argument.
If you really wanted to beat China, you would never sell them your AI models.
If you really wanted to beat China, you would never let them build their own AI models here.
And yet they do.
Socialize the Costs
Start with what the buildout is costing you, because that part is no longer up for debate.
On July 9, the Federal Reserve released the minutes of its June meeting. The Fed said:
Many participants noted that ongoing strong demand for AI infrastructure would likely sustain upward pressure on prices for technology products and electricity.
The Fed put in writing that the AI buildout is pushing up the price of electricity enough to show up in national inflation.
You are paying the costs of AI development, but how is what you are paying for being used?
Selling the Rope
On the same week the Fed published its electricity finding, the Financial Times reported that OpenAI and Google have been selling their advanced AI models to Singapore-based subsidiaries of Alibaba, Baidu, and Tencent.
Those are not random Chinese firms. They are on the Pentagon's 1260H blacklist, a congressionally mandated list of companies the U.S. government ties to the Chinese military.
The sales are legal. That is the whole problem. Washington restricted the chips. It restricted a handful of individual models. It never barred Chinese-headquartered companies from using cutting-edge American AI software, even the ones on a military blacklist. So the same industry telling you to swallow the power bill to beat China has been quietly selling to the exact firms the argument names as the threat.
And it was not clean. OpenAI cut off Alibaba-linked access to its models only after the FT asked about it, over suspected "distillation," the practice of using one model's output to train a competing one. It doesn't even require a sale. Anthropic told Congress that Alibaba ran 25,000 fake accounts to pull more than 28 million exchanges out of its model to do exactly this.
Think about what that means. The models are trained on GPUs. The GPUs run on electricity. The electricity is the electricity you are now paying a premium for, the premium the Fed just confirmed. You are footing the power bill to build the lead that we’ve been told we must build. Then the AI companies went off and sold what you paid for in higher power prices to China.
Chris McGuire spent years working on export controls at the White House and the State Department. His verdict: the administration says "we need to beat China on AI all the time, but the problem is they haven't done anything on export control, which is the actual tool we have to slow China down."
The reason is loud where it makes you pay. It goes silent where it would cost them money.
Right Under Our Nose
Selling the models to China is bad enough. But the same government telling you to pay more to beat China has been letting China build the thing on American soil.
This isn’t new. In November 2024, The Financial Times reported that Alibaba, ByteDance, and Meituan have been standing up AI teams in California, expanding their offices specifically to poach engineers and researchers straight out of OpenAI and the top US labs. Alibaba recruited an AI team in Sunnyvale and told workers it planned to spin the operation into a separate startup. A former OpenAI researcher described being bombarded by Alibaba and Meituan trying to learn what they had worked on. ByteDance runs development on its Doubao model out of California, reporting to a boss in Beijing.
And the chip ban, the one piece of "beat China" that actually had teeth? There were "no restrictions on US-based entities related to or owned by Chinese tech companies accessing high-end AI chips through data centres located in the US." So the export control everyone points to was being routed around on American ground. Build a team in California. Reach the chips through a US data center. Hire the people who trained the American models.
So walk through what "beating China" actually looks like in practice. The chips leak, reached through US data centers by US-based firms owned by Chinese companies. The models leak, sold to blacklisted firms and distilled through fake accounts. The talent leaks, poached out of the frontier labs by Chinese teams built in California, while we import researchers to staff the same labs they are poaching from. Every single control point the security story implies is standing wide open.
How Stupid Do They Think We Are?
If we were serious about beating China, this wouldn’t be happening. But it is happening. Because we aren’t serious about “beating China.” That’s just the lie they tell us when they stick us with the bill. The lie they tell us to manufacture our consent.
The training runs eat enormous amounts of power. The Fed now says that power demand is pushing up your electric bill. You were told to accept that. You were told that AI would take your job, until that warning got inconvenient and they walked it back. And throughout it all, you’ve been told me have to beat China in AI. The Government has allowed China companies to build AI right here in the US, training their models on power from our power grid, jacking up the price you pay for power. The “American” companies also jacked up your power prices while the Government jusifies it by saying “we need to beat China”then those companies sold their models to China. "Beat China" is real when it makes you pay the bill and silent when export controls would cut the revenue. The power cost is spread across the public. The revenue, China included, stays private.
They sell the fear because fear of losing to an enemy is the only thing strong enough to make you pay for something whose only promised return, to you, is your own replacement.
That is what "beat China" is for. It is not a strategy. It is manufacturing consent. It is the mechanism that gets the American people to subsidize an industry that has told them, plainly, that it is coming for their work. The race is the wrapper. The bill is the product. And the leaks, the models sold to China, the labs built in California, the chips reached through US data centers, the talent poached out the front door, are how you know the people invoking the race do not believe in it themselves.
So ask the only question that matters. If we are being forced to pay more to beat China, why is the technology, sold, built, and poached, ending up in China anyway?
Because it was never about China. It was about getting you to pay. And this is what makes it clear.