The United States is preparing an ultimatum for dozens of countries, demanding they clearly define their position in the technological confrontation with China. Executive Director of RAKIB Alexander Brazhnikov sees behind this not strength, but a structural crisis of the American artificial intelligence model.
The Ultimatum and the Balance of Power
The State Department has sent letters to 35 countries that previously signed the American "Statement on AI Capabilities." Those who choose the Chinese side face exclusion from the Pax Silica initiative — a project to control supply chains for models, semiconductors, and critical minerals.
About two dozen states have joined the American initiative. Kazakhstan deserves special attention — the only participant that is simultaneously a member of both structures. This dual position is causing concern in Washington.
Beijing is responding symmetrically: Chinese President Xi Jinping has announced the creation of a World Organization for AI Cooperation, promoting Chinese technology as an alternative to American influence.
The balance of power is already ambiguous. The United States maintains its lead in fundamental research and investment volumes, but China is rapidly closing the gap — primarily in efficiency, applied use, and robotics.
An Economy That Does Not Add Up
The key vulnerability of the American approach is the gap between investment and real returns. Since 2023, technology giants have poured hundreds of billions of dollars into AI, but monetization remains minimal.
The numbers are telling: Microsoft's capital expenditures reached $116 billion with direct revenue from its AI business of $40–45 billion. The investment-to-revenue ratio has jumped from the usual 7–10% to 35%, while cash flow over seven years has grown only 1.6 times against revenue growth of 2.7 times.
Competitors are no better: Google posted negative operating cash flow for the first time, increasing its debt from $30 to $120 billion over fifteen months. Amazon went $25 billion into the red, and Meta is spending 97% of its operating cash flow on AI.
Direct revenues are incomparable to the scale of costs. Microsoft 365 Copilot has gathered only 30 million subscriptions against investments of $190 billion, while Meta's advertising thanks to AI adds about 1% to conversions.
China's Bet on Cheapness and Openness
Instead of racing for "intelligence" at any cost, Chinese developers have bet on efficiency and open access. An example is DeepSeek V4 Flash: the model costs almost nothing, about $0.08 per million input tokens, yet delivers performance at the level of American flagships from spring 2026.
The response has been forced price cuts from OpenAI. The GLM-5.3 model from Z.ai, at $2.5 per million tokens, has reached a level between GPT-5.5 and GPT-5.6, is optimized for Huawei's Chinese accelerators, and reduces dependence on Nvidia.
The result has directly impacted the market: a year ago, American models accounted for 75–85% of requests; now 60–70% of token traffic is provided by Chinese solutions — DeepSeek, GLM, and others.
The reason is simple: for mass tasks like code generation and data processing, expensive "genius" is not needed. What is required is reliability, speed, and low price — and all of this is offered by China.
By releasing powerful models almost for free, China is devaluing American investments: each such release pushes the price bar down and deprives the United States of the ability to recoup its giant investments.
Technology Parity and the Price of Isolation
The quality gap, on which the Americans counted to maintain their premium, has almost disappeared in the mass segment. Flagships like GPT-5.6 and Opus-5 still lead in complex tasks, but the Kimi K3, GLM-5.3, and Qwen-3.8 models have come very close to them, working faster and cheaper. At this pace, China could take the lead as early as 2027.
It is economic weakness that is pushing Washington toward political measures. The demand to choose a side is a sign of vulnerability: the United States is trying to isolate China administratively because it can no longer maintain sales of expensive models through market means.
Such a strategy carries serious risks. The world could split into two technological blocs, developing countries, due to coercion, could demonstratively leave the American coalition, and restrictions would only accelerate China's development of its own chips and algorithms.
My view: this ultimatum is not a show of strength, but an attempt to freeze a market trend unfavorable to the United States. History shows that administrative barriers rarely work if a competitor's product is cheaper and good enough. Artificial isolation will only accelerate the formation of an independent Chinese AI bloc, and then the American model will have to compete under conditions it created itself.