The launch of AI as a Global Strategic Weapon

30 Jan

Entering the year of w-AI-rfare and the snake

In 2025, AI will be recognised as a strategic weapon alongside cyber warfare. The development of AI capabilities has progressed in half the time it took to transform cyber capabilities into practical military tools. This rapid advancement means military leaders must quickly enhance their understanding of AI before it is used against them.

The popular view of weaponised AI is Terminator robots, evil supercomputers, or new super-lethal drones. These are all possible but tactical in nature. AI is now strategic, and in January 2025, we witnessed three significant deployments of AI as a weapon of strategic power.

President Biden conducted the first strike on 13 January, restricting access to GPUs, the core component for training and deploying AI capabilities[1]. The restrictions are complex but aimed at crippling adversaries developing AI and bolstering the US leadership in this field.

Controlling Global Compute and Processing

Core components of the announcement restrict global hyperscalers like Microsoft, AWS, or Google in terms of how many AI data centres they can deploy outside the US. They must now put 50% of their global compute capability into the US. Second, 18 allies were granted permission to purchase GPUs for large-scale data centres in their countries. These countries included the United Kingdom, Holland, and Belgium but excluded NATO allies like Poland. Excluded countries, adversaries or allies would be massively restricted or prevented from acquiring the necessary computing capability to develop or significantly deploy AI capabilities.

This first strategic move sought to maintain the US's global dominance in AI development and deployments. It followed two previous sanctions lists in 2024 that targeted China specifically, although more on China’s response later.

The second strategic launch of AI was made by new President Trump on 22 January, with the announcement of at least $500bn investment in AI under the name project Stargate[2]. This investment is led by Japanese giant Softbank, ChatGPT Creator OpenAI, cloud giants Oracle and Microsoft, and NVIDIA, which supplies its processors.

Investment double the size of the Apollo Programme

In terms of cash investment and adjusting for inflation, this sum is almost double the Apollo Space Programme in real terms. It includes $100bn to construct an AI supercomputer for accelerating artificial general intelligence, the AI holy grail that outperforms humans in thinking[3].

It is an incredible financial investment that no other country can approach, all focussed on true technology world leaders. The outcome was also straightforward: secure American leadership in AI.

In comparison, the UK AI Opportunities Action Plan[4], launched the week before, committed £14bn ($US17.5bn) to AI research and development. This is not an insubstantial sum, but the UK is the fourth largest global investor in AI[5], and the UK plan is over ten years. The US plan is over four years and spends nearly 30 times more.

Combined, these two US policies restricted their allies and tied them to significant US dependency, at least for AI compute capability. The UK Action Plan recognised this constraint: “The UK does not need to own or operate all the compute it will need.” However, the plan also recognises that it will require compute capability that is both Sovereign (owned and operated by the public sector for independent national priorities) and Domestic (UK-based and privately owned and operated). Building that capability will now require US agreement and, probably, US partnerships.

For US adversaries already starved of AI computing capacity, the two US announcements significantly raised the bar in terms of investment that they would need. The announcements created a global shortage of GPUs outside the US, ensured that significant numbers of processors would remain in the US, and probably raised the cost of acquiring GPUs due to the consequent global shortage.

Chinese Economic and Political Counter Moves

At this point, China deployed AI as an economic strategic weapon. DeepSeek AI[6] is a large language model (LLM) and a generative AI like OpenAI ChatGPT. The model itself, R1, posts impressive capabilities on par with the latest public versions from Google and OpenAI in reasoning terms.

Developed in November 2024, public awareness was conveniently timed to coincide with President Trump's inauguration. Public headlines declared China’s Sputnik moment, referencing how the USSR surprised and threatened the US with its first satellite launch.

Launching the model was not a strategic strike. The blow came when it was revealed that the model was trained on a limited number of A100 NVIDIA chips for a rumoured $6m. In comparison, OpenAI trained its latest version on 2,500 A100 chips and spent between $32m and $63 m in training costs[7]. A significant potential saving in terms of cost and energy.

Suddenly, China had an AI capability that could be trained on fewer chips and for 10-20% of the cost. The stock market, especially the US NASDAQ, panicked. In one day, NVIDIA's market value dropped by $600bn, losing 19% in share price, becoming the biggest drop in US stock market history[8]. The NASDAQ Composite Index dropped 3% overall. Softbank, one of the biggest investors in Stargate, dropped 8% in value, wiping all the gains seen since the ambitious project was announced.

A few days later, it became more apparent that DeepSeek R1 was not all it appeared to be. Its training has used massive amounts of OpenAI and Anthropic data and probably used those LLMs to improve and refine its capabilities. It is also true that technological advances make new deployments easier. In this case, China developed an equivalent capability almost 12 months after the first US equivalent version was released and trained it using those US models. This would naturally cost less computing than training a new model from scratch.

However, a simple AI was released to damage US investment and economic confidence in AI. This was a genuinely strategic deployment of a small asset.

The other strategic impact of the DeepSeek R1 announcement was timing. Coincidentally, it was the same week President Trump took office, two weeks after the US announced new restrictions on the sale of GPUs globally, but especially in China, and one week after Stargate launched. DeepSeek announced that it had stockpiled the A100 GPUs needed for its training because of 2022 sanctions limiting their sale to China. In truth, they had to train on limited compute capacity as it was all they could muster together.

The Biden announcement in January makes it even harder for China to acquire these old-generation chips, never mind NVIDIA’s newer H100 units. It introduced restrictions on countries that may have bought large quantities and resold them, possibly ending up in locations that cannot buy them directly. The January announcement makes training harder and almost impossible to deploy next-generation AI without US permission.

Consequently, China announced that it can create competent AI using old chips the same week as the Stargate Project was launched and Trump became President. Trump quickly shared the news with glee, saying it was a wake-up call for US technology[9].

It is highly probable that the strategic deployment of R1 was to shake economic confidence in AI and use political posturing to encourage one person to change policy - President Trump to remove or replace current GPU sanctions. It’s a hard sell, as Trump seems to love tariffs and sanctions, but he also hates losing, so if he thinks sanctions aren’t winning, he may remove them.

China has first Alan Shepard Moment

At the moment, China has caught up with the US on AI. The talks of Sputnik[10] seem to ignore that OpenAI already launched the equivalent of Sputnik in November 2022 with public ChatGPT. If anything, China has finally gotten a rocket into space, but headlines like "China has first Alan Shepard moment" just don't generate clicks.

Yet it is not the weapon of AI that is of interest; it is its strategic deployment. The US has weaponised computational power and access to processors to maintain its economic advantages through AI and, subsequently, the military advantages that AI could bring. In return, China politically and economically deployed AI to damage both confidence and investment, possibly achieving its strategic goals of relaxed processor control.

The rest of 2025 will likely see further strategic uses for AI. The next will be deploying the next generation of large language models, with a probable step change in capability from current versions. Those releases, all coming from US companies, will set a new standard that will be hard to match with models trained on a stockpiled stack of legacy processors.

That release will also prompt China to react and counter differently. It will probably look at exploiting its grip on rare earth minerals, which are essential for the tools and devices that exploit and enable AI. Alternatively, it may increase its economic ownership, where it can, within the AI supply chain.

Yet, twenty days into 2025, on the day China celebrates its new year, it is clear that, like cyber, AI is now both a strategic asset and a weapon.

[1] US tightens its grip on AI chip flows across the globe | Reuters

[2] Announcing The Stargate Project | OpenAI

[3] Sam Altman Wants $7 Trillion - by Scott Alexander

[4] AI Opportunities Action Plan - GOV.UK

[5] https://www.europarl.europa.eu/RegData/etudes/ATAG/2024/762285/EPRS_ATA(2024)762285_EN.pdf

[6] What is DeepSeek - and why is everyone talking about it? - BBC News

[7] GPT-4's Leaked Details Shed Light on its Massive Scale and Impressive Architecture | Metaverse Post

[8] What is DeepSeek and why has it caused stock market turmoil?

[9] DeepSeek a 'wake-up call' for US tech sector - Trump

[10] Chinese AI DeepSeek jolts Silicon Valley, giving the AI race its 'Sputnik moment'