Dec. 10, 2025 - Bannon's War Room
48:54
Participants
| 
| Speaker | Time | Text |
|---|---|---|
| Trump is remaking American culture by sheer force of will, from the Kennedy Center honor to UFC fights at the White House to control over museum displays and defunding public broadcasting. | ||
| But here's the thing. | ||
| The president can take these actions. | ||
| He can cancel events. | ||
| He can take over museums. | ||
|
unidentified
|
But you can't force cultural change. | |
| Can't people simply reject it? | ||
| Before I entered office, 100% of all new net jobs were going to migrant workers. | ||
| See that 100% of new jobs were going to migrate. | ||
| These are government numbers, by the way. | ||
| These are not Trump numbers. | ||
| These are government numbers. | ||
| Because they say, well, did Trump come up with these numbers? | ||
| No, I didn't come up. | ||
| I'm just migrant workers and illegal aliens got 100%. | ||
| But since I took office, 100% of all net job creation has gone to American citizens. | ||
| How about that? | ||
| Now, how about that? | ||
| Even I will give myself a hand. | ||
| Now think of it. | ||
| 100% went to American citizens before 100% went to people that came into the country illegally. | ||
| Again, many of them from prisons, many of them gang members, drug members, trendeiragua. | ||
| More Americans are working today than at any time in the history of our country. | ||
| I've also announced a permanent pause on third world migration, including from hellholes like Afghanistan, Haiti, Somalia, and many other countries. | ||
| I didn't say all you did. | ||
|
unidentified
|
A bad vision, like a really dumb vision and a destructive one for world peace. | |
| Nika, over the last eight decades, eighty years, since the end of World War II, the Cold War, the United States essentially had a fairly consistent foreign policy, supporting the rule of law, balance of power, working through allies, involved in institutions, promoting democracy and human rights where we could. | ||
| This is a massive, massive departure. | ||
| It is the most radical foreign policy vision put forward by any administration in 80 years. | ||
| This is essentially the end of the post-World War II, post-Cold War American foreign policy. | ||
| As you say, a big emphasis on the Western Hemisphere above Europe, Middle East, Asia. | ||
| Big emphasis on promoting commercial interests above all else. | ||
|
unidentified
|
Dealmaking. | |
| Russia gets treated with kid gloves. | ||
| China, the same. | ||
| Toughest treatment of Europe. | ||
| Europe's treated like an Ivy League university, which is woke and needs to be attacked. | ||
| Really dismissive of Europe hostile about the European Union. | ||
| No sense that the European Union, by the way, for all of its flaws, yeah, it overregulates, I get it. | ||
| But it's the reason that you've had peace in Europe in part for the last eight decades, because it brought together Germany and France, which had fought wars and wars and wars again and again and again throughout history. | ||
| So there's no appreciation, I think, of what's been accomplished. | ||
| Let's be honest, it is a radical document. | ||
| It is a radical departure. | ||
| And it'd be one thing to do a radical departure if we failed over the last 80 years. | ||
| But the last I checked, we've avoided great power war. | ||
| We won the Cold War, ended peacefully on terms that were pretty good for us. | ||
| Our economy's done okay, not perfectly, but okay. | ||
| The average person lives longer, a lot more freedom in the world. | ||
| So we're basically junking something that's worked pretty well for something that is radically different. | ||
| I love this Elon Omar, whatever the hell her name is, with the little shoe, the little turban. | ||
| I love her. | ||
| She comes in, does nothing but bitch. | ||
| She's always complaining. | ||
| She comes from a country where, I mean, it's considered about the worst country in the world, right? | ||
| They have no military. | ||
| They have no nothing. | ||
| They have no parliament. | ||
| They don't know what the hell the word parliament means. | ||
| They have nothing. | ||
| They have no police. | ||
| They police themselves. | ||
| They kill each other all the time. | ||
| I love her. | ||
| She comes to our country and she's always complaining about the Constitution allows me to do this. | ||
| We ought to get her to hell out. | ||
| She married her brother in order to get in, right? | ||
| She married her brother. | ||
| Can you imagine if Donald Trump married his sister? | ||
| Beautiful. | ||
| She's a beautiful person. | ||
| If I married my sister to get my citizenship, do you think I'd last for about two hours or would it be something less than that? | ||
| She married her brother to get in. | ||
| Therefore, she's here illegally. | ||
| She should get the hell out, throw it a hell out. | ||
| She does nothing but complain. | ||
| Together we're repairing four years of disaster by the radical left Democrats in Congress and by the worst president in the history of our country. | ||
| He is, I mean, it's not a question about that. | ||
| He's just the worst president in the history of our country. | ||
| The damage he, thank you very much, the damage he's done to our country is something we can never forget. | ||
| After just 10 months, our border is secure. | ||
| Our spirit is restored. | ||
| Inflation is stopped. | ||
| Wages are up. | ||
| Prices are down. | ||
| Our nation is strong. | ||
| America is respected again. | ||
| And the United States is back. | ||
|
unidentified
|
Andrew Breitbart said politics is downstream of culture. | |
| And I think Trump has always innately understood that, that he is shifting the culture. | ||
| He is shaping the culture. | ||
| Will it swing back when he's gone? | ||
| Maybe, but a lot of that stuff we're down the road on. | ||
| I mean, but you know what? | ||
| When you try to force a cultural shift, you open the door for massive public rejection. | ||
| Well, I hope you're right. | ||
| I don't know. | ||
| We'll soon find out. | ||
| This is the primal scream of a dying regime. | ||
| Pray for our enemies because we're going medieval on these people. | ||
| Here's not got a free shot on all these networks lying about the people. | ||
| The people have had a belly full of it. | ||
| I know you don't like hearing that. | ||
| I know you're trying to do everything in the world to stop that, but you're not going to stop it. | ||
| It's going to happen. | ||
| And where do people like that go to share the big line? | ||
| MAGA media. | ||
| I wish in my soul, I wish that any of these people had a conscience. | ||
| Ask yourself, what is my task and what is my purpose? | ||
| If that answer is to save my country, this country will be saved. | ||
|
unidentified
|
War Room. | |
| Here's your host, Stephen K. Bannon. | ||
| Wednesday, 10, December, the year of our Lord, 2025. | ||
| Welcome to the morning edition of The War Room. | ||
| We have both Dave Brett and Joe. | ||
| Allen's going to join us a moment in our command module in the Imperial Capitol. | ||
| President Trump goes to Scranton, and it's not that he ever lost his mojo, but you can see the connection with MAGA, that great crowd in Scranton. | ||
| I want to thank Ernie Preate and all the Real America Voice team yesterday for getting us a great run-up to the speech. | ||
| Dave Brett joins me. | ||
| Dave, first off, Christy Noam, number two Princel, get number two Princel out. | ||
| Ilhan Omar, I think the president has said over and over again, get her the hell out. | ||
| Are we starting the denaturalization process? | ||
| Asking for a friend. | ||
| Dave Bratt, president went up there for the affordability, and he didn't fall into the affordability trap of the Democrats, the 20-some percent inflation. | ||
| In fact, I think Scott Besson rates it now as like 40% inflation, but the inflation, cumulative inflation under Biden, he talked about growth, he talked about jobs, talked about investment, higher wages, taxes that are tax cuts targeted to the working class and the middle class. | ||
| What's your overall assessment of, and boy, if this is how it's going to be, I say do one bilat in the White House a week with economics and nationalism and then get on the road and do more of this. | ||
| Your thoughts, Dave Bratt? | ||
| Yeah, well, that's the right setup. | ||
| You know, it's unfortunately debating right now. | ||
| It's basically God versus no God, truth versus no truth, right? | ||
| And so the Federal Reserve is getting ready to lower rates. | ||
| Why has the federal funds rate been up? | ||
| Because we had 21% inflation under Biden. | ||
| And most people don't know, even if you got 2% or 3% inflation now, it's not down, right? | ||
| Prices aren't down. | ||
| Trump's got the inflation rate way down from where it was under Biden, but it's still a 3% addition to 21% every year. | ||
| So when the people say they're hurting, they're hurting. | ||
| But we got to tell them who did the hurting. | ||
| And so, you know, the narrative right now, here's the New York Times today, front page right above the fold, a price blitz puts Trump on defense. | ||
| A price blitz puts Trump on defense. | ||
| They don't substantiate anything, in fact. | ||
| All the economists have been looking to link tariffs to higher prices. | ||
| They can't. | ||
| The San Francisco Fed, Federal Reserve Bank, did a major deep dive and showed that in the short run, the tariffs have actually lowered prices. | ||
| And they got some other politics in there I don't like, but it can't be found. | ||
| And then on the other hand, the Atlanta Fed now has real GDP growth after inflation, real GDP going up by 3.5%. | ||
| If you would have told me that a year ago, that we'd be at that rate after the Biden economy, I would have been highly skeptical, right? | ||
| Everybody knows I've been putting up the downward productivity charts forever. | ||
| The long run stance hasn't changed except for Trump jacking capital into this country. | ||
| That's the number one cause of economic growth. | ||
| He's doing all the right things. | ||
| It takes a while, but he's just got to get out. | ||
| When he does the Eon Omar or whatever, he can do it. | ||
| But we saw these races in Georgia and whatever. | ||
| The folks downstream from Trump better learn about culture and how to do it. | ||
| Because when Trump does it, he knows how to do it. | ||
| But at these state level races, whatever, you're fighting against the mainstream media still as a state delegate kind of thing. | ||
| And Trump can't help everyone. | ||
| And it's time for the parties in Virginia and Georgia to get a pulse. | ||
| So last night was Miami. | ||
| I don't think that's as big as a deal as what happened in Georgia. | ||
| We'll get more into detail later. | ||
| But basically, a state house that President Trump and they had actually worked the districts. | ||
| President Trump won, I don't know, by 1215 in November in a loss last night. | ||
| This is one that ought to be taken apart. | ||
| The Democrats are clearly enthusiastic. | ||
| That's why President Trump fighting back last night. | ||
| And they didn't use the stats. | ||
| Go back. | ||
| I want the tariffs versus inflation because that's a bald-faced lie. | ||
| And the Federal Reserve of San Francisco is proving that. | ||
| Also, Atlanta, remember, the Atlanta Fed is the one that really takes care of our leads in doing macroeconomic analysis about GDP growth. | ||
| They're saying post kind of any inflationary move, it's 3.5%. | ||
| That's the type of numbers. | ||
| As I've said, you've got to get the 3.5%, maybe even 4% to outrun these deficits. | ||
| Those are huge numbers. | ||
| As President Trump just said right there, those are government numbers. | ||
| That's Fed's numbers. | ||
| Those are not Trump numbers. | ||
| They're saying, oh, Trump's just making things up. | ||
| Hit it again quickly because I want the audience to understand that the serious people that look at this are actually not praising Trump's economic policy because they would never do that, but they're putting out a set of math that praises President Trump's economic policies. | ||
| Yeah, no, that's absolutely the Atlanta Fed now. | ||
| It doesn't do 2026 forecasts, but it says third quarter of 2025, 3.5% GDP growth. | ||
| I've been putting up charts for years on this show. | ||
| We got a productivity problem going down 70 years in a row. | ||
| CBO has us productivity at 2%, 1.7% for the next 30 years. | ||
| And in the midst of that, you know, stagflation, stagnant economy, Trump is able to pull off a rising stock market and 3.5% GDP growth in the face of Biden inflation. | ||
| And if I was Trump, I would not let go of that, right? | ||
| It takes, there's a year and a half lag on monetary policy, at least a year lag on fiscal policy. | ||
| So every economist, if they're telling you the truth, will say we're still squarely in Biden's economy. | ||
| Trump's doing all the right things to pull us out. | ||
| It's going to take a year or two, but he ought to be congratulated. | ||
| And the rest of the party better follow his leader. | ||
| We're going to be in deep trouble coming up soon. | ||
| But it's not that he's to be congratulated because they're never going to congratulate. | ||
| It's Trump. | ||
| It's Trump derangement syndrome. | ||
| What we have to do, because the MAGA movement is very sophisticated when it comes to the economics of this, right? | ||
| And they understand he's turning around an aircraft carrier. | ||
| We have to pound this. | ||
| Wash, rinse, repeat, and do not fall into the trap. | ||
| Everybody says, oh, you just got to talk about affordability. | ||
| Yeah, you must address it in the actions you're taking, what you were handed, the specific actions you're taking to alleviate that. | ||
| But you got to focus on the main thing. | ||
| The main thing is growth. | ||
| The main thing is growth in jobs and particularly high-value added jobs, also wages and increase in wages. | ||
| Remember, the golden age of Trump the first time was the fall and Christmas season of 2019 when it all came together and all clicked. | ||
| And you know who understood that? | ||
| The Chinese Communist Party. | ||
| That's why they let a pandemic bioweapon bomb hiss to try to chop block President Trump. | ||
| Short commercial break. | ||
| Man, a lot going on today in the world. | ||
| Stick around. | ||
|
unidentified
|
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| Dave Bratt, Joe Allen joined us also. | ||
| We'll jump to Joe in a second. | ||
| Both of them are in the command, the command module. | ||
| Brad, I want to continue with you. | ||
| Today, the Fed, of course, talking about the last of the rate cuts and his forecast for next year, what's going to happen. | ||
| I think, give me a minute. | ||
| Our bigger complaint is that the Fed, we have said now for the last couple of years, it's the calculation really of how we set interest rates. | ||
| And I think this is why President Trump refers to him as too late, Powell. | ||
| The next Fed chair, I think the first thing, and Scott Besson has got that magnificent series, and I'll put it back up later today on Getter so you can read it, in the Wall Street Journal and the, I think there was the International Journal of Finance, where he goes through a detail of how really the Fed's become part of the deep state, kind of the Liz Truss pitch bet, the Bank of England, and that they don't take care. | ||
| They're trying to do so much, most of it woke, most of it related to DEI or globalism and not take care of business, which is about the currency and about employment. | ||
| And maybe having a dual mandate is not a thing. | ||
| I recommend they don't focus on employment. | ||
| They should focus on just the currency itself, of which I think they do a terrible job. | ||
| It's one of the reasons gold is on fire, right? | ||
| And you can do that by going and talking to the folks at Birch Gold, Philip Patrick, and the team. | ||
| Your thoughts on interest rates, but also back to the centerpiece of what President Trump has tried to do. | ||
| And we need to say this over and over and over again. | ||
| We made two huge bets, bets about the United States of America. | ||
| And the United States of America is an industrial power. | ||
| And not just nationalism, but what's in the best interest of the American people. | ||
| And this is about us returning to be a manufacturing superpower with high-value added manufacturing jobs where not China, but the United States is the centerpiece of this because our elites sold us out over a 30-year period to ship everything to China. | ||
| And Joe Allen's going to join us, and we're going to talk today about chips and AI and the whole fight there. | ||
| It looks like our elites are trying to do it again for the second time to shift to basically give China the tools to defeat us. | ||
| President Trump's two bets are the big, beautiful bill, the supply-side tax cut, is about giving some incentives to capital to invest in a massive way here in plant and equipment. | ||
| The whole redoing of the commercial relationships of the world, which folks were only in the first six months of this, these trade deals alone with Japan and Korea in the past took three to five years to do. | ||
| It go on and on and on. | ||
| President Trump is trying to quick march that to change the commercial relationships to incentivize the foreign manufacturers to relocate here to the United States of America. | ||
| Now, I am one that's not exactly ever super happy about foreign capital coming to the United States because I think it brings too much control. | ||
| However, in the current economic system we have, you know, if they're going to bring their manufacturing back, they're going to lead with their capital to do it. | ||
| So we'll have to work through that. | ||
| But that is a high-class problem. | ||
| Dave Bragg, your sense of where it's going, and you could tell last night from the audience reaction, the audience wants to hear President Trump address these things. | ||
| They love it when he starts talking about this. | ||
| I mean, he, and it was perfect. | ||
| Alexander Preate, the people, Susie Wiles and the people of the White House to pick Scranton for the first one, I think was absolutely brilliant. | ||
| Your thoughts, sir. | ||
| Yeah, well, Scott Basson is doing Herculean work. | ||
| His best phrase a year ago was, you know, Wall Street has had its turn. | ||
| Now it's time for Main Street. | ||
| We have to make that happen real quick. | ||
| So the last 30 years, the Federal Reserve policy with a greenspan put has always favored Wall Street and the rich and they can time things. | ||
| And the Federal Reserve System, I hope someone is cleaning that out because they're part of the problem, right? | ||
| It goes without saying, 21% inflation because they validated $2 trillion spending deficits from the government. | ||
| They validated that. | ||
| They said, okay, right, we're going to print you enough money so you guys can put the United States out of business. | ||
| The only thing that gets me nervous about the Fed now and Treasury is it's getting so complex now, no one can understand it, right? | ||
| I did a PhD in economics, studied monetary policy some, not an expert in monetary, but I can't follow some of this breaking news, right, on the on the new monetary innovations and what's going on. | ||
| We need to simplify. | ||
| Milton Friedman, if you want to help the average person, the average person doesn't know yet. | ||
| And, you know, as a Calvinist, you know, we're not known for our feelings. | ||
| But when I get really ticked off inside when I know what happened, what we just did to the middle class, right? | ||
| And the working class who's working for $10 an hour, $20 an hour, they don't know that 21% inflation, the purchasing power of their entire retirement account, if they have one, of their lifetime savings just went down by 21% in four years. | ||
| They don't know that. | ||
| They think it's just like the grocery basket where you're at the supermarket and food prices are a little high. | ||
| No, it's way worse than that. | ||
| And so, you know, Milton Friedman, it was pretty simple. | ||
| Print M2 goes up, the same percentage rate as GDP goes up, right? | ||
| There you go. | ||
| That's enough money to accommodate the growth in the real economy, and that's it. | ||
| And quit hiring all these economists who are all woke, and they're studying everything under the sun except for median, the average person's wages. | ||
| They're not doing anything there. | ||
| They're just doing all woke politics on the left. | ||
| The other thing that President Trump is doing also, and he hammered last night, is immigration. | ||
| And this is all immigration. | ||
| I mean, essentially, Axios has a piece of, please go to getter. | ||
| This is where I put my stuff up, is that Axios has a very smart piece today that says, essentially, President Trump, really from the shooting, and hey, maybe it should have started day one, is essentially stopping kind of all immigration right now. | ||
| And we recommend this. | ||
| If you want wages to pop, it's not just the H-1B scam, which has to be eliminated. | ||
| We need to stop bringing in the world to compete with workers in the United States. | ||
| And don't sit there and tell me, oh, they're better. | ||
| They have more entrepreneurial drive. | ||
| The people in the United States of America have plenty of entrepreneurial drive. | ||
| They just need a shot to execute. | ||
| And so stopping immigration, a huge part of this, you can see already with wages of working class people, stopping the illegal alien immigration, which was what Wall Street wanted, the reason they backed Biden. | ||
| They wanted to drive wages down among the working class, particularly Hispanic Americans and African Americans, right? | ||
| And so they stopped that. | ||
| Over 2 million have self-deported because they understand the rules of the games of change. | ||
| Now you need to get into what I call the legal immigration, which is also all a scam. | ||
| You got green cards, the whole thing's a scam. | ||
| You're going to have to take half a decade at least to think all this through and see how it benefits the American citizen while it's benefiting the country. | ||
| Dave Brett. | ||
|
unidentified
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Yeah. | |
| And yeah, one point on that. | ||
| It's hard to keep up with all the corruption, right? | ||
| The Federal Reserve has hundreds and hundreds of economists, really smart people, right? | ||
| University of Chicago, Harvard, all the top brains, but the brains don't have courage and they don't have any moral convictions. | ||
| And economics is supposed to maximize human happiness. | ||
| How's that going? | ||
| The guys that study economics, they just take all those initial assumptions and ignore the basic point. | ||
| They're supposed to be maximizing human happiness. | ||
| So when you have 20 million illegal immigrants, a border invasion, and no Federal Reserve economist has studied that phenomenon. | ||
| Hey, guys, you think that might affect the economy? | ||
| I mean, the U.S. government, right? | ||
| All of the budget committees. | ||
| Have any of the economists covered the damage done to the American worker? | ||
| No, because that's run by the speaker's office and the leadership office, and the donors control those offices. | ||
| So The three mega issues that we've been on, right? | ||
| The economy, the border invasion, the past two wars were $17 trillion. | ||
| Any economic articles on the opportunity cost, right? | ||
| That's the first term you learn in an intro book of that $17 trillion. | ||
| And we have a $7 trillion government budget right now. | ||
| Hey, economists out there, what is the productivity on government spending? | ||
| Just, I haven't seen it lately, right? | ||
| What's the productivity? | ||
| If GDP growth is two, what's the productivity on the $7 trillion in government spending? | ||
| Haven't seen a study on that, guys, because if the American people found out what that number was, you know, and it's not Republican Democrat. | ||
| We're spending like drunken sailors, too. | ||
| And so we got to get our heads on straight here. | ||
| This is a total waste of money. | ||
| We're stealing from the next generation of kids. | ||
| I was with kids yesterday in the White House working on education and Maha and all that stuff. | ||
| And if you love the kids, you better get this spending and economy going for them. | ||
| That's the only hope they have. | ||
| Give me a quick, we're going to come back from a break in a few minutes. | ||
| We're going to have Chris Maguire, an expert on chips and over to the council on foreign relations, join us with Joe Allen. | ||
| I want to go to Georgia real quickly. | ||
| Everybody's making a big deal about Miami. | ||
| I thought the invasion, I thought Marco's invasion of Venezuela was supposed to take care of us there, but let's put a pin in that. | ||
| Enough people yelling about that, although very low turnout. | ||
| In Georgia. | ||
| Now, this is a House of Delegates or House of Representatives seat, not for Congress, but for the Georgia General Assembly. | ||
| But it is a Trump district. | ||
| And once again, I think it, to me, it reinforces what happened in New Jersey in the governor's race and in the Commonwealth of Virginia. | ||
| If you run these basic rhinos or even conservative Inc. Republicans with no energy and their whole program is just tax cuts and size of government, that you got to do more than that. | ||
| And this guy got beaten last night on something that was a shocker to people. | ||
| But you've got, give me 30 seconds. | ||
| You've got some inside information on this. | ||
| Yeah. | ||
| One of my good buddies, African-American small business pastor, is just so fed up with the Republicans. | ||
| They're in the brawl, in-house brawls there between the squishes and the rhinos and the patriots. | ||
| There's no energy in the Republican Party, just like in Virginia. | ||
| It's just totally broken. | ||
| No energy. | ||
| And as a candidate at the smaller seats, you're fighting the mainstream media. | ||
| So same predicament, and you can't rely on Trump. | ||
| I heard Newt Gingrich might be coming in with some ideas, and maybe he can help fix Georgia. | ||
| He did some great work with a contract. | ||
| It seems to me we need a new contract with America. | ||
| Oh, man. | ||
| We'll talk about that. | ||
| Everybody looks at that as a panacea. | ||
| But, Dave Bratt, you're directionally okay. | ||
| Short commercial break. | ||
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|
unidentified
|
Here's your host, Stephen K. Bass. | |
| Okay, Brad, we're going to talk more about the rate cut that should come this afternoon, what it means in a little while. | ||
| Joe Allen, back from your travels. | ||
| Joe, you've been working nonstop. | ||
| Of course, the AI amnesty got pulled from the second. | ||
| This is embarrassing. | ||
| This is why the president's being poorly advised. | ||
| Sachs and these guys tried to jam it in again to the NDAA. | ||
| Of course, the audience in Article 3 and Grace with Bill Blast everybody got up on the ramparts and got that pulled. | ||
| And now they're working on an EO. | ||
| We're going to have, we'll talk more about the EO later. | ||
| But what's the sense? | ||
| You've been going around now, giving more of your talks. | ||
| Give me a sense of things, sir. | ||
| Yeah, Steve, among the public, I don't know anyone who is for the federal preemption. | ||
| I know a few experts and accelerationists who do, but the public want to keep the power in the states. | ||
| You know, I just got back from San Francisco and I was meeting with mainly transhumanists and you might say former transhumanist turn doomers. | ||
| The cultural landscape is astounding. | ||
| I attended a Forsteit Institute conference in an old Christian science church, what's now the Internet Archive. | ||
| And as we all sat in pews, listened to lectures on how gene editing will lead to the curing of all disease and maybe immortality, how the advancement of AI will both enhance and replace and perhaps destroy all the human race. | ||
| And of course, all the ways in which brain emulation will lead to the possibility of uploading your brain so you can live forever in a data center. | ||
| So that's the short version of I went into the viper's den, got bit, and I'm trying to shake off the venom. | ||
|
unidentified
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We would love to say that this is science fiction, but it's not, folks. | |
| This is why we brought you over years ago and what the book Dark Ain's about. | ||
| Joe, just hang with me for a second. | ||
| I want to bring in Chris Maguire. | ||
| Chris is over at the Council for Foreign Relations, former member of the National Security Council, an expert on chips and technology in the CCP. | ||
| And I wanted him to kind of give us some details today. | ||
| We've heard the strategic side of it. | ||
| And the reason is our beloved Murdoch Wall Street Journal, Trump's shift on the VIDIA chips, bolsters China's AI ambitions. | ||
| And it's a pretty brutal article about what has been done. | ||
| Chris, I make the argument that the president, to a large extent, is just hearing, when he hears about China technology, he's just hearing one side of it because he's got all these guys in Silicon Valley, all the oligarchs, and they always pitch. | ||
| And it just, this doesn't make sense. | ||
| If we're at an inflection point and we're having a Sputnik moment and we can't have any controls over the frontier labs, in fact, we have to turn over the weapons labs and the national labs to them to have them work on AI at their direction with no controls. | ||
| Like I said, there's more controls on it. | ||
| You have more regulations about launching a nail salon on Capitol Hill than you have on the frontier labs. | ||
| We have no earthy idea what they're doing. | ||
| And at the same time, they said it's all about China. | ||
| You have to do this because China, and I do disagree with some of my colleagues in this preemption. | ||
| If we had some sort of apparatus like the Atomic Energy Commission on Nuclear Weapons, if we had some part of regulatory apparatus, I think federal rules would actually be more logical. | ||
| The states are doing this. | ||
| DeSantis is doing this. | ||
| Other states are doing this because there is nothing right now. | ||
| And they're not prepared to have their citizens just be at the whim of the accelerationist. | ||
| Then on the other hand, we're now in a situation where the Chinese Communist Party would be nowhere if we didn't give them capital, equity, debt, the ecosystem, train them, educate them, and most importantly, give them the mother's milk of artificial intelligence, which is these advanced chips, which come from American technology. | ||
| So can you walk us through what exactly has happened over the last 48, 72 hours? | ||
| Why is this so big? | ||
| And what should this audience understand on the technical side, sir? | ||
|
unidentified
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Sure. | |
| Thanks for having me, Steve. | ||
| So yesterday or two days ago, President Trump announced that the NVIDIA H200 chip could be exported to China. | ||
| So this is not NVIDIA's most powerful chip, but it is their second most powerful chip. | ||
| It's the best chip of the previous generation. | ||
| And most importantly, it is substantially better than anything available in China. | ||
| It's six times better than the best chip that is, the best U.S. chips that's there now. | ||
| It's better than any Chinese chip that they're going to make for the next two years. | ||
| And up till this point, the U.S. policy has been to export control very, very advanced AI chips to China because these chips are the most important thing for the development of AI. | ||
| You need very large numbers of them to develop and run the most sophisticated models. | ||
| And obviously, the most sophisticated models are crucial to national security, to economic prosperity. | ||
| I mean, the entire US stock market is basically being propped up by the spending on the creation of data centers to run these chips, mostly for AI inference, but also for training. | ||
| Inference is the process of running the models. | ||
| So, up until this point, the U.S. policy had been to maintain as large of a lead as possible over China by number one, maximally slowing China down, and number two, investing maximally at home. | ||
| And the only way the United States has to slow down China's AI progress is export controls on AI chips. | ||
| And fortunately, the United States is much, much better than China is at developing AI chips. | ||
| It's actually across the entire rest of the AI stack, it's more or less awash, if not China's ahead. | ||
| Their people are as good as ours. | ||
| They develop really good algorithms. | ||
| They have access to as much data, if not more. | ||
| They're really good at making electricity. | ||
| But the one thing that they really can't do nearly as well as us is make chips. | ||
| So, therefore, the United States has leveraged this maximally to our advantage and said we're not going to let the most chips go to China. | ||
| And that has had an impact on AI capabilities. | ||
| It's why our labs are ahead of theirs. | ||
| It's why the best models come from U.S. firms and not Chinese firms. | ||
| It's why data centers around the world are not from Chinese companies. | ||
| They're from U.S. companies. | ||
| The Chinese have this belt and road initiative around the world, but there is no AI Belt and Road. | ||
| There is no, there's no competitor to Microsoft data centers to Microsoft cloud providers. | ||
| And that's great for American business and it's great for American technology. | ||
| And it means that the world will use the AI, the US AI stack, because the Chinese can't make it and can't provide it. | ||
| The administration changed this policy and they said that we're basically instead of having as large of a lead as over possible as China, we're going to have a relative lead over China. | ||
| And we're going to be willing to give them maybe not our best chips, but our second best chips. | ||
| And we think that's acceptable. | ||
| There are enormous risks in this. | ||
| Like, even though they're not the best chips, the game with AI is not about whether you have the best single chip or not. | ||
| It's about how much computing power in aggregate can you pull together into a data center, into a training run, and use to make and then run models. | ||
| And you can actually use large numbers of less advanced chips to replicate the performance of comparatively slightly smaller numbers of the most advanced chips. | ||
| So the U.S. advantage over China is predicated on us having very, very large gaps on computing and them not having access to any chips that are anywhere near the frontier in the most advanced. | ||
| That's why previously the U.S. policy was to draw a line in the sand and say you shall not cross this. | ||
| Now that that policy has been upended, it is much more difficult for China for the United States to leverage its advantages over computing power over China and AI. | ||
| And therefore, the U.S. lead over China and I almost certainly will decrease if not evaporate. | ||
| This has come from David Sachs and Adrisa and a lot of people, but principally Jensen Wong. | ||
| Let's focus on this. | ||
| Jensen Wong has told us over the last couple of weeks. | ||
| And look, I'm quite harsh on him. | ||
| I say he's an agent of influence for the CCP and an arms dealer. | ||
| But he said things like: it doesn't matter if China wins the race, we're all benefit. | ||
| It doesn't matter if a Chinese company wins the race. | ||
| We'll all benefit from it. | ||
| What is Jensen? | ||
| Let's take his side for a second. | ||
| What is the pitch he actually makes and Andreessen and Sachs make to the president to try to say, hey, let's get these export controls over because then what we want is complete dominance in the American stack and China using it. | ||
| Give us a sophisticated version of what Jensen Wong is telling the president, sir. | ||
| So I think there's two main arguments that they make. | ||
| The first is that if we don't export the chips to China, China will make the chips themselves. | ||
| So therefore, U.S. companies might as well make money rather than having the Chinese companies make the money and also have the same capability. | ||
| That's wrong, for reason I'll go to it in a second. | ||
| The second one is that by exporting their technology, it's sticky and it becomes difficult for the Chinese to move off of their ecosystem. | ||
| And actually, they'll be incentivized to not make the advanced chips and therefore our dominance will reign for a longer amount of time. | ||
| I think both are incorrect for two different reasons. | ||
| On the second one, it's just very straightforward to address, I think. | ||
| Number one, China has never been satisfied to be relying on the United States for any sophisticated technology ever, and particularly not advanced semiconductors. | ||
| They've been very, very clear that they're going to not be relying on the U.S. | ||
| And also the U.S. up to this point has been very clear that we are going to use this as a choke point to constrain them. | ||
| So if you're the Chinese, there's no putting the toothpaste back in the tube. | ||
| There's no way that we could ever convince the, regardless of whether you think they're full out on the JPN. | ||
| Hang on. | ||
| And there's very specific, as we talk about all the time. | ||
| In May of 2019, after two years of hard negotiation with Li He, Lighthizer, Navarro, the deal to take care of all the problems with the Chinese economy, integrating the world economy, they not only said we're not going to do that, they also said we're going to decouple from Western technology. | ||
| They do this all the time. | ||
| They will not, and the reason why Xi Shan and Xi didn't agree to the deal on the economy and then further took it for, and then they went after their tech entrepreneurs for not being tough enough is they will, they don't see a system where they have to count out to the foreign devils as a system that works. | ||
| They will always try to decouple from our technology. | ||
| That is just their pattern over time. | ||
| Is it not, sir? | ||
| Absolutely. | ||
| Absolutely. | ||
| They are 100% incentivized to do this and they're moving as fast as they can. | ||
| When I was in the White House working on this, when we were debating, you know, what's the Chinese response going to be? | ||
| And is it going to accelerate Chinese indigenization? | ||
| We thought about that. | ||
| And our thinking was Chinese indigenization on advanced semiconductors is already at the maximum. | ||
| Their pedals are already on the floor. | ||
| They know that they need to reduce their reliance on us for this. | ||
| Any logical country would. | ||
| And it's consistent with all of their past practices. | ||
| So they're going to do this. | ||
| The other thing I would also argue, just from a technical perspective, is this technical argument that, well, but it makes it really difficult for them to switch off of chips. | ||
| It's actually not that hard. | ||
| And the reason you know it's not that hard is that the big US AI labs have done it. | ||
| Anthropic has done it. | ||
| Google has done it. | ||
| The big labs are actually moving away from this sticky ecosystem, either away from NVIDIA chips or from the kind of software that they use, the CUDA software, that NVIDIA argues gets people hooked to their ecosystem. | ||
| But if you have a lot of resources, if you have a lot of resources like a US AI lab does, they have already done it. | ||
| They've been able to leverage those resources to do it. | ||
| The Chinese Communist Party, the entire state-backed apparatus and all these sophisticated Chinese companies also have large amounts of resources and also will be able to break through that. | ||
| So the point there is there's not a moat there. | ||
| There's this kind of relying on them not being able to figure out how to get off of our chips at some point in the future is not a technically accurate assessment. | ||
| And so if that's being pitched to the president, I think that's incorrect. | ||
|
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And then one separate question, if you want to go to it on the production side. | |
| Yeah, I want to hold you through the break. | ||
| Before you go to break, we got about a minute. | ||
| Coming on the same day that the Justice Department says they got this black market operation of industrial espionage that was selling the exact same chips for showing, it does show that they're desperate to get the chips and try to somehow recreate them, correct? | ||
| Not just the chips they can steal, but also recreate them. | ||
| That is an active part of their program, is it not? | ||
|
unidentified
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Absolutely. | |
| Yeah, they're trying to steal the chips. | ||
| And actually, look, there are loopholes in controls that should be closed separately. | ||
| I will say that there's things that the Biden administration, while they pushed this forward, building what the Trump administration did, there were loopholes. | ||
| The Trump administration should close. | ||
| Chinese companies can get chips from third countries. | ||
| That should be stopped. | ||
| Chinese companies can access U.S. chips via the cloud. | ||
| That should be stopped. | ||
| But to actually sell the chips instead is the complete reversal. | ||
| And we should be moving completely the other direction in terms of closing loopholes, not opening giant new ones back up. | ||
| Chris, can you hang on for a second? | ||
| We're going to take a short commercial break. | ||
| Chris McGuire joins us. | ||
| Joe Allen's in the house. | ||
| We're going to talk about the executive orders. | ||
| A bunch of executive orders now floating around. | ||
| They're going to try to go a different direction than you've killed the putting into the NDAA the AI amnesty for stopping the preemption or not stopping the preemption. | ||
| Anyway, short commercial break, Chris McGuire, Joe Allen, Dave Bratt on the other side. | ||
| We rejoice with the no more. | ||
|
unidentified
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Let's take down the CCP. | |
| Here's your host, Stephen Kaybat. | ||
| Chris McGuire joins us. | ||
| Chris, just so we get a level set here, with, because I'm going to go to the argument of why you can't have any state regulations and really no federal regulations. | ||
| The accelerationists not just have to be accelerationists. | ||
| My concern is that they're just going to do what they're going to do and accelerate and we just have to live with it. | ||
| How close now, given Chinese Communist Party capabilities, are they really, let's leave this deal aside, are they really in mounting a true competition for us in the area of artificial intelligence, given the entire ecosystem of Chinese technology, training, education, and capital, sir? | ||
| Yeah, so I think the Chinese are close. | ||
| They're probably months behind us, which is a problem and is really concerning. | ||
| It means that they're very close to us in developing sophisticated military capabilities. | ||
| They'll be linked to this from capturing a big percentage of the projected $16 trillion in economic value that AI is going to generate. | ||
| So they are close. | ||
| Where they're not close is in the production of the chips and infrastructure in order to do it. | ||
| The reason they're close is because they still have access to our computing power, either because of smuggling or because of loopholes and controls. | ||
| Without that, they wouldn't. | ||
| So if they were forced to build the infrastructure themselves, they would probably fall far behind to years relatively quickly, which in AI is an eternity. | ||
| And so that gets us back to these chips. | ||
| Now, one of the arguments Silicon Valley is making is that, hey, once the West gets accommodated to Chinese technology and Chinese use, that all the people that threw up these arguments before turn out they're wrong. | ||
| Is that correct? | ||
| Isn't there some examples, particularly with Huawei, where it actually proves our case, sir? | ||
| Yeah, I mean, I think the key thing here where I frankly think that the based on this Bloomberg reporting that says that this decision was linked to saying Huawei is actually really capable, I think that they're frankly not. | ||
| And this is actually one of the few things that the Chinese really do lag at. | ||
| And it's important to kind of draw out the distinctions here. | ||
| It's true that Huawei can make a chip that is slightly worse on paper than this H200, but they can't make that many of them. | ||
| And that's what's important because you need to be able to aggregate very large numbers of these chips. | ||
| Right now, the total number of chips that the Chinese can make, or the total amount of AI computing power that the Chinese can make, is probably in the one to two percent range of what the U.S. can make. | ||
| If you're really generous to the Chinese and you assume their production is much, much higher than the estimates we've seen to date, it's no more than, say, the 5% range. | ||
| And actually, the best U.S. chip right now is about five times better than the best Chinese chip, which is pretty good. | ||
| That is projected to increase to about 20 times better in just two years. | ||
| And the reason for that is that our chips are getting better and better. | ||
| They're using more advanced technology that the Chinese don't have access to. | ||
| And Chinese chips are more or less stagnating. | ||
| So the gap between the United States and China on this is projected to radically increase. | ||
| That means that our export controls and our ability to actually restrain China's AI capabilities is going to go up as long as we don't give them the chips themselves to actually develop the AI that's so dangerous, right? | ||
| So if we actually stay the course, the policies will probably start to have a pretty significant impact on the Chinese. | ||
| But by reversing them, we run a huge risk that actually the gap between U.S. and China will close in AI, and that will have massive impacts on our national security and economic prosperity. | ||
| One of the biggest breaks we had with the globalist of foreign policy stabilization was the confrontation with China. | ||
| In certain aspects, there's continuity from what President Trump did and the team did in his first term and what Biden did. | ||
| If you were able to sit with the president today and just say, hey, look, I got a couple of thoughts, what would that be to the president of the United States? | ||
| Yeah, I think that's worth emphasizing that really this is it and a bipartisan policy that Trump administration started with the restrictions on semiconductor manufacturing equipment in 2019 and 20 and then the Biden administration continued. | ||
| I think we should number one, semiconductor manufacturing equipment is the foundation of this, the ability to produce the chips. | ||
| The Chinese are very restrained, but not fully restrained. | ||
| We should be blocking the export of all semiconductor manufacturing equipment to China that's capable of any advanced production and just basically make sure that they have no chance of having an advanced chip making industry. | ||
| I think our controls have been effective, but they really need to be maximally effective and shouldn't have zero risk. | ||
| So I also think we should basically stop the Chinese from making, buying, or renting AI chips. | ||
| So that means no semiconductor manufacturing equipment. | ||
| It means no sales of AI chips. | ||
| And it also means no Chinese access via the U.S. cloud. | ||
| If we're going to be in a competition with China and AI, then they should use their own chips and their own infrastructure in order to fund to fuel their own models. | ||
| That's the way that we can best ensure American competitiveness. | ||
| If we have leaks in any part of that stack, making, buying, and renting AI chips, China is going to be able to leverage the single greatest asset the U.S. has, the most advanced technology in the world, to produce the very technology that they want to use to overtake the United States. | ||
| It's dangerous and we shouldn't let them do it. | ||
| Chris, last. | ||
| You know these guys and the way they negotiate and the way they think. | ||
| If the Chinese, if the roles were reversed, what would the Chinese Communist Party do to the United States of America in this regard, sir? | ||
| There is absolutely no way that the Chinese Communist Party would ever let the United States have advanced AI chips if they were the only ones in the world that made them. | ||
| It's just that simple. | ||
| It's that simple. | ||
| Sir, where do people go to find out more about you and more about your thinking and writing on this topic? | ||
| On Twitter, I'm at Chris Armaguire. | ||
| I'm at the Council on Foreign Relations as the senior fellow for China and Emerging Technologies. | ||
| We will have, actually, I mentioned some of the production numbers on Huawei. | ||
| going to have a report on this um either today or tomorrow uh kind of going through these numbers in detail and and really looking at the assessment um on u.s and china compute capabilities um so yeah mostly cfr and and twitter but i'm um i will be speaking on this until we get this policy to a good place so thanks for all your help on this steve no thank you um and we will push out all of those reports and studies and make sure that the war emposs has a full understanding of this thank you sir Appreciate it. | ||
| Thanks. | ||
| It's ironic that we leave today's The First Hour with the right stuff. | ||
| A masterpiece by Tom Wolf as a book. | ||
| The movie is a masterpiece by Philip Kaufman. | ||
| The score is a masterpiece by Conte. | ||
| And it was about the last time I would say we had a race with an enemy, with the Soviet Union, about the space program, nuclear weapons, all of it. | ||
| And we had the right stuff. | ||
| Our focus was on total and complete victory. | ||
| Total and complete victory. | ||
| Chris McGuire just said it. | ||
| If the Chinese Communist Party, if the roles were reversed, there is zero probability that they would assist the United States of America in anything. | ||
| And that's what we have to do. | ||
| The Chinese Communist Party is very simple. | ||
| We must win this race. | ||
| We will win this race as we've won others in the past. | ||
| But we cannot give them a helping hand at all. | ||
| They're a murderous dictatorship that is a threat, existential threat to Lao Beijing, their people, and a threat to every nation on earth. |
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