President Trump’s tariffs could inadvertently deliver  a “massive gift” to China by allowing it to catch up in the AI race and court new partners globally, Adam Thierer, a senior fellow at center-right think tank R Street Institute, tells Fortune. 

“It’s going to be very hard for the U.S. to win the so-called AI Cold War if America’s trade policies are simultaneously tanking global markets, discouraging technological investments, and potentially undermining traditional alliances with key allies,” says Thierer, who testified before House lawmakers earlier this week about the threat of Chinese AI models like DeepSeek to U.S. national security. 

Those policies, which are disrupting the global supply chain and creating major volatility in global markets, may have the unintended effect of driving U.S. allies into the arms of China for their technology needs. That gives China an unparalleled opportunity to gain more technological supremacy globally. “Suddenly, in the wake of this trade fiasco, we see EU officials saying, ‘Let’s get on the phone with China and talk,’” says Thierer. “Huawei has this telecommunications hardware system they want to sell, and there’s also these AI models that are free of charge.” 

But Chinese tech comes embedded with specific values, says Thierer. For example, “if you have Chinese-made hardware, you might be getting Chinese embedded surveillance and censorship along with it,” he said. “Or you at least have the potential for China to have greater leverage over those nations later, when they control these important technological systems.” 

It’s no surprise then that China is focused on “technological diffusion”—spreading technology across people, organizations, industries, and countries. In previous industrial revolutions, it was the U.K., and then the U.S., that developed more effective, low-cost products and services that ultimately became market leaders, then national and global leaders in their fields. Now, China wants to use its open-source AI models like DeepSeek in the same way.

That’s why technology executives need to get unified in their response, says Thierer, even though many tech billionaires, including Elon Musk, Mark Zuckerberg, Jeff Bezos, and Sam Altman, donated to Trump’s inauguration fund in the hopes of currying favor on tech policy. 

“If they’re all on their own, and they’re just trying to cut deals, they’re not going to get very far,” he says. “But a more concerted stand by a lot of the tech community to talk about how it undermines the broader interest of the technology community, and then the broader interest of the United States around global AI supremacy—that’s what’s important.” 

Thierer points to the post–World War II period, when the motion picture industry spread America’s culture and values globally. “A lot of conservatives don’t like to hear this,” he said, but Hollywood’s technology was “really important to broader strategic interests.”

With artificial intelligence, pulling back from the global marketplace allows China and the CCP to fill that void with their own technology, he said: “To me, that is extraordinarily dangerous for America.” 

This story was originally featured on Fortune.com

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With the markets in freefall and few exits to be found, it seems impossible right now to scrounge together $2 billion. Unless, perhaps, you’re Mira Murati. 

Murati, the former CTO of OpenAI, started her Thinking Machines Lab shortly after leaving OpenAI last fall, and the fundraising process for the company has been followed with horse race intensity. 

The latest: Business Insider reported Murati’s AI startup is looking to raise a $2 billion seed round. If true, it’s a jarring number, representing what could be the largest seed round in tech history. Given the investor frenzy for AI — and for AI startups with a certain pedigree in particular — the massive number is not as implausible as it might seem at first blush.

Take, for example, OpenAI cofounder Ilya Sutskever’s $1 billion seed raise for his new startup, Safe Superintelligence, which has reportedly reached a monster $30 billion valuation. Another touchpoint: Sierra, the conversational AI agent startup cofounded by Bret Taylor, OpenAI chairman and former Salesforce co-CEO, started in 2023 and last valued at $4.5 billion. 

So, the OpenAI name commands venture dollars, that much is clear. And in addition to Murati herself, the Thinking Machines team is packed with OpenAI-drawn talent, from advisers Alec Radford and Bob McGrew to chief scientist John Schulman. Schulman, the OpenAI cofounder who led the development of ChatGPT, left OpenAI in August, and after an incredibly short tenure at Anthropic, jumped ship specifically to team up with Murati. (What’s not yet clear is what Thinking Machines actually does. The website’s language says the company’s goal is “to make AI systems more widely understood, customizable and generally capable.”)

The report of the Murati’s mega-seed — Murati and Thinking Machines are not confirming it or commenting — seems certain to reignite the debate about the state of the AI bubble, especially amid the volatile economic climate created by Trump’s tariffs. 

Some observers have wondered if the AI boom has peaked, with Wall Street’s mixed reaction to the CoreWeave IPO and Microsoft’s recent pullback on a number of its AI infrastructure projects. VCs, additionally, are getting squeezed, as a dearth of exits is making it tougher to raise money from LPs.

So if Thinking Machines does draw $2 billion from investors, it’ll be a strong signal that the AI boom still has serious legs. And, of course, AI bulls will argue that $2 billion is a drop in the bucket compared to the company’s sweeping potential.

But it’s also important to think about this in a context beyond the AI boom—seed rounds have been getting steadily bigger over time, and AI’s massive development costs have only kicked that trend into high-gear. In 2015, the largest seed deal was for femtech pharma startup Addyi, clocking in at a now paltry-looking $50 million, according to PitchBook. In 2025 so far, PitchBook names Lila Sciences as the largest closed seed deal—at $200 million. 

Seed rounds getting radically bigger is both a sign of the times and a testament to the high-octane interest in Murati herself—but it’s also a trend far preceding our current economic whirlwind.

This story was originally featured on Fortune.com

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