US Demands Allies Choose Between American and Chinese AI Coalitions as Technology Cold War Escalates

EXCLUSIVE: US to tell partners they must pick sides in AI race with China

WASHINGTON, Aug 14 (Reuters) - The U.S. is preparing to tell dozens of countries they must pick sides in the artificial intelligence race with China, warning they will be excluded from a U.S.-led AI coalition if they also sign up for Beijing's competing framework, according to a U.S. official and an internal draft reviewed by Reuters. Washington last year launched the Pax Silica initiative aimed at securing supply chains for AI models, semiconductors and critical minerals, amid a fierce technology rivalry with Beijing. About two dozen countries have joined, including Kazakhstan, a key potential source of critical minerals that has also joined China's coalition, as well as close U.S. allies such as Japan, Australia and South Korea. The draft letter, prepared by the State Department, is addressed to the 35 signatories of a U.S. "AI ⁠Opportunity Statement" signed in June, which includes members of the non-binding Pax Silica framework and other countries that have expressed a desire to align cooperation on AI with Washington. By pressing countries to choose sides the U.S. hopes to starve China of resources in a race to make the most sophisticated AI, which could be used for military or economic dominance. In July, Chinese President Xi Jinping launched a rival "World Artificial Intelligence Cooperation Organization", promoting his country's open-weight technology as a challenge to U.S. influence over the fast-moving sector. Kazakhstan is the only country so far known to have joined both initiatives, setting off alarm bells in Washington. "To be part of everything is to be part of nothing. Signature of the Pax Silica Declaration is not merely a membership subscription, but a commitment," the letter says, urging countries to "choose deliberately" on AI. "It cannot be held alongside membership in duplicative initiatives whose expectations conflict with our own," the letter said, without specifically mentioning China. Reuters could not determine when the U.S. intends to send the letter or whether it might be amended before sending. The draft was undated. The State Department told Reuters it ⁠would not comment on "purportedly leaked internal documents." The Chinese and Kazakh embassies in Washington did not respond immediately to requests for comment. 'CAN'T HAVE IT BOTH WAYS' The Pax Silica agreement aims to push U.S. allies and partners toward joint projects and export controls, and ultimately reduce reliance on adversaries for critical minerals, AI models and the semiconductor chips that power them. The race between the U.S. and China for technological leadership has reached a pivotal moment, as Chinese open-weight AI models have made rapid gains against proprietary systems from U.S. companies such as OpenAI and Anthropic. The exponential growth of the technology's capabilities, including the ⁠ability to hack autonomously, has forced a global reckoning over its power. Beijing is weighing restrictions on overseas access to some of China's leading AI models, highlighting the growing tension with its stringent national security agenda. The U.S. touted Kazakhstan, opens new tab in June as the first country in Central Asia to join Pax Silica, bringing significant reserves of critical minerals that fuel advanced technologies. China has used its current near-monopolies over critical minerals as a ⁠retaliatory weapon in a tariff war launched last year by U.S. President Donald Trump, who has ramped up U.S. efforts to source the minerals domestically and from allies. Members of Pax Silica have access to shared investment opportunities in AI-related projects while those who sign the AI Opportunity Statement have symbolically agreed on a "common purpose" and "shared vision" with the U.S., according to ⁠the statement posted on the State Department's website. U.S. officials drafted the letter to make clear that "you can't have it both ways," the U.S. official told Reuters, speaking on condition of anonymity given ongoing internal discussions on the issue. "It's difficult to see how a country can credibly position themselves as trusted partners in one technology ecosystem while simultaneously signing up for an initiative designed by China to advance a competing vision for AI," the official said. Reporting by Michael Martina; Editing by Andy Sullivan and Edmund Klamann Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * China Michael Martina Thomson Reuters Michael Martina is a Washington-based foreign policy correspondent who covers U.S.-China relations and the global impact of the two countries' diplomatic, technology, and military competition. He was a member of the Reuters team that won the Pulitzer Prize in Investigative Reporting in 2025 for uncovering fentanyl supply chains, and previously reported from Beijing for more than a decade as a senior correspondent for the news agency.

China's AI alliance keeps growing, just as Washington tells countries to choose

China's World AI Cooperation Organisation has added nine members in the month since it was founded, taking it from 29 signatories to 38, according to the South China Morning Post. It is growing at precisely the moment Washington is drafting a letter telling 35 countries they cannot belong to both camps. WAICO was signed into existence in Shanghai on 16 July by 29 countries, a year after Premier Li Qiang first proposed it at the World AI Conference. Xi Jinping used the accompanying summit to argue that no single country should monopolise the technology, calling AI development "a symphony of international cooperation" rather than "a solo performance by a single country". The doctrine underneath the organisation has a name, and Beijing has now committed it to paper at the United Nations. China's Position Paper on Global Cyber Governance in the Digital Intelligent Age, released on 23 July, is organised around "respecting digital sovereignty and promoting development for all". Countries "should respect each other's digital sovereignty, and they all have the right to independently choose their paths of digital intelligent technology development", the paper says, and it went to the first meeting of the UN Global Mechanism on information and communications technologies in international security, held in New York from 20 to 24 July. The formulation is not new so much as newly load-bearing. China's Global AI Governance Initiative, launched at the Belt and Road Forum in October 2023, already asked states to "respect other countries' national sovereignty" when supplying AI products and services abroad. What has changed is that the phrase now has an institution behind it and an American initiative to define itself against. The State Department had drafted a letter to the 35 signatories of its AI Opportunity Statement warning them off "duplicative initiatives", with the line "to be part of everything is to be part of nothing". Two caveats travel with that draft and are easy to lose. It is undated and, as of last week, unsent, and it names neither China nor WAICO anywhere in the text, though the push to make allies choose leaves little doubt about the target. Pax Silica, the grouping the letter is meant to protect, launched in December 2025 with seven founders: the United States, the United Kingdom, Japan, South Korea, Singapore, Australia, and Israel. Its declaration now carries 25 signatories, while the separate AI Opportunity Statement was signed by 35 countries in June. The arithmetic is what makes this awkward for Washington. WAICO's 38 members and Pax Silica's 25 are not mutually exclusive lists, and that overlap is the thing the draft letter exists to end. Chinese commentary has been happy to name the strategy. "Washington wants a divided AI world by drawing a digital curtain to split the global market in two," Li Yong of the China Society for WTO Studies told Global Times last weekend. Beijing's wider case rests less on treaties than on downloads. Alibaba's Qwen family passed three billion downloads in six months with more than 300,000 derivative models, against 418 million for Google's Gemma and 227 million for Meta's Llama across 2026, per Hugging Face. Open weights are a form of diplomacy that export controls struggle to reach. China has also committed 5,000 AI training places for developing countries, according to state media, a figure that has not been independently confirmed. The vocabulary is shared even where the politics are not. Europe has spent two years making its own case for digital sovereignty, by which it mostly means control over its infrastructure and data rather than a right to be left alone by other governments. There is also, in theory, a neutral venue. The UN established an independent scientific panel on AI and a global dialogue on AI governance in August 2025, and held the first dialogue in Geneva in July, while WAICO set up its secretariat in Shanghai and the American letter still has not been sent.

The US is about to make its allies pick a side in the AI cold war

A leaked State Department letter tells 35 partner nations they cannot belong to both the American and Chinese AI camps, turning Washington's Pax Silica pact into an explicit loyalty test. Washington is preparing to hand its partners an ultimatum, and it is not a subtle one. According to a draft State Department letter reported by Reuters, the US is about to tell friendly nations they must choose between the American and Chinese artificial intelligence ecosystems, because belonging to both is no longer an option. The letter is addressed to the 35 countries that signed a June "AI Opportunity Statement", and its language is unusually blunt for a diplomatic cable. "To be part of everything is to be part of nothing," the draft reads. "Signature of the Pax Silica Declaration is not merely a membership subscription, but a commitment." The mechanism doing the work here is Pax Silica, an initiative launched last year to lock down supply chains for AI models, semiconductors and critical minerals. The carrot is access to shared AI investment opportunities reserved for members. The stick is exclusion for any country that also signs up to China's competing framework. It is leverage dressed as a club membership. Roughly two dozen nations have joined so far, including Japan, Australia and South Korea. Only one country, Kazakhstan, currently sits inside both the American and Chinese coalitions, which is less surprising once you remember it is a significant source of the critical minerals everyone wants. That awkward overlap, one foot in each camp, is precisely the kind of arrangement the letter is designed to end, and Astana may soon find its hedging position untenable. One US official put the reasoning plainly. "It's difficult to see how a country can credibly position themselves as trusted partners in one technology ecosystem while simultaneously signing up for an initiative designed by China to advance a competing vision for AI," the official said. The subtext is that neutrality now reads, in Washington, as a form of defection. The timing is not accidental. Cheap Chinese open-weight models have been steadily eating into the market once owned by proprietary American systems, and a cheap Chinese model is now closing in on Anthropic and OpenAI on both cost and capability. When your commercial lead is narrowing, geopolitics starts to look like a handy substitute. China, for its part, has stopped playing defence. In July, Xi Jinping launched a rival "World Artificial Intelligence Cooperation Organization", built explicitly around open-weight technology and open to anyone who wants in. It is the mirror image of Pax Silica, and its openness is the whole pitch. Beijing is even weighing curbs on overseas access to its best models, a sign of how much leverage it now thinks it holds. For anyone who lived through the last decade, the choreography feels familiar. This is the Huawei-era 5G pressure campaign, restaged for large language models, with allies once again asked to rip one vendor out of the stack and commit to the other. Not everyone in Silicon Valley thinks that works. Mark Zuckerberg has argued the US should not block Chinese AI models at all, on the grounds that bans tend to backfire. Europe, predictably, is caught in the middle. The bloc has spent years insisting on "strategic autonomy", the polite European term for not having to choose between Washington and Beijing. Being handed a signature line and told to pick a side is exactly the corner it hoped to avoid, and the draft letter offers no obvious room to wriggle. The State Department, for the record, declined to comment on what it called "purportedly leaked internal documents", which is diplomatic code for confirming very little while denying nothing. The letter may yet be softened before it is actually sent. But the direction of travel is clear enough: the AI cold war has quietly acquired a loyalty test, and for America's partners the comfortable era of hedging your bets is drawing to a close.

Pax Silica: US tells 35 countries to pick a side on AI

A draft State Department letter tells 35 countries they cannot hold Pax Silica membership alongside China's rival AI framework. One country has already joined both, and the letter never names China once. Michael Martina reported the draft for Reuters on 14 August, citing a US official and an internal document. The letter goes to the 35 signatories of an American "AI Opportunity Statement" from June. Its message is that countries must choose. The wording is blunt for a diplomatic text. "To be part of everything is to be part of nothing," it says. Signing the Pax Silica Declaration is "not merely a membership subscription, but a commitment". The letter urges countries to choose deliberately. Reuters could not establish when Washington will send it, or whether the text changes first. The draft is undated. The State Department said it would not comment on "purportedly leaked internal documents". What Pax Silica actually is Washington launched it last year. The aim is to secure supply chains across three things at once: AI models, semiconductors and critical minerals. About two dozen countries have joined. Reuters names Japan, Australia, South Korea and Kazakhstan. Members get access to shared investment opportunities in AI projects, and the framework pushes them towards joint projects and coordinated export controls. The wider group is looser. Signing the AI Opportunity Statement means agreeing symbolically on a "common purpose" and a "shared vision" with the US, according to the State Department's own posting. That is the group of 35 now receiving the letter. The framework is non-binding. That is precisely the gap the letter is trying to close. One country set this off Kazakhstan joined Pax Silica in June. The State Department made a point of it at the time, with Under Secretary Jacob Helberg marking it as the first Central Asian accession. The country holds significant reserves of the minerals that advanced chips depend on. It then joined China's framework as well. Kazakhstan is the only country known to have signed up to both, and Reuters reports that this set off alarm bells in Washington. The minerals are what make it awkward. China has already used its near-monopolies here as a retaliatory weapon during the tariff war. A supplier hedging between the two blocs is the exact scenario Pax Silica exists to prevent. What Xi launched in July The rival body is barely a month old. Xi Jinping announced a World Artificial Intelligence Cooperation Organization at a Shanghai conference, and pitched China's open-weight models as the alternative to American influence. The offer is different in kind. Pax Silica offers investment access and shared controls. Beijing offers models you can download. China's own position is less open than the pitch suggests. Reuters reported in July that Beijing is weighing restrictions on overseas access to its leading models. Both sides are working out how much access they are willing to give away. The word the letter avoids China is not mentioned. The letter refers instead to "duplicative initiatives whose expectations conflict with our own", and leaves the reader to fill in the name. The US official Reuters spoke to was less careful. Officials drafted it to make clear "you can't have it both ways", the official said, on condition of anonymity. The rest of that quote is the argument in full. It is difficult to see how a country can credibly position itself as a trusted partner in one technology ecosystem, the official said. Not while it signs up to an initiative designed by China to advance a competing vision. The timing is not accidental Chinese open-weight models have closed much of the gap on the proprietary systems from OpenAI and Anthropic. Hugging Face's chief executive put numbers on it this month, telling CNBC that China is winning the open-model race with 41% of downloads. American industry is not united behind the closed approach either. Nvidia and several other large firms broke with OpenAI and Anthropic over open weights this year. The enforcement machinery has been tightening in parallel. The Commerce Department is examining how China gets remote access to Nvidia chips it cannot buy. The Treasury Secretary has threatened to sanction Chinese AI firms outright. Europe does not appear in this story Here is what stands out from a European desk. Reuters names Japan, Australia, South Korea and Kazakhstan among the members. It names no European country at all. That is not proof of absence, because the report does not publish the full list. It is still striking for a framework covering chips and critical minerals, given how much of both Europe handles. Brussels has spent the year building a third position rather than picking a side. The Made in EU rules start at a 5% local-content threshold and cover hardware, and the sovereignty push runs through European compute, European satellites and European models. A letter demanding a binary choice arrives into that. Whether any European capital receives one is the thing to watch. The counter-argument arrived within hours The China analyst Rui Ma made the case that the letter may cost more than it gains. Writing on X, she argued that the world is watching one side weaponise supply chains and controlled access. The other promotes open technology and broad access. Her point about durability is the sharper one. Alliances are not permanent and incentives change, she wrote, which is a caution about coercion rather than a defence of Beijing. A third argument turned up alongside it. Several developers responded that countries should build their own systems and depend on neither bloc, because either dependency hands someone else a switch over your economy. That is easier to say than to fund. What would settle it Three things, and the first is whether the letter is ever sent. It is a draft, it is undated, and the State Department has not confirmed it exists. The second is Kazakhstan. It is the test case, it holds the minerals, and what it does when the letter lands tells you whether the threat has force. The third is the full membership list. Pax Silica has announced accessions one at a time. Until the 35 names surface, nobody outside Washington can say whom the US is asking to choose.

Exclusive-US to Tell Partners They Must Pick Sides in AI Race With China

WASHINGTON, Aug 14 (Reuters) - The U.S. is preparing to tell dozens of countries they ⁠must ⁠pick sides in the artificial intelligence race with ⁠China, warning they will be excluded from a U.S.-led AI coalition if they also sign up for Beijing's competing framework, according to a U.S. official and an internal draft reviewed by Reuters. Washington last year launched the Pax Silica initiative aimed at securing supply chains for AI models, semiconductors and critical minerals, amid a fierce technology rivalry with Beijing. About two dozen countries have joined, including Kazakhstan, a key potential source of critical minerals that has also joined China's coalition, as well as close U.S. allies such as Japan, Australia ⁠and South Korea. The ⁠draft letter, prepared by the State Department, is addressed to the 35 signatories of a U.S. "AI Opportunity Statement" signed in June, which includes members of the non-binding Pax Silica framework and other countries that have expressed a desire to align cooperation on AI with Washington. By pressing countries to choose sides the U.S. hopes to starve China of resources in a race to make the most sophisticated AI, which could be used for military or economic dominance. In July, Chinese President Xi Jinping launched a rival "World Artificial Intelligence Cooperation Organization", promoting his country's open-weight technology as a challenge to U.S. influence over the fast-moving sector. Kazakhstan is the only country ⁠so ⁠far known to have joined both initiatives, ⁠setting off alarm bells in Washington. "To be part of everything is to be part of nothing. Signature of the Pax Silica Declaration is not merely a membership subscription, but a commitment," the letter says, urging countries to "choose ⁠deliberately" on AI. "It cannot be held alongside membership in duplicative initiatives whose expectations conflict with our own," the letter said, without specifically mentioning China. Reuters could not determine when the U.S. intends to send the letter or whether it might be amended before sending. The draft was undated. The State Department told Reuters it would not comment on "purportedly leaked internal documents." The Chinese and Kazakh embassies in Washington did not respond immediately to requests for comment. 'CAN'T HAVE IT BOTH WAYS' The Pax Silica agreement aims to push U.S. allies and partners toward joint ⁠projects and export controls, and ultimately reduce reliance on adversaries for critical minerals, AI models and the semiconductor chips that power ⁠them. The race between the U.S. and China for technological leadership has reached a pivotal moment, as Chinese open-weight AI models have made rapid gains against proprietary systems from U.S. companies such as OpenAI and Anthropic. The exponential growth of the technology's capabilities, including the ability to hack autonomously, has forced a global reckoning over its power. Beijing is weighing restrictions on overseas access to some of China's leading AI models, highlighting the growing tension with its stringent national security agenda. The U.S. touted Kazakhstan in June as the first country in Central Asia to join Pax Silica, bringing significant reserves of critical minerals that fuel advanced technologies. China has used its current near-monopolies over critical minerals as a retaliatory weapon in a tariff war launched last year by U.S. President Donald Trump, who has ramped up U.S. efforts to source the minerals domestically and from allies. Members of Pax Silica have access to shared investment opportunities in ⁠AI-related projects while those who sign the AI Opportunity Statement have symbolically agreed on a "common purpose" and "shared vision" with the U.S., according to the statement posted on the State Department's website. U.S. officials drafted the letter to make clear that "you can't have it both ways," the U.S. official told Reuters, speaking on condition of anonymity given ongoing internal discussions on the issue. "It's difficult to see how a country can credibly position themselves as trusted partners in one technology ecosystem while simultaneously signing up for an initiative designed by China to advance a competing vision for AI," the official said. (Reporting by Michael Martina; Editing by Andy Sullivan and Edmund Klamann)

US to tell partners they must pick sides in AI race with China

The US is preparing to ask countries to choose between its Pax Silica AI framework and China's competing initiative, Reuters reported. Washington wants participating nations to align on AI, semiconductors and critical-mineral supply chains amid intensifying technology competition with Beijing. WASHINGTON: The U.S. is preparing to tell dozens of countries they must pick sides in the artificial intelligence race with China, warning they will be excluded from a U.S.-led AI coalition if they also sign up for Beijing's competing framework, according to a U.S. official and an internal draft reviewed by Reuters. Washington last year launched the Pax Silica initiative aimed at securing supply chains for AI models, semiconductors and critical minerals, amid a fierce technology rivalry with Beijing. About two dozen countries have joined, including Kazakhstan, a key potential source of critical minerals that has also joined China's coalition, as well as close U.S. allies such as Japan, Australia and South Korea. The ⁠draft letter, ⁠prepared by the State Department, is addressed to the 35 signatories of a U.S. "AI Opportunity Statement" signed in June, which includes members of the non-binding Pax Silica framework and other countries that have expressed a desire to align cooperation on AI with Washington. By pressing countries to choose sides the U.S. hopes to starve China of resources in a race to make the most sophisticated AI, which could be used for military or economic dominance. In July, Chinese President Xi Jinping launched a rival "World Artificial Intelligence Cooperation Organization", promoting his country's open-weight technology as a challenge to U.S. influence over the fast-moving sector. Kazakhstan is the only country so far known to have joined both initiatives, setting off alarm bells in Washington. "To be part of everything is to be ⁠part of nothing. Signature of the Pax Silica Declaration is not merely a membership subscription, but a commitment," the letter says, urging countries to "choose deliberately" on AI. "It cannot be held alongside membership in duplicative initiatives whose expectations conflict with our own," the letter said, ⁠without specifically mentioning China. Reuters could not determine when the U.S. intends to send the letter or whether it might be amended before sending. The draft was undated. The State Department told Reuters it would not comment on "purportedly leaked internal documents." The Chinese and Kazakh embassies in Washington did not respond immediately to requests for comment. 'CAN'T HAVE IT BOTH WAYS'The Pax Silica agreement aims to push U.S. allies and partners toward joint projects and export controls, and ultimately reduce reliance on adversaries for critical minerals, AI models and the semiconductor chips that power them. The race between the U.S. and China for technological leadership has reached a pivotal moment, as Chinese open-weight AI models have made rapid gains against proprietary systems from U.S. companies such as OpenAI and Anthropic. The exponential growth of the technology's capabilities, including the ability to hack autonomously, has forced a global reckoning over its power. Beijing is weighing restrictions on overseas access to some of China's leading AI models, highlighting the growing tension with its stringent national security agenda. The U.S. touted Kazakhstan in June as the first country in Central Asia to join Pax Silica, ⁠bringing significant reserves of critical minerals that fuel advanced technologies. China has used its current near-monopolies over critical minerals as a retaliatory weapon in a tariff war launched last year by U.S. President Donald Trump, who has ramped up U.S. efforts to source the minerals domestically and from allies. Members of Pax Silica have access to shared investment opportunities in AI-related projects while those who sign the AI Opportunity Statement have symbolically agreed on a "common purpose" and "shared vision" with the U.S., according to the statement posted on the State Department's website. U.S. officials drafted the letter to make clear that "you can't have it both ways," the U.S. official told Reuters, speaking on condition of anonymity given ongoing internal discussions on the issue. "It's difficult to see how a country can credibly position themselves as trusted partners in one technology ecosystem while simultaneously signing up for an initiative designed by China to advance a competing vision for AI," the official said.

U.S. to tell partners they must pick sides in AI race with China

WASHINGTON - The U.S. is preparing to tell dozens of countries they must pick sides in the artificial intelligence race with China, warning they will be excluded from a U.S.-led AI coalition if they also sign up for Beijing's competing framework, according to a U.S. official and an internal draft reviewed by reporters. Washington last year launched the Pax Silica initiative aimed at securing supply chains for AI models, semiconductors and critical minerals, amid a fierce technology rivalry with Beijing. About two dozen countries have joined, including Kazakhstan, a key potential source of critical minerals that has also joined China's coalition, as well as close U.S. allies such as Japan, Australia and South Korea.

US to warn partners they must pick sides in artificial intelligence race with China

The US is preparing to tell dozens of countries they must pick sides in the artificial intelligence race with China, warning they will be excluded from a US-led coalition if they also sign up for Beijing's competing framework, according to a US official and an internal draft reviewed by Reuters. Washington last year launched the Pax Silica initiative aimed at securing supply chains for AI models, semiconductors and critical minerals, amid a fierce technology rivalry with Beijing. About two dozen countries have joined, including Kazakhstan, a key potential source of critical minerals that has also joined China's coalition, as well as close US allies such as Japan, Australia, and South Korea. The draft letter, prepared by the State Department, is addressed to the 35 signatories of a US "AI Opportunity Statement" signed in June, which includes members of the non-binding Pax Silica framework and other countries that have expressed a desire to align cooperation on AI with Washington. By pressing countries to choose sides, the US hopes to starve China of resources in a race to make the most sophisticated AI, which could be used for military or economic dominance. Jinping launches World Artificial Intelligence Cooperation Organization In July, Chinese President Xi Jinping launched a rival "World Artificial Intelligence Cooperation Organization," promoting his country's open-weight technology as a challenge to US influence over the fast-moving sector. Kazakhstan is the only country so far known to have joined both initiatives, setting off alarm bells in Washington. "To be part of everything is to be part of nothing. Signature of the Pax Silica Declaration is not merely a membership subscription, but a commitment," the letter says, urging countries to "choose deliberately" on AI. "It cannot be held alongside membership in duplicative initiatives whose expectations conflict with our own," the letter said, without specifically mentioning China. Reuters could not determine when the US intends to send the letter or whether it might be amended before sending. The draft was undated. The State Department told Reuters it would not comment on "purportedly leaked internal documents." China's embassy in Washington said the country opposes politicizing trade and technology issues. "Such actions will only stifle global AI advances and serve no one's interests," an embassy spokesperson said. The Kazakh embassy in Washington did not respond to a request for comment. The Pax Silica agreement aims to push US allies and partners toward joint projects and export controls, and ultimately reduce reliance on adversaries for critical minerals, AI models, and the semiconductor chips that power them. The race between the US and China for technological leadership has reached a pivotal moment, as Chinese open-weight AI models have made rapid gains against proprietary systems from US companies such as OpenAI and Anthropic. The exponential growth of the technology's capabilities, including the ability to hack autonomously, has forced a global reckoning over its power. Beijing is weighing restrictions on overseas access to some of China's leading AI models, highlighting the growing tension with its stringent national security agenda. The US touted Kazakhstan in June as the first country in Central Asia to join Pax Silica, bringing significant reserves of critical minerals that fuel advanced technologies. China wielding critical mineral supply against Trump tariffs China has used its current near-monopolies over critical minerals as a retaliatory weapon in a tariff war launched last year by US President Donald Trump, who has ramped up US efforts to source the minerals domestically and from allies. Members of Pax Silica have access to shared investment opportunities in AI-related projects while those who sign the AI Opportunity Statement have symbolically agreed on a "common purpose" and "shared vision" with the US, according to the statement posted on the State Department's website. US officials drafted the letter to make clear that "you can't have it both ways," the US official told Reuters, speaking on condition of anonymity given ongoing internal discussions on the issue. "It's difficult to see how a country can credibly position themselves as trusted partners in one technology ecosystem while simultaneously signing up for an initiative designed by China to advance a competing vision for AI," the official said.

The U.S. just turned the Al race into a loyalty test

Every alliance eventually asks for something. For most of the postwar era, the ask was legible. Buy our weapons, host our bases, vote with us at the United Nations, and the security guarantee holds. Trade was the part countries got to keep flexible. You could sell soybeans to one superpower and buy machine tools from the other, and nobody in Washington or Beijing called it betrayal. That flexibility has been thinning for a decade, first through tariffs, then through export controls on advanced semiconductors. Now the scarce resource has changed shape. It is compute, the chips that produce it, and the minerals sitting underneath the chips. Governments figured out the smart play fast. Sign everything. Join the American initiative for investment access, join the Chinese one for cheap models and infrastructure money, and let the two giants compete for your signature. I have watched that hedge hold for roughly three years. It is about to break. The United States is preparing to tell dozens of governments they must pick a side in the artificial intelligence race with China or be locked out of a U.S.-led coalition, according to Reuters, which reviewed an internal State Department draft and spoke with a U.S. official. What the leaked AI letter actually says The draft is addressed to the 35 signatories of an AI Opportunity Statement the U.S. organized in June, a roster that overlaps heavily with a separate American framework called Pax Silica. Countries that also sign on with Beijing's competing organization would be shut out. "To be part of everything is to be part of nothing," the letter says, urging governments to "choose deliberately" on AI, according to Reuters. The State Department declined to discuss what it called purportedly leaked internal documents. Reuters could not determine when the letter will be sent, or whether it survives internal review intact. The draft carried no date. One country is the reason this document exists. Kazakhstan signed the Pax Silica Declaration in June and is also a founding member of China's new AI body, making it the only government known to belong to both. That matters far more than the size of its economy suggests, because Kazakhstan sits on significant reserves of the critical minerals that feed advanced chipmaking. kritsapong jieantaratip / Getty Images How Pax Silica and China's AI bloc took shape Pax Silica opened in December 2025 with seven signatories. By August 2026 the declaration had 25, while the separate AI Opportunity Statement had drawn 35, according to the Information Technology and Innovation Foundation. The framework covers minerals, energy inputs, manufacturing, semiconductors and AI infrastructure, and its architects are not subtle about the stakes. The 21st century "runs on compute and the minerals that feed it," according to Under Secretary for Economic Affairs Jacob Helberg at the State Department. Beijing answered in July. Twenty-nine countries signed the founding agreement for the World Artificial Intelligence Cooperation Organization, or WAICO, on July 16, creating a Shanghai-headquartered body with no major Western democracy among its founders, reported Al Jazeera. Xi Jinping used his keynote the next day to sell open-weight models to developing nations as a "historic opportunity." The two blocs, side by side: * Pax Silica Declaration: 25 signatories as of August 2026, launched December 2025, per ITIF. * AI Opportunity Statement: 35 signatories, signed June 2026, per the State Department. * WAICO: 29 founding countries, agreement signed July 16, 2026, per Al Jazeera. * Known overlap: Kazakhstan, the only government in both, according to Reuters. What an AI loyalty test means for chip stocks This is where it stops being a foreign-policy story and starts being a portfolio one. Selling compute to governments is a real business now, not a rounding error. Nvidia (NVDA) posted record first-quarter fiscal 2027 revenue of $81.6 billion, with data center revenue of $75.2 billion split close to evenly between hyperscale customers and a newer category covering AI clouds, industrial, enterprise and sovereign deployments, according to Nvidia. More Artificial Intelligence: When I ran that against the bloc math, the exposure looked far less abstract than the diplomatic language suggests. The addressable market for sovereign AI is not "the world." It is whichever list of countries a vendor is diplomatically cleared to sell into, and Washington is now drafting that list in writing. A country that chooses Shanghai does not stop building AI. It builds on Chinese silicon and Chinese open-weight models, and every rack it installs is a rack that American vendors never quote. Rivals see the same opening. The pressure runs the other direction too. Chinese open-weight models have closed much of the gap on proprietary systems from U.S. developers including OpenAI and Anthropic, reported Reuters. When the free option is nearly as good, a coalition membership card is a harder sell. Where the AI race goes from here Nvidia guided to roughly $91 billion for its second quarter without assuming any China data center compute revenue at all, according to Nvidia. That report lands later this month, and the sovereign line inside it is now a geopolitical readout as much as a sales number. Watch three things. Whether the letter goes out unchanged. Whether Kazakhstan drops one membership. And whether any of the 35 signatories decides the American terms are worth refusing. Because the quiet assumption holding up a lot of AI valuations is that the technology sells to everyone. Some large investors have already started backing away from that math. A loyalty test is what you administer when you are no longer certain of the answer. The countries getting this letter will notice that too. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc. This story was originally published August 16, 2026 at 11:03 AM.

US-China AI Race Gets Serious: Countries May Soon Have to Choose

The United States is reportedly preparing to tell countries involved in its technology partnerships that they may have to choose between Washington and Beijing in the global AI race. The proposed move reflects growing concern in Washington about China's expanding influence over AI development, supply chains and international technology partnerships. The message is expected to be delivered through a letter from the US State Department to countries participating in the Pax Silica initiative, a US-led partnership focused on securing supply chains for , semiconductors and critical minerals.

US to tell partners they must pick sides in AI race with China

WASHINGTON, Aug 14 (Reuters) - The U.S. is preparing to tell dozens of countries they must pick sides in the artificial intelligence race with China, warning they will be excluded from a U.S.-led AI coalition if they also sign up for Beijing's competing framework, according to a U.S. official and an internal draft reviewed by Reuters. Washington last year launched the Pax Silica initiative aimed at securing supply chains for AI models, semiconductors and critical minerals, amid a fierce technology rivalry with Beijing. About two dozen countries have joined, including Kazakhstan, a key potential source of critical minerals that has also joined China's coalition, as well as close U.S. allies such as Japan, Australia and South Korea. The draft letter, prepared by the State Department, is addressed to the 35 signatories of a U.S. "AI Opportunity Statement" signed in June, which includes members of the non-binding Pax Silica framework and other countries that have expressed a desire to align cooperation on AI with Washington. By pressing countries to choose sides the U.S. hopes to starve China of resources in a race to make the most sophisticated AI, which could be used for military or economic dominance. In July, Chinese President Xi Jinping launched a rival "World Artificial Intelligence Cooperation Organization", promoting his country's open-weight technology as a challenge to U.S. influence over ?the fast-moving sector. Kazakhstan is the only country so far known to have joined both initiatives, setting off alarm bells in Washington. "To be part of everything is to be part of nothing. Signature of the Pax Silica Declaration is not merely a membership subscription, but a commitment," the letter says, urging countries to "choose deliberately" on AI. "It cannot be held alongside membership in duplicative initiatives whose expectations conflict with our own," the letter said, without specifically mentioning China. Reuters could not determine when the U.S. intends to send the letter or whether it might be amended before sending. The draft was undated. The State Department told Reuters it would not comment on "purportedly leaked internal documents." The Chinese and Kazakh embassies in Washington did not respond immediately to requests for comment. 'CAN'T HAVE IT BOTH WAYS' The Pax Silica agreement aims to push U.S. allies and partners toward joint projects and export controls, and ultimately reduce reliance on adversaries for critical minerals, AI models and the semiconductor chips that power them. The race between the U.S. and China for technological leadership has reached a pivotal moment, as Chinese open-weight AI models have made rapid gains against proprietary systems from U.S. companies such as OpenAI and Anthropic. The exponential growth of the technology's capabilities, including the ability to hack autonomously, has forced a global reckoning over its power. Beijing is weighing restrictions on overseas access to some of China's leading AI models, highlighting the growing tension with its stringent national security agenda. The U.S. touted Kazakhstan in June as the first country in Central Asia to join Pax Silica, bringing significant reserves of critical minerals that fuel advanced technologies. China has used its current near-monopolies over critical minerals as a retaliatory weapon in a tariff war launched last year by U.S. President Donald Trump, who has ramped up U.S. efforts to source the minerals domestically and from allies. Members of Pax Silica have access to shared investment opportunities in AI-related projects while those who sign the AI Opportunity Statement have symbolically agreed on a "common purpose" and "shared vision" with the U.S., according to the statement posted on the State Department's website. U.S. officials drafted the letter to make clear that "you can't have it both ways," the U.S. official told Reuters, speaking on condition of anonymity given ongoing internal discussions on the issue. "It's difficult to see how a country can credibly position themselves as trusted partners in one technology ecosystem while simultaneously signing up for an initiative designed by China to advance a competing vision for AI," the official said. (Reporting by Michael Martina; Editing by Andy Sullivan and Edmund Klamann)