Good evening. When it comes to industrial policy contests, Chinese Communist Party discipline and five-year plans will surely trump whatever patchwork strategies America’s warring politicians are able to come up with. Or will they? Could it be that there is a method to U.S. political madness? In this week’s cover story, Noah Berman looks at how, in a decades-long process overseen by a succession of Republican and Democratic governors, the state of New York has attempted to foster the emergence of a world-class semiconductor cluster that could help the U.S. prevail in its 21st century technological contest with China. If it does, part of the credit will be due to a uniquely American advantage that Xi Jinping’s China can never hope to match — the audacity and drive of an immigrant scientist who, more than 30 years ago, arrived in Albany with an improbable dream.
Also in this week’s issue: The Big Picture looks at StepFun, an ambitious Shanghai-based AI start-up; Eliot Chen and Noah Berman report from the AI+ Expo, America’s “own military-civil fusion fair”; PLA whisperer Zhou Bo on China’s rise and America’s decline; and Yao Yang on a possible “Mar-a-Lago Accord,” inspired by the 1985 Plaza Accord. If you’re not already a paid subscriber to The Wire, please sign up here.
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The Silicon State
Alain Kaloyeros arrived at the State University of New York at Albany in 1988 with a PhD in physics and big dreams for his small school employer. Kaloyeros, aka “Dr K”, was determined, as he tells Noah Berman, to create a high-tech “acropolis” in upstate New York, with academic and industry partners “exchanging ideas, innovating and creating new concepts and new applications, especially in semiconductors”. Almost 40 years later, New York has emerged as one of the biggest recipients of semiconductor investments in the U.S. Its politicians say they are determined to help the U.S. beat China in “this race for tech dominance”.
The Big Picture: What is StepFun?
In a periodic series highlighting Chinese AI start-ups worth more than $1 billion, Noah Berman profiles Shanghai-based StepFun. It is in many ways a U.S.-China amalgam. Its founder, Jiang Daxin, worked for Microsoft for 16 years and obtained a doctorate in computer science from the University at Buffalo. After OpenAI released ChatGPT in November 2022, Jiang has said, “I thought, I can do it myself, maybe even better.” Last year, StepFun became the first Chinese company to release an AI model containing one-trillion parameters — an important milestone because models with more parameters can generally process more information.
Outrunning China — But in What Direction?
At last year’s AI+ Expo, one the largest confabs of artificial intelligence and defense companies in the U.S., speakers said China’s AI industry was three years behind America’s. You would have been hard pressed to find anyone repeating such claims at the 2025 AI+ Expo last week, write Eliot Chen and Noah Berman. On panels and across the exhibition floor, participants acknowledged China’s rise in sectors from open-source AI to semiconductors, drones and robotics — and the need for the U.S. to run faster to stay in the race.
A Q&A with Zhou Bo
The People’s Liberation Army is not known for its transparency. But when one of the most opaque militaries in the world wants to make its views known, it often does so with the help of Zhou Bo.
Zhou is a former PLA colonel, a senior fellow at Tsinghua University’s Center for International Security and Strategy, and a highly sought after speaker on the international conference circuit and op-ed writer for Western media outlets. In this week’s Q&A, he tells Andrew Peaple that while China will always be resolute in protecting what it regards as its sovereign interests, that does not make it an expansionist power that the world should fear. He also ponders how “a man like Trump can be elected in a country that has produced George Washington and Abraham Lincoln?”
Zhou Bo
Illustration by Kate Copeland
A Mar-a-Lago Accord Could Benefit China
China would surely oppose a major devaluation of the dollar vis-a-vis the renminbi — or would it? Yao Yang, an economics and development expert at Peking University, looks at some of the reasons why Xi Jinping might in fact welcome one.
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