There Is No AI Race. Inside the Trillion-Dollar Lie

Why have the United States and China pulled so far ahead in the global technology race? Mehran Gul, author of The New Geography of Innovation, argues that the answer goes far beyond individual companies or breakthrough technologies. In this episode, we sit down with Mehran to discuss how successful innovation ecosystems are actually built, why Silicon Valley remains so difficult to replicate, and how China rapidly emerged as a global technology superpower. We also talk about why Europe and India have struggled to produce technology giants at the same scale, and how talent, capital, universities, government, and entrepreneurship shape long-term competitiveness. Mehran also breaks down the extraordinary concentration of money flowing into AI companies like OpenAI, Anthropic, and Nvidia, whether today’s AI valuations are sustainable, and why a major market correction could still happen without ending America’s technological dominance. From AI investment and venture capital to Silicon Valley, China, Europe, India, and the future of global innovation, this episode looks beyond the AI hype to ask a much bigger question: who will actually shape the next era of technology? Subscribe and follow for more conversations with the world’s leading thinkers on AI, technology, innovation, and digital transformation. In this episode: 00:00 The AI bubble and America’s technology lead 01:47 The new geography of innovation 05:30 How China became a technology superpower 09:13 Can other countries replicate China’s success? 13:17 What does “innovation” actually mean? 16:21 Are tech valuations measuring real innovation? 21:03 Does geography determine who wins in technology? 25:01 Will the U. S. and China dominate the next decade? 29:31 Why Europe’s push for tech sovereignty is struggling 33:05 Can government policy actually create innovation? 37:24 PayPal vs. Skype: How innovation creates more innovation 39:47 Is America’s technology dominance a zero-sum game? 43:52 Who is the world’s third-largest technology power? 45:07 Why “indispensability” may matter more than tech sovereignty 47:00 What This global tech race means for business leaders 48:32 Why AI investment is becoming more concentrated 51:29 Are we betting too much on a few tech leaders? 53:35 What Japan’s collapse can teach us about U. S. tech 56:13 Could the AI bubble actually burst? 59:22 Could China overtake the U. S. in Technology? 1:03:29 When government helps and hurts innovation 1:05:51 Predictions for the next era of global technology 1:07:50 Do We need to redefine innovation? 1:10:02 Where business leaders should look for innovation 1:14:02 Why venture capital isn’t actually global 1:18:00 Final thoughts 1:19:41 About Info-Tech Research Group Connect with Mehran: LinkedIn: https://www.linkedin.com/in/mehrangul?originalSubdomain=ch X: https://x.com/mehrangul_ Our links: Visit our website: https://www.infotech.com/?utm_source=youtube&utm_medium=social&utm_campaign=podcast Follow us on YouTube: https://www.youtube.com/@InfoTechRG

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Speaker 00

  I don't think you can argue with the fact that America has the best AI ecosystem in the world. The question really is, should they be worth one tenth of what they're worth today? Should we worth, you know, one fifth of what they're worth today? And even if that is the answer, they're still more valuable than the Chinese tech ecosystem. They can be worth vastly less and still be the most technologically capable ecosystem out there. And maybe that is the systemic shock that they really need in order to sort of up their game.

• 0:30Geoff Nielson?

  This is a show about the future of tech and the future of work. I'm Jeff Nielsen, and today we're diving into the future landscape of innovation with predictions for the US, China, and the rest of the world. My guest today is big brain Meron Goll, author of The New Geography of Innovation, and with a rap sheet involving everyone from the World Economic Forum to Yale to McKinsey and the Financial Times. Look, it's no secret that with AI, we're living in crazy times, and the amount of investment we're seeing is somewhere between reckless and dangerous. Meron agrees, but he doesn't particularly care. He thinks that the world has become such a two-horse race that American tech companies can lose most of their value,

• 1:12Geoff Nielson?

  and nobody other than China can even come close to catching up. What I love about Meron is that he's a guy who sees the big picture. He's deeply researched the world's biggest tech companies and economies, and has built a compelling model of how breakthrough technologies are taking over the world. I want to ask him what's happening now and what happens next. How dangerous is the bubble? What are different tech hubs getting right and wrong? And what do we need to do to build the next world-changing technology? Let's find out.

• 1:47Geoff Nielson?

  Meron, thanks so much for joining today. Really excited to have you on the program here. You know, you've written fairly extensively about, you know, what you call the geography of innovation. And for those who are not familiar with, you know, your work there, can you maybe just set the table a little bit in terms of what you've been writing about and what sort of your central thesis is there?

• 2:05Speaker 00

  So I started writing. So first of all, thanks so much for having me. It's a real privilege to be on the podcast. So I really started writing about this topic something like five, six years ago. And the idea was, at that time, just this dissatisfaction with only talking about the US and China when we talked about technology. And I personally saw so many interesting companies around the world. You know, Spotify is in Sweden. You know, SK Hynix was recently a trillion-dollar company, based in South Korea, TSMC in Taiwan. So for me, this was about kind of expanding the conversation beyond the usual suspects when we, when we talk about tech. And there were some other questions that were kind of linked to that, which were,

• 2:47Speaker 00

  you know, if China could become technologically relevant so quickly, then why is it that other countries that would seem to be much more better positioned to be technologically relevant, like Germany, for instance, France, you know, plenty of other countries in Asia, India? Why is it that these places are not taking as much headspace as China is? Because in my view, if China can do it, anyone can do it. Because 25 years ago, this was a very poor country. And so it was really out of that kind of view that I thought it's useful to maybe look at technology from a more global perspective and see what's happening in Europe, in Latin America, in Canada. And that's really what the genesis of the book was.

• 3:30Geoff Nielson?

  So there's, there's two ways you can potentially frame that question. You can frame it as, you know, why China? Or you can frame it as why not all these other hubs? And I'm curious, from your view and your research, which is the more appropriate framing? And how would you answer the question?

• 3:47Speaker 00

  So I think why not other hubs becomes a much more complex question because then you have to pretty much answer 192 questions because why it's not Germany is very different from why it's not India, right? And it's also, you know, Germany is a country that was very technologically capable 80 years ago. If you were having this conversation in the early 20th century, it would be right up there as one of the three most technologically capable countries in the world. So for Germany, the question is not, you know, why is it not a technology power to begin with? Which is the question that you would ask about India. It is, how did it lose relevance? And in India, the question becomes somewhat different, which is,

• 4:30Speaker 00

  how come when we go to a place like the US, in every major tech company, so much of the workforce is Indian, so many of the CEOs are Indian? But in India itself, the tech industry really isn't producing that many globally relevant countries. So I think, you know, the, the answer to why was it China is much simpler than, even though it's a fairly complex sort of answer, but it's much simpler compared to the question, why are other countries not showing up? Which is a different answer for each region.

• 5:00Geoff Nielson?

  So let's maybe tackle those sequentially. And to me, it's really interesting because, you know, I agree with you. We hear a lot about the US and China. And when I think about the US and I think about Silicon Valley, I mean, I, that to me is a story that's fairly straightforward. It's, you know, been a hub for many decades of, you know, hardware and software, and it just became a center of gravity. China hasn't, right? And at least my sense is it's not a one-for-one parallel of what happened in Silicon Valley. But so let's answer that question first. Why China? How has China been able to gain so much prominence so quickly?

• 5:36Speaker 00

  So I think China is almost sort of the inverse of a place like the valley, for instance. Where if you look at the genesis of the valley, the answer sort of is, from the beginning, it's more, you know, first there's Stanford, then there's defense contracts, then there's venture capital. And I really kind of try and trace the entire evolution of, of the valley in the book. In, in China, on the other hand, it wasn't really the universities that came first. It was really the big tech companies like Alibaba, Baidu, Tencent that came first. The companies came first, then they monetized their domestic market. Then it was research departments within universities, then the universities themselves.

• 6:17Speaker 00

  And I would argue that the state almost shows up by accident at the end. People often tend to draw this distinction, which in my view is oversimplified, between the US and China, that one is market-driven, whereas the other happens to be very statist in character. But if you look at the most iconic Chinese tech companies, ByteDance, for instance, Alibaba, you know, until recently, DeepSeek. In, in their origins, you don't really see the state. You could almost make as strong an argument that the state is an obstacle to their development as that the state is helping them out. If you go back to 2020, 2021, you know, this is when the Chinese state had pulled the plug on Ant Financial,

• 7:00Speaker 00

  which at that point, had it gone public, would have been the largest IPO in history anywhere in the world. And, you know, Jack Ma couldn't show his face in public for two years. He had to go to Japan. And so, you know, and, and on the other hand, if you look at the US, also the picture of this is a completely market-driven economy is also a little bit muddled by the fact that, you know, right now, 10% of Intel is owned by the US state. You know, I'm old enough to remember that in 2009, there were these massive bailouts of both the financial sector and then later the automotive sector as well. So I think this distinction that we draw between these two economies as just being completely different on every single level, that's maybe a bit sort of simplified. But to come back to your question, how did the Chinese tech economy start?

• 7:45Speaker 00

  It was these large tech companies that came first, which really were structured under Silicon Valley law. In many instances, the venture funding came from Valley Venture Capital Funds. And then from there, they worked their way backwards into creating the research institutions and then doing the science to a level where now Chinese science punches at the highest level globally. Many people are not aware of the fact that of the 100 most cited papers in artificial intelligence today, 41 have Chinese authors, including the most cited paper in all of artificial intelligence, which is the paper called ResNet. So people often also have this misperception about China that they're good at the application layer or they're good at making products and services,

• 8:30Speaker 00

  but maybe not the science behind it. But I think all of that has, has changed a lot in the past three years.

• 8:37Geoff Nielson?

  It's really interesting to me and it's very strongly, I guess, against the conventional wisdom and the narrative that, as you said, that there's just a lot of, a lot of talk and a lot of taking for granted that it is state-driven. The reason is the state came in, they dropped huge amounts of capital and that's why China has this sort of unfair advantage there. And to me, the way you describe it is actually a lot more interesting because, at least if I'm processing it correctly, it feels like in some ways that should be more replicable for other countries, for other innovation hubs. So let me maybe frame it this way. What are the, what are the lessons then that other countries and other innovation hubs can take away from that sort of Chinese model and that Chinese growth?

• 9:22Speaker 00

  I think you sort of pointed at something that's, that's really sort of important, which is you can't explain everything in terms of the state because the state everywhere helps the tech industry, right? I mean, in Russia, you had this Kolko Foundation that was trying to create a tech hub, didn't quite work out. Even in the US, you know, if you look at Stanford, you know, just 100 years ago, it was a pretty average school and, you know, it was not nearly anywhere near as prestigious as it is today. Most people trace Stanford's prestige back to right after the Second World War, which is when its provost, Fred Terman, started soliciting defense contracts from the US government. So that is another form of the state helping out a university, becoming sort of what it

• 10:07Speaker 00

  is, it is today. But at the same time, you know, it's, it's not as if the US state only gave money to Stanford. It was also giving money to Harvard, it was also giving money to MIT. But at the same time, Stanford created a much better environment for startups around it than other universities that were also getting state funding. So, you know, state as a determinant is maybe often over explained in terms of how important that is. Now, how does China sort of play into it? I think the main thing that I came out with at the end of the analysis, not just of China, but of other places as well, South Korea, Switzerland, Sweden, was it's not really one formula that applies everywhere. You know, in some places, the state does play a big role.

• 10:49Speaker 00

  In other places, it was things such as, you know, private initiative. You know, if you look at a place like Germany, for instance, it's really their small and medium enterprises where you find most of the most innovative things happening. You know, we talk about the boarding company, Elon Musk's sort of, you know, fourth or fifth venture. It's worth about $7 billion today, but there is a German company called Herren Connect, which has done thousands of projects more than the boarding company. If you're trying to build a subway in Doha, Qatar, for instance, you would, any technical expert would always, almost always turn to Herren Connect rather than to the boarding company.

• 11:32Speaker 00

  And so over there, it's really these private, these small and medium enterprises that are driving innovation forward. So I think the benefit of having a comparative approach is exactly that, that you can begin to see innovation as something that doesn't necessarily happen with the Silicon Valley formula. It can happen in other ways as well. In the US, for instance, people have kind of given up on the idea that old companies can innovate. IBM, Xerox, nobody expects them to be at the technological frontier. But if you go to a place like Korea, it is exactly these older companies, some of them are over 100 years old, Samsung, SK Hynix, Hyundai, that are at the very forefront of

• 12:14Speaker 00

  areas like semiconductors or foundation models. So I think, you know, if from China, we can get this idea that, you know, it was companies monetizing the local market and then from there, working their, their way backwards to creating universities and research divisions. If you widen the aperture to other countries, you can see that people have been doing it in all sorts of different ways.

• 12:39Geoff Nielson?

  If you don't work in enterprise technology, you can skip ahead or take a quick braincation. But if you do, InfoTech is your secret weapon. InfoTech helps IT teams get projects done faster, better, and at a lower cost. Whether you're rolling out new tech, improving processes, or just looking for cost savings, InfoTech provides unlimited access to practical tools and expert guidance you need to execute at a fraction of the cost of traditional consulting. No matter the project, from AI strategy to cybersecurity to vendor negotiation, InfoTech has you covered. Check it out at the link below and don't forget to like and subscribe. There's an awful lot I want to unpack there around these different determinants,

• 13:21Geoff Nielson?

  the different, you know, geographies and what they're doing right and the structures supporting them. But, but just before we do, can we just unpack for a minute what is meant by innovation? When you talk about the geographies of innovation, I mean, I, I think listening to this, there's an inherent notion of, okay, doing new things, tech. But how, how do you define it? And, and what do you need to understand about innovation to make sure that you're kind of up to speed and able to participate fully in this conversation?

• 13:50Speaker 00

  So the most important question, right? And this is my entire chapter, one is devoted entirely to this question. You know, what, what does it even mean to say about we're going to take a tour around the most innovative countries in the world? Does it, I mean, our current conception has almost sort of reduced it to saying who has the most number of billion-dollar startups? And it might be one important measure, maybe a venture, for a venture capitalist, that's the most important way to look at it. But in my book, for instance, I look at three different ways to look at the same question. You know, the first one is this venture capital way of looking at it and saying, who's creating the most number of unicorns? Because say five years ago, six years ago, that was the most fashionable way of asking, you know, what's the most innovative place in the world? The most obvious drawback to saying, you know, we're only going to look at valuable

• 14:35Speaker 00

  startups is that, you know, innovation doesn't just happen in new companies. Today, the most important, the most valuable company in the world today is Nvidia. And nobody would say it's a startup, nobody would say it's a new company. You know, it's almost 30 years old now, more than 30 years old, which would make it, by American standards, a middle-aged company. And, you know, so you have to look at old companies and new ones as well. So in my book, I look, look at, you know, most innovative places as measured by the number of unicorns there. The most important, the most innovative places as measured by the total market cap of all tech companies based there, which I think shows a very unequal picture of the

• 15:16Speaker 00

  world, where the US would be something like, you know, $30 trillion in total market cap, China would be barely $5 trillion, Europe would be something like $2 trillion, and the rest of the world would be just about marginal. And the third one is to maybe look at it beyond just the question of tech valuations in general. And the World Intellectual Property Organization, which is a UN body, comes out with the, a global innovation index, which places Switzerland on top, Sweden second, and then counterintuitively, the US comes in third and China comes in 10th in that ranking. And so over there, they really look more at things like, how many patterns are you producing? How many STEM graduates are coming out of your universities? And so that's a much more multifactorial way of looking at it.

• 15:58Speaker 00

  I think all three approaches have limitations, but I agree with you that we need to at least be asking this question more. You know, what does it even mean for a place to be innovative? I think all three answers that I present in the book are partial answers, and that's why I've used them as three different entry points into answering the same question.

• 16:21Geoff Nielson?

  I like that approach and I like having a multifaceted approach. One, one of the concerns I've had in the past with this kind of unicorn labeling is if we're talking about valuation versus, you know, let's say revenue or annual recurring revenue. To me, you know, we're, we're sort of stepping away from how much value is this company actually creating versus what's the ecosystem of capital available? And it seems like it almost becomes a proxy for density of VCs or of, you know, financial institutions floating around and creating excitement around this. You know, what, what's your reaction there? Is revenue another piece that we should be looking at? Or are there more systemic reasons why we should be looking at the valuation itself?

• 17:04Speaker 00

  I think valuations are a, are a partial way of looking at it. I'll maybe reframe sort of your question or the answer to your question in another way, which is, I think people often look at the fact that, you know, companies like OpenAI and Anthropic are now worth a trillion dollars. And there really isn't any company, even in China today, that reaches that scale. You know, if Nvidia is $5 trillion, the most valuable company in China, a listed company in mainland China today is CXMT, which, you know, recently made its public debut, which is only about half a trillion dollars, right? And to a layperson, that might be, and, you know, the, the companies that we're talking about most recently, like for instance, Moonshot, you know, these would be $20 billion,

• 17:47Speaker 00

  $30 billion companies, which would benchmark to AI companies in America that nobody would even have heard about. Because all the companies that we talk about, Databricks, Anthropic, these are all hundreds of billion dollars, of trillions of dollars worth in value now. But I think the important thing over there is that company valuation is not just a reflection of how good your company might be or how good its prospects might be. But it's at its basic level, a reflection of how much capital you have available in your environment, right? So, you know, in, in places like the US, capital from all over the world is chasing companies in the US. So that's why they end up having these inflated valuations. Now, how valuable would a company like Samsung be if it was listed in the US? How valuable would a company like BYD be, which at this point sells more EVs than Tesla,

• 18:33Speaker 00

  if it was listed in the US? Same for companies like Huawei, a bunch of other companies that I can, that I can mention. So, you know, this purely numerical assessment of saying a company is worth this much in the US and another company is worth a fraction of that in China, doesn't mean that their relative capacities are that much different as well. The problem really becomes when you look at the limitations of this way of measuring innovation. And then if you say, well, we're going to come up with an alternative way of measuring innovation, all the other alternatives that I've seen are also heavily, I mean, they have a lot of issues as well. If you look at WIPO's index, for instance, which is the most cited innovation index in the world, you know, just on

• 19:17Speaker 00

  Just as even as a layperson looking at it, you would say that there's something not quite right here. Because even if you say, I agree that it should be a multifactorial assessment. Seven out of 10 of the most innovative countries, according to Vipo, are based in Europe. And yet, if you asked European policymakers themselves, that is this a continent that is front and center where the future is being made? They would say no. This is a continent that seems to be falling behind the rest of the world. So while I agree with you that company valuations are not a good measure, VC funding is not a good measure. Even revenues are not a good measure. The reason for that being Chinese open models right now are not making that much revenue

• 19:59Speaker 00

  compared to American closed source models, which have enterprises as their clients. Chinese open source models are really going to everyone. Now, would I make the claim that the fact that Moonshot's revenues are not the same as Anthropic means that Moonshot is less innovative than Anthropic? I don't think I'd be comfortable making that claim. So I think this only shows that whatever answer we come up with is going to be a somewhat of a partial answer. It's sort of like asking the question, what's the most democratic country in the world? Right? Is it Switzerland? Is it the US? Is it Japan? And we can debate, you know, for sort of days, the relative merits. But I think the debate itself is useful to kind of refine and distill our values and a possible answer to that question.

• 20:43Speaker 00

  So it's not a futile debate, even if we say that any numerical assessment that we make is in and of itself unsatisfying.

• 20:53Geoff Nielson?

  It's really interesting, and I can see why you're saying it's more complex than it seems like at first blush, and why you're struggling to come up with a single formula for innovation. I am curious, though, and this has come up a few times in a few different ways, which is, you know, to what degree, you know, geography is destiny here? Or I put another way, to what degree history is destiny? That you already have these existing hubs? You've got these, you know, kind of structural ecosystems in different countries. You know, you talked earlier about, you know, Indians being kind of a key import of Silicon Valley and a few different hubs of innovation outside of India. What are the implications if you're not in one of these hubs?

• 21:35Geoff Nielson?

  And how much does it limit your ability to, you know, kind of leapfrog and become a hub going forward?

• 21:40Speaker 00

  So I'm glad you used the word leapfrogging, because that was the second part of my answer. The first part is, so I think geography is absolutely important. And as much as that today sounds like a very obvious answer, you know, I would encourage your audience to think back maybe just to four years ago or five years ago. You know, when COVID happened, there were so many reports that I read in so many different newspapers talking about how geography is over. And I'm sure you remember this as well, you know, the rise of remote working. It's not necessary for everyone to be even in the same office rather than be in the same region. And, you know, part of the motivation behind writing that book and starting at that time was reading all of these assessments about how Silicon Valley is over. It's not going to be relevant anymore.

• 22:26Speaker 00

  Things are, you know, moving to the cloud and things like that. And yet, five years later,

• 22:32Speaker 00

  it's hard not to make the argument that geography has become more important, not less. If you look at the concentration of market cap, talent, you know, you name it, in AI, it is much more concentrated in the valley than any of the previous big platform shifts. Whether you compare it to smartphones, or you compare it to the internet, or you compare it to social networking. I was looking at, you know, something like 90% of all market cap of AI companies is concentrated in the Bay Area. Virtually every important American AI company, whether it's Nvidia, OpenAI, Anthropic, are all still in the Bay Area. In fact, you could make the opposite argument

• 23:15Speaker 00

  that the valley has in fact been going through a significant expansion over the past five years, where, you know, 10 years ago, 15 years ago, maybe San Francisco city itself was not that important from a technology creation perspective. Most of the action was down in the South Bay, in places like Cupertino and Mountain View. But in the past five years, San Francisco has emerged as the AI capital of the world. And, you know, even people like Paul Graham, for instance, have been commenting on how AI has become more concentrated geographically and not less. And the second part, you use the word leapfrogging. Leapfrogging is a very fashionable term that has been around for something like 30 years now. But I would encourage your audience to think about, you know, what,

• 24:01Speaker 00

  as ubiquitous as that term has been, what countries have managed to leapfrog? You know, very few, you know? If anything, the evidence points in the opposite direction that countries that had landlines are the ones that most

• 24:19Speaker 00

  that most seamlessly managed to move into mobile, and then from mobile into wireless. And so I think the opposite argument to leapfrogging is that you build on strong foundations. And there's no real substitute to saying that there was a certain technological foundation that the society had in terms of technical talent, in terms of technical infrastructure, which allowed it to have landlines. And that's why it built on top of that, to get wireless and mobile and all the other levels as well. And the countries that did not have that foundation, leapfrogging ended up being somewhat of a false hope.

• 24:58Geoff Nielson?

  It's, you know, it's really interesting to me. And I'm curious, you know, Miron, if you play the clock forward five years, you know, people have talked about AI. You talk about the fact that, you know, a handful of years ago, there was all this narrative about, you know, decentralization. You're sort of debunking leapfrogging as a concept. Do we get more of the same? Do we get even deeper concentration? Is it just all the hubs that have already done their homework and have already built this infrastructure just continue to get, you know, richer and more dense? Or are there any, you know, kind of macro level trends you expect to see that are materially different from what we have right now?

• 25:38Speaker 00

  So I walked away from this sort of five-year experience researching these various regions. Some were pessimistic about the possibility that you can have a third pole other than the US and China. And to me, like, you know, if I had to make a bet one way or the other, I would say that these two countries are going to reconsolidate their position, whether it's in AI or EVs or in solar. And I don't really see other countries becoming that relevant. You know, just to give you two examples. If you look at just about every major tech company that came out of Europe in the past 50 years, it is now either it has been acquired by an American tech company or it is listed in the US.

• 26:23Speaker 00

  DeepMind, a division within Google. ARM is listed in New York. Spotify listed in New York. Hugging Face, people tend to look at Hugging Face as a very American company. It was actually born at Station F in France. You know, it's in New York now as well. UiPath, which at its time, which came from Romania at the time of its IPO, was the largest European tech company ever, is now based in the US as well. So Europe is producing fewer companies than the US. But the bigger problem is that the few companies that it is producing are migrating to the US within the first three to five years of their creation. The problem is even worse if you look at other countries, at other geographies.

• 27:06Speaker 00

  In Africa, for instance, if you look at what the most valuable company in Africa is, it's a company called Naspers, which I'm sure is a company that you've never heard about. And there's a very good reason for that, which is, you know, the question, what does Naspers do? And the answer to that is not very much. Naspers, which right now is worth about $40 billion, owes its entire value to the fact that it made a bet on Tencent 25 years ago. Now, on the one hand, you know, that's a very good reflection of Naspers' deal-making acumen, even though it's been losing that money on diversification over 25 years. But what does it say about Africa? That the most valuable company on that continent is not a company that is monetizing Africa's technological potential,

• 27:50Speaker 00

  making products to sell abroad, but a company that essentially owns a minority stake in Tencent? And you could make the same argument about Latin America. You could make the same argument about Paris. So I think while you will have certain companies and countries occupy niches, SK Hynix and high bandwidth memory, for instance, I see them more as extensions of the American tech industry. Just my last point on this. If you look at virtually all the trillion-dollar tech companies outside the US, TSMC, SK Hynix, Samsung, these are all suppliers to American tech companies. These are not competitors to American tech companies. So their fortunes rise and fall with the rise and fall of literally Nvidia.

• 28:34Speaker 00

  So I think that shows you how there are two competitors, the US and China, and the rest of the world is somehow trying to make themselves relevant to these two big ecosystems.

• 28:46Geoff Nielson?

  It's a little bit dark, I think, to mix my metaphors, like cast a light on the fact that the world is bipolar there, as you're saying. But I'm curious, because there's also a trend right now, Europe is a great example of it, but I think it's happening all over the place, which is this deglobalization and emphasis on sovereignty and technological sovereignty. And so I think in Europe, for example, you hear a lot more about the need for European technology companies to maybe not get bought by the US, or maybe to stay sovereign within Europe.

• 29:27Geoff Nielson?

  So, given how strongly you believe that there are these poles in the US and China, what do you make of that? What are the broad implications? And if there is a governmental move right now to intervene and prevent that type of absorption, is that a good thing? Is that a bad thing? And what would your guidance be to basically everybody else in the other 190 countries?

• 29:54Speaker 00

  I think what people are talking about is operating on a different plane from what they're actually doing. For all the talk about AI sovereignty, technological sovereignty that you're seeing in Europe, and you're seeing it more in Europe than in other places. In other places, people are still very happy losing their talent to places like the US, losing their companies to places like the US. If you go to Singapore, for instance, you go to India, it is still very aspirational for entrepreneurs to move to the US, or for entrepreneurs to sell their companies to the US. So over there, this question of tech sovereignty hasn't even really taken off in the same way that it has in places like Europe.

• 30:32Speaker 00

  But which tech company in Europe was successfully prevented from being merged or acquired by either an American or Chinese player? I wouldn't want to purely make this out to be a US problem. If you look at a company like Kuka, which is the most important robotics company in Germany, if not the entire world, it was bought by a Chinese company, Midea. If you look at so many other iconic brands all over Europe, the top two shareholders of Mercedes are Chinese. Volvo is entirely a Chinese company. There is barely any gaming company left in Europe which is not owned by China. So it's happening on both sides, not just that the US is acquiring, but China is acquiring as well.

• 31:15Speaker 00

  For all the talk about AI sovereignty and tech sovereignty, I cannot name one company that Europe has successfully persuaded to not get acquired, because they just don't have the money. If an American tech giant comes in and makes a $10 billion offer, and you, from local markets, can't even raise half a billion dollars, then I think for an entrepreneur, the answer is fairly clear. Europe does not have the same levers that China does. China successfully managed to derail the acquisition of Manu's, by instance, by Facebook, by Meta. In Europe, there isn't as much of an appetite to go that heavy-handed in terms of retaining their companies. So I would say, there's a lot of talk, but I see very little evidence that it's translating

• 32:00Speaker 00

  into anything tangible.

• 32:02Geoff Nielson?

  So it's more just political bluster aimed at voters who are dissatisfied than any sort of deep structural reform, you think?

• 32:11Speaker 00

  Yes, and I think that's not just at the level of companies that are being outright acquired, companies in the UK, for instance, that are not acquired by US-based companies. If you look at their cap tables, very often you will see that for the most ambitious UK-based tech companies, the biggest VCs investing in those companies are US-based. They're not European. So I think even if a company might appear to be European in the sense that it's not owned by an American or Chinese patron, the investors at the back end are usually European. There was a report that Startup Nation published a couple of years ago, which showed that for every $1 in a startup that is invested by a European investor, there's $2 invested by American institutional investors. And that was for all startups.

• 32:55Speaker 00

  It was a meta-analysis. I think it would be much more skewed for the companies that are the most promising and the most talked about, like DeepMind, for instance.

• 33:04Geoff Nielson?

  I'm trying to synthesize a number of different points you've made here. I mean, it sounds like in China, we've talked about how the state's role is weaker than we thought. In Europe, we're talking about how, again, the state says that they're going to be more actively involved here, and then it turns out they're not. It feels like the hand of financial institutions and the free market is playing a greater role than maybe it's given credit for. So, outside of the US, outside of China, who clearly seem to be on a winning path here, what is the role of policy? Forget about what's actually happening right now.

• 33:45Geoff Nielson?

  Does it make sense for companies there, or for government agencies, to be playing a more active part? Or is this just letting fate play its course?

• 33:56Speaker 00

  So I think the answer to the first part of your question, which is, China might not be as status as we think, the US might not be as market-oriented as we think. I think my take on that is, reality in general is just much more messy than we imagine it to be. And look into any case study deep enough, and you would see that whatever preconception that we had about it, it has all sorts of holes in it. State policy does clearly have a big role. If you look at a place like Germany, for instance, the most important company to come out of Germany over the past 20 years is a company called Biontech, which created the first coronavirus vaccine.

• 34:38Speaker 00

  And the company is something worth like $25 billion right now, competes directly with Moderna. And it was, in its initial phases, funded by the German government, specifically by this agency called Sprint, which is the German version of DARPA, except it doesn't fund defense projects all that much. So I think you do have examples of the state playing, and I wouldn't say an outsized role, but an important role in various places. But that doesn't mean that other things are not important. So for instance, if the state has played an important role in creating Biontech in Germany, a much bigger problem in Germany is that the mindset of company creation in

• 35:21Speaker 00

  Germany is not that you're creating a startup that will one day go on the public markets. The mindset of startups in Germany is, you're creating an asset for your family, and these companies are going to stay private indefinitely. You will give it to your son, the son will give it to their daughter. And the problem with those sorts of companies is, one, they never reach scale, because they can never tap the vast pools of capital that are needed to scale a company to the size of hundreds of billions of trillions of dollars. And the other problem there is, I think, for all the criticism that we have about the US, that it's a very winner-takes-all skewed economic outcomes, the benefit of having startups that eventually become public companies is that early investors in that

• 36:03Speaker 00

  startup end up making a lot of money alongside the founders as well. But companies, when they stay private indefinitely, they only make their founders rich. You don't have an early pool of employees, 100 people, 200 people, that then become rich, and then go out and start their own companies or fund other companies. In my book, I draw a contrast between Skype, for instance, and PayPal. Skype was one of the most important web 1.0 companies that came out of Europe. PayPal was one of the most important web 1.0 companies that came out of the US. PayPal created 160 millionaires. Skype only created 11. And so that's why you talk about the PayPal mafia, them creating company after company, investor after investor.

• 36:46Speaker 00

  Whereas Skype, you talk less about the Skype mafia. And the reason for that simply is that the early ownership stakes in Skype were much more concentrated in a few people than they were in PayPal, which was a much more common 20% of stock goes to early employees. So, again, you can say the state has, in places, done well in Germany, but if you're up against this massive problem of just the culture of how business is done, then there isn't really much that the state can do over there, rather than people realizing that we need to create startups that are meant for the public markets, rather than for your son or your daughter.

• 37:24Geoff Nielson?

  I'm just, again, digesting all of that. And there's so many different lenses on it, right? And it's funny, thinking specifically about Skype versus PayPal. You can think about successive innovation as unleashing a new technology on the world. You can think about it in terms of revenue. You can think about it in terms of adopters. But you can also think about it in terms of, I guess, the wealth or prosperity it creates for your country or for the society at large. And it seems like the implication there, Miron, is that by aiming too small in somewhere like Germany, by just thinking about what will this do for me and my family versus

• 38:08Geoff Nielson?

  being plugged into a greater ecosystem, it does ultimately, when you play the tape forward, create less prosperity within the country itself. Is that fair or is that too much of a stretch?

• 38:21Speaker 00

  No, of course. And it's not just about creating a technology. I think the way that entrepreneurship diffuses throughout the society, the way that you get not just one cycle of innovation, but multiple cycles of innovation, is that it's usually not people working in isolation. It's more people who leave successful companies then go out and create their own successful companies. And the reason for that is startups and entrepreneurship is a very applied discipline. And people who've seen it happen in one company can then go out and then replicate that success elsewhere. You mentioned you're having seen that movie before. That was exactly the analogy that a venture capitalist sort of mentioned to me, that

• 39:02Speaker 00

  early employees in an existing successful startups are way more likely to create another successful startup than somebody coming out of a business school or somebody who just in isolation decides to start a company because they've seen that movie before. They've seen how to raise capital. They have seen how to deal with regulators. They have seen how to deal with all the problems that you have to deal with as an early-stage company. And again, if you don't have a system where your early employees get rich of an exit, if it's all about one or two founders making all of the money, you are less likely to see those repeat cycles of innovation. And that's what we've seen in places like the UK. And then that is especially what we've seen in places like Germany.

• 39:48Geoff Nielson?

  There's sort of an implication I'm picking up on, and maybe it's right, maybe it's not, that some of this, especially when you look at the US relative to the Europe's and the India's of the world, that it is zero-sum and that the US is winning at their expense and that the US is still ascendant here and these other countries are in decline. Now, decline is a strong word, and I'm using it deliberately. But is it zero-sum? Is it a case of the pie itself growing? Can these countries still be successful and get ahead and be prosperous with this sort of technological hegemonic setup?

• 40:29Geoff Nielson?

  Or does something structural need to change to prevent spiraling into a deeper decline?

• 40:36Speaker 00

  I think both can be true. And I think different things are true between the US and China versus the US and China on the one hand and the rest of the world on the other. Whereas I think with the US and China, it is genuinely a case of the pie getting bigger. But then the problem is, since these are two big hegemonies, their relative importance matters a great deal to them. So even if in absolute terms, both are doing immeasurably better than they were 20 years ago, whether the US comes out on top or China comes out on top is enormously important to both of them. I often say the main thing that's happening in the world is not what we often talk about, which is, is the US winning? Is China winning? It is how both of these countries are opening a massive gap between themselves and others.

• 41:19Speaker 00

  And that's where it's the absolute difference between two countries and everyone else. If you look at the year 1990, the US share of global GDP was something like 25%. A quarter of all global GDP was the US. And China was around 1.9%. If you fast forward to today, China is responsible for about a fifth of global GDP, 20%. It's multiplied 10-fold. The US is still responsible for a quarter of the global GDP. So despite all the talk about the US-China competition, China has not eroded America's share of global GDP. It has eroded the share of other rich world economies, like those in Europe. And the US has actually been doing better relative to places like the economies in Europe.

• 42:04Speaker 00

  In both absolute terms and in relative terms, the US share of G7 GDP has gone up and not down over the past 30 years. So I don't think it's a question of the US being in absolute decline. I think, is it in decline relative to China? That is a much more nuanced question. And there can be many different answers to that. But I think both answers can be simultaneously true, that you could be doing better in absolute terms, but worse in relative terms. But not worse in relative terms vis-à-vis Europe, but only worse in relative terms vis-à-vis China.

• 42:41Geoff Nielson?

  Well, and it's really interesting, and I'm glad you put a fine point on it, that it seems like there's still an open race for who's gold medal on the podium and who's silver medal on the podium. But the reality is, it seems like the gap between silver and bronze is immeasurable, right? There functionally is no third spot. There's those two, and then there's everybody else who's left way behind and it feels like is only getting farther behind, right? Like, the gap is widening, it's not shrinking. And I think that should be a really scary prospect for an awful lot of people in an awful lot of places. Is that reversible or not any time in the next few decades?

• 43:26Geoff Nielson?

  Do you have prescriptive guidance for what to do if you're not in the US or China? Or is the answer just try to in some way strap yourself to one of those two economies to unlock more prosperity?

• 43:40Speaker 00

  So just to comment about the first part of your question where you talk about, it seems that the bronze medal doesn't really matter at all. And I actually deal with this question in the book, which is, if you were to give the bronze medal to somebody, who would it go to? Everyone has a sense that the US and China are in one and two. Where would you put each? That can be debatable. But who's number three? And by most numerical measures, you would say that number three is a place, a country like the UK, which is the only country other than the US and China that has produced more than $100 billion startups. If you go to the UK, it doesn't feel like it's a country that is winning. If you talk to anyone in the tech industry, a venture capitalist, they would feel like they're losing. And the simple answer to that is just the sheer gap between them and numbers one and two.

• 44:25Speaker 00

  If you add up the combined market cap of every single tech company in the UK, it's about $1 trillion at a time when Nvidia alone is worth about $5 trillion. So in terms of numbers, the outcomes are really skewed. In Europe today, the idea of a trillion-dollar company is still something that feels almost comical, that is something that has become a fairly mundane unit of measurement in places like the US. The top 10 largest companies in the US are at this point all trillion-dollar companies. And in Europe, you don't even have a single one. Even in China, you don't have a single trillion-dollar company. It's only in South Korea and Taiwan that you have them. And that's because they're linked to American companies. In terms of other places, what can they do?

• 45:10Speaker 00

  I think a third technology pole emerging is at this point fairly unlikely. The idea that Europe can suddenly become relevant, or even India, or even places like Latin America, I don't think so. I think sovereignty also is going to be a distant dream. What countries can instead aim for is something that's more like indispensability rather than sovereignty, which is find a place for yourself somewhere in the technology stack where you're irreplaceable, a Samsung, for instance, or a TSMC, for instance, SK Hynix. And it's not just that you need to have the technological capability. If you look at countries in the Gulf, for instance, they have become massive investors in the American AI boom.

• 45:51Speaker 00

  So the Gulf doesn't really have a very strong educational infrastructure at the higher education level in STEM disciplines. I wouldn't compare it to China. I wouldn't compare it to the US. But they are very big stakeholders in the American data center boom. And the Norwegian Sovereign Wealth Fund has also done something similar. You would be hard-pressed to name any single Norwegian tech company. But for the Norwegian Sovereign Wealth Fund, which is one of the biggest in the world, the top five holdings are in American tech companies. So I don't think it's a question of all hope is lost because in relative terms, there are some countries that are doing better than others. I would name South Korea.

• 46:35Speaker 00

  I would name Switzerland. I would name Sweden, where you have companies like Lovables, Spotify, Klarna. So I do think that there are ways to become more relevant, even if the dream of becoming this kind of apex predator in the tech economy is only one that two countries can afford at this point in time.

• 47:00Geoff Nielson?

  So if we're thinking about prosperity, if we're thinking about increasing innovation and we're thinking about, I guess, wealth and success in general, it's interesting to me and I'm just kind of unpacking now. We've talked about the US and China and I'll pick on the US for a minute. We say the US as though it's the entire country, the entire economy. But the concentration we're seeing there in terms of the few number of tech companies, where that wealth is concentrated feels like it's substant-- I say feels like, I'm sure you have more stats than I do. It feels like it's substantially more concentrated than it has been historically. And maybe when you look at the oil tycoons or some of the barons of the past, it was even more so.

• 47:45Geoff Nielson?

  But certainly, when you look at the last half century to century, it feels very concentrated there. Is that sustainable? Is that good? And let me qualify that a little bit. I'm thinking again about being prescriptive, about business leaders who are internationally dispersed or even in the US, because it feels like implicitly the guidance here is just tether yourself in some way to one of these big companies in the US or China, because that's where this concentration of wealth is. Is that good advice? Is that how we expect the economy to stay shaped globally for the next decade or so?

• 48:26Geoff Nielson?

  Or is that a concentration of risk and there's a different approach we should look at?

• 48:32Speaker 00

  So the concentration is absolutely real. And that's the main message that I came out with at the end of my research process as well, which is what I expected was to say that things are decentralizing. And instead, the answer was no, they're centralizing more. To just give you one stat, last year, over $200 billion was invested only in AI in the state of California, which was-- and this is according to the Stanford AI Index, which was way ahead of the second on the list, which was Colorado, which was about $20 billion. And Colorado even for-- just because of a couple of companies like Palantir, et cetera. It's not because it has a very impressive sort of tech ecosystem. And the third on the list was New York with something like $13 billion.

• 49:14Speaker 00

  So Colorado is 20 orders of magnitude less, 10 orders of magnitude less, and then New York is 20 orders of magnitude less. So the concentration is real and it's unlike anything that we've seen before. And even if we might say that there's more money going into the tech sector, it's all going into the same companies. It's all going into Anthropic and OpenAI. It is today still hard for the median entrepreneur to raise money as it was five years ago, as it was 10 years ago. So I agree with you that everyone's looking for a safe investment and everyone is doubling down on the same few companies. The systemic risk that it creates is something that you would not be that unfamiliar with,

• 49:56Speaker 00

  which is the valuations of these companies like SpaceX, like Anthropic, like OpenAI. SpaceX is valued like-- not a space company, it's valued like an AI company. And even in its S1 filing, you could see that they pitch themselves as an AI company because of the XAI stake. And so their valuations are at this point completely untethered from the underlying business. It's not based on their recurring revenue. Benedict Evans, who used to be a partner at A16Z, said that the valuations of the top 10 American tech companies, only about 5% of these valuations are based on hard statistical evidence.

• 50:36Speaker 00

  The rest is tweets, podcasts, hype, and you really can't make any rational calculations for these sorts of things. So I agree with you, but I don't know what the policy prescription for that would be because there's a lot of dispersed actors making the same risk averse bet, which is let's pile into the same number of small companies. Because as this big hedge fund investor in the US said, what makes SpaceX so valuable is just how valuable it is, right? And so they see these big trillion-dollar companies and say, this is where we park our money for it to just be safe.

• 51:20Speaker 00

  And so I think people are maybe taking less entrepreneurial risk today on a systemic level than they were taking 20 years ago, 30 years ago.

• 51:27Geoff Nielson?

  Well, and it seems like there's sort of an unspoken piece there again, where a lot of these feel like key person risks in the sense that, yes, Anthropic is a much newer company, but you've got guys like Dario who have been in this sphere for a while and are connected. And it's not just the companies, it's the people running them. And I have to believe, if Elon Musk gets hit by a bus tomorrow and he's gone, SpaceX loses 90% of its value because it's not even the mission. It's a vote of confidence in the man at the helm. And it feels like it's entered this very oligarchical era globally where there's

• 52:07Geoff Nielson?

  just a handful of people that we're collectively betting on and pouring money into. I mean, A, would you agree with that? And does that, in your mind, create a really high level of systemic risk here? I guess to ask a follow-on question to that, assuming you agree with it, how high is the risk that a lot of this valuation could just disappear overnight and upend this entire structure that we've been talking about so far?

• 52:39Speaker 00

  So on the point about the oligarchy that you mentioned, I think it's an interesting question to at least ask whether America is the technological oligarchy, right? And I interviewed Margaret Umarra, who wrote the history of Silicon Valley called The Code. And I asked her exactly that question, do you think America is an oligarchy? And a few years ago, she brushed off that question because it seemed like an absurd question to ask. But in a time when there's one individual who is worth as much as the Indian economy, Elon Musk, is it really that absurd a question to ask? And even this question of, what if he gets hit by a bus? That might sound like maybe an exaggeration, but if I were to reframe it and say, what

• 53:23Speaker 00

  if he overdoses on ketamine, right? And it's a real risk. It ought to be in the S1 filings. And I agree with you. And in terms of valuations and whether they can switch quickly, I think there's an interesting parallel between what you're seeing in the US today and what you saw in Japan back in 1989. If you look at the US today, there's something like the eight or nine most valuable companies in the world are all American. It was exactly this back in 1989, where the top nine companies in the world were all Japanese, as hard as it might be to imagine today. Just the most important Japanese company, I think it was called NTC, was worth more

• 54:04Speaker 00

  than the top six American companies combined, which is almost an exact parallel of what you see between the US and the rest of the world today. And within 10 years, it was exactly the opposite, where there was hardly any-- there was hardly any Japanese company left in the top 10 anymore and they were all populated by Americans. So has it happened before that a country which just has this unassailable lead, as measured by market cap and as measured by the most important companies in the world, that picture flips entirely over a fairly short amount of time? I would say that that's happened before. People often compare Japan to China in the sense of-- people often wonder, is China like Japan?

• 54:47Speaker 00

  A country that is rising very quickly and then suddenly loses relevance. But I think there's an equally sound analogy to be made between the US and Japan, which is could the US be like Japan? Which is, it is the absolute unassailable leader, but very quickly, things change. And I think an important metric over there would be that companies that are far less valuable than American tech companies, like Moonshot or Jipu, they are producing products that are very competitive with these frontier American labs.

• 55:26Speaker 00

  The Stanford AI Index put the performance gap between American models and Chinese models to as little as 2.7%. So it was a 2.7% performance gap for a delta of 23X when it comes to the amount of money that is invested between the US and China. So should American companies really be worth that much if for a fraction of the cost, you're seeing almost capable models coming out in China? And it's not just about almost capable models. China's producing better EVs at this point in time, better solar. Unitree is, by popular consensus, the most capable humanoid robot company in the world. So can these valuations collapse?

• 56:08Speaker 00

  I think any reasonable person would say that that possibility absolutely exists.

• 56:14Geoff Nielson?

  See, that's very interesting to me because I can, for anyone listening to this, I can see how it may sound like we're talking about two incompatible messages. One is that it's more and more concentrated, the US is getting farther ahead, China's getting farther ahead. And the other one is that the possibility of a collapse is real. And, you know, I'll put words in your mouth, but to some degree, it's starting to feel inevitable. Not the complete collapse, but that there's, you know, a correction of some sort. And so I guess to try to marry those two, and maybe there is no way to marry them, is it that these companies can lose, I'll throw a, you know, a made up number out there, is it that they can lose half of their value and

• 56:54Geoff Nielson?

  that doesn't change the overall narrative, the overall global positioning? Or is there a world where there's a fairly substantial likelihood that should these valuations collapse, that it does completely change the chessboard globally?

• 57:10Speaker 00

  I think it doesn't change the chessboard other than vis a vis China, right? Because, like, you know, even, so I think that's where the narrative becomes compatible, right? Which is, even if on the financial level, the valuations might be inflated, I don't think you can really argue with the fact that SpaceX is today the best space, private space company in the world. You know, I don't think you can argue with the fact that America has the best AI ecosystem in the world. And by AI ecosystem, I mean Nvidia, OpenAI, Anthropic. So even if, you know, the question really is, should they be worth one tenth of what they're worth today? Should they be worth, you know, one fifth of what they're

• 57:53Speaker 00

  worth today? And even if that is the answer, they're still more valuable than the Chinese tech ecosystem, right? So I think both answers again can be true, which is, they can be worth vastly less and still be the most technologically capable ecosystem out there. And maybe that is the systemic shock that they really need in order to sort of up their game. I was recently talking to a professor at Caltech, and they were lamenting about the fact that, you know, you cannot, number one, that undergraduate degrees in computer science in the US have become commoditized. And number two, just because somebody has a CS degree from an American school, does not mean that that person can even code. So you can't really look at a person's credentials and say that this person is good at what

• 58:38Speaker 00

  they do. At this point, you know, prestigious American universities have essentially become signaling mechanisms. You get into Stanford, you drop out, you start a company. But that doesn't mean that on a technical level, you know, you know what you're doing. In China, things are different, right? If you went to Shinghua and you graduated with CS degree, you can pretty much, you know, be very assured that this person knows, you know, the technical side of things very well. So I think maybe that is the correction that is needed in the US in order for people to double down on, you know, on the technical side of things and saying that, you know, it's not about company valuations, it's not about, you know, the hype, it's more about getting the technology right, which is what China is doing better right now.

• 59:22Geoff Nielson?

  Is the implication there that China may be better positioned than the US in the next handful of years because of that, that structural difference? Or is it more complicated than that?

• 59:32Speaker 00

  So I think an interesting thing about China and the US is that if you look at China's tech industry, it is entirely Chinese. You know, there are very few people, you know, the populations of places like Beijing and Shanghai, less than 1% of their populations are foreign born. Their tech industry is for all purposes, a Chinese tech industry. If you look at the American tech industry, you know, that is primarily driven by immigrants, you know, not just from India, but also at this point, China, if you go to just about any American AI company, Nvidia, if you go to OpenAI, Anthropic, a lot of the people in their core technical teams, even today, despite this Cold War-like situation

• 1:00:12Speaker 00

  between the US and China, come from China. And then you have, you know, engineers from Eastern Europe, from other parts of the world. And I do think the US is alienating a lot of international talent right now. So if even, you don't even need to talk about something happening on a broad sort of like economic level. If even something as small as 50% of the talent that is making the US its home stops coming to the US, if they stay in, in the countries that they're from, which is a scenario that can happen, given the fact that over the past five years, enrollments from China has dropped by a third in five years alone. So could that happen in India? Could that happen in Eastern Europe? So I

• 1:00:55Speaker 00

  think in that sense, the US is already very reliant on, you know, non-US sources in order to shore up its technological capabilities. So, yeah, so I don't think it's completely out of the question that China can, in relative terms, kind of pull ahead of the US for the simple reason that the foundation of the Chinese tech industry is Chinese, the foundation of the American tech industry on the talent level is very international.

• 1:01:24Geoff Nielson?

  That's really interesting to me because I can see it, even the way you describe it, as both, as both an advantage and a risk. And it seems like, and I'll put words in your mouth here, but there's, there's an implication, I'm hearing, or maybe I'm just biased, that that actually could be a structural advantage, but for the US to take advantage of that, it's really all that needs to happen is the government needs to butt out and let that continue to be an advantage versus introducing policy that erodes that advantage. Is that fair? Or is that too far?

• 1:01:57Speaker 00

  Yeah, but I would look at the direction of travel, right? Which is, I absolutely do think that the fact that, like, you know, everyone between the ages of 14 and 16 in the world, you know, their big dream is they move to the US, they go to an American school, they work for an American company. And that's a huge advantage that the US has. But the direction of travel in the US for the past two to three years is in the opposite direction, which is, the US has been trying to stem the flow of international students coming to the US, not just from China, but from other places as well. So I think, you know, it's, it might sound counterintuitive, it might sound like, you know, like the US is shooting itself in the foot, but you do see governments around the world making catastrophic

• 1:02:42Speaker 00

  decisions, right? It's, it's not that unlikely that just because a decision is going to result in enormous self-harm, that that means that it's not going to be made, right? And I see, I think this conflation of illegal immigration, you know, this mass migration on foot with talent migration in the US and now in Europe as well, is these two places, you know, scoring massive own goals against themselves.

• 1:03:09Geoff Nielson?

  Well, it's interesting and it's cynical because I feel like we've talked about the state a few times today. And I don't know that we've talked about them yet in a positive light. Like, it feels like it's somewhere between, at best, having no impact or just speaking but not acting, and at worst, as you said, catastrophic self-harm and own goals. Is there a positive role here? Or is it, is it actually a good thing when the state plays a smaller role?

• 1:03:38Speaker 00

  I mean, the US is, I mean, the message that I came out with the book really is that the US is by almost any objective measure, doing really well, right? The question really only is, should the valuations be as inflated as they appear to be right now? So clearly, the US is doing something right here. For it to, even today, despite all the debate about the US and China and, you know, the rest of the world, it is by any objective measure, the most, is the place to be if you want to be in the tech industry. It is just that in certain areas, there are troubling developments, right? In the talent area, I would see there are certain troubling developments. I would say, the state can

• 1:04:22Speaker 00

  play a negative role as well. I'm not so sure that replicating the golden share model in the US, you know, with the US taking shares in Intel, for instance, saying that we will take shares in OpenAI, we will take shares in Nvidia, perhaps. I don't know whether that is positive state intervention in the tech economy or not. The golden share model, as in China, was introduced in 2020, largely in order to bring the Chinese tech industry in line, and largely in order to have a government say in the Chinese private sector, which I think at that time in the US was seen very negatively, right? That this is almost, you know, this is not just state investments in the, in the private

• 1:05:07Speaker 00

  sector, this is the state trying to control the private sector quite literally. And I don't know whether replicating that same model in the US is things moving in the positive, in the positive direction. So I think what the US does well is well-known. Immigration is, does really well, like, funding of higher education, it does really well. Like, you know, even today, you know, the US produces more Nobel prizes in the sciences in any given year than China has in its entire history. So I think if we have focused more on what might not work out, at least in my view, is because what the US is doing well is, is just so obvious, right? So.

• 1:05:49Geoff Nielson?

  That's fair, and it makes a lot of sense to me. Maran, you've researched this area quite a lot, and we've covered a lot of ground today. I'm curious if you have any other geopolitical, technological, economical predictions in the next handful of years that we haven't covered as a result of what you've unearthed.

• 1:06:11Speaker 00

  I think on a broader level, maybe I'll just say a couple of things. I think on a broader level, where technology comes from is going to be a bigger and bigger part of what we end up talking about. And technology competition being at the same level as economic competition, geopolitical competition, security competition is going to be a bigger theme. Xi Jinping himself, at the recent World Artificial Intelligence Conference in Shanghai, said that technology is the main arena of international competition, and the East is rising, the West is declining. So it's very much a part of Chinese vocabulary today. It sounds like an unremarkable thing to say, except 20 years ago, when the iPhone came

• 1:06:54Speaker 00

  out, nobody really cared about the fact that the iPhone was designed in California and manufactured in China. If you're in the UK, or if you're in Russia, wherever you might be, it's just a coveted sort of object that everyone wants. But the question of technological sovereignty, the question of where was this made, these things are now front and center. And any major piece of tech that comes out, the main question is no longer, how good is it? How cheap is it? The main question is, oh, China's becoming more powerful because it has BYD, or the US is becoming more powerful because they banned Metos, and now all of a sudden, Europe cannot access Metos anymore without US permission, right?

• 1:07:36Speaker 00

  And so I think just this question of where technology is made is going to become a bigger and bigger thing going forward. I think the second thing, I don't know if this will happen or not, but I think it's an important question that we need to go into, which is something that you asked in the very beginning of this conversation, which is, what should innovation really mean, right? In the US right now, innovation is what OpenAI does, it's what Anthropic does, it is what private startups do. But if you go to Singapore, what the government does is also innovation. And in the US, the idea that the government can be innovative is almost laughable. It's something that barely even ever comes up, even though it's a perfectly legitimate expectation to have.

• 1:08:20Speaker 00

  So in Singapore, on the other hand, they have something called GovTech, which is the government agency, which is as worthy of being talked about as any startup that might operate on its territory. If you look at a country like Switzerland, they might not have a Google or a Facebook, but they have something such as the Swiss train system, which is a public, which is a state-owned enterprise. And it connects the entire country, it has been entirely electric since the 1960s, runs on renewable energy, and at a time when we look at electric vehicles as clean tech and sustainable tech, the idea that there's a country out there, which since the 1960s has been running its entire public transport system on sustainable energy, sort of shows

• 1:09:02Speaker 00

  you that it doesn't just need to be venture-backed companies. You can have big ideas in tech that come packaged in alternative institutional forms. Bitcoin did not come from a company, the internet did not come from a company. Why is it that today, the entire focus of innovation is venture-backed enterprises? And why aren't we looking at alternative models, like what we see in Switzerland, in Sweden, in South Korea? Why can't old companies innovate? So I think that would be the other question that ought to take more oxygen.

• 1:09:40Geoff Nielson?

  I really, really like that framing. And I'll maybe even open the aperture a little bit more and frame it as saying that innovation can come from anywhere, whether that's geographical, or whether it's not just these frontier AI labs, but it can come from the government, it can come from older companies, newer companies. And that, to me, is a really exciting prospect. I want to continue down that road a little bit, because there's an area here we haven't really covered much ground in yet, which is that, at least on paper, a lot of our audience for these types of conversations are technology leaders and their business leaders across the English-speaking world. Given that innovation can come from anywhere, what sort of advice would you give people

• 1:10:25Geoff Nielson?

  who are in governments or in companies where they want to play a larger role in innovating, or they want to better take advantage of positioning themselves in the value chain or innovation landscape at a bigger scale?

• 1:10:42Speaker 00

  I think it would be to look for it in places that you haven't been looking for it traditionally, and to maybe sort of widen your peripheral vision beyond the things that we always talk about, the OpenAI and sort of Anthropic's of the world. Recently, CXMT became the most valuable company in China. Its largest shareholder is not a VC fund, it's not even a founder, it's not a big tech company, it's a city. It's the city in which it was founded, Hefei. And that, to me, is not just an innovation at the level of a product or a service, it's innovation at the level of how the financial machinery behind innovation actually operates.

• 1:11:26Speaker 00

  So for me, that is innovation at the level of venture capital being invented, right? It doesn't need to be a private VC fund. Cities can also begin to invest in companies as well. And that way, you see also not just that cities can then build the entire infrastructure around those companies in order to help them succeed, but also much of the friction that you see between these very successful tech communities in the US, like Silicon Valley, between the tech companies that operate there and the wider community, which has become a persistent theme in the politics of California and of San Francisco and much of the Bay Area. That could be less of a thing if the city kind of buys into, financially in a very

• 1:12:11Speaker 00

  direct way, into the success of the companies that operate there as well. So I think there are plenty of interesting models of innovation all over the place. It's just that all the airtime is occupied by the same two or three stories. And I think there are plenty of companies out there that are worth investing in more than these hyperscalers for which they have most of the value. If at this point in time, you invest in SpaceX, you are investing in SpaceX not to benefit from the growth of the company, but simply to preserve your capital. At this point, most of the growth has already gone to the early investors. And I would say that is true for almost all American hyperscalers.

• 1:12:52Speaker 00

  If you're investing in them right now, you're not investing in the growth of those companies, you're investing simply to preserve the capital that you already have. The growth investments happened 10 years ago, 20 years ago. In other parts of the world, those investments are still very much there. UiPath came from Romania. There are plenty of companies, like SK Hynix is in South Korea. There are plenty of companies in other parts of the world where that growth prospect, that growth story, is there. Even if it might not grow to the same level as the American hyperscalers, they probably deserve the marginal dollar a lot more than the companies that have already grown as much as they were supposed to.

• 1:13:33Geoff Nielson?

  I think that's a really interesting point, and it comes back to the notion that even if so much of the capital is concentrated in the US, and even if the US is the ultimate destination for a lot of these innovators, that by looking globally, you can find some really undervalued companies, some really undervalued technologies, and have the opportunity to help them grow and grow your own capital in the meantime by doing that.

• 1:14:02Speaker 00

  And an interesting question to think about over there, which is, can anyone really name a truly global venture capital fund? And by truly global, I don't mean, oh, we have a few investments in Latin America, by which I mean, half of our fund is invested outside of our home market, right? Traditional, sort of like your private equity funds, this would not be that bigger deal. But even to like, I expected, when I started, I thought the venture industry was very durable, and I realized that it's really not. It's not even national. Like, most venture funds are very regional. They'd be investing in California and not in many other places, and their portfolios are highly skewed. Their home market would be something like 90%, and then everything else would be a

• 1:14:47Speaker 00

  marginal experiment. So I think there is still an opportunity for a truly global venture fund, which doesn't just operate at every stage of investment, but which operates across three or four different continents, which, to my surprise, is even today, in the 21st century, in the year 2026, not that common.

• 1:15:08Geoff Nielson?

  It's funny, when you said that, Maya, the implication I had was slightly different, which was that maybe it's just a reflection of the limits of humans and that when you look at, you know, VCs and who's running them, it actually is substantially more interpersonal and person-dependent than we would have it believe. And just when you boil it down to a person or a handful of people, their knowledge, the acumen they bring, ends up being hyper-local. And, you know, what you bring in terms of edge in Silicon Valley doesn't translate into China, it doesn't translate into Germany. That part, that part I could understand. So how, how might you take that next step

• 1:15:52Geoff Nielson?

  if you believe that global venture capital is the future and has the edge? Is it just by finding partners in other markets? Is it by leaning on technology? Or, you know, have I got my characterization of this completely off?

• 1:16:06Speaker 00

  I think, I think the US-China thing worked a lot better than maybe we think. If you look at Sequoia, for instance, it worked really well in China up until the point where it was really not its returns that compelled it to leave. It was, it was really state policy because of which it had to, it had to cut off sort of its China operations. And, you know, Neil Shen used to be a Sequoia partner and now he is independently one of the most, if not the most successful Chinese venture capitalists out there. Similarly, Tencent made some incredible investments in the US. It was at one point the third largest investor in Tesla. Tencent owns something like over 1,000 companies around the world, including some marquee names in the US.

• 1:16:50Speaker 00

  I think it was an investor in Discord. It was, it's a long list of companies. So I think if it can work well across the US and China, which culturally are very different places,

• 1:17:03Speaker 00

  I don't see why that model cannot be replicated in more places. I think, I agree with you that if on the one hand, there are certain aspects of it that are very interpersonal. On the other hand, how do you fund an early-stage startup? How do you incentivize employees? The idea that I sort of talked about earlier, the fact that these people have seen the movie before and they know how to start a company in a way that an entrepreneur in, say, Bolivia or in, in Eastern Europe hasn't. So just, you know, somebody from the US coming in with the knowledge of how to start companies and then helping local entrepreneurs be the conduits for actually rolling out the actual companies. I think if it's happened at the level of the US and China,

• 1:17:47Speaker 00

  I don't see why it can't happen with more country pairings as well.

• 1:17:53Geoff Nielson?

  That makes sense. That's a, that's a really good counterpoint and I appreciate the perspective there and the example as well with Sequoia. Maran, that's about, I mean, my head is still sort of spinning from the conversation we've been having. You've been giving me a lot to process. Are there any sort of areas we haven't covered that are in your sphere that you think are worth discussing? Or, you know, is this probably enough for one conversation?

• 1:18:16Speaker 00

  No, I think, I think I've, I've kind of bombarded you with enough sort of information. If it sounded like it's a lot of threads in every answer, it's really because it's like five years of sort of research that's coming out over the span of sort of 90 minutes. So I think we covered sort of some of the most important sort of themes that I wanted to talk about. And I think there are some things that did not come out in a lot of other conversations, like what should innovation actually mean? And some of the more abstract things. So, yeah, I mean, you know, compliments to you for actually sort of focusing on that rather than, you know, what's been happening in the news more recently.

• 1:18:53Geoff Nielson?

  Hey, the, the pleasure is all mine. This, you know, I, I never know what other people think of these conversations, but for me, this was a lot of fun. This was extremely insightful and I really appreciate, you know, the depth of your research and, you know, all the insights and, you know, analytics that you, you know, analytics in your mind as well as with data that you bring to the conversation.

• 1:19:12Speaker 00

  No, likewise. It was, it was great to talk about, you know, technology more globally at a time when people are only still interested in one or two places. So thanks so much for giving me the opportunity to talk about technology from a more global perspective. And I hope that that will at least make your audience more curious to look for tech companies and for innovation in places that they might not, might not normally think about.

• 1:19:36Geoff Nielson?

  I love it. Lots to think about. Thanks so much for joining.

• 1:19:41Geoff Nielson?

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