For those who reside in self-righteous echo chambers, this week was a disaster. Donald Trump turned fully against Ukraine, accusing it of prolonging the war with Russia before suggesting that Kyiv should hold elections and calling Zelensky a dictator. The US President clearly characterizes the decision to fight Russia as a mistake.

The single most important decision the Europeans need to make right now is not about Ukraine, but about their own readiness to plug the gap the US will leave as it reduces its security commitment to Europe. The US won’t go from everything to nothing, but it will leave Europe badly exposed to a potential future threat from Russia.

This is a time for the Europeans to really focus — something they are not good at. The first decisions to be taken by EU and NATO leaders should be a credible multi-annual strategy to raise defense capabilities to a level that provides sufficient deterrence and the first step needs to be implemented now. This could be a defense spending target, measured in percentage points of GDP, or it could be something more ambitious, like a target measured in terms of defense capabilities. And Europe should try to produce the weapons within its own borders, rather than reinforcing its dependency on the US. Rheinmetall, for example, is already expanding its manufacturing capacity for ammunition. There will be a lot of idle industrial capacity in Germany as de-industrialization proceeds.

Under-fire German Chancellor Olaf Scholz was right to say it is too early to talk about peacekeeping in Ukraine. It was a stroke of diplomatic stupidity by Emmanuel Macron to call an ill-prepared summit that ended up with a German chancellor storming out and telling the media about his irritation. This is a good moment for Mark Rutte, NATO Secretary-General, to show the leadership that national leaders are failing to.

The EU has to start reconnecting with reality. It was unforgivable for Ursula von der Leyen to classify Ukraine as the political priority for the EU. It absolutely is not. The EU evidently has no control over what is going to happen there. It is not even at the table. The European Commission should focus on its narrow mandate, the European economy, something over which it actually has some influence, and which is in need of urgent attention.

The Europeans are still shell-shocked by what is happening around them, which is due to the echo chamber effect mentioned above. Earlier this week on the BBC’s Newsnight, there was repetition of the most unchallenged lie of the entire war — that if Ukraine would only be allowed to fight a little while longer, Russia would collapse. Reputable newspapers have peddled the lie that Russia’s war economy would create hyper-inflation. It would eventually. But to turn Keynes on his head: Russia can stay liquid for longer than rational analysis would assume, especially when its stated enemies are still paying for its oil.

There are still calls for the West to send more money to Ukraine. Whether or not Ukraine could have won the war had different decisions been taken is a legitimate matter which will be discussed by historians. I doubted the claims of glorious victory early on, especially after the EU’s timid sanctions against Russia. Countries that prioritize their own comfort do not win wars.

Nothing that happened this week should have come as a surprise. Trump may not have been very effective during his first term, but he told us everything we needed to know. EU leaders chose to ignore him. Five years earlier, they chose not to use the eurozone’s sovereign debt crisis as an occasion to give the area a fiscal, banking, and capital markets union that it now so badly needs to catch up on investment. Weakness, after all, is a choice.

This is an edited version of an article which originally appeared in the Eurointelligence newsletter.

---

Wolfgang Munchau is the Director of Eurointelligence and an UnHerd columnist.

EuroBriefing

---

China is trying to catch up with America on artificial intelligence. The Wall Street Journal has reported that Zhipu AI — one of China’s six “AI tiger” LLMs — has released a new model that can rival leading US systems, including Anthropic’s Mythos, in cybersecurity tasks such as pinpointing security bugs. While this marks a milestone in China’s drive to catch up with Western AI capabilities, strong performance on a single benchmark does not mean it has taken the lead. Chinese models still lag behind their Western counterparts in broader capabilities, such as autonomous operation. Skepticism is therefore warranted before resorting to hysterical conclusions, but complacency about the geopolitical implications of China’s AI advances would be an even greater mistake.

On the infrastructure side, Chinese AI is still constrained by access to advanced chips, with American labs way ahead in computing capacity as well as investment. Analysis from earlier this year suggests that Chinese models are likely to be at least a few months behind those in the US. But they are still continuing to make progress, or that the geopolitical importance of AI will be decided only by whose LLM has ventured deeper into the technological frontier. The practical applications of AI, countries’ to capture foreign markets, and the application of AI into the real economy will matter just as much.

Here, China may hold an advantage. As with its dominance across many critical supply chains, Beijing may not need to produce the most advanced AI systems — only those that are affordable and widely deployable. In doing so, it could consolidate global influence by supplying functional, low-cost AI at scale.

Beijing seems to be pursuing exactly that path, developing an AI “open-source” strategy that offers affordable, widely available AI models for companies and individuals to use and modify as they wish. The production of the DeepSeek AI model, which matched the performance of Silicon Valley tools such as ChatGPT at a fraction of the cost for users, created goodwill among Chinese models with developers.

The four most popular models on OpenRouter, an AI hardware platform for developers, are now all Chinese. The goal for China is not only to win the frontier-model race, but to make its systems the default layer of AI adoption across industries and global markets. For most economies, the choice is increasingly between an affordable tool they can deploy now and a more robust one that may be out of reach.

And while the countries adopting Chinese models may be exposed to political pressure and cyber threats from Beijing, safer and more capable alternatives matter little if they are unaffordable. American AI companies are already under pressure to monetize products whose operating costs are rising. If Chinese open-source models become the cheap default for startups, universities, governments and businesses across the developing world, then America’s AI lead will be eroded from below.

Perhaps more concerning for America in the long run is how AI can give Chinese manufacturing even more strength, through the ongoing integration of AI as a general-purpose technology. China’s new Five-Year Plan mentioned AI more than 50 times and includes an “AI+” action plan aimed at spreading AI across the economy.

Beijing has been pioneering automation of its critical infrastructure for years, with promising recent results in increasing warplane production capacity. In that regard, China’s open-model strategy and manufacturing dominance will reinforce each other. Cheap, adaptable models accelerate deployment across the real economy while those deployments generate real-world data and use cases that can feed back into further model improvement.

The United States should not dismiss the importance of its lead in the AI race. That lead worries Beijing, not least because a more automated Chinese economy would also become more vulnerable to AI-generated cyber threats. But nor should Washington assume that China cannot catch up with American capabilities over time.

This AI competition represents part of a broader struggle over tech supply chains and geopolitical influence. Decisions over whether to adopt US or Chinese models could produce a more fragmented global reality, with different regions relying on different cloud providers, chips and security structures. The result will likely be a global economy which is divided into competing spheres, rather than one which produces a single winner.

---

Miquel Vila is a political and geopolitical risk consultant focusing on industrial strategy, critical infrastructure and global supply chains.

miquelvilam

---