Soho House, the London-based private members’ club empire boasting chains across the world, has been bought for £2 billion by American investors. Alongside more debt, which is unlikely to help the already cash-strapped business, the new Soho House has also added Hollywood actor Ashton Kutcher to its board.

While Soho House was only founded in 1995, it tapped into a more longstanding British need for social spaces with distinct identities. London’s private members’ clubs stand out as a relic of an age when membership and association were considered a fundamental part of British life. According to research by the Centre for Democratic Business, the UK had over 4,000 members clubs in the Seventies; today, the total is less than half that.

Walk around any deindustrialised town or city in Britain and it’s easy to find buildings that used to be miners’ institutes, Conservative Clubs or branches of the Women’s Institute. Even golf clubs, a barometer of Middle England, have seen their memberships decline. Trade unions, pubs and nightclubs are all struggling according to research earlier this year by Power to Change. Associational life appears to be on life support, at a time when we need these spaces more than ever as concerns about social cohesion in our communities mount.

We have failed to sustain these institutions because the decent industrial employment that sustained them has gone. In May 1976, UK exports of goods comfortably outstripped exports of services. Today, we export 30% more services than we do goods. In 2021, creative and cultural industries made a total of £54.73 billion of exports, or 8.35% of total UK exports — more than double the figure from a couple of decades ago.

The irony is that Britain may have become a cultural and creative superpower, but it is struggling to keep hold of the very businesses that we have come to rely on to pay our way. Soho House is just part of over 1,000 mergers and acquisitions in the sector since 2013 from inward foreign investors. Cinema chain Curzon has been bought by private equity backed by the UAE. Film studios Bray Studios and See Saw Films have been bought by American and French companies respectively. Even clubland’s staple newspaper, the Daily Telegraph, has been purchased by US investors.

British leaders may think that creative and cultural industries are the country’s economic future, but it probably won’t own them. The profits they make will increasingly be sent overseas, along with the net £160 billion that has left the UK since 2010 and gone to foreign investors. To buy what we need from the rest of the world, we have to sell our most profitable assets, including our creative industries.

This reliance on services is a comforting story that we tell ourselves. We are “better” than other economies which must do the grubby trade of goods and raw materials. We are the global cultural elite. The truth is that we may have great cultural and creative power, but no major economy can live off private members’ clubs, films and newspapers. To keep our great cultural and creative businesses, we will have to put as much effort into rebuilding our homegrown industrial capacity as we do our creative industries. Alternatively, we can wait around for the news that Matt LeBlanc has just bought the Athenaeum.

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Andrew O’Brien is the former Director of Policy at the think tank Demos and currently Head of Secretariat of the Independent Commission on Neighbourhoods. He writes in a personal capacity.

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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.

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

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