Many in Europe have convinced themselves that the EU’s relationship with Russia will not normalize after the end of the war in Ukraine. However, it seems that the Trump administration has other plans. It could use normalization, especially in the energy relationship, as a carrot to try and persuade Russia to accept a peace deal. If Washington were prepared to pull that lever, Europe would find itself in an intractable position.

The German newspaper Handelsblatt has reported that, according to Russia, restarting Nord Stream 2 is actively being discussed as part of negotiations. It is never easy to distinguish truth from rumor in times of war, but it wouldn’t be totally surprising if this were the case. Previously, the US has been interested in exploring energy cooperation with Russia as part of the peace talks.

It also wouldn’t be surprising if Russia demanded access to European markets directly through its pipelines. Gas is a source of revenue for the Kremlin. But, more than that, it is geopolitical leverage — especially if Russia floods the market with cheaper gas, driving out competition.

There are, however, multiple complications here. One is the fact that the pipeline is damaged, following a series of underwater explosions in September 2022. Another is the pending bankruptcy of Nord Stream AG, the firm responsible for building and running both Nord Stream pipelines. Handelsblatt has reported that an American investor is interested in taking over the firm and assuming responsibility for the pipeline itself. Based on how Donald Trump sees the world, it’s plausible that this is at least something his administration would support and attempt to facilitate. It bears some resemblance to both his “Gaza Riviera” plans and the Ukrainian minerals deal.

But it won’t be that simple to get Russian gas running through Nord Stream 2 again. Aside from the damage to the pipeline’s physical integrity and the financial troubles of Nord Stream AG, Germany has refused to issue a permit for the pipeline. Equally, the European Commission could halt any possible gas deal with Russia if it believes it would be incompatible with single-market rules, competition, or security of supply. Trump’s administration can lean on Germany and the EU to go along with any deal he wants. But it will be more complicated to resolve the legal mess that has ensued as a result of the gas shut-off in 2022.

A new paper from the Oxford Institute for Energy Studies outlines yet more reasons why Nord Stream 2 is likely to remain defunct. There is the matter of arbitration between Gazprom and the various companies that bought gas from it prior to 2022. In some cases, such as Uniper’s, arbitration decisions have allowed firms to unilaterally terminate their long-term contracts with Gazprom. In others, there may be awards that have to be paid by Gazprom to affected companies.

Complicating this further is that Gazprom, which is state-controlled, has engaged in its own proceedings against these firms in Russia, filing anti-suit injunctions and seeking its own damages. In an eventual deal, it’s conceivable that the Kremlin could get Gazprom to drop these claims as leverage. But this is not the case for the buyers. European governments also obviously cannot force arbitration tribunals to drop cases against Gazprom.

Ultimately, the fate of Nord Stream 2 and any future energy relationship between Europe and Russia will depend on the coercive powers and decisions of Trump and Putin. The Russian government can obviously bend Gazprom and the court system to its will. Although the US government doesn’t exercise such direct control, the Trump administration has proven capable of intimidating various firms into doing its bidding. This is not the case in Europe, where national governments and the EU simply don’t hold that kind of power.

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

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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