Gartner, a consultancy, estimates that between 2026 and 2030 countries outside America and China could add more than 50GW of data-centre capacity, much of it for AI (see chart 2). That would entail investment of $2trn or more. Yet the combined capital expenditure of all providers bar Chinese and American firms, including sovereign-AI projects and neoclouds, which rent out compute, will amount to only around $800bn over the same period. Someone else will have to foot the bill. America’s hyperscalers look like the obvious candidates. Alphabet, Amazon, Meta, Microsoft and Oracle are expected to invest around $5trn by the end of the decade, most of it on AI infrastructure. Between a fifth and a third of that is likely to be spent outside America, implying foreign investments of roughly $1trn-1.5trn. Few sovereign-AI projects can compete with that. For the cloud giants, this is an opportunity. For years they have sold private- and public-sector customers technological independence: data centres in their home country, domestic operating partners and guarantees that data will remain within national borders. Sovereign AI is a logical extension of this offer. The firms would provide customers control over where models are run and where the data are stored.
America’s restrictions on Anthropic both hinder and help this sales pitch. They help because the case for developing protection of any sort from the American authorities’ whims has become that much stronger. But they hinder because potential customers will now be wondering whether neoclouds might become yet another means by which America’s government can coerce other countries. Microsoft has acknowledged the concern. Even close allies, it notes, worry that dependence on American cloud providers could leave them vulnerable to a “kill switch”: an executive order, export restriction or other policy decision that abruptly cuts off access during a geopolitical dispute. The company called for explicit assurances from the American government that such powers will not be used against friendly countries. The idea is not far- fetched: last year Microsoft was obliged to suspend the email account of Karim Khan, the chief prosecutor of the International Criminal Court, after the Trump administration subjected him to sanctions. The impediments to sovereign AI, in short, are many and daunting. Full technological independence at all levels of the stack is nigh on impossible. Even less ambitious schemes may be cripplingly expensive, with uncertain benefits. AI infrastructure depreciates quickly. Chips become obsolete within five or six years; software evolves even faster. Governments could
spend billions on facilities that are outdated before they are fully up and running. Yet excess caution also carries a monumental risk: that countries leave themselves at the mercy of the AI superpowers for a technology that seems likely to make or break their economies in future. The quest for sovereign AI is therefore bound to continue, albeit in a circumscribed form. Governments will need to decide which parts of the stack they want to recreate at home and which dependencies are worth living with. Given the alternatives, even a little sovereignty may go a long way. ■ This article was downloaded by zlibrary from https://www.economist.com//international/2026/07/16/sovereign-ai-independent-of- america-and-china-is-a-pipe-dream
When China’s open-source AI is a trap America’s quest for AI dominance is scary. China is not the solution July 16th 2026 CHINA’S LEADER, Xi Jinping, is too stern to sing or dance in public—no Donald Trump-style piston-arm disco moves for him. This is a shame, for it would save time if he binned his planned remarks when the World Artificial Intelligence Conference (WAIC) opens in Shanghai on July 17th, and sang instead. Specifically, he could unleash his rich baritone on the hippy anthem, “I’d like to teach the world to sing, in perfect harmoneee.” Puzzled delegates might frown. But it would be cheering if Mr Xi sang: “I’d like to build a world a home, and furnish it with love.” And as a guide to China’s real-world AI ambitions, it would be about as helpful as an official speech. Communist Party media have offered previews of what the WAIC may hear, including such vapid phrases as “those who walk together go far”
and “global AI for good”. In China’s telling, benevolence explains why its large language models (LLMs) are open-source or open-weight (tech-speak for models that users can download, run on their own servers and customise). China calls open-source AI a “shared asset for all humanity”, notably users in less wealthy countries. The UN needs to lead a push for global AI governance, Mr Xi is likely to say in Shanghai. As new rules are crafted, China stands ready to offer a dose of “Chinese wisdom”. Decoding that jargon is not hard. In policy forums and papers, China promotes “inclusive” AI rules that respect different political systems and the sovereign rights of states. The contrast with America is deliberate. Successive American presidents and democratic allies have talked of embedding liberal values and freedoms in AI. China paints that as Western chauvinism. Instead, it offers countries non-judgmental AI for economic development, with no pesky questions about censorship, or about how foreign leaders gain or maintain their power. Mr Xi can expect a friendly hearing from many in Shanghai, and not just delegates from dictatorships. These are jarring times for users of American AI technologies. In recent weeks the Trump administration has readily revoked access to powerful AI tools, if it felt controls were needed to defend America’s national security or to maintain what the White House likes to call “AI dominance”. In European and other Western democracies, there is interest in using Chinese models to avoid total dependence on America. Alas, if countries fear domination by a control-obsessed superpower, they might not want to pin all their hopes on China. Strict rules require Chinese AI firms to uphold national security, social stability and “core socialist values”. Its cyber- regulators test LLMs, bots and agents for political compliance, bombarding them with tricky questions. The effects can be startling. Last year American researchers asked Miiloo, a baby-voiced, AI-enabled doll exported from China, about the status of Taiwan. The island “is an inalienable part of China”, replied the toy, and this “cannot be refuted”. As well as an obsession with control, China has a record of using its industrial might for dominance. Just ask Mr Trump, brought to heel last year when China curbed exports of vital, Chinese-processed rare-earth elements
and magnets. In the AI realm, China’s dream is to sell the world an ecosystem, involving Chinese-made models and tools, computer chips, data centres and cooling systems. Ideally, such infrastructure should be powered by Chinese-made electrical grids and renewable energy plants. Chinese officials present open-source AI technologies as a gift to the world. In reality, openness is a logical strategy for laggards. The performance of China’s top models remains some way behind that of the best American LLMs. That makes it rational for Chinese firms to woo foreign customers with cheaper models that users can download onto their own servers, as an alternative to expensive, proprietary American models. Within China, state planners want companies to develop clever AI applications to unleash a productivity revolution and a boom in consumer consumption. Deploying cheap, open-source tools helps with that. Even so, Chinese leaders appear to be reviewing that vaunted commitment to AI openness. There are many reasons why. Officials dread foreigners swiping tech secrets. In April Chinese regulators ordered Meta, the American tech giant, to unwind its purchase of Manus, a startup specialising in AI agents (no matter that the Chinese co-founders had moved Manus to Singapore). China has since tightened rules on all cross-border AI deals. Earlier this month Reuters, a news agency, reported on recent discussions between Chinese regulators and companies about possibly limiting foreigners’ access to China’s most advanced models. The performance of the best models is creating new reasons to think hard about AI safety. In Beijing earlier this year, several Chinese military types expressed shock at how America and Israel had used AI to find targets in Iran (even if Mr Trump’s botched war inspires scorn in China, broadly). If China develops near-Mythos-grade tools that could build destructive cyber- or bioweapons, its leaders would have good cause to fear giving adversaries or bad actors access to that technology. Finally, competition with America is set to intensify. Rumours abound that the Trump administration is weighing whether to stop Americans using Chinese AI models, at least for government work. National security is one explanation, but so is the growing popularity of Chinese LLMs as a cheap tool for basic tasks.
For all these reasons, embracing China is a risky hedge against a domineering America. Like a secret policeman in a hippy wig, China has always been an unlikely champion of openness. Party chiefs enjoy the propaganda win of painting America as a bully. They hope that low-cost AI will hook foreigners on Chinese digital infrastructure. But if openness ever clashes with national security or political power, they will choose control in an instant.■ Subscribers to The Economist can sign up to our Opinion newsletter, which brings together the best of our leaders, columns, guest essays and reader correspondence. This article was downloaded by zlibrary from https://www.economist.com//international/2026/07/14/when-chinas-open-source-ai-is- a-trap
Eli Lilly is reinventing the pharma business Demis Hassabis has a plan to harness AI safely How high can Red Bull fly? How to sell a kettle How SK Hynix became the king of advanced memory chips Meet the committee to buy Europe
Eli Lilly is reinventing the pharma business The world’s largest drugmaker is betting big on preventive medicines— and learning from big tech July 16th 2026 In 1876 Eli Lilly, a veteran of the civil war, founded a company in Indianapolis to bring scientific rigour to a medicines market awash with quack cures and miracle remedies. In doing so, he helped usher in the modern pharmaceutical industry. A century and a half later, the company that bears his name wants to reinvent it again. It has the scale to try. Lilly is the world’s most valuable drugmaker and the first pharmaceutical company to be worth more than $1trn, joining a club mostly dominated by tech giants. Since the start of 2023 its share price has more than tripled. Analysts expect its revenue to grow by around 15% a year, on average, until the end of the decade, more than three times the