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    • China’s AI Rise: Open-Source Diplomacy and Engineering Culture

      China’s AI Rise: Open-Source Diplomacy and Engineering Culture

      This piece is published in partnership with the French Institute for International and Strategic Affairs (IRIS).

      China’s rapid progress in AI challenges US leadership and the narrative of its “financial exceptionalism” that underpins the asset bubble. It demonstrates what can be achieved when open-source collaboration, technical expertise, and industrial strategy align. Rather than a genius breakthrough, this advancement is rooted in engineering skills, rational investment and industrial organization. China’s weak domestic demand also means it will increasingly include AI models and semiconductors as part of its mass export strategy.

      At the same time, China is pursuing a geopolitical ambition. By positioning itself as a champion of open-source AI, the country is leveraging technology as a tool for global influence, offering an alternative framework to proprietary systems built on unsustainable funding. This is striking given that open-source is ubiquitous in western digital technology and can even be seen as its foundation. Many U.S. AI labs, like the ill-named OpenAI, have drifted away from this logic amid the hype and financial excesses.

      Current developments rely on globally-shared engineering skills. The path to technological competitiveness is open to any nation – including those in Europe – that chooses to support broad scientific education, empower its younger generations, and reward inventiveness over bureaucratic inertia. With determination, resources, and industrial realism, catch-up remains within reach.

      The AI Race and the Open-Source Strategy

      The global AI landscape has been undergoing a shift far beyond Silicon Valley’s hyped labs since last year’s ‘Deepseek moment’. The United States still leads to some extent in cutting-edge AI models, which continue to set benchmarks in reasoning, coding, and multi-modal tasks. However, the rise of Chinese AI models like Moonshot AI’s Kimi K3 or DeepSeek V4 has introduced a new dynamic, with performance that rivals US models at a fraction of the cost.

      China is challenging its dominance in ways that seemed impossible to envision just a couple of years ago, based on the US exceptionalism narrative, but easier to anticipate with a pragmatic sense of traditional math and engineering skills. While lacking the funding scale of global AI labs, French startup Mistral demonstrated, even before Deepseek, that it was possible to develop a competitive model, initially with just about thirty top scientists.

      Chinese competition is economically and financially disruptive, to the point of challenging the stratospheric valuations of US tech giants. As a result, it is also starting to shake semi-conductor companies, notably in Asia, which have enjoyed a massive transfer of cash flow from American ‘hyperscalers’ spending unlimited amounts on compute and infrastructure.

      The cost advantage is particularly compelling in the era of AI agents, where iterative actions drive exponential token consumption. Companies are increasingly routing tasks to Chinese models to slash costs. In the race to scale AI, affordability is becoming nearly as important as performance.

      Beyond pricing, the philosophy and politics behind AI development is key. At the World AI Conference in Shanghai this July, Chinese leaders and tech executives positioned their country as the global champion of open-source AI. Unlike the US, where proprietary models now dominate, China framed its AI advancements as open, accessible, and collaborative, in contrast to the closed, corporate-controlled systems of Silicon Valley giants.

      By offering accessible, low-cost AI tools, China is courting the Global South and beyond. The idea is that AI should be seen as a public good more than a corporate asset. Of course, the devil is the details and it will be interesting to monitor how Chinese companies and policymakers will deliver on this commitment over time. However, it is striking that China is officially making its own the approach which has long been a discrete pillar of western tech, around Linux and far beyond. OpenAI was also originally launched on this promise.

      China’s open-source strategy serves three key objectives. It undermines US tech dominance by providing a viable alternative to proprietary systems. It builds a new tech alliance, particularly among developing nations that lack the compute resources for expensive models. And it lays the groundwork for a parallel tech ecosystem, one that reduces dependence on the U.S. and includes domestic hardware, alternative cloud platforms, and even standards-setting.

      While America relies on proprietary systems and export controls to maintain its edge, China is betting on openness and accessibility to win global influence. The temptation for the US to respond with a ban of those models risks backfiring, by dissociating its top companies from the achievements made in open-source AI, including at the national level, and leaving domestic users at the mercy of pricing schemes dependent on the ebb and flow of the bubble.

      Semiconductors and the Battle for Tech Sovereignty

      The AI revolution is not just about algorithms. It is fundamentally tied to hardware. Since 2022, the U.S. has progressively banned the export of advanced NVIDIA chips to China, citing national security concerns. These restrictions reached a fever pitch in June 2026, when the Commerce Department blocked all foreign nationals from accessing models like Claude Fable 5 and Mythos 5. The move forced a global suspension of these models, demonstrating the far-reaching impact of U.S. export controls.

      China’s response has been strategic. Huawei’s Ascend 910B, while still behind NVIDIA’s H200 or even H100, is now powering notable Chinese AI advancements. China’s leading semiconductor manufacturer, is inching closer to advanced nodes, though it still lacks access to top EUV lithography techniques mastered by Dutch firm ASML. To accelerate self-sufficiency, China has poured nearly unlimited money and effort into its semiconductor industry, aiming for a vast majority of domestic AI workloads to run on local chips within a few years. US restrictions, intended to cripple China’s AI ambitions, have rather accelerated its drive for self-reliance. Meanwhile, American firms like NVIDIA and AMD are progressively losing access to the lucrative Chinese market, as Jensen Huang recently acknowledged.

      This semiconductor race is not only about economic competitiveness, but also technological sovereignty. The US has long relied on its ability to control the flow of advanced chips to maintain its technological edge. But as China builds its own ecosystem – from chips to cloud platforms – it is creating a parallel market where its tech industry can thrive with fewer and fewer US components. The result points to an increasingly bifurcating global tech order, with implications on standards, supply chains, and alliances.

      These innovative strategies echo those employed by European nations – like France under Charles De Gaulle’s presidency – to catch up with American technologies, until a deep cultural shift allowed critical dependencies to go unchecked, culminating in the current industrial impasse.

      From AI to the New Military-Industrial Landscape

      The competition in AI and semiconductors is increasingly spilling over into military and strategic domains. It is visible in the rise of asymmetric warfare, where nations like Iran have demonstrated how low-cost, mass-produced systems can effectively challenge US and Israeli military superiority.

      China, too, is leveraging its technological advancements for military purposes. Its civil-military strategy ensures that breakthroughs in AI and semiconductors benefit its defense capabilities. Hypersonic missiles, autonomous drones, and AI-driven cyber warfare tools are examples of how China is combining commercial and military technology. This constitutes a key advantage in the new bloc confrontation, where the ability to rapidly deploy and scale advanced systems can determine the balance of power.

      Decades of deindustrialization have left the US and Europe dependent on global supply chains for critical technologies, from rare earth materials to advanced semiconductors. In the US and to some extent in Europe, chips acts are attempts to rebuild semiconductor capacity. Yet, for now, TSMC in Taiwan remains the linchpin of the global chip supply chain, leaving clients vulnerable to disruptions. Meanwhile, China’s increasing ability to produce its own hardware, however lagging behind some of the latest American designs at this point, gives it a degree of resilience that the US currently lacks. The democratization of military technology, driven by advances in AI, drones, and missiles, means that an increasing number of countries can now challenge traditional military superpowers.

      The Future of Tech Diplomacy

      As the AI and semiconductor competition intensifies, the Global South is emerging as a critical political battleground. The World AI Conference in Shanghai was not just a showcase for China’s technological prowess, but a platform for its technological diplomacy. By positioning itself as a leader in open-source AI, China is appealing to developing nations that are eager for affordable, accessible alternatives to Western systems.

      For many, the choice between expensive, proprietary American models and cheaper, open-source Chinese alternatives is a no-brainer. African and Southeast Asian startups, for example, are increasingly adopting Chinese AI models for applications in agriculture, healthcare, and finance, where cost and accessibility are essential. By offering training, funding, and infrastructure support, China is cultivating a network of partners that progressively reshape the global tech landscape.

      The future of international power will be determined by mastery of AI, semiconductors, robotics, and industrial production. Europe, in particular, must return to the engineering culture that drove its post-war industrial success – before mass bureaucratization, misguided industrial policies lacking scientific culture, and the importation of the US cultural crisis, without its top scientific programs or funding.

      Power will also be shaped by the nations who can offer the most compelling narrative for the world’s technological future outside of unsustainable financial trends. China’s open-source gambit is a clear signal. In a more multi-polar order, the ability to provide accessible, innovative, and inclusive tech solutions will be essential.

    • Behind the US Defeat Against Iran: A Crisis of the Industrial System

      Behind the US Defeat Against Iran: A Crisis of the Industrial System

      This piece is published simultaneously by the French Institute for International and Strategic Affairs (IRIS).

      The outcome of the US-Israeli war against Iran reveals a profound shift in power dynamics, centered on industrial capacity and a new paradigm for innovation. Superiority now depends less on the most advanced systems—or on GDP—and more on industrial organization. This organization must follow a modular logic: designing, modernizing, and producing systems rapidly by integrating diverse components and sustaining high replacement rates, to support a rational deterrent strategy.

      Beyond the strategic fiasco for the United States, what is most striking is not Iran’s military-industrial prowess—despite its economic constraints—but America’s difficulty in embracing this new global industrial paradigm. Western economies struggle to translate their historic scientific base into productive capacity. Chronic shortages of armaments are just one revealing symptom. The concentration of resources in asset bubbles, such as AI or real estate, plays a key role, as does the sidelining of essential skills. Yet, contrary to stereotypes, Generation Z—despite the educational crisis—would be capable of driving a rapid recovery.

      Industrial Capacity and Engineering Density

      Emerging economies, in all their diversity, increasingly rely on the classic skills of engineers and technicians—versatile and trained in large numbers. Many nations, like China, are pursuing industrial ascension on this basis, reflected in their economic policies. This shift is evident in military terms, both in Iran and on the Russo-Ukrainian front.

      Recent conflicts mark a crucial turning point. Drones of all kinds, ballistic missiles, and electronic warfare systems are reshaping the economics of war. The ability to mass-produce relatively simple devices is becoming more decisive than possessing a limited number of highly sophisticated systems.

      The appeal of Iran’s Shahed drones lies less in technological breakthroughs than in their industrial architecture. Design choices prioritize available components, standardized electronics, simple manufacturing, low costs, and continuous adaptation to operational constraints. Ballistic missiles follow the same logic of incremental improvement. This approach mirrors what emerged in the Russo-Ukrainian conflict: innovations do not come solely from design offices but also from production lines, the battlefield, and the ability to rapidly modify systems. This challenge is already pushing the United States to attempt a new approach to drone and missile production—massive and less costly.

      Behind the fantasy of replacing engineers and coders with AI, this evolution places the skills of younger generations at the heart of the race. Innovation depends on a vast number of engineers, technicians, and geeks of all kinds, capable of solving new problems. Emerging countries—particularly China, but also Russia and Iran—now train a higher number of scientific profiles than most Western nations. While attention remains fixed on the most (over)valued companies, the real difference lies in the depth of the technical fabric.

      This also influences decision-making processes. When an organization is largely composed of individuals with scientific understanding, choices naturally rest more on technological realities than on politico-administrative considerations. This is the paradox of the rise of centralized yet effective countries, as was the case with several European countries like France under Charles De Gaulle’s presidency, during their post-war industrial boom.

      Iran has many structural weaknesses. Even before their influence grew during the war, the IRGC already wielded considerable economic power, monopolizing resources and, naturally, prioritizing military objectives—often at the expense of civilian development. However, the industry is well-suited to the demands of a war economy, where industrial planning, the decentralization of production capacities, and organizational resilience are top priorities.

      Modularity Redefines Industrial Sovereignty

      The organization of value chains has evolved. Systems now rely on increasingly modular architectures, composed of electronic subsystems, embedded software, sensors, batteries, or RF components that circulate within international supply chains. In many of these segments, the Chinese industry now occupies a central position, lowering entry barriers for numerous countries. Developing a system no longer requires mastering all the necessary industrial processes from the beginning. The advantage often lies in the ability to integrate components, organize production that evolves with needs, while pursuing a gradual substitution strategy for autonomy purposes.

      Iran has largely built its military-industrial apparatus on this logic. Chinese supply chains have given it access to abundant and inexpensive electronics, while the modularity of systems facilitates their continuous improvement. Sanctions have forced Iran to adapt—modifying architectures or developing certain components locally.

      This openness does not diminish the importance of industrial sovereignty. On the contrary, competition now focuses on mastering critical dependencies. The goal is to identify the links whose loss could disrupt production capacity and concentrate efforts on securing them. Industrial resilience depends less on absolute autonomy than on the ability to continue producing despite sanctions, logistical disruptions, or infrastructure destruction. Moreover, the concept of economic warfare, developed by the United States, is now being mirrored by Iran—with the Strait of Hormuz—and China—with rare earth elements.

      China’s industrial lead stems from the gradual integration of value chains. Batteries, electric vehicles, electronics, rare earths, and robotics illustrate this strategy. U.S. restrictions on semiconductors exemplify the dynamic: they temporarily slow certain Chinese developments but also create strong incentives to invest in domestic capacities, such as those around Huawei.

      The rise of Turkey’s defense industry is another example of this industrial development trend, particularly in drones—where it established an early foothold—but also in armored vehicles, weapons, and ammunition, even generating interest in its fighter jet program. While it had long been confined to a subcontractor role in the automotive sector, the country now develops its military exports to the EU, addressing significant needs after decades of underinvestment.

      The Erosion of Western Productive Culture and the Potential of Gen Z

      The United States retains exceptional assets, such as its university system and energy independence. Yet, a growing share of capital is directed toward activities whose valuation depends primarily on hyper-inflated financial markets. Passive investments, major stock indices, and abundant liquidity create self-sustaining mechanisms where the most highly valued companies attract new flows.

      The technological potential of AI is undeniable. However, a significant portion of investment remains focused on consumer applications, driven by advertising revenue or the growth of digital platforms. Applications capable of durably transforming the productive apparatus—such as robotics—still occupy a secondary role.

      These shortcomings also affect skill allocation. The United States continues to attract some of the best scientists and engineers. Yet, cronyism often prevails, as seen even in the civilian nuclear industry with the so-called “nuclear bros”—entrepreneurs whose knowledge of nuclear physics is often no deeper than that of the two lead diplomatic negotiators.

      The situation in Europe appears even more concerning. Despite the persistence of cutting-edge scientific sectors, strategic decisions are increasingly driven by administrative or political logic. The FCAS fighter jet program is a case in point, with its insurmountable flaws evident from its politically motivated launch. The “Chips Acts” overlook the value chains linking electronics, materials, industrial equipment, software, and manufacturing demand. Issues are addressed in isolation, without an integrated vision or sufficient scientific expertise. Analyses often revolve around calls for a great financial leap forward in European construction, as seen in the Draghi report, rather than technological foresight. Setbacks in key sectors, such as batteries—with the bankruptcy of Northvolt—now invite a more gradual approach to substitution.

      As shown by various emerging countries, recovery remains possible. Never before has a generation had such broad access to scientific and cultural knowledge, open communities, or educational and catch-up content. Despite the educational crisis, much of Generation Z is developing—often outside institutions—a technical culture that familiarizes them with the design of complex systems.

      An economy does not regain its industrial dynamism through an accumulation of short-sighted political spending initiatives, but by empowering those who understand technologies, master production chains, and can transform innovation into productive capacity. It is on this terrain—far more than on that of spending, including military spending—that the hierarchy and prosperity of global powers will be decided.

    • The Art of the Non-Deal: Mishandling Negotiations Without Re-escalation

      The Art of the Non-Deal: Mishandling Negotiations Without Re-escalation

      Deescalation in the Iran war happened as the US administration sensed that continuation carried too much economic cost, as a result of the energy crisis. The argument holds more than ever, especially when it come to the threat of re-escalation. This process however did not lead to a phase of structured agreement but rather a halt to the conflict, with ambiguous rules. Markets have interpreted this situation as if it already meant long-term stabilization, assuming a level of general resolution that cannot be easily achieved.

      Donald Trump tried to leverage this situation as if it already contained the outline of a deal, and to accelerate the sequence accordingly. Although the Strait of Hormuz could be reopened with a limited, even implicit understanding, this aim has so far been defeated by the attempt to rush broad negotiations under extreme threats.

      His framing of Iran’s concessions on enriched uranium follows this approach, moving the public narrative ahead of the negotiation itself. He tried to transform deescalation into a political outcome that could be presented as victory to his audience, rather than as an exit from an unsustainable military stalemate. Political obfuscation surrounding a military outcome tends to disrupt any long-term stabilization.

      The nuclear issue does not compress easily, since it requires explicit steps. At the same time, Israel introduces a separate constraint, since its objectives and claims in the region contradict a prolonged deescalation. This too pushes the US side to rush negotiation, not because conditions are ready, but because the balance is unstable.

      Narrative over Negotiation

      Donald Trump has described Iran’s position on its nuclear program, particularly regarding enriched uranium, in terms that had not been agreed by Tehran. As in other negotiations, his tactics consist in attributing to the counterpart concessions that are expected rather than obtained, as if the process could be advanced by anticipating its conclusion publicly.

      This approach reflects an attempt to convert deescalation into a rapid political outcome that can be presented as a success. The objective is less the construction of a detailed and sequenced agreement — which would require time and technical alignment — than the establishment of a perception of movement on Iran’s core positions. The negotiation is thus partly shaped by political signaling of victory rather than convergence.

      This logic is closely linked to a form of brinkmanship, where pressure is assumed to generate linear responses. The underlying assumption is that Iran will adjust its stance whenever the United States modulates escalation or restraint. It leaves open the possibility of operations or coercive actions, particularly as a comprehensive nuclear agreement remains distant and structurally difficult to assemble. The risk is therefore not so much a return to full-scale war, but a cycle of episodic escalation within a still-contained and reversible configuration.

      An Off-ramp Constrained by Its Own Logic

      The underlying constraint remains a preference in Washington to avoid a renewed large-scale confrontation, given its economic and strategic costs. At the same time, the absence of tangible diplomatic results is difficult to acknowledge politically. This produces an intermediate position in which disengagement is pursued while being continuously framed as progress or even victory. This results in a configuration that neither leads to stability or restarting the war, but where fragility comes from the attempt to compress a process that remains inherently slow.

      Israel’s role adds a second structural layer of instability. Its regional objectives, including territorial gains and expanded military control clash with the prospect of a prolonged deescalation phase. The divergence is structural and long-term, as US popular support of Israel quickly erodes. In practice, this has required the US administration to rely on explicit pressure to restrain Israeli moves long enough to preserve a narrow window for accelerated negotiations with Iran. The difficulty is that this sequencing is already under strain.

      Hormuz and the Structure of the Stalemate

      The Strait of Hormuz remains the central variable. A durable normalization would require coordination on passage rules, some form of fees or regulatory mechanism, and a broader ceasefire framework extending beyond the Strait itself, including Lebanon. None of these elements are in place as a result of the excessive focus on a global deal including the nuclear issue.

      The recent sequence highlights a persistent misalignment. The United States has maintained pressure while expecting functional normalization, while Iran has treated the Strait as a lever of negotiation rather. In practice, any sustained reopening requires coordination, even in the absence of a comprehensive agreement.

      External actors further complicate the picture. China, in particular, has been critical of a regime of fees that would alter flow conditions, while offering substantial material support probably more valuable than the toll booth model. This increases pressure on Iran to accept arrangements that preserve access. The equilibrium therefore depends on a balance of constraints and opportunities rather than only on a formal diplomatic settlement.

      At this stage, two broad configurations remain plausible. The first is the emergence of a partial framework, limited in scope but sufficient to organize coordination around the strait and establish minimal normalization conditions. This would allow Iran some economic space while leaving the nuclear issue only partially resolved. The second is a more explicitly frozen conflict, where no agreement is reached but where a managed status quo emerges, including conditional reopening of the Strait and continued tactical coordination between actors.

      For markets, many pricing assumptions remain built on simplified scenario frameworks that understate the institutional fragility of the situation, particularly around energy flows. The current situation should be understood as a reorganization rather than a resolution. Deescalation provides a temporary equilibrium, but it is increasingly exposed to attempts to convert it into a rapid political success without the institutional basis required to sustain it. Though the rationale for deescalation is more present than ever, the gap between political acceleration and structural constraint defines the fragility of the current situation.

    • Partial Normalization in Energy Markets After Iran War Deescalation

      Partial Normalization in Energy Markets After Iran War Deescalation

      Energy markets are unlikely to fully return to prewar standards once a deescalation process starts. The conflict has introduced lasting costs. In particular, Iran’s role in the Strait of Hormuz has become structural to global supply risk and pricing, as a new transit regime can be expected to apply. This new normal should have a lasting effect on financial markets and the real economy.

      This piece is published in partnership with the French Institute for International and Strategic Affairs (IRIS).

      Donald Trump’s statements about the terms of negotiations with Iran have astonished many as they did not seem grounded in real diplomatic channels. Meanwhile, his threats of massive escalation and ground offensives hardly pointed to a realistic strategy, given the enormous political and economic cost, as even the European governments most aligned with the U.S. started to distance themselves. Although confusing, this agitation finally reveals the urgency to find an exit from the quagmire. In practice, deescalation can occur even without full negotiations. It is important to understand what dynamics will be at play in energy markets in light of this trend.

      Tehran has been exerting control over shipping through Hormuz during the conflict, by dramatically restricting or threatening access but also applying charges on commercial ships for transit. Sustained control over the strait would translate into direct economic influence and pricing effects on global energy markets. This can take the form of negotiated transit fees, enhanced monitoring requirements, and arrangements that reflect Tehran’s geopolitical interests.

      Such explicit or implicit arrangements would sustain a structural premium on energy prices. Transit fees could act like reparations, providing revenue to rebuild infrastructure and support the regime, while structurally sustaining a premium on global energy prices. Simultaneously, some sanctions have been effectively relaxed in the sense that Iranian crude continues to flow through the Strait of Hormuz, reflecting U.S. reluctance to further tighten supply and worsen global price shocks.

      Market Price Dynamics and Short‑Term Reactions

      A cessation of hostilities would reduce active risk to tankers allowed passage by Tehran and reassure insurers, lowering the current premium embedded in energy prices. It would quickly see at least a partial reversal of the price spikes, which translated into an overall 60 percent surge. Global equity indices rose and energy futures already fell on various reports of deescalation prospects.

      However, a deescalation process alone does not guarantee an immediate restoration of normal flows or of confidence in the security of transit routes. Reconstruction of damaged infrastructure, clarification of maritime security arrangements, and the re‑establishment of reliable insurance coverage are all prerequisites to a fully functioning transport environment. These processes take time and some degree of international coordination. Risk premia and cost structures in energy markets can therefore be expected to persist above prewar levels.

      The overall disruption to oil markets is unprecedented and price behavior cannot be read solely through short‑term trading patterns, in one way or another. Oil and gas futures curves frequently reflect this complexity. For example, short‑term contracts have exhibited backwardation — where near‑term prices are higher than further delivery dates, indicating that markets expect supply constraints to ease over time even if the near‑term remains tight. However, persistent risk premiums and structural changes in supply can maintain a higher baseline.

      A Lasting Economic Impact

      Meanwhile, prolonged increases in energy prices feed through into inflation. Energy‑related price pressure will persist beyond short‑run market repricing. Persistent inflationary pressure complicates macroeconomic trends, reinforcing second‑round effects such as wage demands and broader price adjustments beyond energy components. In turn, higher inflation expectations and elevated energy costs feed directly into bond yields on government debt, affecting sustainability.

      For energy importers, the implications extend beyond immediate price levels. Disruptions affect contract structures, investment decisions in alternative supply lines and household cost burdens. Europe, while less directly reliant on Gulf than Asia for crude oil and LNG, faces its own challenges in terms of supply and pricing dynamics. With the relegation of nuclear energy production Europe’s strategy has tended to become a process of shifting from one external dependency to another as crises erupt.

      Deescalation reduces acute risk, but structural factors such as Iran’s control over the Strait of Hormuz and the time needed to rebuild confidence and infrastructure mean the market may settle at a new normal contrasting with prewar levels. The interplay between security, infrastructure, inflation dynamics and fiscal stress will shape financial and macroeconomic conditions in ways that a simple cessation of hostilities does not entirely resolve.

      This piece only serves analytical purposes and does not constitute investment advice.

    • Beyond the Iran Fiasco, an Abysmal Strategic Vacuum

      Beyond the Iran Fiasco, an Abysmal Strategic Vacuum

      Op-ed published by Les Echos on 24 March 2026. As Donald Trump seeks a way out of the Iranian quagmire—to suspend hostilities without any real prospect of peace—I invite you to consider a broader reflection on the strategic void that accompanies this situation:

      The war with Iran reveals a structural failure within the American decision-making apparatus, marked by a difficulty in aligning immediate tactical actions with long-term political objectives. This misalignment extends beyond the military sphere. Defense, trade, finance, and technology policies interact in a chaotic manner. The conduct of the trade war has already illustrated this: the legitimate goal of reindustrialization has been overshadowed by geopolitical coercion.

      In this very real war, the inability to anticipate the consequences of a failed regime change or the closure of the Strait of Hormuz further demonstrates a loss of overall vision. The military instrument is wielded without a political framework capable of setting a clear direction.

      These strategic and material flaws, already evident in the war of attrition in Ukraine, suggest a system grappling with internal contradictions and a reliance on a form of virtual thinking. The strategic framework appears frozen in patterns inherited from the era of the Iraqi adventure, even as industrial and geopolitical realities have radically transformed, reshaping the balance of power. This latest crisis calls on Europe to undertake a difficult reorientation.

      Retreat of Monetary Hegemony

      Economic sanctions have become a central tool of diplomacy. Yet their use generates side effects that are beginning to reshape the global financial architecture. Initially designed to isolate specific actors without direct military engagement, these measures have accelerated the search for alternatives. Beyond the surge in gold, we are witnessing a proliferation of bilateral agreements in local currencies and the development of parallel clearing systems, which are undermining one of the pillars of American power.

      The Iranian conflict acts as a catalyst here. The paralysis of the Strait of Hormuz underscores how power depends not only on dematerialized flows but even more on complex material systems: energy and industrial infrastructures. The West finds itself in a position where its instruments of pressure are losing effectiveness as regional powers adapt, coordinate outside traditional frameworks, and are prepared to escalate.

      Industrial Wars of Attrition

      Above all, the evolution of recent operational theaters, particularly in Ukraine, has forced a belated rediscovery of the importance of the industrial base. Technological superiority and the development of financial markets may have created the illusion that mass production capacity was secondary. The reality of a war of attrition has shown that economies with much more modest GDPs, but equipped with resilient production systems supported by China, can stand up to technological powers whose production chains are fragmented or optimized for peacetime.

      This situation reveals a divide between nominal wealth, driven by services and intangible assets, and the actual ability to mobilize material resources in prolonged crises. Tensions over ammunition stocks and delays in reactivating defense industries illustrate this lack of industrial depth. Although deindustrialization is recognized as a risk to social cohesion and strategic autonomy, the response has remained superficial. Tariff policies are often employed erratically, serving more as diplomatic tools than as genuine levers for rebuilding an integrated productive fabric.

      Misalignment of Capital and Educational Erosion

      Meanwhile, financial markets continue to channel capital toward high-visibility sectors, to the detriment of fundamental infrastructure. The AI bubble absorbs a disproportionate share of investments, while heavy industry and industrial transformation struggle to attract the necessary funding. This imbalance creates a two-speed economy, where digital innovation advances without an industrial infrastructure capable of withstanding geopolitical shocks.

      This crisis of strategic thinking is rooted in the weakening of educational structures, particularly in scientific culture and the classical humanities. The decline in science education reduces the ability to grasp the physical and technical constraints of the real world, fostering a virtual vision where it is believed that large language models can replace versatile engineers. At the same time, the retreat of the humanities deprives decision-makers of the historical intuition needed to understand the long term.

      Europe particularly embodies this tension. The continent’s industrial catch-up is hampered by regulatory complexity, compounded by a shift in decision-making power from the technical to the administrative, reducing the capacity for long-term planning. The management of contemporary crises highlights the need for a transition toward a systemic approach, integrating energy security, industrial resilience, monetary stability, and technological innovation within a strategic framework. This transformation cannot occur without questioning decision-making and educational mechanisms. The reallocation of resources must be accompanied by a renewed emphasis on fundamental knowledge, capable of restoring a long-term vision.

      This piece was originally published on Les Echos website in French.

    • The West’s Gorbachev

      The West’s Gorbachev

      This piece is published in partnership with the French Institute for International and Strategic Affairs (IRIS).

      The Iran war points to a strategic vacuum extending well beyond military affairs. It reflects a broader failure to align actions with long-term objectives—a pattern also visible across trade, finance, and technology policy, from erratic tariff decisions to the AI bubble.

      Donald Trump had the intuition that social dislocation demanded reindustrialization, in the wake of the global financial crisis. However, his chaotic inconsistencies reveal a broader cultural and institutional malaise, evident since the Bush years, and mirrored across Europe. This systemic paralysis runs deeper than any single leader and obstructs substantial reorientation.

      Amid the educational crisis, the capacity for strategic planning informed by science and humanities has receded, giving way to geopolitical agitation, economics driven by inflated assets, and generalized improvisation.

      Tactical Successes, Strategic Vacuum

      The Iraq war was supposed to serve as a textbook example that the pursuit of regime change without a viable alternative can plunge a whole region into chaos. Yet, the same logic persists, without a coherent plan either to mitigate the immediate consequences of the war or to manage its aftermath. Excluding a ground offensive was supposed to put aside the specter of the Iraq fiasco in the eyes of the American public. However the current narrative rather points to the lasting legacy of the Bush era, despite Trump’s inconsistent efforts to strike a balance between neoconservative circles and the public’s rejection of long wars.

      This instability erodes rational calculation across the international system, as negotiations led by real-estate moguls prove episodic and unreliable. Meanwhile, the weaponization of finance accelerates defensive reactions among emerging powers. Alternative payment arrangements and bilateral trade mechanisms are expanding. What was designed as leverage undermines the monetary architecture that long sustained US trade deficits.

      The Lost Intuition About Manufacturing and the Social Fabric

      War also exposes material limits. The experience of Ukraine has demonstrated that Western industrial capacity struggles to sustain prolonged conflicts and especially a war of attrition, as production lags behind operational requirements. Europe, in particular, remains strategically dependent, lacking cohesion and sufficient manufacturing depth.

      Donald Trump centered his discourse on the impasse facing his country and the need for systemic change. His intuition was that social fragmentation stems from deindustrialisation. The difficulty lies in execution. Tariffs, without serious industrial analysis, aggravate the very instability they seek to cure, especially when they turn into sanction weapons wielded erratically.

      Trade wars were launched in the name of reshoring, yet without a coherent long-term framework linking workforce development and manufacturing technology. Constant shifts leave firms unable to plan capital-intensive investments. When the rules change continuously, for geopolitical reasons or as a result of legal rulings like that of the Supreme Court, reindustrialization efforts become rhetorical.

      The AI Bubble and Financial Distortion

      Simultaneously, vast liquidity flows into artificial intelligence without weighing the limits of existing architectures and relegating promising research. The scale of the speculative enthusiasm surrounding AI reflects a financial structure shaped by the printing press. Asset inflation has distorted price signals, encouraging capital to chase scalable digital opportunities while physical production systems often remain undercapitalized.

      Circular funding models and passive investment flows sustain high valuations often disconnected from business models. While artillery shortages reveal supply-chain fragility, capital concentrates in data centers, based on today’s state of technology, rather than reflecting on future advances in efficiency. The imbalance resides in the absence of coordination between financial allocation and strategic necessity. Over the long term, investment and credit waves sustain unproductive firms and delay adjustment. Resources are misallocated while machine tooling and applied engineering struggle to attract patient capital.

      Europe in Strategic Limbo

      The problem is particularly acute in Europe, where overregulation constrains entrepreneurial planning. Military rearmament is discussed with insufficient supply-chain strategies. Fiscal pressures narrow policy space. The continent risks combining strategic posturing with declining productive autonomy. More troubling is the human capital dimension. With the technological retreat, engineers and scientists have been relegated by social hierarchies dominated by bureaucracies and managerial symbols. The attempt to substitute skilled labor with AI-driven systems often reflects short-term cost minimization rather than industrial realism.

      Geopolitically, a push for autonomy had started to gain some momentum since Ursula von der Leyen’s full alignment last summer in trade negotiations—and, above all, since Donald Trump’s fanciful claims on Greenland, barely concealing his desire to blow up NATO. Yet beneath the rhetoric of strategic and technological independence, much of Europe appears to be waiting for signals of renewed transatlantic oversight, contingent on electoral shifts and military adventures. This, too, reflects a systemic transformation spanning two generations, shaped by bureaucratization and questionable organizations providing conferences. Industrial leadership and the opposition to the Iraq War now seem a distant echo.

      The Iran war serves as a stress test of a broader Western model. Military action, trade wars, and technological speculation unfold without anticipation. Despite the demonization of tarif policies, Trump’s assessment that social stability depends on industrial strength was correct. The failure lies in transforming that intuition into disciplined, long-term strategy at the state level. Like Gorbachev, his intuitions for reform have stalled in the face of deep-seated interests, institutional paralysis, and erratic execution. Without a renewed spirit of humanism in foreign policy, industry, finance and education, activism will fail to mask a profound cultural crisis.

    • After the Bubble: AI Can Serve Industrial Power Instead of Draining It

      After the Bubble: AI Can Serve Industrial Power Instead of Draining It

      This op-ed has originally been published by Les Echos(fr).

      The generative AI bubble is built on circular funding between sector players, valuations disconnected from economic realities, and an extreme concentration of resources on large language models (LLMs). What should be alarming is not so much the scale of these investments as their stark contrast with the disintegration of Western industrial capacities. The war in Ukraine exposed this structural flaw, revealing the inability to produce sufficient quantities of essential military equipment—the result of decades of deindustrialization and skewed capital allocation. Beyond its strategic dimension, this paradox calls into question how we measure economic power.

      On the AI front itself, the success of more frugal players like Mistral or DeepSeek demonstrates that innovation does not depend solely on a relentless race to build ever-larger models. Billions continue to pour into colossal physical infrastructures—energy-hungry data centers, specialized chips, computing networks—without questioning the fundamental limits of LLMs. These massive investments stand in sharp contrast to the chronic underfunding of industry, and paradoxically, of automation.

      Beyond the fantasy of a dematerialized digital world, data centers are infrastructures that consume vast material resources: energy, rare metals, electronic components. Their proliferation highlights the current paradox: we are exponentially increasing computing power, while the productive sectors that could benefit from these technologies lack funding and orders. Many of these sectors launch AI projects merely to tick a box and make announcements to attract investors. In the military domain, autonomous drones, intelligent combat systems, and predictive maintenance represent concrete applications where AI will make a difference—but only if integrated into a solid industrial base, rather than betting everything on unreliable models.

      The production chains for ammunition, armored vehicles, and electronic components, weakened by years of underinvestment, struggle to meet demand. Factories have closed, skills have dwindled, and revival attempts are hampered by the absence of long-term strategic planning. The United States, despite its own contradictions, is trying to correct this imbalance by relocating some strategic production. Europe, however, remains on the sidelines, locked in extreme technological dependence that undermines its sovereignty.

      The core issue lies in this skewed allocation of resources. Capital and talent are concentrated on speculative technologies, while industrial applications of AI—advanced robotics, autonomous systems, production process optimization—remain underfunded. Above all, they lack commercial guarantees in the form of orders. This creates a vicious cycle: the more investments flow into LLMs and their infrastructure, the fewer resources remain to modernize the real productive apparatus.

      Yet AI could be a major lever for reindustrialization if approached differently. A more balanced strategy would involve redirecting some investments toward industrial automation, developing practical applications embedded in production processes, and fostering hybrid skills that combine digital expertise with industrial know-how, rather than chasing publicity stunts.

      Without this strategic shift, the gap will widen between an oversized digital sector and an industrial base unable to meet material challenges. The war in Ukraine served as a wake-up call. Power is not measured solely by the ability to develop sophisticated algorithms but also by the capacity to produce essential equipment. The challenge is not to reject AI but to reintegrate it into an industrial logic, where digital innovation finally serves material production rather than replacing it. Without this rebalancing, the West risks ending up with an economy where computing power soars, but factories continue to close.

    • Agricultural Crisis and EU-Mercosur Deal

      Agricultural Crisis and EU-Mercosur Deal

      A growing divide between those advocating for production, resilience and know-how, and a bureaucracy still mired in the limbo of the 1990s.

      The EU is rushing to finalize a trade deal with the Mercosur while simultaneously preparing protective measures against Chinese products that can no longer find a market in the United States.

    • EU Breakup Risk and Productive Resilience

      EU Breakup Risk and Productive Resilience

      This piece is published in partnership with the French Institute for International and Strategic Affairs (IRIS).

      The U.S. administration criticizes the European Union for failings that often have real basis. However, the EU’s economic subordination to the United States and the embrace of its cultural crisis play a key role in Europe’s falling behind. In light of this paradox, these attacks are all the more destabilizing since the Trump administration’s economic demands – acquiesced to by Ursula von der Leyen – simultaneously hinder any possibility of Europe re-entering the technology race. Beyond transatlantic invective, this historical impasse makes the prospect of the EU’s breakup tangible. We must anticipate its potential effects through productive and intellectual resilience.

      The trade terms dictated by Washington first illustrate the technological impasse amid the transatlantic chaos. In exchange for unilateral tariffs of only 15%, the von der Leyen Commission has implemented a policy of accommodation towards the U.S. tech sector on most issues, with the exception of those related to social media content. The fact that these concessions are subsequently presented as a competitiveness policy unfortunately does not mitigate their long-term effects.

      The abandonment of technological autonomy follows a series of ill-conceived strategic choices. More than the lack of discussion, these bets have revealed a gap in scientific and industrial competencies. Examples include: the excessive gamble on hydrogen, the generalized transition to electric vehicles without competitive impact studies, later forcing a retreat, the semiconductor failure (with the costly reliance on technology transfers from Intel, now losing momentum). One could add the export of Germany’s energy transition shock, amplified by the abandonment over the past decade of gas import diversification projects, in favor of Nord Stream I & II. Concrete skills have been supplanted by bureaucracy, high-level events, and regulatory prose.

      We have imitated the excesses of U.S. governance, but omitted the scale of its research system, funding for technological programs, and the emergence of Big Tech within this framework. The aspect that inspires Europeans is more centered on the type of managerial hypertrophy that led to the decline of a company like Boeing.

      The crisis in European industry illustrates the exhaustion of a logic of extreme logistical optimization, at the expense of innovation and new industries. This has allowed us to benefit from very low costs in Asia and Central Europe while capitalizing on the prestige of legacy brands. The energy crisis and China’s technological leap – long presented as a promised land for European exports – have derailed this model.

      The fact that the United States seeks to anchor its reindustrialisation effort in the subordination of its vassals adds to these difficulties. Shortages of military equipment on the Ukrainian front have not only revealed the extent of industrial attrition in the EU and the US, behind the enthusiasm generated by the AI bubble at the same time. They have also accelerated the fracture within the Western bloc, leading Europeans to start redeveloping their military capabilities. However, this period of political turmoil seems ill-suited to long-term strategic planning and to averting nuclear risk, which motivated previous generations. Moreover, remilitarisation is largely benefiting US defence companies as evidenced by high-profile orders of F-35s.

      In reality, the level of deindustrialisation calls into question our very interpretation of GDP, given the activities that are now at the heart of developed economies, sustained by bubbles until they burst. At a time when many countries are developing, training engineers in large numbers, and deploying them for industrial expansion, we must soberly assess the value of our deindustrialised economies in the era of PowerPoint and circular funding.

      The euro crisis did not lead to genuine reconsideration. On the contrary, it was followed by a policy of monetary bubbles and, around 2017, the belief in an imminent leap forward for federal structures. A reindustrialization dynamic was even announced, although a more cautious analysis could only indicate the opposite trend. It is in this context that France’s situation has continually deteriorated on the financial and industrial front. The maxim that each crisis is an opportunity to complete a stage in the EU’s edification has accompanied the fading prospect of a stable, creative, and prosperous society.

      A fresh start for the European Union is hindered by the very nature of its falling behind, rooted in deep cultural trends, of which the bureaucratic drift and the educational crisis are central elements. Instead of remedies, we see numerous parties and movements of all kinds positioning themselves in a cultural war, the terms and theatrics of which are directly imported from the U.S. The Commission’s current concessions would, in a best-case scenario, delay a productive recovery by several years.

      Beyond Donald Trump’s invective, the long-term persistence of the EU can no longer be the sole working hypothesis in the face of looming financial shocks, productive and educational decline, and the outcome of the Russo-Ukrainian war. States and economic stakeholders must prepare for the possibility of a disruption in the European system within a decade.

      The focus, at this stage, should not be on making prophecies about the triggering factor, among various options: from the election of the Alternative für Deutschland (AfD) to the exit of certain Central European countries, potentially losing their status as net beneficiaries of the EU budget due to Ukraine’s integration – which might explain why Moscow does not oppose it.

      Rather, the task at hand is to undertake preparatory work to avoid a disorderly breakup. Such an event would have dire consequences for countries that, at that moment, would lack both a productive base and necessary resources. In a scenario combining breakup and lack of preparation, the trend illustrated by the EU-Mercosur agreement could, by that time, even lead to food supply difficulties. A resilience strategy must address these tangible risks.

      Anticipating the possible return of responsibilities to the national level, within a framework closer to an integrated customs union and a monetary coordination mechanism, could provide some impetus towards a productive strategy and an educational revival. As the level of mutual ignorance among Europeans has reached an alarming level, such an effort could even bring us together around more concrete objectives of good relations and stability.

    • Europe’s Trade Problem

      Europe’s Trade Problem

      I took part in Al Jazeera’s Inside Story discussion with Andy Mok and Ben Aris. Ailing European economies need to rebalance their trade relations with China and break out of their self-inflicted technological doom loop.