'State capitalism is neither socialism, in which the government owns the means of production, or laissez-faire capitalism. It’s more of a hybrid, variants of which have long been commonplace outside the U.S. Once popular in Japan and Western Europe, it remains prominent in China, Russia and other countries to varying degrees.'
USA-Trump is introducing state capitalism to respond to and try to keep ahead of China huge success using state capitalism.
'In the grander scheme, though, the administration cares more about building national champions that can compete abroad than preserving competition at home. It allowed Hewlett Packard Enterprise to acquire rival Juniper Networks, over the objections of Justice Department antitrust staffers. The apparent rationale: The combined company would be a stronger competitor to China’s Huawei. Google parent Alphabet’s $32 billion acquisition of cybersecurity startup Wiz, which Biden appointees would likely have opposed, appears headed for approval.
If AI is, as widely feared, a bubble, its bursting would jeopardize the capital that finances data centers and U.S. economic growth. Cognizant of these risks, some in Silicon Valley think Washington should stand behind the industry, as it once stood behind the banks. OpenAI has called for federal “grants, cost-sharing agreements, loans, or loan guarantees to expand industrial base capacity and resilience.” No company fits the national champion profile better than Nvidia, which has a commanding market share in the graphical processing units used in AI model training and inference. Both the Biden and, at first, Trump administration blocked Nvidia from selling many of its most advanced chips to China. With AI prowess seen as critical to economic and military dominance, the restrictions were intended to slow the advance of top Chinese AI modelers such as DeepSeek. Huang met repeatedly with Trump and other officials and went to Capitol Hill. He argued that allowing sales would secure U.S. leadership by keeping Chinese developers dependent on an American “tech stack.” Without U.S. chips, he said earlier this month at the Center for Strategic and International Studies, “they’re going to go build their own complete stack. Once they’ve built that entire complete stack, they’ll export it as quickly as you could imagine.”'
If AI is, as widely feared, a bubble, its bursting would jeopardize the capital that finances data centers and U.S. economic growth. Cognizant of these risks, some in Silicon Valley think Washington should stand behind the industry, as it once stood behind the banks. OpenAI has called for federal “grants, cost-sharing agreements, loans, or loan guarantees to expand industrial base capacity and resilience.” No company fits the national champion profile better than Nvidia, which has a commanding market share in the graphical processing units used in AI model training and inference. Both the Biden and, at first, Trump administration blocked Nvidia from selling many of its most advanced chips to China. With AI prowess seen as critical to economic and military dominance, the restrictions were intended to slow the advance of top Chinese AI modelers such as DeepSeek. Huang met repeatedly with Trump and other officials and went to Capitol Hill. He argued that allowing sales would secure U.S. leadership by keeping Chinese developers dependent on an American “tech stack.” Without U.S. chips, he said earlier this month at the Center for Strategic and International Studies, “they’re going to go build their own complete stack. Once they’ve built that entire complete stack, they’ll export it as quickly as you could imagine.”'
China leads on nearly all tech fronts- the USA has been losing leadership on multiple fronts for decades- neoliberal deregulated economy has been a total loser- so now Trump is turning to what has demonstrated success in China and historically in the US and many other nations- a mixed economy with some state led strategic investment and a layer of free enterprise below it.
Good luck catching up with China though- so far USA is losing and Chinas lead is massive.
Can Trumps strategy of turning to a mixed economy with major state investment work this late in the game?
It may be the only viable approach now that China has crippled the US military by cutting off rare earths supply.