As I noted last year in my long piece on AI/generative AI, the only important application will be in its military use. Its commercial uses are for childish games. No one cares about AGI. Goldman Sachs says global AI investment is projected to reach $200 billion by 2025. The Pentagon, all by itself, has already hit that number.

Because whether for its repressive capabilities, economic potential, or military advantage, technological supremacy will be a strategic objective of every government, every military, with the resources to compete. Across the entire geopolitical spectrum, the competition for technology supremacy, especially for AI supremacy, will be fierce. And will be uncontrollable. There is a zero-sum dynamic at work.

Few people are focusing on how all of this is upending the global power supply chains. But American universities are playing an (unwitting) key role.

9 August 2024 — Like many of the subscribers on this list (well, those of a certain age), growing up our biggest fear was “the bomb”. I was 11 years old during the Cuban Missile crisis (1962). Countless “A bomb drills” at school where we hopped under our desks (“You need to duck and cover up!!”) Yep. Your desk will shield you from a thermonuclear blast. Though sometimes we filed into the school basement.

My uncle worked at a Howard Johnson’s restaurant in Florida and he told us stories of feedings 100s of troops going down to Key Largo – 290 miles from Cuba where transport ships were converging.

“Dr. Strangelove” came out two years later. It became one of Stanley Kubrick’s greatest movie hits. Peter Sellers was paid $1 million for his three roles in the film, which was 55% of the film’s total budget of $1.8 million. Kubrick famously said “I got three for the price of six”. The film grossed $11 million, and unheard amount at the time. Sellers got an Oscar nomination for his largely improvised performances.

And so, looking back at that 11 year old kid, I must have been confused. Was I living through a “Cold War” or a “Hot War”? I just watched an interview with the historian Niall Ferguson. He believes it was a Cold War and now he says we’re several years into a second Cold War. His fellow geopolitical gangster Fareed Zakaria calls it a “Cold Peace”. Regardless, there’s definitely a cold front moving in, but you wouldn’t know it looking at America. It’s mind is elsewhere, and it’s guard is down. 

War and Innovation

Nothing focuses one’s attention like the threat of imminent death. The first guy to use a sling to hurl a rock at his enemy was an innovator. The people who forged swords and shields from a copper-tin alloy spawned the Bronze Age.

The U.S. Civil War saw the arrival of hot air balloons for aerial reconnaissance, the first organized army ambulance corp, the mass adoption of railroads, the telegraph, and photojournalism.

The dividends from World War I included stainless steel, zippers, and daylight savings (hard pass).

And then just one madman invading Europe in the middle of the last century brought us flu vaccines, mass adoption of penicillin, blood plasma transfusions, radar, computers, and countless other products.

Hell, if it wasn’t for a Cold War-era DARPA project that laid the foundation for the commercial internet, you’d be getting this missive by post. Yep. The 20th century was defined by the symbiotic relationship between conflict and progress.  

But conflict and progress will also likely define the 21st century. Veterans of Israel’s famed Unit 8200 have made a fortune founding scores of startups, including Palo Alto Networks, Waze, and Wiz. Combat in Iraq and Afghanistan contributed to significant medical advances, particularly the use of robotic prosthetics, and deepened our understanding of traumatic brain injuries.

Facing a more powerful enemy, Ukrainians are developing long-range drones that cost $30,000 a piece (a fraction of the price tag for a cruise missile) to strike targets hundreds of miles inside Russia. On the battlefield, Russia and Ukraine are locked in an innovation race to produce tactical drones that start at $500. Prediction: by the time that war ends, delivery drones will be commonplace, and the best will come from Ukraine. Yesterday I spent half the day at a DARPA session on drones. More to come. 

Hybrid Warfare

In a global economy, every point of connection is an axis of attack. Hybrid warfare is a conflict cocktail that blends conventional military operations, cyber, disinformation, guerilla tactics, lawfare, diplomacy, regime change, and economic warfare. Vladimir Putin is a 7th-level hybrid warfare wizard. He has covertly poured state resources into high- and low-tech means to pit Americans and Europeans against each other.

And just as Big Tech realized the greatest ROI was misinformation from likable executives – “We’re proud of the progress we’ve made!” – propaganda continues to be how nations punch above their kinetic weight class.

Radio Free Europe 

The U.S. practices hybrid warfare, too. It started with Radio Free Europe: propaganda wrapped in rock & roll, pumped into the Eastern Bloc. We spend $500 million a year so the Peace Corps can flex America’s soft power muscles.

U.S. and Israeli computer scientists created Stuxnet, a virus that sabotaged the centrifuges at Iran’s nuclear facility without firing a shot.

And despite spending $820 billion a year on kinetic power, the primary U.S. weapon-of-choice is economic warfare. It leads the world in sanctions – it isn’t even close.

But … the U.S. remains unguarded

TikTok, owned by ByteDance, is a Trojan horse that enables the Chinese Communist Party to construct the frame through which American youth see the world, the U.S., and themselves.

It’s not about whether the CCP strives to diminish U.S. standing and prosperity (they do), but that we make it so easy for them. Yes, the U.S. government is (kind of) slowly waking up to the TikTok threat. When it comes to communications platforms of declining influence – television and radio – U.S. law restricts foreign ownership. (Note: Rupert Murdoch bypassed this law by becoming a U.S. citizen. He knew 😎). 

Investments affecting national security, energy, and infrastructure also face scrutiny. It’s a dumb idea to give your adversaries the ability to control your weapons systems, turn off the power grid, or close your ports. And it’s plain stupid to let them implant a neural jack into the wet matter its youth. (See above: TikTok).

American universities, however, are undefended — they are open for business. In 2019 fewer than 3% of 3,700 higher education institutions complied with a law requiring them to report foreign gifts or contracts exceeding $250,000. In a 2021 report, the U.S. Department of Education concluded:

“U.S. institutions are technological treasure troves where leading and internationally competitive fields, such as artificial intelligence, biometrics, and nanoscience, are booming. For too long, these institutions have provided an unprecedented level of access to foreign governments and their instrumentalities in an environment lacking transparency and oversight.”

A subsequent crackdown called into question foreign money at Harvard, Yale, MIT, and other schools. But it went nowhere. 

China

High tariffs keep Florida oranges out of the Chinese market. Phew. But contracts worth $1.8 million give Chinese growers access to University of Florida citrus research. One Florida grower called the deal “a pure intellectual property grab”.

The University of Michigan has around $1 million in contracts from DiDi Global, a Chinese ride-sharing company built on government money that forced Uber out of their market. When a Chinese equipment maker filed an IPO, it told investors that its connection to the University of Minnesota allowed it to “enjoy the latest achievements of world-class R&D institutions”.

Hell. Why worry about IP theft, when IP can be purchased at a deep discount on campus? 

Saudi Arabia

62 U.S. universities have received several billions in dollars from Saudi Arabia over the last 15 years. In exchange, the Saudis get access to America’s top minds, but they also get a brand makeover. The Kingdom has made similar investments in sports and startups, including in Premier League football, the PGA, and WeWork. Kind of a market transaction that’s good for both parties, as American firms get access to cheap capital.

However, there’s something uncomfortable about a monarchy that doesn’t share U.S. values having influence over the universities that, arguably, shape the values of tomorrow’s business and government leaders. 

A former U.S. ambassador to Saudi Arabia likened the Kingdom’s “higher-ed-washing” campaign to U.S. soft power. True, it’s the same tactic, but there’s no moral equivalency. When the Saudis buy brand makeovers from American universities, there is also a risk that the curriculum and professorships will question, in the most civilized manner, American values.  

Qatar

Since 2001, Qatar has spent an estimated $6 billion (nobody knows the exact number other than Qatar) funding satellites of U.S. universities in Doha. “Education City” is home to campuses for Georgetown University’s School for Politics and Foreign Relations, Carnegie Mellon’s computer science department, Virginia Commonwealth’s fine arts department, Cornell’s medical school, and Northwestern’s journalism school.

Texas A&M has an engineering school in Qatar, though it’s set to close in 2028. Why? School officials say they’re “concerned” about stability in the Middle East. Meanwhile, the Pentagon noted Qatar had “substantial ownership” of weapons development rights and nuclear engineering research being developed at the Texas A&M campus. Texas A&M denies the allegation. Oops.

Look. Nations form alliances and partnerships based on shared interests, not altruism or friendship. This is the reality of geopolitics and the U.S. relationship with Qatar. It has an awful human rights record and major ties to Hamas and Iran. But it’s also home to the U.S. Fifth Fleet. See. It’s complicated.

The thing is American foreign policy needs Qatar, but American universities don’t. Elite schools enjoy endowments worth billions and charge students roughly the equivalent of a luxury car for every year of tuition. They might miss Qatar’s money – but they don’t need it.

Patriotism

U.S. colleges coast to coast mobilized for war in the 1940s. Every school sent graduates to the front lines. The University of Maryland graduated students in three years to boost enlistment. Columbia University changed its curriculum to serve the war effort. By 1942 as many as 3,000 armed forces personnel were taking classes at Harvard.

And, of course, America’s research universities provided the intellectual firepower, including the atomic bomb, that won the war. The “Greatest Generation” displayed a sense of duty and patriotism that we applaud today as exemplary. Their love of America helped them save America. 

But today, the U.S. is overall less patriotic, especially young Americans. That should be a clear and present danger to university administrators and faculty as autocrats threaten democracy in the U.S. and around the world. The U.S. armed the “Greatest Generation” with patriotism; it’s disarming today’s students with narcissism. 

Tip of the Spear

Universities are the tip of the spear for America, shaping the next generation of leaders and innovators. The purpose is to provide an environment where students can explore their passions, challenge their beliefs, and develop critical thinking skills. Trashing America might earn students and faculty clout online, but in the real world it’s stupid. And the U.S. is on the road to stupid – a road paved with money from its adversaries.  

For 25 years I have lived on two shores – Europe and America. To me, Americans’ superpower is its optimism – something totally missing in Europe.

However, the Achilles’ heel of this optimism is that it’s easier to fool Americans than convince them they’ve been fooled. This, coupled with money-obsessed, bloated universities have turned American values of intellectual freedom and free speech on itself.

Cancer is when the host’s own cells turn on it, and America’s cancer is the coarsening of its discourse and the emergence of a white-hot fashion among university youth – hating America.

Is the estimated $20 billion in foreign money that has poured into American universities an attempt to build bridges between the U.S. and other nations? Or is it a long game being played by our adversaries to turn its youth against itself? The answer is the latter.  

Is there a point where the risks outweigh the upside? No matter how “benign” it may look, the donor expects something in return (e.g., influence over curriculum, who receives financial aid, faculty hires, etc.)

American universities need to ask a simple, two-part question: What do foreign nations want in return for their billions, and what are they getting?