Who lost and who won? How to bet on AI in US-China tech hegemony and I found this answer

In recent years, the US government has used export restrictions, economic sanctions, and increased tariffs to attack rival countries. The U.S.-China technology war has been particularly fierce, and many companies have been affected. How can global investors stay ahead and bet on potential geopolitical outcomes before the rest of the markets notice the changing winds? Perhaps artificial intelligence (AI) could take advantage.

In January 2024, the director of ASML, a major Dutch semiconductor lithography equipment manufacturer, warned in a press conference that the most advanced immersion systems (NXT:2000 and above) may not be approved by the US government for export to China, resulting in a loss of 10% to 15% of ASML’s core equipment sales to China.

this is obviousWashington Using hegemony in an attempt to slow down China’s AI development. However, the disclosure of this type of information by companies raises more questions than it answers, leaving global investors with a lot of questions: What impact does a warning message like Esmore have on investment portfolios? Who will bear the cost, and who will benefit from it – the United States, which imposes sanctions, or China, which Washington targets? How will investment risks and rewards be rewritten for companies caught between the United States and China?

Bloomberg News reported that investors may get some answers from a “geopolitical pressure” article. The paper was co-written by economists including Clayton, professor of finance at the Yale School of Management. This group of researchers fed a total of 600,000 corporate legal meeting data from 22,000 global listed companies over the past 20 years into an open source Large Language Model (LLM) executed on Stanford University computing systems. The algorithm listens to the outcomes that actually occurred: not just the conflict points mentioned by the corporate CEO, but also whether there was an actual government-mandated price adjustment, investment divergence, or supply chain realignment.

The use of pre-trained LLM can not only understand the meaning of sentences from the context, but also effectively filter out “false positive” and “false negative” information. It is better to understand the meaning of micro words, compared to traditional keyword searches or forced application of statistical tools in a sea of ​​words. AI can also highlight problems that corporate executives deliberately downplay in legal circles, and capture benefits and harms that are downplayed.

For example, the export ban imposed by Washington has caused US companies to suffer loss of orders and decline in profits, but it has been a blow to companies in Asia-Pacific. A Yale University study found that in legal meetings with Chinese companies where export restrictions were mentioned, nearly 40% of executives announced an increase in R&D funding. Two-thirds of the press conference detailing the spending expansion was classified by AI as “core technology localization” projects, meaning investing in locally manufactured chip devices to avoid US dominance.

Other geopolitical shocks have had similar adverse effects. When European and American countries imposed sanctions due to Russia’s invasion of Ukraine in 2022, European and American companies suffered the consequences of price cuts, seized assets, and increased logistics expenses. The real winners are China and India, who do not have to choose a side between the United States and China. Chinese and Indian companies immediately took advantage of the situation and actively purchased Russian Urals crude at significantly discounted prices, when European and American companies were unable to compete with them.

The tariffs imposed by US President Trump in 2025 are also regressive. As Trump hoped, foreign exporters did not “swallow” these tariffs. Nearly three-quarters of instances in corporate briefings held by companies responsible for disclosing the impact of tariffs were negative. Of the cases that mentioned the impact of tariffs, about 60% pointed to an increase in the cost of imported components. Only a few American companies benefit from being isolated from foreign supply chains, unlike competitors who have to pay additional costs because they depend on imports, and even have the ability to raise prices. At the same time, foreign producers have ways to absorb the pressure, not by lowering export prices but by relocating factories to Vietnam and Mexico.

The conclusion drawn with the help of AI models is: Whether it is tariffs, sanctions, or chip restrictions, when the United States uses economic weapons to attack, the probability of accurately hitting the target is very low. Most of them are carpet bombings, with bullets scattered along the path, causing considerable indirect damage. If investors can anticipate these unexpected outcomes before the market reacts, they can expect to profit from them. They can benefit from machine interpretation of corporate legal information.