The Invisible AI War: Why Taiwan's Chips Matter More Than Anything Else In Global Politics
"The fate of this Administration and of Donald Trump's reputation hinges on whether his realpolitik avoids China gaining Taiwan. If China gains Taiwan, I think that is the end of American primacy in the Indo-Pacific," warns renowned historian Niall Ferguson, cutting through the noise of current global conflicts.
End of Miles reports the historian's stark assessment reveals a critical blind spot in current geopolitical analysis: while the world fixates on Ukraine and the Middle East, the true epicenter of global power struggles lies in the Taiwan Strait.
The Technological Heart of Global Security
Ferguson, speaking during a March 14 interview at the Hoover Institution, identified Taiwan as uniquely vital to global technological security in ways that few other territories can claim.
"Taiwan's not Cuba, Taiwan is where nearly all the most sophisticated semiconductors get manufactured. It is the HQ of the AI industry. Nvidia makes its chips in Taiwan," Ferguson emphasized. "The big issue is who controls Taiwan—not Greenland, it's not the Panama Canal, it's not Ukraine, not Berlin anymore, it's not Gaza, it's Taiwan." Niall Ferguson
The Oxford-educated historian points to a crucial shift in global strategic thinking that remains underappreciated by many policy analysts. While diplomatic attention focuses elsewhere, control of advanced semiconductor production and AI infrastructure has become the defining element of superpower competition.
The Narrowing Window for Chinese Action
The Hoover Institution fellow believes China's leadership is acutely aware of a potential closing window of opportunity regarding Taiwan, with implications that extend far beyond regional concerns.
"The key question for us, the big geopolitical question, is does Xi make a move on Taiwan while the opportunity is almost irresistibly tempting? It will be, I'm absolutely sure, during this Administration, during this presidential term." Ferguson
He suggests that Xi Jinping is watching closely as the West struggles with internal challenges, noting that if Ferguson's own analysis indicates the United States and Europe might regain their technological and financial footing within "two to five years," China's leadership may feel pressure to act before that potential recovery materializes.
Beyond Military Invasion
Rather than conventional military action, Ferguson outlines more subtle strategies China might employ that would challenge traditional American response frameworks.
"It's not that he's going to invade. I don't even think he does a blockade. There are much smarter things he can do that will be much harder for us to respond to. Suppose he says, just for example, from now on all vessels going in and out of Taipei have to clear Chinese PRC customs, and we're sending Coast Guard vessels to do that. What do we do then? It's not an act of war. On the other hand, it's an assertion of sovereignty that it would be very difficult for us to let pass." The historian
These asymmetric approaches could create precisely the kind of strategic ambiguity that complicates Western responses, particularly for an administration pursuing diplomatic engagement with Beijing.
The Technological Power Balance
The position of the United States relative to China represents a fundamental shift in global power dynamics, according to Ferguson. He draws a striking historical parallel that contextualizes current vulnerabilities.
"The situation of the United States today is more like that of Britain in the 1930s than of anything else I can think of," he argues, noting that America's technological advantages have narrowed to specific domains. "I think we still have leadership particularly when it comes to training large language models in AI, and we've probably got an edge in Quantum Computing. We don't have an edge in robotics."
With Taiwan sitting at the nexus of these technological power struggles and controlling the most advanced semiconductor production capabilities globally, its significance transcends its geographical size—becoming instead the defining territory in the emerging cold conflict between major powers.
