Semafor Flagship-The World Today

"A third Fed rate cut, Beijing boosts local chips, US investors bet on China chips."

Views expressed in this World and US news roundup are those of the reporters and correspondents.  Accessed on 11 December 2025, 0523 UTC.

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Russ Roberts (https://trendsingeopolitics.blogspot.com).

LAUSANNE  BEIJING  SHANGHAI December 11, 2025 Read on the web Flagship Sign up for our free email briefings→   The World Today A third Fed rate cut Beijing boosts local chips US investors bet on China AI Silicon Valley’s PR push Data centers in space American military woes Russian hybrid warfare A crisis carrier US to vet tourists’ posts A hospital bans hand-washing A fantastic time for fantasy art. ↓ 1 Divided Fed cuts interest rates A divided US Federal Reserve lowered interest rates by a quarter point on Wednesday, but signaled a high bar for additional cuts next year. For the first time in six years, three officials dissented, but “if nobody is fully happy or angry, then they probably did their job,” one strategist said. The next year could see more contention and uncertainty: The Fed has penciled in only one trim for 2026, but “no one in the markets” believes that forecast, an economist wrote. President Donald Trump has suggested that his nominee to replace Fed Chair Jerome Powell will be someone committed to lowering borrowing costs. ↓ 2 Beijing adds AI chips to procurement list China added homegrown AI chips to its government-approved list of suppliers, the latest move in Beijing’s quest to break reliance on American processors. The list, which influences what the public sector buys, was reportedly circulated before US President Donald Trump allowed Nvidia to export advanced chips to China. His decision Monday raised concerns that it would propel Beijing in the AI arms race with Washington, though the White House believes it will slow down Chinese AI firms’ advances. The deeper fear inside top American AI labs is that “China will use Nvidia’s chips to build data centers around the world that offer cheaper prices for running models inspired by… US AI firms,” Semafor’s tech editor wrote. For more insights on chips and AI, subscribe to Semafor Tech. → ↓ 3 China AI firms draw US investments China’s biggest AI players are luring US capital back to the country while extending their reach in overseas markets. As the sector’s stock surges, US-managed funds have increased their stakes in firms like Alibaba, despite Washington’s scrutiny, while China-based funds are raising US dollars to invest in Chinese early-stage startups, The Wall Street Journal reported. Driving China’s AI development is an embrace of open-source models, which are free to adapt and download. “The effect is akin to studying together to ace a test, rather than relying on individual intelligence,” a Chinese AI company’s CEO said. By contrast, US tech firms largely favor “closed” systems that are tightly controlled; Meta is reportedly planning to pivot to a closed model. ↓ 4 AI industry launches charm offensive The Tonight Show Starring Jimmy Fallon/YouTube Silicon Valley is launching a charm offensive — both privately and publicly — to counter growing fears and skepticism over AI. OpenAI CEO Sam Altman’s recent appearance on The Tonight Show was part of the tech world’s “most visible publicity push in recent memory,” WIRED wrote: Ads from tech giants and AI upstarts are flooding TV and social media, though “the jury is still out on how well that messaging is working.” The White House appears to be more receptive. Nvidia’s CEO reportedly personally lobbied US President Donald Trump to stop states from regulating AI. The tech industry’s “tireless work to make Trump look and feel good has already offered a healthy return on investment,” a Bloomberg columnist wrote. ↓ 5 The new space race Steve Nesius/Reuters The next frontier of data center development is out of this world. Billionaires Elon Musk and Jeff Bezos, who each have their own rival rocket companies, are now racing to build AI facilities in space, while a Nvidia-backed startup announced it trained an AI model from space for the first time. Such systems at scale could theoretically alleviate the energy constraints that set back their earthbound peers, though skeptics believe Musk and Bezos’ ambitions overlook the technical challenges: One Google executive working on building an orbital data center told The Wall Street Journal it would take 10,000 satellites to match the capacity of a one-gigawatt facility. ↓ 6 Pentagon mired in bureaucracy The US military is struggling to procure the weapons of the future, as it faces threats from innovative adversaries. The Pentagon spends hundreds of billions of dollars a year, but prefers adapting old weapons rather than developing new ones, and has a byzantine testing and approval process, The New York Times editorial board wrote. Congress aids this dysfunction by doling out unnecessary funds, including $240 million for a drone the Army itself labeled “obsolete,” and $360 million for a helicopter that wasn’t requested. The US’ safety “depends on the federal government getting serious” about reform, The Times wrote, as other nations beef up their defenses. Global military spending hit a record $2.7 trillion in 2024, new data showed. ↓ 7 Moscow escalates sabotage campaign Polish Prime Minister Donald Tusk visits site of suspected sabotage in November 2025. KPRM/Handout via Reuters European intelligence officials believe Russia is escalating its hybrid warfare campaign, potentially with a future hot war in mind. Moscow is taking greater risks in its covert sabotage operations: A series of parcel bombs capable of bringing down a cargo plane exploded across European depots in 2024, and authorities have foiled plots to derail trains, burn shopping centers, and poison water supplies. Attacks usually involved local proxies recruited through Telegram — “the gig economy of spycraft,” the Financial Times said; they are often incompetent but operate in numbers. The moves bear remarkable resemblance to Soviet plans for a “prewar” phase of deniable, disruptive attacks, found in KGB files uncovered after the fall of the USSR, analysts said. ↓ 8 A go-to carrier for crises Taliban helicopter evacuates earthquake victims. Sayed Hassib/Reuters A Swiss company is hoping to disrupt the humanitarian business by serving its clients at a fixed price. Due to a paucity of vendors, crisis services like airlifts and evacuation flights are often priced dynamically, leading to gouging: Private evacuation from Kabul in August 2021 cost $6,500 per seat, and commercial flights from Beirut during Israel’s 2024 offensive ran even higher (some evacuated by yacht, at a comparative discount). By structuring as a nonprofit and operating older planes, Bluelight hopes to become “the go-to carrier for crisis response,” Monocle wrote. But its success depends on keeping the costly planes flying as often as possible — something traditional shippers excel at, but which could prove tricky in disaster zones. ↓ 9 US plans to vet tourists’ social media Benoit Tessier/Reuters The US government could require all foreign tourists to provide five years’ worth of their social media history to enter the country. The White House has previously expanded screening of visa applicants’ online presence, citing national security concerns and a need to root out anti-American and antisemitic sentiment. The new proposal, NBC News reported, would even apply to countries whose citizens can enter the US visa-free. The crackdown could undermine US efforts to welcome soccer fans around the world for the FIFA men’s World Cup next year. If Qatar “was probably the most politically charged sporting event in history… I’m not sure that 2026 will be any less politically charged,” a sports professor said. ↓ 10 UK hospital bans hand-washing Danny Lawson/PA Images via Getty Images A UK hospital is removing sinks and banning hand-washing, overturning two centuries of infection control advice. Wexham Park Hospital expects to remove 80% of all sinks, except those in toilets, because drains and sinks harbor bacteria, and most people don’t wash hands for the full recommended 20 seconds. Instead, staff are required to use hand sanitizer after every patient interaction. This “water-safe” approach follows similar initiatives in the Netherlands and Germany after studies found that removing sinks from patient rooms and using water-free patient care reduced the presence of antibiotic-resistant “superbugs” in wards and decreased the rate of hospital-acquired infections. German health guidelines now recommend that no washbasins be placed in patient rooms in intensive care units. ↓ Flagging Dec. 11: The IEA and OPEC+ publish oil market reports. Portugal’s two main trade unions call a nationwide general strike. The Magic Flute, by Wolfgang Amadeus Mozart, opens at the Metropolitan Opera in New York. ↓ Curio Frank Frazetta, multiple works. Heritage Auctions A Conan the Barbarian painting could fetch more than $10 million at auction this week, the latest sign of a red-hot fantasy art market. Long marginalized by the arts establishment as lacking in conceptual pedigree, fantasy art has no greater luminary than longtime Conan illustrator Frank Frazetta, five of whose works have sold for seven figures this year alone — up from $674,640 in total sales for 2018. Frazetta’s works have influenced filmmaker George Lucas, whose Lucas Museum of Narrative Art is set to open in 2026, and will include Frazetta works — signaling “increasing institutional interest in the best of fantasy art as its significance becomes impossible to ignore,” a Heritage Auctions executive told Artnet News. ↓ Semafor Spotlight The News: The Florida senator-turned-secretary of state evolved from Trump critic to close ally, but he’s still not pure MAGA on foreign policy. → You’re receiving this email because you signed up for briefings from Semafor. Manage your preferences or unsubscribe here. Read our privacy policy. Was this email forwarded to you? Sign up now to get Semafor in your inbox. Semafor, Inc. 228 Park Ave S, PMB 59081, New York, NY, 10003-1502, USA