An AI development slowdown and Taiwan

0:00We interrupt this broadcast with some important news. Let's rewind, then check out the biggest news stories from this week. It's time, time for Taiwan this week. Good evening, and welcome to this week's edition of Taiwan this week with me, our host Gavin Phipps. And I'm joining the studio this evening by Sasha Chabra of the Formosa Review. I'm glad to be back on the show. And on the telephone from Unilin by regular commentator Michael Feihy. Hello, Gavin and Sasha. Good to be on the show again, too. And we'll begin this week's show with Vice President Shelby Kim making an unannounced trip to Italy at the end of last week to attend a Freedom and Democracy conference. Shao attended the conference as a guest of honour accompanied by Foreign Minister Lin Jia Long, and her participation was not announced until after she arrived in Italy, too, according to the Ministry of Foreign Affairs, prevent interference from Beijing. Now, China's Foreign Ministry said earlier that it had lodged solemn representations with Italy and the European Union over the visit. While here in Taiwan, the Foreign Ministry was telling China

1:01that it has no right to dictate Shao's participation in events she was invited to by the European Parliament. Now, the US State Department issued a rather roundabout statement backing Shao's trip, with a spokesperson saying the Washington believes the closer exchanges between Taiwan and the international community are beneficial to the people of host countries. And Taiwan's relationship around the world will provide significant benefits to the citizens of those countries, including across Europe. While the European Union issued a statement, saying the block does not comment on specific travel plans or engagements involving members of the European Parliament and also reiterated its adherence to the one-China policy. Now, prior to those no comments or comments, the European Commission cancelled its participation at the conference Italy after Shao was announced as a surprise guest. Now, the European Commission's representation in Italy also says in inform of the European Parliament, liaison office of the European Parliament rather, that it wanted its own logo removed from the event while a Commission official, who was due to speak on a panel called off his participation, while on route to the Italian island and later confirmed that the European Commission instructed him not to attend.

2:07So, Shao, she goes off to Italy. This is another trip to Europe, but I think that the first one in Brussels got more media attention, although this one seems to have got attention because the European Parliament and the European Union had some disagreements about who should be there and who should not be there. Well, I think maybe this is getting a little less of media buzz because now it's becoming more normalized and we're seeing that China can't stop Taiwan's vice president from attending international meetings with high level politicians that she's invited to. And yeah, we've seen that there's this fallout, you know, there's fallout from the meeting in Brussels, which is a private IPAC event. This actually is, I would say, higher level because it was officially organized by the European Parliament. Of course, the European Parliament is about one of the institutions of the European Union. You know, there's the European Commission has had a different response and there are different other bodies. And again, there's 27 different countries that make up the European Union. They will have different one-China policies, different policies towards the Indo-Pacific,

3:09different policies towards Taiwan. So, you know, we can't read too much of this in either direction, I'd say. It isn't saying it's not a big breakthrough for against Taiwan, but it's an ongoing step in Taiwan's normal engagement with the rest of the world. But do you think the European Commission's decision to bring back its representative while it was on the way there was a bit of a slap in the face? Sure, it's a slap in the face, but you know, there was a hug from the European Parliament and a slap from the Commission and Xiaomi has seen as far from the only politician to get that one-two situation. The European Commission has to deal with China on a daily basis. And I think we say that see the same dynamic in Taiwan's relationships with the United States. There's quite warm relations with Congress, members of Congress are willing to meet with Taiwanese officials. But the State Department and the Executive Branch is a lot more cautious.

4:09They have to balance those contacts and their support for Taiwan with the practical difficulties of managing the relationship with China, which for the United States is certainly the broadest and deepest and most complicated relationship in the world. And I suspect the EU has exactly the same problem. So I think it's a very similar dynamic that we see elsewhere. I just highlight that what we're seeing here is an ongoing upgrading of Taiwan's relations with Europe, which were on a pretty low level until a decade ago or even more recently than that. And awareness of Taiwan was very low. And certainly the Eastern European countries have been very positive and interacting with Taiwan. And now we're seeing a bit more of it in Western European countries. I mean, Italy is particularly significant because it was the only member of the Belt and Road in Western Europe, although it's since pulled out.

5:11So Italy's position has changed. And it's also with pointing out that at the same time the Minister of Culture Lee Yen was barnstorming across the UK and France. So on the whole, this is all good. This particular event I agree with Sasha is not some kind of big breakthrough, but it's more of a part of a long-term trend. I completely agree with what Michael has said. And on that note, you see Taiwan has a lot more opportunities with parliamentary engagement because parliamentarians or US Congressmen and the other context. They're happy to have more leeway and they're happy to get some anti-China points. But I do think this is significant if you look at this in both the EU and the Italian context. So yes, you have a vice president of the European Parliament engaging at this high level with Taiwan. She's in the ruling grand coalition in the EP. But if you look at the Italian context, it's a little different because she represents one of the main opposition parties.

6:14And she's actually not reflective of the ruling political establishment in Italy. That being said, the ruling political coalition in Italy is actually becoming very, very pro-Taiwan. And even the current Prime Minister of Italy was the first ever Prime Ministerial candidate in Italian history to give an interview to Taiwanese media. And she's the one who pulled out of the belt and road. So what we're seeing is actually a very good development where Taiwan is getting good relations with both sides of the political spectrum. Sometimes you're seeing very good relations developed with one political party, often a right wing political party. But in this case, we're seeing both the right wing and the left wing in Italy are having very high level engagement with Taiwan. But of course, especially with us, remember, we have lots of these parliamentary delegations come to Taiwan. And of course, it's invariably opposition parliamentarians that come here. And they come here for a jolly little trip. They meet with the people and they go back. And a couple of years later, oh, lo and behold, it's another bunch of parliamentarians because they're now in opposition.

7:14Because the people that we're here are now the ruling party. But nothing seems to actually change in the big scheme of things. These opposition party people that come here, go back home, become the ruling party. But nothing changes. You know, you have a very good point there and that's why I think there's much more important than the eye-packing engagement. So this happened and what happened the same time that Shalbe Kim was going to Italy. You had the largest average delegation of Italian parliamentarians in history visiting Taiwan. And it's included many MPs from the ruling brother's Vittily party, which is, you know, right wing establishment party. They'll be out of power at some point. And if they're out of power, they'll likely be replaced by a coalition led by the PD party to the democratic goal, which is the party of Pino Pichetta, who's the one who invited Shalbe Kim to Vendor Danes. So, yeah, you're seeing actually this is a trend in the positive direction where they're really playing all sides of the spectrum. So I do think this is quite a significant development from that perspective. Michael. I just add that didn't the delegation of labor MPs visit Taiwan fairly recently after labor took power.

8:20So it's not always true that members of the ruling coalition or whatever don't come to Taiwan. But also, I think that personally, I had a question, I don't know, a year or so ago, as to whether or not this whole eye-pack thing, these parli of this association of parliamentarians mainly centered around Europe, who supported Taiwan, was, you know, just kind of a flash in a pan. They had a big conference in Taipei, lots of US government officials appeared. There was, you know, a big discussion of the misuse of the UN resolution. All of that was great, but then it seemed to kind of die down. And this event was very closely associated with eye-pack and suggests that the, you know, eye-pack's role is going to continue despite, you know, the changes that are happening all over the world. So I think that's another positive. But this wasn't an eye-pack event. This is why I think this is significant.

9:20But it's absolutely true that eye-pack members tend to be these, you know, back benchers, sometimes oddballs. And sometimes that's what you need to raise the China issue, or raise the Taiwan issue in a different way. But you have to break into the mainstream. And this is a very, very mainstream political gathering in Europe. So I think this is actually really good at the normalization of engagement. This is not, you know, the meeting in Brussels that Shelby came for a spoke to was not an official event. It was this private meeting. And that's why China was like, oh, she's snuck in the back door because, you know, she did. But she's snuck in the back door. And now she was invited through the front door at an official EP hosted event. So yeah, there's some backlash. It's not perfect. You know, the commission is still, you know, as responded in a certain way, Taiwan wouldn't like. But this is a step in the right direction. I just add that you're absolutely right that it's important to be clear that this was not an IPAC event. But the European Parliament Vice President, who I was very prominent in this and stood beside Shell,

10:22and a potential is a member of the IPAC and also the European Parliament Vice President. So my point being that IPAC is still and more effective going concern than I might have thought to be the case. And Michael, I mean, obviously if more Taiwan politicians and high-ranking government officials go to Europe, I think China could step up its war to stop them going to Europe. Not its war as in firing at bombs at Taiwan, but its war to stop Taiwan officials from going to Europe. And what could it do? Well, I can do what it did to President Lai when he tried to visit S1TN for the first time, get other countries to deny airspace access and somehow prevent the trip from actually taking place. And indeed, I think it has a little bit of colorful detail that Taiwanese government was very much in pain to let people know that they had taken all kinds of precautions and kept everything super secret and supposedly,

11:26Liginja Long and Xiao Mei-Chi and somehow traveled wearing hats and changed their clothes and this kind of thing. So there's a bit of cloak and dagger in there, which I think the Taiwan government relishes telling people. But at the same time, I think it suggests that they're very aware that if word gets out in advance that there are leaks, there are all kinds of ways that China might be able to interfere with the event actually taking place. I actually disagree with this a little bit. I think, look, it's one situation when Taiwanese government is sending a specific presidential aircraft over this very specific area corridor in a chartered flight where three micro-states can just wave away the flight permissions. These people travel in all on regular scheduled commercial air services, whether it's China Airlines or EVA, or sometimes they've also taken Emirates to fly to Europe. And what is China going to do is say cancel the whole EVA commercial flight route. You know, deny Emirates permission, this flight from Dubai to enter or from Taipei to Dubai,

12:33which has been the route that Liginja Long has taken a few times. And it's normalized now. So it's very normal for Liginja Long to go to Europe. We're seeing it's much more normal now for Beikim to show up and have these meetings. And so yeah, China gets mad, but now the power diminishes because what can they do? This is a normal thing that's happening and other countries are going to look around and say, hey, look, it's done this, Belgium's done this. You know, why can't we invite Taiwanese officials as well to engage whether it's in Chakia or Poland or any other place? Moving on now, on China's Xi Jinping has stated to meet with the US President Donald Trump next Thursday in Washington, DC for what will be their third face-to-face meeting in a year or maybe not. As reports have been saying, China has warned it could cancel the summit at the last minute between the two leaders if the US approves new arms sales to Taiwan. And of course, the possible meeting has been a topic of much conversation here. For a minister Liginja Long this week said that Beijing is seeking to influence Donald Trump's handling of ties with both China and Taiwan. And according to Ligin, she is expected to raise the Taiwan issue during his visit,

13:36but Trump has a wide range of other issues to discuss with Beijing, including trade investment, procurement and AI competition. And Ligin went on to say according to the China Times that the US government has repeatedly assured the Liar Administration that its policy toward Taiwan has not changed and the US has persistently emphasized that peace and stability across the Taiwan Strait serve the interests of the US and the world. And the foreign minister also said that Taiwan's US relations should not be tied to US-China relations. So Michael, what should we be looking for here next week? I think that what we should be watching for is number one, whether anything comes out of the meeting that further derogates from the second of the six assurances, which was that back in the 80s the US said that it wouldn't consult with China over arms sales and President Trump at his last summit with Xi and China. After the summit on the plane said that arms sales were an excellent bargaining chip, which seemed to cut pretty

14:42clearly against that assurance. So number one, and then again, of course China has followed up and said reportedly anyway that if the US announced this pending $14 billion dollar arms sale to Taiwan before the meeting, the meeting wouldn't go ahead. So I think they want to keep that bargaining chip idea alive. What I would be watching for is if Trump says or the US does anything to, you know, that can be used to water down that assurance any further. The other thing is kind of related, which is that my understanding from what I've heard, you know, on podcasts and things like this from former US diplomats is that the two leaders usually have pretty frank direct discussions in private behind closed doors.

15:42And in that they talk about what their red lines are and don't do this and we really want you to do that and that sort of thing. My question is that I believe that Trump disclosed some of that the content of those discussions and his off the cost marks to US media while leaving China. Will he do that again? Would be the other thing that I would watch for. Well, I can tell you what won't come out of this Trump Xi meeting is an announcement that that $14 billion dollar arms sale to Taiwan will go through. Look, as Michael said, it's very clear that the second assurance has been broadly eroded, but I would say this is not the first time and I've done an analysis for this on for most review and listeners can read through that on my website. But ever since the first writing of these six assertions arm sales were on the table. This was something that was heavily discussed in the communicates with China in the opening of diplomatic relations. This is why Taiwan was pushed out of the F6 program and eventually had to develop its own indigenous fighter jet capabilities.

16:47So over time back and forth throughout the 90s, the early audits, you've seen all sorts of times when certainly arms sales have been discussed and the US has not sold arms to Taiwan in order to placate China. We're seeing it discussed a lot more explicitly now, but I think it's always been a bargaining chip. The problem is the explicitness of this and combined with a lot of other things Trump is saying starting to mirror Xi's language on Taiwan and when he says things like it's 9,500 miles away, I don't want to fight this war, it creates an impact both here and also in the United States. And that's an impact Xi wants to create. He wants in Taiwan there to be this growing idea that we cannot count on the US. That Taiwan will not be defended by the US, should not have faith in the US, and should have said pursue surrender talks with Beijing. And at the same time, he wants the American political establishment and the American people to view this as a fatalistic pursuit, that there's no chance of deterring China. And it's best for the US to keep out of what he would say as an internal dispute between Chinese people.

17:50I strongly agree with Sasha's first point about the fact that the historical record clearly shows that the US and China have repeatedly discussed US arms sales. And I don't think that it would be realistic to think that they wouldn't. And it's true that the actual language of the second assurance says that the US won't consult with Beijing about them. And there might be some distinction that some clever diplomat could draw between consult and discuss. We're not going to ask you for permission to do it. It's sort of the way I would read it. I think that Sasha's also right that, you know, very broadly, what China in many ways is interested in in these summit meetings really is more on the cognitive and discourse level and the protocol level rather than, you know, where the US is kind of always going in there.

18:56And I think this time it's no different with the whole bunch of concrete deliverables that they want to get, you know, soybean sales and beach sales and maybe an AI agreement or something like that. So the US wants all these concrete things. And I don't think China really cares about those things all that much. Their first priority is don't let our leader be embarrassed, which is a particularly, you know, strong concern with Trump and she being in unfamiliar territory in Washington. And then yes, I don't think that China wants, I think China's modus operandi is to try to see if it can peacefully take over other countries or as it sees it, other regions of China first by, you know, subverting capturing the elite in those countries. And so for China, a real takeaway from this would be language coming from the US administration that it can then deploy both in its own media and through its friends in Taiwan, feeling the American suspicion discourse saying that the US is unreliable and is going to walk away from Taiwan and won't defend Taiwan.

20:08Because that can change the political environment in Taiwan. And it would be much easier for China to take over Taiwan if it had a much friendlier political party in power. So I think that it's immediate goals have to do with that sort of thing rather than some kind of grand deal. And I think that's a completely agree and just look at how they've slowed down those Boeing purchases since the Beijing summit. There's this big announcement of the biolidies Boeing jets, which Trump was happy to trump it. And then look in the months since they've slowed down what that what that's going to be in practice. Why they want to keep this on the table. They want to keep a little carrot in front of Trump. So he doesn't give that $14 billion arm sale to Taiwan. And aren't rarest kind of the same. I think the US thinks that. Rareers aren't flowing as quickly as China said they were and that's I think that's another thing that China can keep on the table. You know, so that well, we'll give you something on this if you give us our propaganda and protocol points. I think the two sides are bargaining often over almost completely different things.

21:18Yeah, yeah. And where's Taiwan going to be sitting in all this session. Well, Taiwan will be sitting on the sidelines or in the middle. It'll be an object of discussions, but it will lack a lot of agency. And I think often people will fatalistic here. They think, well, we have no agency. What can we do? And it's true. Taiwan is unfortunately for centuries been tossed between superpowers. But Taiwan has a lot of opportunities to make itself better known and better aware here. It has the opportunity to assert itself whether it's an AI whether it's making it clear to the business industry in the US that you can't use Taiwan or whether it's making it clear to the American people that, you know, their future, their freedom is also depend on Taiwan. So I don't think Taiwan is completely sitting out of this. But yeah, they won't have a seat at the table in Washington. So it's important that every other day of the week, Taiwan's doing everything they can to make sure everyone in the US and around the world knows its value. I just like to rip off something, Sasha, just said, you know, Taiwan won't be there. So in a sense, it's it's it's sideline and an object rather than an agent that is fated in the immediate context of these talks.

22:23But what's really interesting about the discussions here in Taiwan is that you have, you know, the government to media outlets and commentators who are, you know, broadly, pro green or Taipei, you know, the Taiwan faction. They're trying to set things up before the summit and they will also try to spin whatever comes out of the summit as saying that Taiwan action to the Taiwanese people, Taiwan actually has more agency than you realize. And sometimes that gets you little, you know, over the top, I believe in Jalan reported we said that Taiwan and the US will be managing China, which seems to be, you know, very positive. But it is an example of trying to set Taiwan up as an agent of its fate. Now meanwhile, the other side, you know, say the United Daily News and the blue camp is looking for things that they can use to represent Taiwan's the Taiwanese people as being, you know, bargaining chips at not in control of their fate.

23:36An agent outside of what's going on, we're going to be active on. So we need to make good with, you know, have better relations with China and engage in more exchanges and do something differently with the current administration is doing. So the reception of this event in the summit in Taiwan will all be about framing Taiwan either as, you know, an agent of its destiny, Taiwan, the Jouki-Sing, you know, the subject to the Taiwan or Taiwan as an object upon a bargaining chip. Can I one thing? I completely agree with what Michael said and I'll have one other big problem with this is you'll see this willful misinterpretation or I don't know if it's willful misinterpretation or just these people are bad English, but you see this intentional manipulation and misinterpretation of comments made by Trump and American officials by the green media by DPP official to say actually everything's dandy and Taiwan is doing great.

24:40Case in point you continuously see in the green media when Trump made this comment on Air Force Taiwan on Air Force one wish there was Air Force Taiwan on Air Force one you basically said Taiwan is Taiwan and this was, you know, translated in the the green media as he said Taiwan is just Taiwan and it's this Taiwan is Taiwan is, you know, really recognizing Taiwan is just Taiwan. And that's not what he said he's like Taiwan is Taiwan it means like it's this problem it's there we're dealing with it. But you see this has been manipulated in the green media to say, you know, Trump is making this big endorsement of Taiwan and you've seen the foreign minister and others possibly in the president I believe in foreign media interviews citing this comment as some sort of big, big evidence that Trump and the Americans will back Taiwan no matter what and that, you know, there's no chance of any betrayal of Taiwan. So I don't know if that's just because the people interpreting and analyzing this have bad English or they're just sort of, you know, I'll have a lot of hope you're about this. So yeah, that's absolutely something that will come out of this as well on the green side of the media spectrum.

25:44And we have to take a short break now, but we will return after these rather important messages. And welcome back to Taiwan this week and we're moving on from the political side of things now to well, AI as industry leaders this week have been busy in the corner of the AI development to slow down due to recent safety concerns or dismissing such calls and warnings as being baloney. Now stocks related to artificial intelligence fell sharply this week after the CEOs of major US companies developing the most advanced AI models warned that the pace of development must slow to prevent threats to humanity. Taiwan semiconductor manufacturing share price slipped as did that of South Korea's SK Heinix in Samsung. There you go. But the government here in Taiwan appeared to be largely ignoring the warnings and instead was talking about how Taiwan and the US are supporting a new APEC task force on AI, the launch of a campaign aimed at collecting content that could help AI models better understand Taiwan values. The advancement of President Licheng does 10 major AI investment projects and Taiwan's AI sovereign training program more than tripling in size since its launch in December of last year.

26:54Well, they were the main AI stories here and Sasha everyone here seemed to be ignoring the fact that there had been calls for an AI slow down in development and what could that mean for Taiwan if these companies do slow down AI development. Well, first of all, please don't take any stark advice from me, but there's a lot of things going on here and I think there's a question of Taiwan's economies have a heavily dependent now on the AI sector. Mostly in chips, but a whole bunch of things downstream from that, you know, the servers, the racks, all these components of the AI. And I see that that's based on production here in Taiwan. So there's a question of that dependency and then there's a second question now if you know the frontier AI companies are going to slow down development is that going to impact demand here. I think on that point and that latter point, not really. First of all, we don't even know if the slow down is going to happen. There seems to be, you know, a unified call from a bunch of the frontier lives in terms of training, but also does that mean that they're going to be buying fewer chips or buying more. And fewer chips or buying them at a slower pace and also does that mean the slow down will actually happen.

27:58Jensen Huang doesn't seem to think there's going to be a slow down. Trump doesn't seem to think there's going to be a slow down. So it remains to be seen if that will happen. And if it does, there'll still be huge demand for all this technology from the frontier lives and also from everywhere else that's developing it. So, you know, let's not make any predictions. I don't know how this will go. Even the AI won't know. Maybe it'll be making the decisions for us. But there's a much bigger issue of Taiwan's dependency on the AI sector now. It's a bubble. There will be a bubble. It will burst. I don't know when it will burst. Nobody knows when it will burst. It might burst next year. It might burst five years from now. It might be 15 years from now. But there's going to be then a huge, huge impact to Taiwan because of that. And that's something Taiwan needs to be ready for by diversifying its economy and making sure that it's ready to handle that kind of shock. Three things. First, Taiwan hasn't really caught up with the discussion in the US. Second, Taiwan's economy has been highly dependent on the US technology industry for decades now.

29:08So, you know, this will have an impact. But let's look at how Taiwan handled that in the past and try to get an idea of what might happen here. Third, what Gavin was saying about Taiwan's own AI sovereignty and the various programs that is running, again, reminds me very much of what happened in Taiwan during the .com boom in the 1990s, which is that there was a lot of talk and some very small amounts of money thrown at things. But Taiwan didn't really do very much in terms of becoming, you know, a internet power or in the same way I don't think it's doing that much to become, you know, an AI software power as opposed to the AI hardware and chip power that it already is on the first point. You know, for those of us watching what's going on in the US and are interested in the AI, the blow up over the last week where suddenly people were saying that AI is going to kill humanity and we have to regulate things and put car trails in place.

30:18It isn't too surprising. There had been a growing discussion about data centers, which were already a major local political issue. There have been lots of concerns about safety. And all of a sudden those all came together last week and now we may or may not have some changes on how cutting edge models are regulated. But all of that is not really something that most people in Taiwan, even in government are following day to day. I think it came to them as kind of a surprise because people in Taiwan are generally pretty optimistic about AI, you know, all the politicians. It's not a negative issue when Taiwan, all the politicians running for office right now are competing for how many times they can use the word AI and every one of their policy proposals. It's just overwhelming. And the people working in the industry are busy filling all the orders and getting production runs and building new centers to pump out more chips. They don't have time to think about this stuff. So Taiwan has a caught up. That's number one. Number two, just because the leading edge models, you know, become more regulated if they do, which is totally unclear to me, that's actually going to happen.

31:29Sasha is absolutely right that that doesn't necessarily mean an immediate drop in demand for what Taiwan is selling, which of course are chips, servers and otherance Larry products. Third, what if that what if that does happen? So when the dot com bubble burst, you know, it had an immediate impact on Taiwan. Taiwan's GDP growth went from 6.4% the previous year to minus 1.3%. But then in a year or so, it bounced back to 5.6%. The great financial crisis with a little bit less impact, but the recovery took a little bit longer. In short, Taiwan is used to dealing with these sharp, sudden shocks and the government is really good at managing. It's totally capable of borrowing money to make up any revenue shortfalls and subsidizing people who lose work and that kind of thing. And if past experience, you know, goes to show that there will be a it will have an effect, you know, the sales of like, you know, those really fancy sports cars you're seeing all over the place right now will go down and people who sell them will lose their job.

32:39But but Taiwan, AI is not going the way it's come on faster than the internet. Its applications are immediately obvious and people are going to still need the equipment to Taiwan sells even if there's a short term. And so, Taiwan has been caught up. It's ready for the change, although it will be a shock. And finally, I don't think that Taiwan is really all that serious about becoming, you know, some kind of AI superpower that's developing leading models and that kind of thing. That's not just hype. Sorry, apparently SESHA, Michael said that Lai Qing does AI Island is just hype. I think Michael's way is a very important point. It's an issue I've raised several times publicly and also in private conversations with officials. Right now as we speak Taiwanese officials, delegations are in New York with this big campaign to be included in the UN. So the same slogan they've had the last several years is Chippen with Taiwan. I don't know what that means. As a native English speaker, I do not understand this.

33:42But there's a picture of a microchip on their posters, which are all over these bus shelters in New York and in Times Square. And it's supposed to give this big association with Taiwan as an AI Chippen center and they have AI and Taiwan and different coloring as you see in many things. And they really don't understand this huge backlash that there is to AI in the United States, but also in many other developed countries such as the UK. A lot of emerging economies and then other countries such as Taiwan that are very dependent on AI have really embraced AI. But there's a massive, massive backlash and it's not because of Chinese disinformation is somewhat how you believe it's because people are losing their jobs over this. It's because people can't afford housing in American cities, but somehow their tax dollars are used to subsidize data centers. So there's a big problem if Taiwan comes out there and says, hey, we're responsible for all of this. We're building those data centers. We're the source of this AI that's going to take your jobs. This is going to make the average American person and the average person in the UK and many European countries be like, hey, that's Taiwan that took my job.

34:48That's Taiwan that's building those data centers. I want nothing to do with this. And there is a complete lack of awareness at any level of the Taiwanese government and media establishment about this issue and it's something they really really need to be careful about. Be careful about you have leading politicians in the United States on both the Democrats and the Republicans saying we want a data center moratorium, we want a data center ban, we want to regulate AI. This is something that Taiwan needs to be very, very careful about in its international messaging. Fine, domestic messaging as Michael's pointed out, it is very funny. I'm very amused watching these campaign commercials where they compete, however, how to say many times to say AI or use AI. And honestly, I do hope AI is used more here and you know, Michael's gotten a lot of the point of Taiwan is failed to be a software super power. It's really get a hardware. It's not going to the software, you know, UX here is terrible. These are the kind of things AI can help. AI can help the UX, the software experience here. It's never going to be a major power for software and certainly for AI development. Taiwan can afford to compete.

35:49You know, there's only the United States and China, the only countries in the world that can compete in and in front of your AI development. So Taiwan has its niche to stay there. But when AI is useful, when it can help with software development with UX, go ahead but be very, very careful at how you talk about AI in the United States and other countries. I would just add that I think that Taiwan does need to think about its messaging about AI in the US. I mean, it is true that on a recent trip to the US, I was really shocked that still how many highly educated people I was actually at a sort of a private reunion of University of Chicago students where I believe both Sasha and I went. Where is my invite? Well, it was for people a little older than you. It's a class of eight. But I was really surprised at how these really smart, well informed people. I'd say at least 50% of them couldn't name the Taiwanese company that produces all the chips to the SMC.

37:00I mean, that's partly the name of the SMC that Taiwan loves initials, but they don't, you know, unless you're really familiar with them, people have trouble remembering them. So it makes some sense to point out that Taiwan is doing it. But I agree, you're waiting into a political fight that you don't really understand. That's it. The real reason Taiwan and the UN delegation are they're doing that putting up those signs and that kind of thing. It would be nice if people in the US noticed it and reacted positively, but the real audience is back here in Taiwan. That stuff will get coverage in the Taiwanese news media and the Taiwanese public loves seeing like that stuff like that. And it's very much part of the current government's program, you know, the DPP for years that Taiwan needs to rejoin the UN. And this is, they need to show the faithful and the base that they're actually doing something and they're not giving up. And I think that's the real point of that messaging, although I completely agree that it's risky.

38:01And of course, it is United Nations time soon, Sasha. And what do you see the government doing this year that's different to last year? If anything, a tool that's different to last year. I would say nothing is different from last year. Or the year before that. I agree 100% with what Michael said. This is for domestic audiences. I mean, look, I'm from New York. I've been invited before by the New York office to their press conference outside the UN. And I was one of maybe two people from media that attended there. This is this is a no way to raise a message on international stage. It's for domestic audiences. They want to see good coverage in the Taiwanese media about the great efforts they're doing. I think, look, Taiwan's never getting back into the UN anytime soon. It's time to focus on relationships that matter. And what should it do? Should it join? Of course, America, your country decided to form its own UN a couple of years ago. Do you think Taiwan should join that? The board of peace. Yeah, yeah. And this is one thing. Taiwan sort of acts like it has this pragmatic diplomacy where it's willing to cut a couple big checks with some dictators because it helps recognition of the ROC.

39:05But it's not willing to play the influence game with Trump, like the Middle Eastern countries do. They're not willing to throw some money at Jared Kushner or build a Trump golf course and tell you in somewhere. Or, you know, cough up a few billion dollars for the board of peace. And I think that would be money much better spent than subsidizing this sort of human trafficking king of S.W.A.T.E. I was happy to have a cost a lot more money though. Not sure. I mean, look, Mofa's requested a 4 billion entity increase for next year. One billion of which is just to build a science park in S.W.A.T.E. So, look, you want to throw that money somewhere else. Maybe at the Trump family and get a little bit of influence. So, Michael, I mean, do you think the government here should stop prancing around in New York City and elsewhere in America with stupid advertising? And instead, just give Donald Trump his family a big check. I think that would... I see the immediate temptation of pursuing that kind of course. But I think that actually, you know, when it comes to spending money and actually doing things that the Taiwanese become very...

40:09The Taiwanese government becomes very cautious. And I think with good reason, they understand very well that half of America hates the other half. And they don't want to offend the Democrats anymore, maybe than they already have at times. And so, they want Taiwan to say a bipartisan issue. And is that something that they... I think do a pretty good job on, even though I'm critical of other aspects of how they... Conduct things. And so, I think they're very cautious about doing something like that because it would invite partisan backlash in the U.S. and in Congress. The people will remember and they don't want to do that. They want to stay on good relations with both parties without doing too much for one or the other. That has more... Joining the UN thing, you know, I always felt that it's, you know, a sort of a form of play acting and this kind of thing.

41:14But the truth is that it's very important to people here in Taiwan. People in Taiwan really believe in, like, I think maybe this is the case in many small countries. And in many small countries have a real interest in international order and international institutions. And they lend legitimacy and a voice. And so, for people in Taiwan, it's something that they really like to see and hope that the world could be this way, even if they probably know deep down inside that it isn't. I completely disagree with what Michael has said here. Look, I think they play lip service of this, like, when they're taking meetings on the hill, they'll take an equal number of democratic and Republican meetings if they can get it. And then look, what do they do? Light Shinder does a press conference with APAC publicly or they have these weird figures like, and his canter showing up and all these very, you know, marginal far right figures, because they have very prominent associations in Taiwan and with Taiwanese officials. And they really don't think about the immense backlash that comes from the Democrats, from the left side of the spectrum, and often as well with the populist sides of the right wing.

42:19So they kind of have this homage to lip service of, you know, what we'll say we're doing everything bipartisan, but they're really not aware of how things look in the United States and messaging. And they often do these very, very dangerous moves. And you know, by contrast, throwing a bit of cash at the, you know, the Trump family is just something everyone is doing. It's not, it's not going to generate a human amount of backlash from people understand you, you got to, you got to play the game. There's certainly no tight fist in this when it comes to a lot of this spending. Like, yes, Mofa can be very tight fisted about funding a lot of different, quite important initiatives. But how many Mercedes does the king of S.W.A.T. on? I think it's like four, five hundred at this point and about half of them have been purchased by Taiwan with their annual multi million dollar contributions to his big birthday bashes. So I think look, if you can be bright being a strong men and dictators, at least bribe the ones who have nuclear weapons. And that comment will leave it here this week on Taiwan this week. And I've been joining the studio today by Sasha Chabra.

43:21Thanks for having me on. And by Michael Fahey in your Lin. Take care, Gavin and Sasha. And thanks for tuning into this week's edition of Taiwan this week here on ICR2 with me Gavin Phyps. And there won't be a show next week due to it being the Mid-Auto Festival long weekend holiday. But we will return on Friday October the second. In the meantime, don't forget to check out Taiwan this week podcast now. I'll frame it podcast app when you access all our previous shows. Tune in again next Friday evening for another informative look at the tough stories of the week with Taiwan this week. And don't forget to also check out our podcast on our website, icrt.com.tw. Now keep it here for more music and news only on ICRT FM 100.