The United States is preparing to tell three dozen allied nations that they cannot straddle both sides of the global artificial intelligence race, according to a draft State Department letter addressed to the 35 signatories of the U.S. AI Opportunity Statement. The message is blunt: countries that also join China's newly formed AI coalition risk being cut out of Washington's own alliance, built around shared access to advanced chips, computing power and critical minerals.
The plan, first reported by CNBC citing Reuters, is based on an internal draft and a U.S. official familiar with the matter. The draft letter itself is undated, and the U.S. has not determined when it will actually be sent, but its language is unambiguous: Pax Silica membership, the letter states, cannot be held alongside membership in duplicative initiatives with conflicting expectations. A U.S. official told Reuters that a country cannot credibly be a trusted partner in one technology ecosystem while joining China's competing AI initiative.
Pax Silica itself is the product of a diplomatic push that began in Washington, D.C. on December 12, 2025, when Under Secretary of State for Economic Affairs Jacob Helberg launched the initiative at an inaugural summit, framing compute capacity, semiconductors and critical minerals as the central pillars of 21st-century national security, according to the U.S. Department of State. The coalition has grown to roughly two dozen member countries, including Japan, Australia and South Korea, and the framework remains officially non-binding — designed to promote joint AI and chip projects, shared investment opportunities and coordinated export controls rather than a formal treaty.
A Rival Bloc Takes Shape In Shanghai
The pressure campaign traces back to a rival framework Beijing unveiled this summer. On July 16, 2026, Chinese Foreign Minister Wang Yi and officials from 29 founding member nations — including Russia, Pakistan, Indonesia and Belarus — signed an agreement in Shanghai establishing the World Artificial Intelligence Cooperation Organization, an independent intergovernmental body headquartered in the city, according to China's Ministry of Foreign Affairs. The organization promotes China's open-weight AI technology, and the following day, at the World AI Conference, President Xi Jinping pledged 5,000 specialized AI training slots for developing countries over five years along with new AI application centers for ASEAN, BRICS and Shanghai Cooperation Organization members, as reported by Xinhua News Agency.
That offer is landing at a moment when Chinese open-weight AI models have made rapid gains against proprietary systems built by U.S. companies including OpenAI and Anthropic. Official Chinese data released in July 2026 put the country's core AI market above 1.2 trillion yuan, or roughly $176.6 billion, in 2025 across more than 6,200 domestic enterprises, with Chinese open-source models racking up more than 10 billion global downloads, per the Chinese People's Political Consultative Conference data cited by state media.
Kazakhstan Caught Signing Both Sides
The immediate trigger for Washington's draft letter appears to be Kazakhstan, which became the first Central Asian country to join Pax Silica in June 2026, prized for its significant reserves of critical minerals. Weeks later, Kazakhstan also signed on to China's WAICO agreement on July 16, 2026 — making it, per Reuters, the only country known to have joined both competing AI initiatives. That dual membership crystallized the tension Washington is now trying to resolve: resource-rich, non-aligned states want access to American capital and hardware without cutting ties to Chinese technology, a dynamic detailed by GIS Reports.
China's near-monopoly over critical minerals gives Beijing significant leverage in this standoff. China has previously used that dominance as a retaliatory weapon in the tariff war that began in 2025, and President Trump has ramped up U.S. efforts to source critical minerals domestically and from allies in response. Beijing is also weighing restrictions on overseas access to some of its leading AI models, according to the Reuters reporting relayed by CNBC, a move that would tighten its grip on the very open-weight tools drawing developing nations toward WAICO.
Beijing Pushes Back On The Ultimatum
China's embassy in Washington has objected to what it calls the politicization of trade and technology issues. An embassy spokesperson said such actions will stifle global AI advances and serve no one's interests. The State Department, for its part, declined to comment on what it described as purportedly leaked internal documents.
Underlying the standoff is a shared anxiety in Washington about what advanced AI can do in the wrong hands, including concerns that the technology could enable autonomous hacking and be leveraged for military or economic dominance. U.S. officials drafted the letter specifically to pressure signatory countries into choosing deliberately between the two ecosystems rather than hedging their bets, urging them to commit to what the AI Opportunity Statement — signed by all 35 countries in June 2026 — called a common purpose and shared vision with the United States.
Building The Physical Infrastructure Behind The Rivalry
Away from the diplomatic maneuvering, Pax Silica has already produced concrete projects on the ground. The Philippines became the 13th country to sign the Pax Silica Declaration in May 2026, partnering with the State Department to build an AI-native industrial hub in New Clark City aimed at strengthening semiconductor assembly and critical mineral processing, according to The Philippine Star. A month later, the State Department announced a Pax Silica pilot project in Panama to build an AI supply chain credentialing platform meant to verify and expedite shipments of semiconductors and minerals through the Panama Canal, per the U.S. Embassy in Poland.
Those investments sit alongside a string of domestic U.S. moves to shore up mineral supplies that Hoodline previously reported, including a Commerce Department rule finalized on August 7, 2026 that will block exports of tungsten scrap and lithium-ion battery waste starting August 27, 2026 — a response, in part, to China's December 2024 export ban on gallium, germanium and antimony, which Beijing paused for the U.S. through November 27, 2026 while keeping strict licensing controls in place. Whether the draft letter to the 35 Pax Silica signatories is ultimately sent, and how nations like Kazakhstan respond, remains unresolved as Washington and Beijing continue building competing infrastructure to lock in the world's AI supply chains.
