Since the arrival of the Chinese AI tool DeepSeek in January, this month has seen a flurry of conferences on artificial intelligence (AI).

At the AI Action Summit in Paris on February 11, 2025, attended by global leaders like EU President Ursula van Leyden, French President Emmanuel Macron and Indian Prime Minister Modi, US Vice President JD Vance made four major US policy points on AI. 

First, the Trump Administration “will ensure that American AI technology continues to be the gold standard worldwide, and we are the partner of choice for other foreign countries and certainly businesses as they expand their own use of AI.” 

Second, “we believe that excessive regulation of the AI sector could kill a transformative industry just as it’s taking off.”

Namely, the US wants more AI deregulation. 

Third, we feel very strongly that AI must remain free from ideological bias, and that American AI will not be co-opted into a tool for authoritarian censorship.” 

Fourth, the Trump administration will maintain a pro worker growth path for AI.”

Trump2.0 does not fear job losses as AI is seen as a tool for job creation.

The current daily tornado of Executive Orders and speeches by key American officials on global issues suggest that despite the sound and the fury, the key signal of Trump 2.0 is to transactionally create fortress America, defended by tariff and migration walls, aiming to achieve the gold standards in energy, AI/technology, military power and the dollar. 

Tariffs on Canada and Mexico, claims on Greenland, and ending the war in Ukraine only prove Henry Kissinger’s dictum, “It may be dangerous to be America’s enemy, but to be America’s friend is fatal.” 

No country has experienced such a bitter lesson than Ukraine, having lost an unverifiable number of war casualties, huge war debts to NATO countries, with threatened US aid cut-off, unless it cedes rare mineral rights to America.  

What is happening to the gold standard, since the price of gold has hit just under US$3,000 per ounce in New York, performing better than S&P 500 or the NASDAQ stock indices?  

Veteran gold analyst Alasdair Macleod has argued that recent events in the New York and London gold markets show that the gold price uptick is less about the speculation on gold as a hedge against systemic risks, but more an issue of the devaluation of the dollar standard against gold.  

Indeed, the dollar has strengthened against the other reserve currencies as inflation has remained stubbornly higher than the Fed anticipated, so US interest rates are higher than Euro, Japan or Chinese interest rates.  

Indeed, central banks like China, Russia and smaller countries are beginning to buy gold in serious quantities, worried about possible US sanctions on their financial systems for geopolitical reasons. 

What the gold standard for money shows is that any benchmark is not absolute and is relative to something else.

Thus, the US is benchmarking herself against China in different metrics, such as finance, technology, military power, GDP, education, health and soft power.

 The US is the world leader in oil and gas production, with the ambition of increasing oil production by 3 million barrels per day, whilst virtually abandoning Biden’s green commitments.

America will use her energy advantage to power her competitive edge in energy-dependent technology, military-industrial production and eventually be less reliant on China.  

As Indian analyst Manoj Joshi shrewdly recognised, the US restrictions and sanctions on technology against China have inadvertently spurred China to accelerate R&D and innovation, allowing it to challenge Western dominance.

Chinese overall strategy appear three-pronged: “replicating technologies that are restricted by the West, emphasising a younger and more productive cohort of their scientists and researchers, and third, focusing on entirely new technologies where the West does not have the kind of lead that it had.” 

Since any change requires some form of use or transformation of energy, such as sunlight into plants through photosynthesis and through time into fossil-fuels, we need to recognise in the 21st century that energy, power, finance, technology and geopolitical power are one and the same thing.  

America is the world’s leading fossil-fuel nation, being the largest producer of oil and gas.

China is energy and resource starved, but she has concentrated on alternative energies (especially solar, wind and hydro) and on electricity generation and batteries to store energy, as almost all tech devices run on electricity.  

Indeed, China is the emerging electricity-driven tech state, whereas the US remains a fossil-fuel reliant economy, with Chinese electricity production twice that of the US, even though Chinese electricity consumption per capita remains lower than the US (Brookings study).  

After all, even cybercurrency mining is energy hungry, whilst AI learning models, advanced chip production and data centres rely on the availability of abundant cheap energy. 

If you have cheap energy, like Saudi Arabia, you can green the deserts and grow food through desalinated water.

An energy abundant nation can even mine cybercurrency to finance its development.

Essentially, a new energy-powered model (how you exploit free sunshine and energy/natural resources using technology) is emerging to replace the old Bretton Woods “let free markets rule” development model. 

So why is the gold standard so critical in understanding money and power?  

Gold is the sole zero-counterparty money.  

Credit or fiat money relies on faith that the counterparty (like the US paying off its debt) will never default.

But if you print too much money, history shows that sooner or later, the credit bubble will burst.

Cybercurrency essentially means that you are using an energy-standard in mining Bitcoin.

The more we use cybercurrency or gold, the less we need dollars or any reserve currency. 

Trump2.0 is testing the boundaries of mainstream monetary and fiscal theory.

“Drill, baby, drill” may be pricking or blowing the growing credit bubble.  

We really don’t know. As the dollar note says, “in God we trust”.

Everyone else should pay in gold or energy-coins.

(Andrew Sheng is Distinguished Fellow of Asia Global Institute, University of Hong Kong, and Chief Adviser to the China Banking Regulatory Commission.)