Oren Cass warns that Washington’s China policy on AI chips is incoherent, dangerous, and driven by the same corporate interests that sold out American industry for decades.

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This clip aired on WarRoom’s morning show on December 9, 2025. Transcript begins below (lightly edited for clarity; may contain minor errors).

STEVE BANNON (HOST): I want to start with Oren Cass of American Compass, the chief economist over there.

So folks should understand behind the scenes in D C, two huge things are taking place simultaneously. Number one, the Senate is working on a megabus, not an omnibus, but a megabus. This thing’s quite frankly a mess. We’re going to break that down later. All types of spending we thought we got out of there is back in. So we’ll get to that in a moment.

But the other big fight is about kind of this. David Sacks people want no restrictions. But on the other hand, because the reason we’re even talking about no restrictions is that we’ve had a Sputnik moment. We’re in a race like either to the moon or to build a hydrogen bomb against the Soviets. And we can’t miss a beat. We can’t put any restraints or any oversight on these amazing entrepreneurs because to do so, we turn the world over to the Chinese Communist Party.

But simultaneously, the Chinese Communist Party can’t be competitive unless they have our chips, our know how, our education, our capital, all of it, the whole ecosystem to build a complex system, probably the most complex, like artificial intelligence, needs Western support in every aspect of it.

So make it make sense to me. How do we have this situation where we are, and we’re going to get a team of experts to start coming on here. Many have never been on the War Room before because they’re experts in this area. And across the board, this is kind of uniting a lot of people saying, we don’t understand what’s happening. Just explain it to us.

Oren, the floor is yours.

OREN CASS (GUEST): Well, thank you for having me on. It is a sad day for America first, bluntly. I think as you’ve laid out, there are these fights that have been going on behind the scenes over all of these different definitions and fights on AI. And what’s fascinating about them is these people won’t have the debates in public. You won’t find anybody actually go out there, face a tough interview, and try to explain why we should be telling states nobody else can do any regulation. They will certainly not go out and explain why should we sell chips to China. And yet they continue to push these directly contradictory policies.

AI is the most important thing. We have to win on it. Also, we should give advanced chips to China. I have to highlight, because this is so funny or maybe pathetic, you decide. Literally yesterday, as the Trump administration was saying we’re going to start selling these advanced chips called the H 200s to China, the Trump administration Department of Justice was proudly announcing they had cracked down on somebody for smuggling those exact same chips to China.

This is the release from the Department of Justice. Proudly says that they exposed a sophisticated smuggling network that threatens our nation’s security by funneling cutting edge AI technology to those who would use it against American interests. Well, now it’s President Trump and the White House that are funneling that exact same cutting edge AI technology to the Chinese who would use it against American interest.

The only through line, the only common denominator that makes sense, is at every stage it’s the choice that’s going to make the most money for the people selling these products, the people who apparently get the last hearing in the Oval Office, the people who the decisions are being made on behalf of with no consideration for the national interest or the American people.

STEVE BANNON (HOST): I want to go back because it’s absolutely kind of one of the key points. The Justice Department, and this investigation’s been going on a while, and the way that the release is, is that they’ve had a massive investigation. They found these guys that are basically black market guys doing this. And it’s like I said, Jensen Huang is an arms dealer. He’s an art dealer. And guess what. Some black market arms dealers got caught, as arms dealers often do, by people like the Justice Department that have these nets out there to make sure this isn’t happening. Delete that.

All the controls we put in in the Commerce Department and all the different regulatory agencies that have a hand in this. You have very tight restrictions on this. You go up to Capitol Hill. You get sign off. You get everybody in kind of agreement. Nobody’s perfectly happy, but it kind of is a structure that you live with.

And then on the very day that they announce this really great effort to get these smaller arms dealers, the biggest arms dealer gets a pass, and he’s going to pay, you know, he’s going to give 25 % to the American people or back to the government. That’s fine, but it’s kind of irrelevant if you’re selling them something that’ll make them even near competitive.

If this is a race, and we’ve signed an executive order that turns the national labs and turns the weapons labs, the great weapons labs that Oppenheimer and the team built the atomic bomb and then built a hydrogen bomb, those same weapons labs, Los Alamos, Lawrence Livermore, Sandia, and others, plus the other national labs, will essentially be turned over to the AI guys because it’s a matter of the utmost national security.

You know, why do we provide not just the chips but any part of the ecosystem, the capital, the expertise, the 350,000 Chinese students over here, all taking engineering and advanced computer, because they’re not majoring in medieval poetry. None of that.

So two things can’t be right at the same time. If this is a Sputnik moment, okay, and we have to actually do some things that we wouldn’t be comfortable with in ceding ground to the accelerationist, right. Then at the same time, you can’t be arming the enemy with everything they need to actually compete with us. It doesn’t make any sense, does it.

Is there any logic here that you and I are missing or the other people I’ve talked to, the hundreds of other people in the last 24 hours on this.

OREN CASS (GUEST): Well, look, the argument that folks will make behind the scenes, because as I said, no one’s willing to make this argument in public because it is such a weak argument. But if you ask them, you know, with a straight face, like, tell me what you think here. What are they saying in the Oval Office.

The argument is essentially that we want U S to have tech leadership in China. And so if we sell these advanced chips to China, that’ll allow us to keep a foothold there. That’ll sort of addict them to our technology. This should sound familiar because it’s the exact same thing corporations have been saying for 30 years.

Every new generation comes in and says, we have to get into China, we have to sell our technology, we have to give away our technology there, and that’s going to be good for us in the long run. And every single time they end up embarrassed and thrown out on the street, and China keeps the technology and takes the leadership. And yes, the shareholders get a bunch of profit in the short run, and the U S falls behind in the long run.

And what’s so frustrating here is that AI’s in many ways now the one advantage that we have. If you think about the competition that we’re in with China, as we try to reindustrialize, build back manufacturing in this country, our advantage on AI chips, our ability to build the most powerful systems, that’s really the one thing that we sort of have going for us as we try to make up for the mistakes of the past.

And so to have folks saying, no, no, we want to instead go back and make the exact same mistake again, undermine the advantage that we have just to make a little bit more money in the short run. This is exactly the mistake we’ve been making over and over again.

And you just have to ask yourself, you know, if the tables were turned, if China had this advantage, would you have Chinese interest at all. It just gets thrown out the window if there’s a little bit more money to be made, essentially selling the Chinese the rope that they’re going to hang us with.

STEVE BANNON (HOST): And what you’re talking about is decoupling. Is that in 2019, in 2019 they did this. This is why you’ve had TikTok, you’ve had DeepSeek, you’ve had all these things. As soon as they get enough expertise, because they copy everything, as soon as they get enough expertise, they try to decouple from the West. This is why they didn’t sign the Lighthizer deal.

President Trump negotiated for two years. They would take care of the seven deadly sins and integrate them into the global economy. They actually, at the very last second, Liu He, when he presented it to Wang Qishan and Xi, they tore it up. They said, we’re not going to do that. Then we’re not going to do that. The two years of negotiation.

What you mention here is that Jensen Huang, when you talk about this and people making this argument, Jensen Huang is trying to sell the American people that it doesn’t matter who wins. If China wins, that’s okay. If a Chinese company wins, it’s okay. He’s on record saying that. He’s actually said the American dream, that if you’re a China Hawk, that is a badge of shame.

If you’re a China Hawk, if you’re anti CCP, you’re a China Hawk, that is a badge of shame, not a badge of honor. And he’s said in this regard that the American dream actually goes through China. What would you say of a person that tried to make that pitch consistently to the American people, sir.

OREN CASS (GUEST): Well, I think you’re giving him too much credit for even saying he’s making a pitch consistently. One of the reasons he’s not actually out there trying to make the case for this policy is because he can’t make the case for anything. One day he goes out there and says China’s going to win. One day he goes out there and says it doesn’t matter who’s going to win. Then his PR people run in to clean up and say, no, no, no, we’re going to win.

Then he says export controls don’t work. Then he says there’s no smuggling going on. Then he says don’t worry about the smuggling, just let us sell it directly. Then one day, obviously, we have to beat China. The next day, China Hawk is a badge of shame. It’s just throwing stuff at the wall, seeing what, if anything, sticks, and counting on at the end of the day having an administration that isn’t going to think about the actual arguments, that’s just going to sort of, I guess, go with the rich guy.

And I would hope that we’d have an administration. We have policymakers. You know, it was reported that when Trump met with Xi, he was thinking about doing this kind of deal. And other folks in the administration, maybe with cooler heads, stepped in and said, you can’t do this. This is a mistake. This is bad for the United States. This is not consistent with the foreign policy that the president has espoused, the commitment to America first.

And now they’re throwing it all out the window. And it’s a tragedy for this administration, and it’s going to be a tragedy for the United States.

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The post America’s AI Advantage Is Being Sold Out: Oren Cass Warns We’re Repeating the Same China Mistakes for Short-Term Gain appeared first on Stephen K Bannon’s War Room.