Eurasia Group’s Xiaomeng Lu explains why China's tech competition with the U.S. remains intense, but argues that tech co-dependence may expand in 2026, driven by easing export controls, cross-border deals, and the global uptake of Chinese open-source AI models. Lu also outlines how these open-source AI models could eventually create Android-like ecosystems with global influence.

San Francisco

Eurasia Group experts suggest that the technological relationship between the U.S. and China is likely to become more co-dependent by 2026, even as both countries remain competitors in artificial intelligence and semiconductor sectors. President Xi Jinping's recent address highlighted China's achievements and promoted open source A.I. models as a means of global engagement.

The report notes that slower U.S. export controls and increased cross-border mergers are facilitating greater tech exchange. Chinese open source A.I. models are gaining traction globally, with significant adoption among Silicon Valley startups, indicating a potential shift in the global technology ecosystem.

U.S.-China tech co-dependence may grow in 2026: Eurasia Group

Now what I want to know is President Xi Jinping in his New Year's Eve address. He highlighted the achievements of China in its A.I. and chip industry calling for more confidence in the country's development path. I want to get your take on how you received or how you viewed this. You know he was kind of cheerleading for his country about the developments. And of course maybe what do you expect from China this year. Yeah I think President Xi definitely trying to deliver a positive message on this. But I think there's also the reality that U.S. and China are very much locked in the technology competition with A.I. at its center. And I think between the two China two country in 2026 we are likely to see some tech coal dependence going on and even growing despite the broader trend of U.S. China competition. You can see that from the slowing export control coming out of Washington that will allow technology supply to flow and cross-border merger acquisition deal are coming through as well with some strings attached but wider adoption. I think this is a point that President Xi mentioned in his New Year's speech that a Chinese open source model offers a sense of globalization revival because the open source models are just almost as good as they're here in the U.S. are closed source version but comes at three at least at the very early stage of deployment. As you're talking about these open models that China is largely using as it is more globally adopted do you think that China will be influencing the global ecosystem of A.I. more in this space. I think in the beginning it's hard to see that. But what's going to happen in a few years down the road. You could envision in one scenario these open source models become a version of Android ecosystem and have some lock in facts with users around the world. I think it was around Thanksgiving time in the U.S. where the venture capital company Anderson Horowitz were saying that among all the startups this company invested in Silicon Valley 80 percent of them built their application on Chinese open source models. That shows the potential of influence this type of business model may have around the world in the future.

Israel says more than 30 aid groups have failed to comply with new rules to register their workers and will have access to Gaza suspended. The banned organizations say the rules will have horrific consequences during deadly floods as it tries to rebuild just months into a fragile ceasefire.

Jerusalem

Middle East Conflict

Israel’s ban on dozens of aid groups from Gaza begins

A U.S. intelligence assessment has determined that Ukraine is not responsible for what Russia claims was a drone strike targeting Vladimir Putin’s residence. Both Putin and Ukrainian President Volodymyr Zelenskyy gave year-end news conferences amid continuing discussions about a peace deal held up by key unsettled issues.

Moscow

CIA rejects Russia’s claim Ukraine tried to hit Putin’s residence

Zohran Mamdani was officially inaugurated as the mayor of New York City, becoming the first Muslim and first immigrant in half a century to hold the position. The public ceremony at City Hall featured Senator Bernie Sanders administering the oath of office, followed by a community celebration on Broadway.

New York

Mayor Zohran Mamdani inaugurated at New York’s City Hall

Taiwan’s president has struck a defiant tone after China launched fresh military drills near the island. In a New Year’s Day speech, Lai Ching-te said 2026 would be a critical year and vowed to defend Taiwan’s sovereignty.

Taipei City

Taiwan president signals tougher stance on Beijing

For several years, the French government has explored ways to limit teenagers’ access to social media due to its harmful impact on mental health, and new guidance from the European Commission could now make it easier for France to pass legislation on the matter.

Paris

France proposes social media ban, following Australian model

Israel will enforce a ban on 37 international NGOs in the Gaza Strip, citing failure to meet security and transparency standards.

Israel says it 'will enforce' ban on 37 NGOs in Gaza

Zohran Mamdani became mayor of New York City just after midnight on Thursday, marking a historic moment with a low-key swearing-in ceremony held deep beneath Manhattan. The Democrat, who at 34 is the city’s youngest mayor in generations, takes office as one of the most closely watched political figures in the U.S.

Mamdani becomes New York City mayor

Dozens of people have been killed and 100 injured, most of them seriously, after a fire tore through a crowded bar during a New Year's Eve party in the upscale ski resort of Crans-Montana, Swiss officials said.

Crans-Montana

Dozens killed, 100 injured in fire in Swiss ski resort bar

President Donald Trump said his administration was removing the National Guard from Chicago, Los Angeles and Portland, but he added in his social media post that federal forces will "come back" if crime rates go up.

Chicago

Trump: National Guard being removed from Chicago, LA and Portland

Finnish police have seized a cargo ship suspected of sabotaging an undersea telecom cable between Helsinki and Estonia on December 31. Authorities say the vessel was sailing from Russia to Israel when it was intercepted in the Gulf of Finland.

Helsinki

Finland seizes Russia-linked ship over suspected cable sabotage

Russia's defense ministry released video footage on Wednesday (December 31) of what it said was a downed drone at a briefing intended to show Ukraine tried this week to attack a presidential residence and challenge Kyiv's denials that such an attack took place.

Russia releases video footage to challenge Kyiv over alleged attack

Severe humanitarian needs in Gaza are worsening as dozens of aid groups are forced to halt operations under new Israeli restrictions.
Up to 48 organizations have stopped work, leaving fewer clinics, food distributions and shelters for civilians.

Israel to block dozens of aid groups working in war-battered Gaza

The world has begun saying goodbye to 2025, with South Pacific nations first to welcome 2026.

Council of the City of Sydney

Fireworks light up the globe as nations ring in 2026

CNN, citing sources, reported that the CIA had carried out a drone strike earlier this month on a port facility on the coast of Venezuela. U.S. President Donald Trump said the U.S. struck a facility where boats accused of carrying drugs "load up."

Caracas

Trump says U.S. strike hit dock in Venezuela

President Trump says the U.S. "knocked out" a "big facility" last week linked to alleged drug boat operations. Unlike previous operations at sea, this strike occurred on Venezuelan territory, though the president did not disclose specific details about the timing, location, or the party responsible for the attack.

Washington

Trump says U.S. launched strike on boat dock inside Venezuela

Tatiana Schlossberg, the granddaughter of President John F. Kennedy and an environmental journalist, has died at the age of 35 following a battle with cancer, the JFK Library Foundation announced Tuesday.

Tatiana Schlossberg, JFK's granddaughter, dies at 35

The United Arab Emirates says it's withdrawing its remaining forces from Yemen. The move comes after Saudi Arabia bombed a port in Yemen, saying it targeted an arms shipment intended for a UAE-backed separatist force.

Al Mukalla

Saudi Arabia bombs port in Yemen

In an overnight strike, the Saudi military hit a Yemeni port saying they were neutralising a weapons shipments arriving from UAE. The UAE has denied the shipment contained weapons and claimed the vehicles were not intended for any groups. Both countries have supported the fighting sides in the over-decade long war in Yemen, but this strike has turned this rivalry into an open dispute.

The UAE denies shipping weapons to Yemen after overnight Saudi strike

The Kremlin said Tuesday it would toughen its negotiating position in talks on ending the war in Ukraine after accusing Kyiv of attacking a Russian presidential residence — an allegation that Kyiv said was baseless and intended to prolong the conflict.

Russia will toughen negotiating stance on war in Ukraine

China fired rockets into waters off northern and southern Taiwan on Tuesday (December 30) and deployed new amphibious assault ships alongside bomber aircraft and destroyers on the second day of its most extensive war games.

China fires rockets towards Taiwan in war games simulating blockade

President Donald Trump on Monday confirmed an alleged drug-related site was targeted during a recent strike, saying, "they load the boats up with drugs, so we hit all the boats and now we hit the area." Trump did not say when the strike happened or exactly where.

U.S. strike hits Venezuelan port facility

The search for Malaysia Airlines flight 370 that went missing in 2014 with 239 people on board is expected to resume Tuesday (December 30). The Malaysian government and a private marine robotics company say they will use advances in technology to aid in the search.

Kuala Lumpur

Search resumes for Malaysia Airlines flight that disappeared in 2014

The two countries have agreed to hold fire, freeze troop movements and allow civilians to return home under a new agreement.

Krong Poi Pet

Thailand-Cambodia ceasefire holds as 72-hour observation period ends

Head of Yemen's presidential council, which is supported by Saudi Arabia, says UAE-backed forces in the country should leave within 24 hours.

Yemen’s presidential council cancels UAE defence deal

U.S. President Donald Trump said the United States could support another major strike on Iran were it to resume rebuilding its ballistic missile or nuclear weapons programs and warned Hamas of severe consequences if it does not disarm.

Florida

Trump warns Iran of possible strike, urges Hamas to disarm

U.S. hit an area in Venezuela where boats are loaded with drugs, Trump says, as Pentagon carries out another deadly strike in the Pacific. This claim follows a series of U.S. strikes on boats in the Eastern Pacific, raising the total number of known strikes to 31 and resulting in over 100 deaths.

Trump claims attack on a dock in Venezuela, strikes kill two in Pacific

The Taiwanese government says it has placed its forces on alert as China intensifies its military presence in the Indo-Pacific Ocean and launches air, navy and rocket drills around the island.

Taiwan's forces on alert as China launches military drills

Ukrainian President Volodymyr Zelenskyy is denying Russian Foreign Minister Sergei Lavrov’s claim that Ukraine tried to attack President Vladimir Putin's residence in northern Russia.

Kyiv

Ukraine Invasion

Zelenskyy denies Russian claim that Ukraine targeted Putin’s residence

President Trump said after a meeting with Israeli Prime Minister Benjamin Netanyahu that Hamas must disarm soon or "there will be hell to pay." He said the next phase of the Gaza peace plan could move forward quickly if Hamas disarms.

Trump warns "hell to pay" if Hamas doesn't disarm

CBC’s Kris Reyes highlights the biggest AI advancements in 2025 along with the continued calls to establish clear boundaries in an effort to prevent misuse.

Breakdown