Beijing warns of retaliation if US probes Chinese AI firms

Beijing has issued a warning that it will retaliate if the United States proceeds with investigations and potential sanctions against Chinese artificial intelligence companies. This development comes amid escalating diplomatic tensions between the two nations, with Washington indicating increased scrutiny of China’s tech sector. The warning from Beijing appears to reflect a growing rift that could affect various aspects of U.S.-China relations, including high-level diplomatic engagements. In the context of these tensions, markets are assessing the likelihood of Chinese President Xi Jinping visiting the United States before the end of 2026. Key Takeaways Beijing’s warning suggests escalating diplomatic tensions, which could negatively impact the probability of a visit by Xi Jinping to the U.S. Market pricing indicates a slight decrease in the likelihood of Xi visiting the U.S. before 2027, with odds now at 92.5% YES. The potential for U.S. restrictions on Chinese AI firms appears consistent with scenarios where diplomatic relations may further deteriorate. What to Watch Observers will be closely monitoring any official statements from both Beijing and Washington that might indicate ...