Section I: IOpening

On the morning of May 8, 2026, in the contested waters of the South China Sea, the People’s Liberation Army Navy (P.L.A.N.) Type 076 amphibious assault ship Sichuan was on its first cross-regional trials and training deployment, six months after the PLAN’s new carrier Fujian’s commissioning at Sanya Port. The Sichuan’s aircraft launching electromagnetic catapults are mounted on a 40,000-ton drone-carrier hybrid platform that has no current US/NATO counterpart. Beijing now operates bleeding-edge US Navy Ford-class carrier systems like the electromagnetic catapult in its military-industrial vocabulary across multiple vessels. Conversely, in August the Trump administration ordered future US carriers to give up the electromagnetic catapults the Chinese were emulating and return to steam. In the same months, a fourth Chinese carrier, the Type 004, took shape in the dry dock at Dalian, its hull measured from satellite imagery at the length of a Ford-class, with compartments analysts read as housing two reactors. This carrier is the first of the six more carriers the Pentagon says the navy aims to build by 2035. The People’s Liberation Army Navy has also been expanding rapidly from a coastal defense force to a blue-water service in roughly 20 years. China has focused on shipbuilding over the last decades, with one Chinese builder, CSSC, launching more commercial tonnage in 2024 than the entire American shipbuilding industry has built since the Second World War.¹ The last time China put hulls in the water at this rate, its treasure fleets were sailing in 1433, when the Ming Dynasty were the hemisphere’s heavyweight. We return later to that century to better understand the present.

Something very different, and less industrial, is happening across the Pacific Ocean. In a conference room in San Francisco, the “frontier” AI company Anthropic was negotiating a May 2026 funding round to raise as much as $50 billion at an eye-watering $900 billion - $1 trillion valuation. The Financial Times reported on the talks the day before, describing it as the company’s last private round before going public. The company’s annualized revenue was expected to surpass $45 billion shortly, up from $9 billion at the end of 2025. Vastly surpassing this, Anthropic somewhat simultaneously committed to spend $200 billion on Google Cloud services over five years. This represented more than 40% of Google’s disclosed revenue backlog, with Anthropic representing the biggest single customer in Google Cloud’s AI compute base. The filing for Anthropic’s public offering sat un-advanced, meetings with bankers described by those in attendance as casual, timetables unspoken, valuation discipline already debating whether the listing should itself be priced below a final private valuation. A potential multi-trillion-dollar company usually doesn’t linger at the door of the event that would price it at trillions of dollars publicly, unless accurate pricing itself is perhaps the problem.² Meanwhile, the President insists that his military is in “great shape” and “stocking up big” on ammunition and interceptor missiles, about some war somewhere that caused some gas prices to rise, which the President insists on the weekly is merely a temporary phenomenon.³

The dominant US narrative about all of these developments is that the 21st century remains the “American century” that was much celebrated for decades at the so-called “End of History” after the collapse of the Soviet Union. Eleven US Navy Ford and Nimitz-class super-carriers stand, at least on paper, against the PLAN’s modest navy, just now reaching for three carriers. US frontier AI models are supposedly dominant, US chip manufacturing technologically superior, and the US capital markets dynamic, innovative and strong. The Trump administration’s January 2026 White House paper named “US AI dominance” as the foundation of a second “Great Divergence” of the West from the rest. The House Committee on Energy and Commerce went on record in April describing the American AI build-out as “winning the global race against Chinese adversaries.” The common understanding is that whatever China is doing will not change this structural reality: United States leadership is being solidified, and this time, the two major projects the US is now championing might create such a lead and such a lock-in that US hegemony could just be indefinite.

The United States’ first reach to this final, indefinite victory is exactly in the rush toward “artificial general intelligence.” The pitch to the capital that funds the AI build-out is that machinery and automation is now reaching into the cognitive layer, before and in tandem with a reach into physical labor via robotics. This means massive reductions in “variable-capital” components of services such as knowledge work, software and design, legal and customer support, before everything else like plumbing and cooking. The reduction in labor costs is a significant factor in justifying otherwise truly insane company valuations and capital expenditures on AI. It is reminiscent of the “technological transformation” in the 1990s internet productivity-boom story, repeated at massively higher volumes. It is exactly nostalgic for that moment after the collapse of the Soviet Union when a dynamic US capitalism with no real competitor appeared to be permanently ascendant and also escaped its usual boom-and-bust dynamics through computing and the internet.

The second reach to a final, indefinite victory is with the current war against Iran and the battle over the Strait of Hormuz. The United States is fighting against a 47-year-old “thorn in its side,” a regional power that has stubbornly refused the US project of the last three decades to remake the Middle East in the US image. If victorious, the US could simultaneously secure US energy and political dominance in the energy-rich Middle East and North Africa (MENA) region, as most other Gulf states prior to the war were quite cooperative with US interests. Iran is the latest entry in a sequence that established this, with actions against Iraq’s Saddam in 1991, Saddam again in 2003, Libya’s Gaddafi in 2011, and the moves against Syria’s Assad across the 2010s. In each case: a regional power pursued sovereignty, growth, or confrontation in ways the US-led system could not accept, and in each case, at a moment of maximum weakness for the local state, the US administered punitive intervention to demonstrate that sovereignty outside its terms is impossible.

The anti-Iran project is equally nostalgic for these 1991 and 2003-era uni-polar moments when the punitive demonstrations appeared to work. The US government is also currently not-so-quietly suggesting that the battle for the Strait of Hormuz is part of a larger struggle and strategy: after “taking over” Venezuela, and winning the Iran war, the US will be shortly taking permanent control of the Panama Canal and Greenland and, on analysts’ reading of its new partnerships with Indonesia and Morocco, the Strait of Malacca. The US wants to control global energy flows, to secure critical rare-earth mineral supplies that would break a Chinese monopoly, and to use those powers, with tariffs and sanctions, to strangle China or any other competitor over the materials that make a modern industrial economy work.⁴

The nostalgia-fueled hubris fueling these new projects is made by an institutional framework and political-military leadership class that cannot accurately remember what it is reaching back toward, and therefore cannot truly understand what it is doing now. Our aging “patient” of the United States empire does not recall the full sequence of events.

The war of 1991 left a US garrison in Arabia and 12 years of sanctions on Iraq, which became the grievances that caused Osama bin Laden’s anti-US declarations of 1996 and 1998 before the attacks of September 11, 2001. The US invasion of Iraq in 2003 answered an attack Iraq had no part in, and the occupation, by disbanding the army and purging the Baath, fed an insurgency it then fought for eight years. The civil war that followed and the US withdrawal of 2011 left the ground on which ISIS, grown from the Iraqi insurgency and fed by the Syrian war, took Mosul in 2014, causing the world to need to recommit to combat them. This chain of events consumed trillions of dollars and represented a generation of failed nation-building, and its lasting product was an Iranian-friendly Shia government in Baghdad and an Iranian reach across Iraq, Syria and Lebanon, held until 2024. The irony being that the whole project had been meant to prevent a US-unfriendly regional power, and had, regardless, created exactly that thing.⁵

The US institutions also do not accurately recall that the 1990s productivity boom and technology bubble led to the 2000s “Dot Com” crash, which itself had echoes in the 2008 financial crisis. The institutional memory has been molded across some 40 years to support only a picture of decades of ongoing strength which the US still sees when it looks at itself in the mirror, flexing its remaining muscles.

This faltering memory and need for flexing of muscles to the world is precisely the thing every failing hegemon of prior systemic transitions has also reached for. This work leans heavily on analysts of prior hegemons and the capitalist system, cited later, who have done decades of work chronicling that hegemonic powers and their overall control of “capitalism” has changed hands between the states at least three times since the “Heavenly Dynasty” scuttled its fleets and the Italian city-states and Spanish Empire filled the sea they left.

Each time the hegemon changed, the incumbent hegemon started reaching back for a moment of strength it could no longer reproduce, while feeding a successor that built an even larger and more complex container for a developing military, political and economic system. The successor state, whose productive base increasingly held the world’s accumulation, eventually eclipsed the incumbent and fought to acquire hegemony, typically ending in a general war that crowns the new hegemon.

A new succession crisis is now under way, and this time is being fought with economics itself, along with drones, missiles, sanctions, chokepoints and clearing shares, where the confessions, mercenary bands and the crowns used to be, Interestingly and ironically, it is being fought precisely at the exact strait where the history shows the entire system began.