America's Moat Is Getting Attacked on Three Sides at Once

The moat is leaking in three places

Here's the thing about a moat: it only works if it surrounds the whole castle. Right now the US has three big ones — payments, AI, and the plumbing of global finance — and lately each has taken a knock.

The Economist put a name to it, warning that storm clouds are gathering over America's financial supremacy and that its payments firms may be the first casualties. That's the companies that move money around the world and take a cut every time. It's one of the quietest, stickiest sources of US financial power, and the argument is that it's more exposed than people assume.

But payments isn't the only front. Cheaper Chinese AI and a run of Asian firms building financial markets on public blockchains are pushing on the other two walls. On its own, each is a story. Together, they start to look like a pattern.

When challenges to payments, AI, and financial infrastructure all surface at once, it stops being 'a competitor emerged' and becomes 'the moat is being tested everywhere at once.'

Cheaper AI is doing to US models what cheap goods did to US manufacturing

Alibaba's shares surged last week after an earnings update, dragging up Baidu, Tencent and JD.com with them. Meanwhile US tech had a rough stretch — the Nasdaq lost steam midweek before leveling out, and Nvidia briefly shed around a trillion dollars in value, trading about 17% below its May record before bouncing back.

The reason matters more than the price move. Alibaba's Qwen model is now the world's most-downloaded AI, and the tokens needed to run Chinese models — basically the metered cost of using them — are significantly cheaper than US rivals. Alibaba even spent $431 million on Lunar New Year giveaways to get people downloading the app. That's not a better-mousetrap story; it's a Walmart story. Undercut on price, win on volume.

So what does this mean for you? If you're holding US megacap tech on the assumption that American AI is uncatchable, note that some US firms are already switching to Chinese models — enough that a House committee is investigating the risk and has sent letters to Cursor and Airbnb. The threat isn't hypothetical; it's showing up in who's actually using what. Two things to watch: whether Beijing restricts overseas access to its top models (Reuters says it's looking into it), and whether Chinese AI's cash bonfire ever pays off — Alibaba plans $55 billion in AI spend by the end of next year against just $1.3 billion in AI revenue last quarter.

Asia is quietly rebuilding financial plumbing — on someone else's rails

The third front is the sneakiest. Japan's SBI Holdings, a financial giant, is partnering with the Solana Foundation to build a Japan-based onchain financial market, and rebranding its SBI R3 arm to SBI Solana Global. Read alongside SBI's broader push into crypto, it reads as a signal that traditional Asian finance is willing to build on public blockchains rather than lean only on incumbent Western payment networks.

Why should a retail investor care about a rebrand? Because financial infrastructure is where US dominance is least visible and most durable — the dollar, the card networks, the clearing systems. If large regulated players in Japan start settling and issuing on public chains, some money that used to flow through US-controlled rails could start flowing elsewhere. That's the payments vulnerability The Economist flagged, potentially arriving through a side door.

The honest caveat: SBI is one company, Solana is one chain, and 'onchain financial market' is doing a lot of work in a short announcement. This is a direction of travel, not a done deal. But it rhymes with the AI story — an established US advantage, a cheaper or more neutral alternative, and early adopters peeling away.

The bigger picture: watch the exits, not the headlines

None of these three developments topples the US on its own. American payments still dominate, US AI models are still generally regarded as technically ahead, and the dollar is still the dollar. The point is timing. When challenges to payments, AI, and financial infrastructure all surface at once, the story stops being 'a competitor emerged' and becomes 'the moat is being tested in several places at the same time.'

For investors, the practical move is to stop treating US tech and financial dominance as a permanent given baked into valuations. A lot of value is concentrated in a handful of American megacaps, and that concentration assumes a lead that cheaper substitutes and more neutral rails are now nibbling at.

What to watch next: whether US firms keep migrating to Chinese AI models (or whether Washington and Beijing wall it off), whether more Asian institutions follow SBI onchain, and whether the payments giants The Economist singled out start showing strain in their revenue. The first casualty is usually the one nobody was watching.