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CNN International: E.U. Leaders Agree to Pursue Security Guarantees for Ukraine; Zelenskyy to Meet with Saudi Crown Prince; Mexico and Canada Tariffs Delayed; SpaceX to Launch Starship; Alibaba's New A.I. Model; Beijing Ordering a State Backed Fund to Fuel Innovation; SpaceX Execute Chopsticks. Aired 6-7p ET

Aired March 06, 2025 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[18:00:00]

JIM SCIUTTO, CNN ANCHOR: Hello and welcome to our viewers joining us from all around the world. I'm Jim Sciutto in Washington.

Just ahead this hour, all E.U. leaders, except only for Hungary's Prime Minister Viktor Orban, agreed to pursue security guarantees for Ukraine. This comes as Ukrainian President Volodymyr Zelenskyy says he is now drawing up proposals to end the war.

A significant backtrack, however, Donald Trump suspends tariffs on Mexico and Canada for a month on at least goods covered by the USMCA free trade agreement, which he signed in his first term.

And as the U.S. ratchets up trade pressure on China, Beijing fights back with tech and A.I. Beijing ordering a state backed fund to fuel innovation. That conversation, plenty more coming up.

European leaders have agreed to pursue a peace deal for Ukraine in the face of its ongoing full-scale invasion by Russia. That is backed by, quote, "robust and credible" security guarantees. The lone E.U. holdout was Hungary's Viktor Orban. Listen to what the European Commission president, Ursula von der Leyen, said just now.

(BEGIN VIDEO CLIP)

URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: Fact is that Europe is facing a clear and present danger. And this is why I presented the Rearm Europe plan today to the leaders. A plan to give Europe the military capability that it needs to face today's threats. It could mobilize up to 800 billion euros. And it is about taking more responsibility on our shoulders for our own security because the urgency is real.

(END VIDEO CLIP)

SCIUTTO: The E.U. statement says, quote, "There can be no negotiations that affect European security without Europe's involvement. Ukraine's, Europe's, transatlantic, and global security are intertwined." This meeting follows a special summit in Brussels attended by the heads of all 27 E.U. nations. They welcome the Ukrainian president, Volodymyr Zelenskyy, in stark contrast with his tense confrontational White House visit just a week ago.

Here in Washington, President Trump, and this is crucial, once again called into question the U.S. commitment to NATO's Article 5 mutual defense commitment, saying that if NATO members do not pay enough for their defense, the U.S. may not defend them, suggesting, and we should note not for the first time, a potential shift away from a core tenet of the alliance dating back decades.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: I said, if you're not going to pay, we're not going to defend. I said that seven years ago. And because of that, they paid hundreds of billions of dollars. I said, if you're not going to pay your bills, we're not going to defend you. And it also went for the attack. But if they got attacked, they said, well, does that mean you won't defend us? I said, are you current or are you delinquent?

(END VIDEO CLIP)

SCIUTTO: As if it were a bank account, Nic Robertson is live in Brussels. Let's set aside President Trump's comments there for a moment. Let's talk about the commitment that the E.U. made here. It strikes me that the E.U. is saying that if the U.S. doesn't step up with genuine security guarantees, we will provide them on our own, in effect. We would like to have the U.S. involved, but they're reading the U.S. president saying he may not be, and if so, we will step into the breach.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, Jim. I think the reading, not just what the president says in the last moment, but what he said a few moments prior a day prior and all they're getting is a sense of inconsistency, confusion, perhaps just to dip into those comments he made about NATO. As the president spoke, he said, would they come to support us if we called them.

Actually, the only time Article 5 has been invoked was after the 9/11 attacks, and the United States is the only country to have called Article 5 help from other NATO members and they came, and the long war in Afghanistan was part of that. As you say, that's for another moment of discussion.

[18:05:00]

But it's comments like these that leave the European leaders concerned, not just about if President Trump is going to stand by his allies, but even if one day he says he will, they don't know what's going to come the next. So, that inconsistency is really part of what is driving this situation. The need and desire to protect Europe's security through supporting Ukraine's security, and the only way to do that in the absence of the United States traditional and long time and much dependent upon support is to step up how much NATO nations are willing to spend on defense. And not just spend on defense, but actually spend wisely and smartly, which is some of the other language coming from the meetings today. Talking to E.U. diplomats here over the last few days, they point to sort of seven or eight countries out of the E.U. 27 that are big defense producers, there are all the other countries that are sort of small and medium businesses, and they're already drawing up plans to see how they can integrate all these different big producers, small, medium producers together to be effective, to have commonality, to save money, to have clout, precisely what weapons, all of that is actually being worked out right now.

So, this is the urgency. And I think the thrust of today as it was contextualized really before the meeting was about making sure that they could get the money to do all of that, and that's what they're still on track to do. So, that's the big win today. Whatever the language is on Ukraine, that's the big win.

SCIUTTO: You know, it strikes me that this sets up a potential test at some point, because Europe is saying we must be involved in any peace negotiations. Ukraine is saying, of course, we should be involved as well. If President Trump goes forward and says, you're not, I'm going to do this above your heads, in effect, face-to-face with Vladimir Putin, what happens then? You're set up for potential conditions, I suppose, that Ukraine says no, Europe says no. That would be quite a confrontation.

ROBERTSON: And that's a very real and live discussion here right now, Jim, because that's the reality of where we're at. The United States, as far as we can tell from what President Trump has been saying, has a completely contrary position on Moscow. He is more benign, more supportive of Moscow than any of the European nations, perhaps outside of Hungary and maybe Slovakia.

Europe and NATO, of which the United States is part of, NATO in particular, has defined at its last meeting of -- as Russia as a threat. And that is something that the United States signed up to. NATO says Russia is a threat. The European Union nations inside of NATO are on board with that idea. The United States isn't. So, it's not clear where this issue will face a decision or a deeper discussion inside the context of NATO. That's under NATO Secretary General Mark Rutter, who would sort of have to manage those differences or would it come simply as the powers, the powers of the European Union questioning the moves that the United States is making with Russia.

But, yes, as things stand today with the language that's being used and the diplomacy that's underway, it does seem that there is a path, there are other paths, there is a path to that logical conclusion that you're talking about where it must be decided who is right.

SCIUTTO: A game of diplomatic chicken and what's truly remarkable is among allies, right? I mean, this is among treaty allies not an ally and adversary. Nic Robertson in Brussels, thanks so much.

Well, President Zelenskyy is set to continue his diplomacy tour next week as he seeks to further support to end Russia's ongoing invasion of his country. He says he will meet with the Saudi crown prince, Mohammed bin Salman. This, after a source said that U.S. and Ukrainian officials will meet in Saudi Arabia as they attempt to mend ties and perhaps get a minerals deal back on track.

The Ukrainian president largely confirmed the news on social media saying, quote, "Next Monday, I have a visit planned to Saudi Arabia for a meeting with the crown prince. After that, my team will stay in Saudi Arabia to work with our American partners. Ukraine is most interested in peace."

Nick Paton Walsh is in Kyiv with more.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT: President Zelenskyy's meeting in Riyadh with the Saudi crown prince on Monday, March the 10th. I should point out is something which he said he was going to do when he cancelled the previous meeting in Riyadh just ahead of the U.S.-Russia summit that occurred in Saudi Arabia nearly two or three weeks ago. Now, his team will then stay on for talks with senior Trump cabinet officials.

[18:10:00]

Now, this is obviously a bid to try and get that relationship back on track after Zelenskyy sent a letter to President Trump, which he referred to in his Tuesday night's speech in positive terms. Indeed, Zelenskyy does appear to have pretty much acceded to all of the Trump inner circle's demands to fix what they consider to be the fallout from the Oval Office meeting last Friday, which I should say many Ukrainians here feel still was a public drumming for their wartime commander.

Zelenskyy has said that meeting was regrettable. He says he's ready to sign the rare earth minerals deal and indeed to commit to peace. So, this meeting in Riyadh will be particularly pertinent to see if the deal is indeed signed and also to try and elicit some kind of specifics as the kind of peace deal indeed that the United States wants Ukraine to sign up to.

Remember, it is now casting itself as no longer Ukraine's singular most important ally, but an intermediary between the Moscow and Kyiv. That is a stark and frankly shocking change for Ukraine and also many of its European allies who have today in Brussels attempted to shore up again support the second time in five days around Zelenskyy talking about the financing of European security but also, of Ukraine's defense as well.

But lingering in the background there, in fact sometimes glaring in the forefront, is the recognition amongst these European powers that the peacekeeping plan they're potentially putting together, if there is indeed a ceasefire, is one that can't really succeed without some kind of U.S. logistical or even some said psychological support.

So, they're very dependent on how Trump falls in terms of their peace endeavors here. And actually, there has been some initial reaction from Moscow as to some of these early proposals from both the European powers and Zelenskyy, hinting at the possibility of a month-long partial ceasefire, which would involve a truce in the sea and the air and attacks on energy infrastructure. Hints from the foreign ministry that that won't necessarily be something they're willing initially to go along with. The entire policy on that truce, not completely clear on a senior level.

So, so much moving here, but the big outstanding question, as Ukraine reels, still now, 48 hours from a pause in intelligence sharing, slightly longer from a pause in military aid to exactly what peace plan is it that the White House want them to sign up to for this vital assistance to be resumed. That's a key pressing question here when lives are lost every night in civilian areas every hour on the frontlines.

Nick Paton Walsh, CNN, Kyiv, Ukraine.

(END VIDEOTAPE)

SCIUTTO: Later in the program, we will explore Ukraine's political future. This amid pressure from the White House and its allies to force President Zelenskyy, the elected president of Ukraine, out.

Still ahead, President Trump made a second significant trade concession in as many days. He is now pausing more tariffs on Mexico and Canada, at least until next month. The latest White House U-turn on trade, coming up.

(COMMERCIAL BREAK)

[18:15:00]

SCIUTTO: Welcome back. U.S. President Donald Trump announced a brand- new set of tariff concessions for Mexico and Canada. Today, the president said he will pause 25 percent tariffs on more Canadian and Mexican imports, at least until April 2nd. The new tariff carveouts include goods covered by the existing USMCA free Trade Deal, which President Trump signed in his first term.

The president's latest tariff swerve coming just two days after his 25 percent across the board tariffs against Mexico and Canada officially took effect. And one day after, he paused 25 percent tariffs on car imports from the two nations.

Canada announced late Thursday that it will suspend its new round of tariffs against the U.S. in response to these concessions by Trump. During his Q&A with the press Thursday, President Trump said he told car executives that tariff pauses, however, will not last forever.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What was the reaction?

DONALD TRUMP, U.S. PRESIDENT: I told them, that's it. This was a short-term deal. And they came back to me yesterday. They said, could we have some help on the tariffs because of the speed? And I said, look, I'm going to do it, but that's it. Don't come back to me after the 2nd, April 2nd. I don't want to hear from you after April 2nd. We're not going to be doing it anymore. I want to help them. UNIDENTIFIED MALE: What was their response?

TRUMP: They didn't complain.

(END VIDEO CLIP)

SCIUTTO: President Trump says today's decision on Mexican tariffs was made out of respect for the Mexican president, Claudia Sheinbaum, if you remember, she was poised to announce retaliatory tariffs by Mexico against the U.S. this weekend. CNN's Gabriela Frias joins me now from Mexico City with more.

Gabriela, I wonder, do Mexican officials see this as a potential end of the trade war or just a pause? Are they planning for this to last in effect?

GABRIELA FRIAS, CNN ES ESPANOL ANCHOR: They're planning for it to last and President Sheinbaum hinted at that, Jim. Also, let me just say that next Sunday when she was planning to announce these new retaliatory tariffs or measures, we're going to have a festival in downtown Mexico City, the Zocalo, which is the largest public space in Mexico. So, she will be using this politically.

But as you said, we're kicking the can down the road because this suspension is until the 2nd of April and that's when reciprocal tariffs will be implemented by the Trump administration to all countries with which the U.S. trades, and that includes Mexico, as you know, its largest trading partner.

President Sheinbaum had a call this morning, as you know, with President Trump. calling it an excellent and respectful conversation, which by the way, she described afterwards during a press conference, according to Sheinbaum, she told President Trump, put yourself in my shoes, having to suffer these tariffs when Mexico is cooperating with the U.S., doing its parts in helping reduce the number of undocumented migrants who cross the border. By the way, something even President Trump has written about on his Truth Social. But also, ceasing fentanyl in Mexico, which by consequence has helped reduce the number of seizures of fentanyl on the U.S. side.

And according to Sheinbaum, to prove her point during that phone call with President Trump, she juiced data from the U.S. -- from the Customs and Border Protection, again, U.S. data. Again, this is only another pause, the second one, April the 2nd is that day. And one has to wander, Jim, if the USMCA, which Trump renegotiated during his first term is not, and I quote, "the fairest, most balanced, beneficial trade" agreement we have ever signed into law. And you know these are his words.

SCIUTTO: Yes, no question. And of course, the justification seems to be changing. Is it fentanyl? Is it migrant flows? Is it a desire, as the president himself has said, to just move all the manufacturing from Mexico and from Canada to the U.S.? It's a moving target. Gabriel Frias, thanks so much.

Today's tariff pause on Mexico and Canada comes just days after Commerce Secretary Howard Lutnick suggested the U.S. was done with tariff pauses. Stephen Collinson joins me now. And listen, it's not hard to be confused by this. And that's not just you and me, you're hearing that from the leaders of America's neighbors and chief trading partners.

[18:20:00]

The thing is, when you listen to Trump in the Oval Office there, he's quite clear saying these are just pauses. They're going to go back. The tariffs are going to go back.

STEPHEN COLLINSON, CNN POLITICS SENIOR REPORTER: But that's what he said before. Why would anybody believe what he says now? Is it going to be any different in April when the car guys get on the phone or the farmers get on the phone?

SCIUTTO: Yes.

COLLINSON: You know, it's no way to run an economy, least of all an economy that is showing real signs of growing distress, slowing consumer sentiment. Businesses need certainty, and they aren't going to be spending the money perhaps they would have been spending in this atmosphere. So, it's a self-perpetuating, self-defeating circle.

I don't know what the president has achieved. He could just as easily have got these concessions from Mexico. Canada hasn't really done that much on the border, even though it's made -- it says it's tried to help Trump cut down fentanyl. What's the point to all of this? Apart from the President having a device which he can wield unilaterally, he doesn't need Congress, he can't be stopped by the courts. Perhaps that's it.

SCIUTTO: Yes.

COLLINSON: But I don't see how it can carry on month after month.

SCIUTTO: Beyond the question as to what the president has achieved is the question, what does he intend to achieve? Because as I noted to Gabriella, the justifications have been all over the board. It's about fentanyl coming across the border. It's about migrants, migrant flows are down. They're doing a lot on fentanyl. But the president has also said he just wants to move the manufacturing back to the U.S., which, of course, he's said many times before. I mean, that's something that those countries aren't going to be comfortable with, right? Because that's manufacturing jobs for themselves. Do we know what the intent of this is?

COLLINSON: OK. So, let's take that at face value. If that is the intent, you put the tariffs on, you keep them on. And you make the bet that over four years of the presidency there is going to be pain and there is going to be disruption, as the president said himself in that speech on Tuesday night. But then, you're going to get some kind of benefit. That doesn't seem to be any indication that he's going to stick firm to this.

SCIUTTO: Yes. COLLINSON: Is he prepared to pay the political price for that kind of policy? It's very unclear. Now, the Canadians, I was talking to a former official in Canada yesterday, they're absolutely infuriated by this.

Melanie Joly, the foreign minister, I think you interviewed earlier this week, she was saying that now the Americans are not just talking about fentanyl and border issues, they're talking about water rights. They want to get concessions. They want more money for defense. You know, what Canada is doing right up on its northern borders.

So, it's total confusion. There doesn't seem to be a plan. And in the end, I think you're going to get countries like Canada and Mexico, as the president hinted yesterday, they're going to start to look, do we have to look at other markets?

SCIUTTO: And it's not dissimilar from as we were talking earlier in the hour about the national security questions that U.S. allies have. Do we -- can we rely on the U.S. as a national security partner, as a defense ally? And the answer is, frankly, it's quite public, is no, they can't. And that the trust, in effect, is broken.

COLLINSON: Right. And the United States, for 80 years, has been -- and it's not been perfect, obviously. There's been volatile times in its foreign policy, but it's been a source of predictability and stability. When countries see that they can no longer get that, it's in their national interest to try and you know, help themselves, that might mean someone like, you know, countries like Europe decide, OK, we need to have closer trade ties with China. That diminishes American power.

You know, if the goal was to take on China, you would think a strong, unified western hemisphere, an alliance as much as possible on trade issues with Europe, that is a big block to take on China. But it's all about fracturing and national interest and its own most basic, you know, form.

SCIUTTO: Listen, and at a national level, there's appears to be a limit as to the punishment, right, that even America's closest allies are willing to take. And of course, they have their own domestic political constituencies as well. Stephen Collinson, thanks so much.

The new tariff uncertainty is not playing well on Wall Street. U.S. stocks fell across the board Thursday with tech stocks hardest hit. Investors focusing on new signs as well of broader U.S. economic weakness.

Still ahead, Alibaba's A.I. moment. The Chinese tech giant said its new A.I. model is as powerful as the ones from DeepSeek, also a Chinese product, and ChatGPT. The latest on China's A.I. ambitions next.

And we're also watching SpaceX's latest launch. It follows some hiccups earlier this week and a midair explosion in January. More on that after the break.

(COMMERCIAL BREAK)

[18:25:00]

SCIUTTO: SpaceX is set to launch the eight Starship test flight in just a few moments. The company, you'll remember, scrubbed an earlier launch on Monday, just seconds before takeoff. SpaceX still not releasing the reason why that flight was scrubbed. We'll be continuing to watch it.

Further off the ground, Houston-based firm, Intuitive Machines successfully landed its Athena craft on the moon. It is not yet clear whether it landed right side up. That's important. Joining me now is Garrett Reisman, a veteran NASA astronaut, professor of aeronautical engineering at the University of Southern California. Thanks so much for joining.

I wonder, as we wait for an update there, you see the countdown going, but there is a moment 40 seconds prior to launch when they might pause, depending on conditions. What's the importance of this launch, especially given that we've seen some hiccups in previous tests?

GARRETT REISMAN, FORMER NASA ASTRONAUT AND PROFESSOR OF ASTRONAUTICAL ENGINEERING, USC: Well, you know, a 24-hour, 48-hour scrub is no big deal. There's no -- they're not rendezvousing with the Space Station. They're not delivering anybody to orbit. So, they can do it today, they can do it next week. That's not that big of a deal. What's important is that it goes well, and last time it didn't go so well. So, they can hold it at T-minus 40 seconds for a few minutes before the propellant gets a little too warm. So, they -- that's something they have the capability of doing. They exercised that last time and then decided not to proceed.

So, far today, it sounds like -- I've been listening to the count, it sounds like everything's normal. And hopefully, we'll go right to T zero.

SCIUTTO: SpaceX has launched a lot of rockets successfully, put a lot of satellites into orbit, gone to the Space Station. In general, it's been doing pretty well. I mean, what are the particular issues? Are they testing something out new here that is leading to these questions?

[18:30:00]

REISMAN: Yes. Well, the Falcon rockets are getting to be pretty routine and very, very successful, very reliable and have had quite a track record. This rocket though is a different beast. This is Starship. It's bigger than the Saturn V moon rocket by a factor of about two and as far as liftoff thrust. It's a monster. And nobody's ever launched a rocket this big.

It's also designed to be 100 percent reusable. That's another very hard thing to do technically. And it's designed to be refueled on orbit. I mean, this is something that has -- is a game changer. And so, when you're trying to do something this difficult, it's not unlikely that it's not going to work the first few times. SCIUTTO: All right. Let's listen in now because, as you can see there on the clock, the countdown has begun again. Let's listen to Mission Control.

UNIDENTIFIED MALE: Let's listen in as he takes us through the final seconds of the count.

UNIDENTIFIED MALE: T-minus 8, 7, 6, 5, 4, 3, 2, 1.

UNIDENTIFIED MALE: All right. We're a little over 40 seconds, a little over 40 seconds into the flight. We are seeing 33 out of 33 Raptor engines ignited. Boosters pushing us downrange over the gulf. Next milestone coming up in just under 10 seconds is going to be Max Q, that max aerodynamic pressure.

UNIDENTIFIED MALE: Max Q.

UNIDENTIFIED MALE: All right. So, we're through Max Q. That's the heaviest stresses it's kind of seen on the way up. Wow. That was pretty incredible.

UNIDENTIFIED FEMALE: I'm still recovering. That was amazing. Beautiful views of the vehicle on ascent. Pitching downrange away from the launch tower.

UNIDENTIFIED MALE: Next thing coming up is hot staging. So, we're going to look for six engines to ignite on ship while we're still attached to the top of the booster. We'll see all but those three center engines shut down on booster.

UNIDENTIFIED FEMALE: We're hearing the initial call that we are go for booster catch back here at the launch tower. Coming up now on hot staging, the ship's engines will ignite while still attached to the super heavy booster and also while super heavy booster will still be under power itself.

The clamps holding the two stages together are going to release and Starship second stage engines will --

UNIDENTIFIED MALE: Booster engine cutoff.

UNIDENTIFIED MALE: Ship engines start up. Stage separation. Boost back burn start up.

UNIDENTIFIED MALE: There we go. Ship engines all six Raptors ignited. We're doing that boost back burn. Looks like we got 11 of the 13 that we command for that. So, that's going to start sending the booster back. We are still go for booster return, even with two Raptors out during that boost back, we can do a full duration one.

Looks like we got a ship, six engines heading into space. And then, we got a booster hopefully on our way back to Starbase. How's everything going in Hawthorne, Chris?

UNIDENTIFIED MALE: Everything is looking good. The crowd eagerly followed that ascent and now watching the booster coming back. So, as you can see on the left-hand side of your screen here, that is ship continuing -- no, that's a great view of ship continuing on its way to space. They're looking -- that's inside the camera, inside the aft skirt, looking at the Raptor vacuum and the sea level engines. The sea level ones there in the center of your screen under our T plus clock. You can see our boost back burn. We're down to three engines on the boost back burn.

[18:35:00]

And you can see ship on the right-hand side of that telemetry with six engines lit continuing its ascent to orbit already over 100 kilometers in altitude. The booster 87 kilometers in altitude, and continuing its trek right now back to the landing site and catch site. There's a -- and we just heard a good call out for boost back shutdown.

The next thing we should see on our screen --

SCIUTTO: So, at this stage, a successful launch of the SpaceX Starship, which, as we were discussing just before, this is big, bigger even than the Saturn V, that of course took men to the moon, and in part, is it not right of plans to go to the moon and beyond? That's part of this plan going forward.

REISMAN: That's a big part of it. It's designed so that you could fill up the gas tanks again once it reaches space and orbiting the Earth. And if you could do that and get a full tank of gas, you can then take this starship and go pretty much anywhere in the solar system, including not only to the moon, which NASA intends to use it for, but even onto Mars. So, that's why this thing is a real game changer.

They have a way to go though -- today so far so good. In a few moments, they're going to try to catch that booster coming back down with those chopsticks. That's always a real crowd pleaser and a very difficult thing to do.

But for me, the most interesting thing is what happens with the ship when it comes back to the atmosphere. That's the thing that didn't go so well last time. And that's what I'll be watching really closely this time.

SCIUTTO: Yes. As they always say, space is hard. And that piece, the retrieval piece, the reusable piece is one of the innovations of SpaceX. That really is truly remarkable because of course, for decades, those pieces just fell into the ocean. I mean, the booster rockets for the space shuttle fell in the ocean where we were reusable. Let's look at this next stage. But landing themselves pretty tough, right? Pretty tough thing to do.

REISMAN: Yes, when we first tried to started trying to work on this with the Falcon rockets, people told us we were crazy. It'll never work. It's too hard. It's not efficient. But they made it work. And now, you know, so far twice they've managed to catch this booster. They're going for a number three in just a short while here.

SCIUTTO: Well, we'll continue to monitor. Thanks so much, former astronaut Garrett Reisman, as we watch that SpaceX rocket continue to soar.

Well, China's goal to become a global leader in artificial intelligence appears to have taken another big step forward. China's tech giant Alibaba unveiled a brand-new A.I. model of its own, which it claims is as powerful as the ones from Chinese rival DeepSeek that caused such a storm a few weeks ago and from OpenAI.

The announcements sent shares of Alibaba up more than 8 percent in Hong Kong trading. All this comes as China says it will establish now a state-backed innovation fund to support growth in A.I. as well as other areas of tech. China clearly hoping A.I. will become a new growth engine for its sluggish economy. Also essential to a broader race among the superpowers. Beijing also announced this week that it will significantly raise deficit spending in order to help boost growth.

Paul Triolo joins me now. He's a partner at DGA-Albright Stonebridge Group. Paul, great to have you here. Remarkable. In the span of a few weeks, Chinese companies announced big advances in A.I. Tell us the significance of that as, well, we're seeing you might call it a global A.I. race.

PAUL TRIOLO, PARTNER, DGA-ALBRIGHT STONEBRIDGE GROUP: Great question, Jim. So, look, I think the -- as we all know the release of DeepSeek's model in January -- December and January, it was sort of a big milestone here because the comparison of this model and its capabilities with OpenAI and with Anthropic and some of the leading model companies turned out to be pretty strong in terms of these benchmarks that are used to judge the effectiveness of these models, at solving math problems and a whole range of things.

So, that set off a whole, you know, sort of earthquake within China's A.I. sector because it was the first reasoning model. That's the other thing to remember here. These models now are capable of doing longer reasoning tasks, taking a complex problem and breaking it down over a longer period of time instead of just an instantaneous response.

And so, that -- all the other Chinese companies that are -- have been developing models over the last three or four years, like Alibaba, Tencent, ByteDance, others all were sort of caught a little bit off guard with a small company, DeepSea coming out with such a capable model. So, they've all been working on their own reasoning models.

And certainly, Alibaba appears to be, you know, sort of on par in terms of some of these benchmarks with some of the leading model companies, such as OpenAI and Google.

[18:40:00]

SCIUTTO: One of the big surprises about DeepSeek, right, was that they were able to do this with fewer advanced chips and not the quality, right, of chips from -- particularly from chip maker NVIDIA, which had been restricted deliberately, as you know, by the U.S. government to, in part, give the U.S. a boost, but also because they considered a national security issue. Are we seeing the same lesson from Alibaba's advances here that they're able to just get around that or not suffer as much from that as we thought?

TRIOLO: Great question. That's a little complicated because, of course, these Chinese companies did have access to some of these advanced GPUs before those export controls came into effect in October of 2022 and 2023.

So, companies like Alibaba and ByteDance and Huawei and even DeepSeek did have access to some pretty good and capable GPUs that they'd stockpiled or they had purchased before the export controls went into effect. So, it's a very mixed bag of in terms of GPUs available in China. There's still companies like Alibaba that probably had some number of these A100s and H100s that were available for purchase before these export controls went in.

So, DeepSeek definitely used some -- a smaller number of GPUs that were modified by NVIDIA to be less capable. And that's one of the big innovations they came up with. They used less capable GPUs and they came up with all these innovative optimizations to take advantage of the hardware they had and overcome some of the limitations that had been imposed by the export controls.

SCIUTTO: Remarkable to watch and it's moving very quickly. Paul Triolo, thanks so much for joining and helping us understand.

TRIOLO: Thanks, Jim.

SCIUTTO: And we'll have much more news right after the break.

(COMMERCIAL BREAK)

UNIDENTIFIED FEMALE: Slows down for its landing. And we just heard the sonic boom.

SCIUTTO: Super heavy rocket booster, as you watch it there, almost seems out of a movie, returned, landed successfully, back to Boca Chica, Texas, back to Earth. That's not an easy thing to do, land a rocket and kind of grab it out of the air with giant metal chopsticks, but they did.

UNIDENTIFIED MALE: Stuck the landing.

SCIUTTO: Stuck the landing, as he said. Returning now to one of our top stories. Ukraine's president has thanked E.U. leaders for their support in an emergency summit in Brussels, not just on defense spending, but also on a peace plan for Ukraine, security guarantees for Ukraine.

[18:45:00]

This comes at a time when Ukraine's relationship with the U.S. is under enormous strain. This follows last week's explosive meeting in the Oval Office between Zelenskyy and Trump. Since then, Politico has reported that Trump administration allies have contacted some of Zelenskyy's top political opponents.

Speaking to CNN, in the past several hours, Ukrainian lawmaker Kira Rudik said that Ukraine's leadership is up to Ukraine and Ukraine alone.

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KIRA RUDIK, UKRAINIAN MEMBER OF PARLIAMENT: We have heard these statements from Russia that there should be someone else than Zelenskyy. Now, we have heard it from the United States. And I can say one thing, it is not up to Russians or American citizens to define when Ukraine people are electing our president.

(END VIDEO CLIP)

SCIUTTO: Joining me now is Alina Polyakova. She's the president and CEO of the Center for European Policy Analysis. Good to have you.

ALINA POLYAKOVA, PRESIDENT AND CEO, CENTER FOR EUROPEAN POLICY ANALYSIS: It's great to be here, Jim.

SCIUTTO: There's a quite deliberate campaign by President Trump and some of his allies to including Elon Musk, to undermine the Ukrainian president. You've heard him call him a dictator. They're claiming without basis that he has four or five or six percent support in his country. In your analysis, is Zelenskyy's support in Ukraine holding despite these attacks?

POLYAKOVA: It's not only holding. In fact, what we've seen after the Oval Office meeting, he's seen a real boost in popularity in Ukraine. So, you see Ukrainians really rally around their president. He is 100 percent seen as the legitimate leader of Ukraine, even by those who may not agree with some of his decisions. I mean, Ukraine is a democracy now. Everybody agrees with him. But certainly, we have seen a boost in his popularity since last Friday, and there's no question about it that he is a legitimate leader of Ukraine.

SCIUTTO: We're seeing in this E.U. emergency summit quite public support for Ukraine and something of a line in the sand drawn by European leaders. Zelenskyy said, any peace plan has to have Ukraine at the table, despite this conversation of it just being Trump to Putin. But Europe is now saying, we've got to be there too. And by the way, we're backing that up with significant boosts in defense spending. Did you see that as -- I don't want to say ultimatum, but is Europe making clear that it will not accept anything unless it's involved, unless there are genuine security guarantees?

POLYAKOVA: Well, we have to remember what we're seeing is a really profound shift in U.S. foreign policy after 75 years of the NATO alliance. What Europeans are seeing now is a United States that maybe they can't trust, maybe they can't rely on, that maybe won't come to their defense in NATO.

You know, you'll hear the administration say that, well, we haven't reneged on Article 5, we haven't reneged on our commitments to Europe, we wouldn't need cutoff intelligence sharing to Ukraine. Other allies who also rely on U.S. intelligence start to question, you know, if we cross the president in the wrong way, are we going to see the same kinds of punishments come our way that will make us far more insecure as an alliance and as European countries?

So, I think what we've seen over the last several weeks is a set of emergency meetings that have happened in Brussels, across Europe, where the Europeans have said, we want a seat at the table because there should not be conversations about Europe without Europe, which is exactly how they're perceiving the bilateral conversations between Trump and Putin.

SCIUTTO: And Trump -- by the way, Trump saying once again today, or at least expressing some doubt as to whether he would abide by Article 5. I mean, it's not the first time he has done that. I wonder is it possible that Trump is undermining his goal here, right, which is some U.S. and Russian-led peace agreement for Ukraine, but more importantly, a reassessment of their relationship, a normalization of their relations?

Because if Ukraine and Europe stand by their demand here to say, we have to be involved and don't accept something that Trump attempts to impose on them, Trump doesn't get what he wants.

POLYAKOVA: I mean, that's the big irony here, right? You know, Ukrainians have sacrificed so many lives to say the least, to fight this war they didn't provoke by the Russians. And if you talk to a lot of Ukrainians, there's no question they want this to end. They didn't want the war to start, they want it to end.

But are they willing to accept a ceasefire in which the Russians might return after a year or two years, however long where they have no guarantees for their own security, either from the United States and Europe? I think the majority of Ukrainians will say no. We want the right to determine our future. No one should tell us who our president should be except us.

And then, for Europe, they do see this as a threat to their own security, even though Ukraine is not a NATO member state. They don't want Russia closer to their borders. They don't want to see Russian orchestrated regime change because they're afraid that the Russians will then have an open door to cross the NATO line. These are the kinds of concerns that you hear from European allies to what the administration is doing.

[18:50:00]

SCIUTTO: Can -- Von der Leyen there, as she was discussing, talked about the enormous pressure, huge pressure, she called it, to increase defense spending and that they now have a surge in defense, and that is true. You look at the numbers they are lifting some of the restrictions on debt spending so that they could do this. How credible is that surge? Because Europe's defense is much small than America's. How quickly can they fill that hole, in effect?

POLYAKOVA: I mean, the hard truth is that they can't. I mean, Europe's defense sector has been completely divested from, devastated because they've had a reliable partnership for many decades with us. And the reality is that there is no one that can fill the gap that the U.S. could leave behind if we do start to reunite some of those commitments or if we stop military support not just for Ukraine but for other European allies.

And so, I think this is something that I hope this administration is thinking about. We have this alliance for 75 years, and it's served our interests in a real and significant way. It's helped our security and our economic growth. Are we going to just throw all that out, or are we going to say the Europeans, look, we don't want to be in Europe anymore? Fine. We may agree or disagree with that. I would disagree with that.

But is there a timeline in which for the next 10 years, we continue to supply you while you build up your defense industrial base? Because there's no reality in which Europe can just say, snap, we're going to build armored vehicles and tanks and planes that can compete with the United States, not even mention the nuclear umbrella, which the United States has been the guarantor of for all these decades.

SCIUTTO: Well, and now that's why you have this open discussion of France perhaps expanding its nuclear arsenal to protect other allies there. I mean, these are seismic changes. No one watching at home should underestimate them. Alina Polyakova, thanks so much for joining.

POLYAKOVA: Thanks, Jim.

SCIUTTO: And we'll have more news right after the break.

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SCIUTTO: All right. So, a break from it all, little sports now. It was a busy night in the Europa League, where the round of 16 kicked off on Thursday. Some of Europe's biggest clubs were in action, including Manchester United, who though continued to struggle. Let's bring in world sports Don Riddell. What happened for United?

DON RIDDELL, CNN WORLD SPORT: Hey, Jim. Yes, Manchester United have not exactly been enjoying a stellar season this year. They've had a manager change during the campaign and they are currently languishing in 14th place in the English Premier League. But they can say something that nobody else can match in this competition now.

United ahead in their first leg match here at Real Sociedad in Spain with a long-range shot from Joshua Zirkzee. United had to settle for a draw on the night though. Sociedad equalizing with a penalty from Mikel Oyarzabal, 20 minutes from time.

[18:55:00]

United will have home advantage in the second leg next week. And this is what they can say. They are still the only unbeaten team in the competition.

(BEGIN VIDEO CLIP) RUBEN AMORIM, MANCHESTER UNITED MANAGER: I felt until the penalty, we had the control of the game. And then, I think the penalty changed a little bit, the momentum. I felt our team in the last 30 minutes were really, really tired, and you can feel it in the game. So, we take the -- this stage to Old Trafford. It's going to be a different game. The pressure is going to be on us in that -- in the -- in that stadium. And we have to be ready.

(END VIDEO CLIP)

RIDDELL: Meanwhile, Tottenham have got some work to do in their tie against AZ Alkmaar. Spurs had a disappointing night in the Netherlands. They only had one shot on target and they conceded this own goal in the 18th minute. Lucas Bergvall's unfortunate intervention means that Spurs will have to come from behind in the second leg.

But they will be very grateful to their goalie, Vicario, that they're only one goal behind. He made a string of saves to keep them in the tie. The second leg will be on Thursday, March the 13th, next week in London, Jim.

SCIUTTO: That was a pretty incredible save in a one on one there. Don Riddell, thanks so much. And thanks so much to all of you for joining. I'm Jim Sciutto in Washington. Please do stay with CNN.

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