New US export control rules aim to close loopholes that Chinese firms used to buy and make advanced AI chips. They add dozens of items to a list of restricted chip-making equipment and blacklist 13 Chinese companies, including China’s AI leaders.
The message is clear: the Biden Administration prioritizes security over sales. Yet unanswered questions abound. Will reinforced export controls cause a rift with allies? Will they hold back US innovation? And will they even prevent China from developing cutting-edge technology?
Start with the impact on US companies. California-based NVIDIA took an immediate hit. Its high-flying shares dropped almost 8%. Overall, 30 chip stocks, including Intel, AMD, Applied Materials, and ASML, the Dutch lithography machine maker, lost a combined $73 billion in market value. US semiconductor companies warn that cutting sales to China will boomerang in the long term, hurting their competitiveness.
…As Western supplies shrink, China is redoubling its own efforts to develop high-performance chips. Huawei’s new Mate 60 Pro smartphone contains a domestically produced seven-nanometer chip, showing that China can produce cutting-edge hardware despite American export restrictions. In a pointed shot, the phone was launched at the same time as US Commerce Secretary Gina Raimondo visited Beijing, surprising the US government.
American Buddhist Net 