Editorials & Other Articles

ancianita

(41,183 posts) Fri Jul 25, 2025, 09:24 PM Friday

America Will Come to Regret Selling A.I. Chips to China

By Ben Buchanan
Dr. Buchanan served as the White House special adviser for A.I. during the Biden administration.

https://archive.ph/4875C

"The Trump administration announced last week that it would allow China to purchase advanced artificial intelligence chips from the tech giant Nvidia. The decision, a reversal of the administration’s past restriction on chip sales, is a profound mistake.

It cedes the United States’ greatest point of leverage in A.I.: control of the global computing power supply chain. Mr. Trump claims to champion American tech, releasing an “A.I. action plan” this week. But permitting these chip sales threatens American dominance in A.I., undermines U.S. tech companies and risks our national security — all in favor of one chipmaker’s near-term profits.
Computer chips are the lifeblood of powerful A.I. systems. A.I. companies ... spend the vast majority of their funding on chips. (I do advisory work for some of these companies, including Anthropic.) American chipmakers, including Nvidia, sell more than 10 million of these chips annually. China relies on these chips to aid both its military and its A.I. companies, but can make only about 200,000 of its own per year... Ample evidence suggests that Chinese military suppliers prefer Nvidia chips and use A.I. systems trained on U.S. chips. The stakes are not hard to grasp: We should not allow American troops and intelligence officers to be targeted by Chinese A.I. trained on Nvidia chips...

Last year, in response to these restrictions, Nvidia created a chip called the H20 ... designed to elude U.S. export controls so it can be sold in China. The controls focused on processing power, so Nvidia gave the H20 chip mediocre processing but large amounts of high-bandwidth memory. That memory allows the H20 to outperform the H100 when running, as opposed to training, A.I. systems — a process called inference. Inference is becoming increasingly important: One analysis suggests that it will make up more than 70 percent of A.I. needs by 2026. This memory, and other components of the H20, could have been used to make H100 chips for American companies.

But Nvidia’s chief executive, Jensen Huang, lobbied hard for a reversal. To do so, he hyped China’s Huawei chips, claiming they were on par with Nvidia’s and that Huawei could produce them in competitive quantities. He urged the Trump administration to let Nvidia re-enter the Chinese market to stop Huawei from growing more powerful...But the claim that China’s chips rival the United States’ is false...The estimated number of chips Huawei can manufacture this year would hardly be enough to fill a single cutting-edge data center ... If Huawei’s chips were as good as Nvidia’s, there wouldn’t be the overwhelming demand in China for the H20... It performs substantially better than Huawei’s best chip at inference...

Worst of all, the H20 decision could fracture the hard-won bipartisan consensus on the need for American A.I. dominance over China... the A.I. industry senses weakness in his China policy...
As the world’s first $4 trillion company, Nvidia doesn’t need the Chinese market to thrive. The demand for A.I. chips from U.S. companies is enormous.... Amid the A.I. boom, Nvidia’s stock price has increased by a factor of 10 over the last two and a half years, even as U.S. chip restrictions tightened.

You’d be forgiven for assuming that the United States got something from China in exchange for giving away its advanced technology. Not from what I can tell. The day after the H20 reversal, China ratcheted up its own export controls on critical minerals and battery technologies — areas where it has an advantage. It was a fitting and lamentable coda to a decision that benefited one company at the expense of America’s A.I. leadership and its national security."

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While this so-called trade deal is part & parcel of the depraved stupid felon's stupid administration, it's also true that the world shouldn't suffer United States A.I. dominance in the hands of the stupid Heritage and Silicon oligarch networks, either.