The Trump administration faces a difficult balancing act as it considers regulating the sale of U.S.-developed AI chips to China. On one hand, it aims to keep artificial intelligence capabilities out of the hands of China’s government and military branches. On the other hand, it doesn’t want to hurt American companies by limiting access to major sales markets.
President Trump has shown support for a big-budget AI effort called Project Stargate, which includes funding for OpenAI, Oracle, and SoftBank. He also issued an executive order aimed at enhancing America’s global AI dominance. However, this stance may be compromised if he imposes export restrictions and tariffs on the sale of Nvidia’s leading-edge AI processors.
China, however, has been advancing its own semiconductor manufacturing capabilities and finding technological workarounds for its AI systems. The country’s domestic chipmaking industry is growing rapidly, with investments exceeding those in the US.
The US trade restrictions on selling advanced chips to China have not stopped the country’s development of AI technologies. Instead, they seem to have spurred a surge in domestic spending on semiconductor-making equipment. Experts warn that setting lower performance thresholds for AI chips could further stimulate China’s chipmaking goals.
Some lawmakers are calling for further restrictions on AI chips sold to China. However, Trump is set to begin a round of tariffs on goods imported from Canada and Mexico, and has pledged tariffs on products made in China and Taiwan.
The US semiconductor industry faces a significant challenge, with the share of global capacity declining from 37% in 1990 to 10% by 2022. Industry leaders emphasize the need for the US to boost its chipmaking capabilities to remain competitive.
Source: https://www.investors.com/news/technology/ai-chips-white-house-faces-delicate-balancing-act