Scrapping AI Export Controls Is Self-Defeating
The controls on Nvidia's H20 chips appear to have been working until CEO Jensen Huang's lobbying secured a reversal that handed Beijing exactly what it wanted. DeepSeek's founder admitted that the chip controls were his company's biggest constraint. As AI's compute demands soar, export controls allow America's hardware advantage to deliver compounding benefits. Reversing course cedes those gains to China.
Mr. Ginn's notion that 'each Nvidia chip sent abroad is a new point on the board for American software and values' assumes vendor lock-in works in Leninist dictatorships as it does in free-market democracies. The Chinese regime isn't a normal client—it's a rival with a decades-old policy of replacing U.S. vendors with indigenous alternatives.
Beijing's playbook should be obvious by now: It requires foreign vendors to surrender their trade secrets, then scales up domestic competitors and displaces foreign suppliers—first in China, then abroad. Xi Jinping was backing efforts to replace Nvidia long before Washington moved to restrict its chip exports. Our permissiveness gets him one step closer to that goal.
Ironically, soon after the White House approved selling H20s to China, Beijing summoned Nvidia for questioning about chip 'safety.' Beijing surely has two goals in mind: Signal to domestic companies that they ought to shun American technology as soon as possible, and manipulate Nvidia to reveal how it designs its chips so that Chinese GPU-makers can replace Nvidia even faster.
Mr. Ginn also unfortunately shrugs off national-security risks. This year the People's Liberation Army sought H20 chips for military AI systems. We've seen this pattern before: U.S.-based Cadence Design Systems last month pleaded guilty to criminal violations of export controls and was fined $140 million after its semiconductor design technology, diverted through Chinese entities, powered PLA hypersonic missile simulations.
Mr. Ginn, whose company is a Nvidia partner, is right that America needs a strategy beyond export controls—including streamlined energy approvals and faster reindustrialization. But these initiatives would complement, not replace, export controls.
Matt Pottinger and Liza Tobin
Palo Alto, Calif., and Washington
Mr. Pottinger was deputy national security adviser (2019-21). Ms. Tobin was China director of the National Security Council, (2019-21).
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
5 minutes ago
- Business Standard
South Korean President Lee to meet Trump in Washington on August 25
South Korea's new President Lee Jae Myung will travel to Washington later this month to meet with US President Donald Trump, Lee's office said Tuesday, for talks on trade and defence cooperation in the face of nuclear-armed North Korea and other threats. Their August 25 summit will follow a July trade deal in which Washington agreed to cut its reciprocal tariff on South Korea to 15 per cent from the initially proposed 25 per cent and to apply the same reduced rate to South Korean cars, the country's top export to the United States. South Korea also agreed to purchase $ 100 billion in US energy and invest $ 350 billion in the country, and the leaders could use their meeting to discuss expanding cooperation in key industries such as semiconductors, batteries and shipbuilding, Lee's spokesperson Kang Yu-jung said. The meeting also comes amid concerns in Seoul that the Trump administration could shake up the decades-old alliance by demanding higher payments for the US troop presence in South Korea and possibly move to reduce it as Washington shifts more focus on China. Lee and Trump will discuss strengthening the allies' defence posture against growing North Korean threats, and also developing the partnership into a future-oriented, comprehensive strategic alliance to address the changing international security and economic environment, according to Kang, who didn't elaborate on the specific issues to be addressed. Dating back to his first term, Trump has regularly called for South Korea to pay more for the 28,500 American troops stationed on its soil. Recent comments by key Trump administration officials, including Undersecretary of Defence Elbridge Colby, have also suggested a desire to restructure the alliance, which some experts say could potentially affect the size and role of US forces in South Korea. Under this approach, South Korea would take a greater role in countering North Korean threats while US forces focus more on China, possibly leaving Seoul to face reduced benefits but increased costs and risks, experts say.
The Hindu
5 minutes ago
- The Hindu
Trump opens door to sales of version of Nvidia's next-gen AI chips in China
U.S. President Donald Trump on Monday suggested he might allow Nvidia to sell a scaled-down version of its next-generation advanced GPU chip in China, despite deep-seated fears in Washington that China could harness U.S. artificial intelligence capabilities to supercharge its military. The move could open the door to China securing more advanced computing power from the U.S. even as the two countries battled for technology supremacy, critics said. "Jensen (Huang, Nvidia CEO) also has the new chip, the Blackwell. A somewhat enhanced-in-a-negative-way Blackwell. In other words, take 30% to 50% off of it," Trump told reporters in an apparent reference to slashing the chip's computing power. "I think he's coming to see me again about that, but that will be an unenhanced version of the big one," he added. Earlier, the Trump administration confirmed an unprecedented deal with Nvidia and AMD to give the U.S. government 15% of revenue from sales of some advanced chips in China. The move sent shivers across Washington, where China hawks of both parties have long sought to keep Beijing generations behind U.S. AI technology. 'Even with scaled-down versions of flagship Nvidia (chips), China could spend and buy enough of them to build world-leading, frontier-scale AI supercomputers," said Saif Khan, former director of Technology and National Security at the White House National Security Council under former President Joe Biden, who heavily restricted U.S. AI chip exports abroad. "This could directly lead to China leapfrogging America in AI capabilities.' Reuters in May reported that Nvidia was preparing a new chip for China that was a variant of its most recent state-of-the-art AI Blackwell chips at a significantly lower cost. Nvidia has not disclosed the existence of the chip, or its capabilities compared with its U.S. offerings. But the flagship U.S. version of the Blackwell chip, which Nvidia unveiled in March, is up to 30 times faster than its predecessor. Trump on Monday defended the agreement calling for Nvidia and AMD to give the U.S. government 15% of revenue from China sales, after his administration green-lighted exports to China of less advanced AI chips known as the H20 last month. The Trump administration halted sales of Nvidia's H20 chips to China in April, but the company said last month it had won clearance to resume shipments and hoped to start deliveries soon. "The H20 is obsolete," Trump said on Monday, arguing China already had it. "So I said, 'Listen, I want 20% if I'm going to approve this for you, for the country.'" The deal is extremely rare for the United States and marks Trump's latest intervention in corporate decision-making, after pressuring executives to invest in American manufacturing and demanding the resignation of Intel's new CEO, Lip-Bu Tan, over his ties to Chinese companies. The U.S. Commerce Department has started issuing licenses for the sale of H20 chips to China, a U.S. official said on Friday. Washington does not feel the sale of H20 and equivalent chips compromises national security, a second U.S. official told Reuters on Sunday. The second official did not know when or how the agreement with the chip companies would be implemented but said the administration would be in compliance with the law. When asked if Nvidia had agreed to pay 15% of revenue to the U.S., a company spokesperson said: "We follow rules the U.S. government sets for our participation in worldwide markets." "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide," the spokesperson added. A spokesperson for AMD said the U.S. approved its applications to export some AI processors to China, but did not directly address the revenue-sharing agreement and said the company's business adheres to all U.S. export controls. China's foreign ministry said the country has repeatedly stated its position on U.S. chip exports. The ministry has previously accused Washington of using technology and trade measures to "maliciously contain and suppress China."
The Hindu
5 minutes ago
- The Hindu
South Korean President Lee Jae Myung to meet Donald Trump on August 25 in Washington
South Korea's new President Lee Jae Myung will travel to Washington later this month to meet with U.S. President Donald Trump, Lee's office said on Tuesday (August 12, 2025), for talks on trade and defence cooperation in the face of nuclear-armed North Korea and other threats. Their August 25 summit will follow a July trade deal in which Washington agreed to cut its reciprocal tariff on South Korea to 15% from the initially proposed 25% and to apply the same reduced rate to South Korean cars, the country's top export to the United States. South Korea also agreed to purchase $100 billion in U.S. energy and invest $350 billion in the country, and the leaders could use their meeting to discuss expanding cooperation in key industries such as semiconductors, batteries and shipbuilding, Lee's spokesperson Kang Yu-jung said. The meeting also comes amid concerns in Seoul that the Trump administration could shake up the decades-old alliance by demanding higher payments for the US troop presence in South Korea and possibly move to reduce it as Washington shifts more focus on China. Mr. Lee and Mr. Trump will discuss strengthening the allies' defence posture against growing North Korean threats, and also developing the partnership into a 'future-oriented, comprehensive strategic alliance' to address the changing international security and economic environment, according to Kang, who didn't elaborate on the specific issues to be addressed. Dating back to his first term, Mr. Trump has regularly called for South Korea to pay more for the 28,500 American troops stationed on its soil. Recent comments by key Trump administration officials, including Undersecretary of Defence Elbridge Colby, have also suggested a desire to restructure the alliance, which some experts say could potentially affect the size and role of U.S. forces in South Korea. Under this approach, South Korea would take a greater role in countering North Korean threats while U.S. forces focus more on China, possibly leaving Seoul to face reduced benefits but increased costs and risks, experts say.
