The Trump administration has reimposed Biden-era sanctions aimed at restricting Chinese companies´ access to U.S. technology, despite criticisms over their effectiveness. These sanctions add dozens of Chinese firms to an export restriction list, bringing the total to approximately 800 entities. Notable among them is Nettrix Information Industry, accused of acquiring Nvidia AI chips through indirect channels.
Despite being cut off from advanced U.S. technology, Chinese firms like Huawei and Alibaba have been developing their own AI chips. These companies are closing the performance gap with their American counterparts and have even achieved cost efficiencies. For example, Ant Group reported a 20% cost reduction by using domestically developed chips over Nvidia hardware for training models.
The persistent sanctions have not substantially hindered China’s tech progress but have instead pushed Chinese firms to innovate and diversify their sources. Meanwhile, the Federal Reserve Bank of New York highlights the significant economic cost of these restrictions to U.S. businesses, indicating a need for reassessment of the export control strategy to preserve American technological leadership.
