The U.S.-China tech standoff just got a little more entrenched: The Biden administration is now putting pressure on allies to stop their domestic companies from servicing the high-end chipmaking equipment they’ve sold to China. It’s the latest development in a global clampdown that started in October 2022, with American restrictions on semiconductor tech exports to China, and then tightened last year with more rules on chips used for artificial intelligence and the lithography machines that make them. (Another round of export control updates is expected from the Department of Commerce this Thursday.) In an election year, this all might just be inevitable saber-rattling: Both presidential candidates have promised to be tough on China, and Joe Biden wants to protect his flank. But some observers of the U.S. export strategy see it as misguided — not because it’s too political, but because it’s too hypothetical. The U.S. is fixated on a far-off scenario that’s hard to pin down, says Paul Triolo, a China expert and tech policy lead at Albright Stonebridge Group. He told DFD that America’s long game right now is driven by fear of how technology could be used — in ways that might not even come to pass. “I think it’s a misunderstanding, frankly,” Triolo said. “There’s this weird obsession with the idea that somehow, whichever country gets to some advanced machine intelligence, also called AGI or artificial general intelligence — that's going to give a country an edge, either economically or politically or militarily.” His view is that the government, in many cases, has been virtually assuming there will be a U.S.-China conflict down the road, and then reverse-engineering the kinds of technology — like say, AI-powered swarm drones — that could prove decisive, and the components within them. It’s not the smartest approach to shaping tech policy, Triolo argued, because by focusing on hypothetical conflict, the U.S. is bound to cause a lot of “collateral damage” — to Beijing’s economy, but also the global industry including American companies that rely on China as a key market. The backlash has started to come into focus already. Seemingly in response, Chinese President Xi Jinping warned a visiting Dutch Prime Minister Mark Rutte last week against “artificially erecting tech barriers.” China is also said to be enforcing guidelines that will ditch chips made by Silicon Valley giants AMD and Intel from being used in government computers, and sideline foreign software such as Microsoft Windows in favor of homegrown alternatives. American officials stress their priority is to protect national security, but James Lewis, a senior vice president at the Center for Strategic and International Studies and veteran of the Commerce and State departments, says the strategy appears more directed and effective at crippling China’s economic growth. (We asked the Commerce Department and its export control office about this critique, but they did not immediately respond to a request for comment.) Lewis made the observation that cutting-edge chips don’t necessarily address China’s immediate defense needs, like aircraft carriers, tanks, and missiles — which rely more on older semiconductors. Part of the challenge — and part of the reason it’s hard to make policy around uncertain future technologies — is that AI innovations have dual potential. The same chips could power an algorithm capable of massively boosting a country’s productivity or enabling its creation of unimaginable weapons of mass destruction in the future. Another challenge for banning tech exports is that — unlike the U.S.'s race against China for 5G wireless dominance — when it comes to AI, the hardware isn’t the whole story. According to Lewis, if China can compensate through superior algorithms or connective software (the secret weapon behind Nvidia’s grip on generative AI), hardware controls may become irrelevant. So, it might be the case that “China will not be able to make cutting-edge chips for the foreseeable future,” as Lewis observed. (His conversations with Chinese contacts suggest that the export controls have knocked off the country’s timeline for an independent chip industry by five to seven years.) But for any meaningful impact on security, he noted, these latest moves are largely symbolic: “That doesn’t mean it will affect their military. That doesn't mean they won’t look for ways to compensate,” he said about the predictions on China’s slowdown.
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