U.S. Trump Administration Tightens Restrictions on China’s Technology Development
The Trump administration in the United States has once again tightened restrictions on China’s technology development, warning global companies that using artificial intelligence (AI) chips manufactured by Huawei could result in criminal penalties for violating U.S. export controls.
(Background: Trump backstabbed Huang Renxun! Nvidia’s H20 “pre-negotiation useless” led to a $5.5 billion loss under U.S. ban; how will the outcome inform TSMC?)
(Context: U.S. Customs seized Bitcoin mining machines mistaken for Huawei radio frequency, now fully released, which is beneficial for mining companies)
New Developments in the U.S.-China AI Trade War
The U.S. and China AI trade war has new developments, as the U.S. Department of Commerce recently issued important guidance aimed at clarifying and strengthening export controls on Chinese AI chip technology. The guidance explicitly states that the Ascend series AI processors from Huawei Technologies Co., Ltd. “almost certainly” contain or use U.S. technology in their manufacture, thus warning global companies against using these chips to avoid regulatory sanctions.
U.S. Department of Commerce Guidance
The Bureau of Industry and Security (BIS), responsible for overseeing export controls, announced enhanced regulations for foreign AI chips this Tuesday (13th), specifically emphasizing that using Huawei AI chips violates U.S. export bans. Although insiders stressed that BIS is not issuing new regulations, it is clearly conveying a message to global companies: Huawei’s chip products likely violate existing export control measures, as exporting U.S. technology to Huawei requires extremely difficult-to-obtain licenses.
Export Control Violations
The guidance indicates that using Huawei’s Ascend chips anywhere in the world constitutes a violation of U.S. export controls. Kevin Wolf, a senior export control attorney at Akin Gump, pointed out that the Department of Commerce specifically named Huawei’s Ascend series chips 910B, 910C, and 910D, indicating that these chips are likely made using stolen U.S. technology, raising concerns about export regulation violations:
The guidance is not a new regulation, but rather a public confirmation of existing interpretations, meaning that anyone, anywhere, simply using advanced computing (integrated circuits) designed by Huawei will violate export control regulations.
Concerns Over Huawei’s 910D Chip Performance
The U.S. government’s guidance comes amid increasing concerns about Huawei’s rapid advancements in advanced chips and other AI hardware. Reports indicate that Huawei has begun delivering its AI chips to Chinese customers, claiming that its performance surpasses that of U.S. AI chip giant Nvidia in key metrics such as overall computing and memory.
It is reported that the systems Huawei exports rely heavily on its own 910C chips. Although a single 910C chip does not match the performance of Nvidia’s most advanced products, the collective server product reportedly outperforms Nvidia overall.
Recently, Huawei has also released performance parameters for the Ascend 910D, claiming to match Nvidia’s H100 chip, launched in 2022. In addition to striving to equal overall computing power, it aims to exceed in certain areas, with expected shipments of over 800,000 units by 2025, covering major Chinese state-owned telecom operators and large AI developers like ByteDance.
However, Huawei also admitted that, compared to Nvidia, its chip manufacturing capabilities are still limited by process levels, primarily relying on domestic foundry partner SMIC’s 7nm process, which differs from Nvidia’s ability to utilize TSMC’s more advanced processes, resulting in ongoing challenges for Huawei’s chips in raw computing power and power efficiency.
Adjustment of U.S. AI Export Policy
It is noteworthy that on the same day the U.S. Department of Commerce issued guidance on Huawei chips, it also announced the repeal of the “AI Diffusion Rule.” This rule, planned by the previous Biden administration, was set to take effect on May 15 and aimed to restrict the export of AI chips to other countries, making it harder for China to circumvent existing U.S. export controls. However, the Trump administration’s Department of Commerce deemed the rule overly bureaucratic—despite opposition from former Biden administration officials—and indicated that an alternative would be forthcoming.
At the same time, Nvidia’s custom chip H20, produced for China, has also been banned from sale in China under this wave of AI restrictions, resulting in a $5.5 billion loss for Nvidia. These policies indicate that the competition for computing power between the U.S. and China is no longer a simple matter of companies producing compliant products according to specific regulations and data; the U.S. is strengthening various interventions to obstruct China’s access to computing power.
Coincidentally, the day these policy adjustments were announced was during President Trump’s visit to Saudi Arabia. During the visit, Trump facilitated a series of agreements, including a commitment from the newly established state-owned AI company Humain to use hundreds of thousands of Nvidia chips to build AI infrastructure. Insiders revealed that these large-scale AI cooperation projects in the Gulf region shocked many senior officials in the Trump administration, who were not only concerned about the offshore outsourcing of large-scale AI infrastructure but also felt uneasy about Saudi Arabia and the United Arab Emirates’ cooperation with China in related fields. Consequently, the U.S. is actively pursuing partnerships with them.
