Give China the Best AI Hardware to Protect the U.S.

On July 16, 2025, the Trump administration loosened the sales ban on Nvidia artificial intelligence chips to China. This decision flies in the face of the growing bipartisan consensus in Washington that selling advanced AI chips to China poses an unacceptable national security risk to the United States, demonstrated by the letter that Senators Elizabeth Warren and Jim Banks recently sent to Nvidia. While such a consensus sounds prudent, it is dangerously short-sighted.

Export bans on high-end hardware may seem like a tool of strategic restraint. In reality, they are accelerating China’s technological independence, undermining U.S. influence, and weakening America’s ability to shape the global future of artificial intelligence.

The logic behind the bans is simple: deny China access to cutting-edge chips, and you delay its development of advanced AI systems used for surveillance, cyberwarfare, or military operations. But the real-world effect is often the opposite. China does not stop building. It builds without us, with more urgence and independence.

Take DeepSeek, a Chinese AI firm that achieved an efficiency breakthrough resulting from being constrained by less powerful hardware.[1] Unable to access Nvidia’s top-tier GPUs, the company redesigned its architecture to run efficiently on more limited chips. By prioritizing computational efficiency and low-level GPU tuning, DeepSeek advanced despite the constraints. Hardware scarcity didn’t block innovation. It provoked it.

We’ve seen this before. In World War I, the United States relied on German optical glass, critical for rangefinders, binoculars, and periscopes. When war cut off the supply, the U.S. faced a strategic crisis. But denial didn’t paralyze American industry. It catalyzed it. Backed by wartime urgency, firms like Bausch & Lomb and institutions like the National Bureau of Standards created a domestic optics industry from scratch.[2] The U.S. didn’t freeze in place. It caught up and then took the lead.

Every Chinese data center running Nvidia chips today is a node of American influence. As long as Chinese AI systems run on U.S. hardware, the U.S. retains leverage over performance, updates, supply chains, and, most importantly, alignment with global standards. That leverage vanishes the moment China builds a full-stack alternative. Export controls don’t preserve dominance. They motivate self-reliance.

This dynamic also applies to software. In early 2024, a sophisticated backdoor nearly compromised a core open-source utility called XZ Utils.[3] A rogue contributor spent years building trust with project maintainers before inserting a subtle exploit during the release build process. The malicious code was not visible in the open repository and could have granted remote access to Linux systems worldwide. It was discovered only because one engineer noticed an unusual delay anomaly.

That discovery was a triumph of global transparency. But it was also a warning. Open-source software is not immune to manipulation just because its code is public. Governance matters. Who writes the code, who merges it, and who sets the defaults matters. If China dominates the development of open-source infrastructure, it will quietly shape what the world considers “normal.” Backdoors won’t need to be hidden if they’re built into the standard itself.

This is not theoretical. Much of the world’s AI stack, from model training frameworks to distributed computing libraries, depends on open-source tools. If the technical backbone of those tools becomes defined by institutions aligned with Chinese state priorities, the U.S. will lose more than influence. It will lose visibility. It will be using “open” software which is open only in name.

The real danger of ceding the hardware layer is that the software follows. And when both migrate abroad, so does the power to define what remains visible, what gets reviewed, and what becomes hidden in plain sight.

Meanwhile, the bans aren’t airtight. Chinese companies continue to acquire restricted chips via overseas intermediaries and black-market resellers. Enforcement is difficult, and circumvention is increasingly sophisticated. In the process, American firms lose access to a market they once led while China accelerates efforts to replace them.

Consider what we’re giving up. It is not just the economic value of a $4 trillion company like Nvidia selling globally. More importantly, it also includes the geopolitical leverage that comes from setting the technical standards others must follow. When the world builds on American platforms, America helps shape the rules of the road.

By forcing China to build its own AI ecosystem, we heighten, not reduce, the risk of miscalculation, misalignment, and cyber escalation. The U.S. gains nothing by building a digital Iron Curtain around an adversary that is fully capable of building its own infrastructure and often moves faster under constraint.

If we want to shape the future of artificial intelligence, we need to be in the room – and in the rack.

[1] https://www.nytimes.com/2025/01/28/technology/china-deepseek-ai-silicon-valley.html

[2] https://gl-history.carnegiescience.edu/news/optical-glass-rivalry

[3] https://www.reuters.com/technology/cybersecurity/why-near-miss-cyberattack-put-us-officials-tech-industry-edge-2024-04-05/