The United States has lifted export restrictions on specific AI chips.

This allows Nvidia and Advanced Micro Devices (AMD) to sell to China.

It permits the sale of Nvidia’s H20 and AMD’s MI308 chips under certain conditions.

White House AI adviser David Sacks said the move aims to boost US competitiveness while limiting Huawei’s market share in China.

The policy change benefits Nvidia and AMD, which faced multi-billion-dollar losses due to previous export bans.

Treasury Secretary Scott Bessent said the policy shift is part of wider US-China trade talks, including rare-earth mineral negotiations.

Some critics raised security concerns, but officials argue the affected chips are outdated and pose minimal risk.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Export controls created market opportunities for Chinese competitors

Previous U.S. restrictions on AI chips backfired by accelerating China’s domestic semiconductor capabilities rather than containing them.

When Nvidia’s advanced chips were banned from the Chinese market, local firms like Huawei rapidly developed alternatives, with Huawei’s Ascend 910 series emerging as a direct competitor to Nvidia’s offerings 1.

This dynamic is reflected in Cambricon Technologies’ stock surge of over 400% in the past year as investors recognized the market opportunity created by export restrictions 1.

The unintended consequence of U.S. policy is evident in how Chinese firms exploited regulatory gaps, with some companies establishing entities in nearby countries to circumvent restrictions and obtain Nvidia chips through indirect channels 2.

Even under tight controls, black market activity flourished, with restricted A100 chips selling in China at double their U.S. price, demonstrating the difficulty of effectively blocking technology transfer through export controls alone 2.

2️⃣ Semiconductor restrictions expose the economic costs of tech decoupling