New U.S. chip guidance on Huawei reveals deeper fears, tougher realities

The U.S. Department of Commerce has issued new guidance declaring that the use of Huawei's Ascend AI chips "anywhere in the world" may violate U.S. export control regulations. The statement, released by the department's Bureau of Industry and Security on Tuesday, explicitly warned of the potential consequences of enabling U.S.-origin "AI chips to be used in training or inference for Chinese AI models."

While the move aligns with Washington's broader strategy to curb China's access to advanced semiconductor technologies, it also underscores a deeper anxiety: the fear of losing its global leadership in artificial intelligence.

NVIDIA CEO Jensen Huang said that China is "not behind" the U.S. in artificial intelligence and called the race in AI development a "long-term, infinite race," as he spoke to reporters at a tech conference in Washington, D.C., last month. 

During a recent congressional hearing, U.S. tech leaders, including OpenAI CEO Sam Altman and executives from Microsoft and chipmaker Advanced Micro Devices, testified on Capitol Hill to urge lawmakers to streamline policy for AI-related projects and fundraising in order to race the global competition with China in AI development.

The latest guideline follows a period of regulatory volatility. After walking back the previously announced "AI Diffusion Rule" from the Biden administration, the U.S. has now pivoted toward this more aggressive interpretation – a shift that highlights the inherent difficulties in enforcing such extraterritorial bans.

Convincing sovereign nations to follow U.S. law, particularly when it limits their own tech development, poses significant diplomatic and operational challenges.

"The Trump Administration will pursue a bold, inclusive strategy to American AI technology with trusted foreign countries around the world," Tuesday's statement said.

Implementing a global enforcement regime would likely require bilateral negotiations with dozens of countries – a time-consuming and politically fraught process that risks diminishing returns.

The Chinese Foreign Ministry has repeatedly criticized the U.S. crackdown on China's semiconductor industry. Lin Jian, a spokesperson for the ministry, stated at a regular press conference on February 25 that "the U.S. has politicized trade and technology, overstretched the concept of security and used these issues as tools, stepping up chip export controls against China and coercing other countries into going after China's semiconductor industry." 

"Such moves hinder the development of the global semiconductor industry and will backfire and hurt the U.S. itself as well as others in the end," Lin said.

In practice, these efforts may only reinforce China's determination to achieve technological self-sufficiency. Huawei's trajectory stands as a case in point.

Since coming under U.S. sanctions in 2019, the company has made notable advances in AI and chip development. Most recently, the company invited select Chinese tech companies to test its most powerful processor yet, the Ascend 910D, the Wall Street Journal reported, citing sources familiar with the matter. The chip is expected to rival – or even surpass – Nvidia's H100 in performance.

If such innovation continues to emerge under pressure, Washington may need to ask itself:
Is the goal to contain China or to compel it to innovate faster?