US-China Tensions Escalate Over Huawei's AI Chips Amid Shifting Tech Policies

Tensions flare between the US and China over Huawei's AI chips | TechCrunch

Just a few weeks after the U.S. and China made significant steps to de-escalate the growing trade war between the two countries, tensions are flaring again -- this time over semiconductors. China's Commerce Ministry in Beijing released a statement on Wednesday that threatened legal action against anyone who enforces U.S. export restrictions on Huawei's AI chips, according to reporting from Bloomberg. This statement is in response to a set of "guidelines" released by the Trump administration on May 13 -- alongside the revocation of Joe Biden's Artificial Intelligence Diffusion rule -- that reminded companies that using Huawei's Ascend AI chips "anywhere in the world" was a violation of U.S. export rules. Earlier this week, China said the Trump administration had undermined recent trade talks by issuing that guidance. The U.S. Commerce Department has since changed the wording of its original May 13 guidance to remove the "anywhere in the world" phrase, according to Bloomberg.

China slams US 'bullying' over new warnings on Huawei chips

Beijing (AFP) - Beijing condemned on Wednesday new US warnings on the use of AI chips by Chinese tech giant Huawei, vowing it would take steps against "bullying" efforts to restrict access to high-tech semiconductors and supply chains. Washington has sought in recent years to curb exports of state-of-the-art chips to China, concerned that they could be used to advance Beijing's military systems and otherwise undermine American dominance in AI. US President Donald Trump's administration last week rescinded some export controls on advanced computing semiconductors, answering calls by countries that said they were being shut out from crucial technology needed to develop artificial intelligence. Some US lawmakers feared the restrictions would have incentivised countries to go to China for AI chips, spurring the superpower's development of state-of-the-art technology. But Washington also unveiled fresh guidelines warning firms that using Chinese-made high-tech AI semiconductors, specifically tech giant Huawei's Ascend chips, would put them at risk of violating US export controls. In a statement Wednesday, Beijing's commerce ministry described the warnings as "typical unilateral bullying and protectionism, which seriously undermine the stability of the global semiconductor industry chain and supply chain". China accused the US of "abusing export controls to suppress and contain China". "These actions seriously harm the legitimate rights and interests of Chinese enterprises and endanger China's development interests," the commerce ministry said. It also warned that "any organization or individual that enforces or assists in enforcing such measures" could be in violation of Chinese law. And it vowed to take "firm steps to safeguard its legitimate rights and interests" in response. Chips on the table The United States warned last week about the potential consequences of allowing US AI chips to be used for training Chinese AI models. And those found using Huawei's Ascend chips without clearance from Washington, the guidance read, can face "substantial criminal and administrative penalties, up to and including imprisonment, fines, loss of export privileges, or other restriction". The US commerce department said its policy was aimed at sharing American AI technology "with trusted foreign countries around the world, while keeping the technology out of the hands of our adversaries". Previous US rules divided countries into three tiers, each with its own level of restrictions. Top-tier countries like Japan and South Korea faced no export restrictions, while countries in the second tier, which included Mexico and Portugal, saw a cap on the chips they could receive. Chipmakers including Nvidia and AMD lobbied against the tiered restrictions and saw their share prices rise when the Trump administration indicated it would rethink the rule. Speaking at Taiwan's top tech show on Wednesday, Nvidia CEO Jensen Huang described US export controls on AI chips to China as a "failure", since companies are using locally developed technology. "The local companies are very, very talented and very determined, and the export control gave them the spirit, the energy and the government support to accelerate their development," Huang said.

How the US-China chip conflict is evolving under Trump

America targets Huawei's AI chips amid tech tensions with China. The US shifts its approach to limit China's access to vital semiconductors. Trump's strategy differs from Biden's, focusing on bilateral measures. Beijing accuses Washington of bullying. AI rivalry intensifies trade disputes. Both nations reduce tariffs temporarily. Tech competition shapes national security policies. The US may blacklist Chinese AI players.The United States has taken aim at China's Huawei over the cutting-edge chips powering artificial intelligence (AI), part of a shifting technology dispute between the two largest economies. AFP looks at how the US-China chip war is evolving under US President Donald Trump: A US government statement this month showed how the Trump administration is seeking to change the ways the US limits China's access to state-of-the-art semiconductors needed to develop AI. The US Commerce Department said on May 12 that it would rescind the "AI Diffusion Rule", which was issued by Trump's predecessor Joe Biden to shield American chips from Beijing. Set to take effect on May 15, the rule would have imposed three tiers of curbs, allowing trusted nations to freely import AI chips but controlling or banning their export to lower-tier countries like China. It "would have stifled American innovation" while harming US diplomatic ties with "dozens of countries", the commerce department said. The same statement reminded companies that using Huawei Ascend -- the Chinese tech giant's most advanced chip -- "violates US export controls". It warned of "potential consequences" if US-built AI chips were used to train Chinese AI models. The announcement aimed to "refocus the firepower" of AI curbs squarely on Beijing, said Lizzi Lee, a fellow on the Chinese economy at the Asia Society Policy Institute. Manoj Harjani, a research fellow at Singapore's S. Rajaratnam School of International Studies, agreed, saying the policy turn meant "the spotlight (would be) clearly on China and Huawei". Analysts told AFP that Trump's approach to chip controls marks a distinct shift from Biden. The latter relied on multilateral coordination with allies to keep Beijing out of the loop, said Marina Zhang, an associate professor at the University of Technology Sydney's Australia-China Relations Institute. In contrast, Trump's recent measures "adopt a more selective and bilateral approach", Zhang told AFP. "(The policies are) flexible enough to accommodate allies' demands and protect US firms' global market positions, yet continue to aggressively target specific Chinese companies like Huawei through unilateral measures," she said. Harjani noted that Trump was often viewed as a leader who "does not care much for allies and partners". His chip policy, Harjani said, "runs counter to this assumption" as it includes efforts to create new AI-focused partnerships with allies. Beijing has accused Washington of "bullying" and abusing export controls to "suppress and contain" China. The fighting talk shows that Beijing "will not yield easily", Zhang said. However, she said the restrictions would significantly hamper Huawei's access to "crucial" US chipmaking technology. "The AI competition has entered an accelerated and potentially dangerous phase, complicating future negotiations" on global AI governance, Zhang added. China has already made impressive strides in AI development, with homegrown startup DeepSeek shaking up the technology sector this year with a chatbot that seemingly matches the performance of US competitors at much lower cost. Chinese firms like Alibaba and Xiaomi have announced huge investments in AI in what experts say feeds into a national goal to cut reliance on foreign suppliers. "It's part of a broader mobilisation happening domestically," Lee said. "The strategy is not to beat the US -- it's to be good enough in the short term, while buying time to build domestic capacity and catch up to the cutting edge." The AI rivalry is playing into broader trade tensions between Beijing and Washington. The two sides traded tit-for-tat tariff hikes after Trump took power, but this month dramatically slashed levies on each other's goods for 90 days, signalling a detente for now. Lee, from the Asia Society, said the trade truce was "never going to hold tech policy at bay", noting the US backlash against Huawei just days after crunch bilateral trade talks in Geneva, Switzerland. "Tariffs can be dialled up or down. Tech competition, by contrast, is hardening into the architecture of national security policy for both sides," she said. "If the US doubles down on blacklisting key Chinese AI players, it's hard to imagine Beijing making big concessions elsewhere."