Today: Feb 12, 2025

Cracks in the firewall: Are U.S. export controls failing to stop china’s AI advancements?

Despite strict U.S. export controls, China’s DeepSeek AI is catching up, challenging America’s grip on technological dominance. With reports of thousands of high-performance chips in Chinese hands, are these restrictions truly working—or are they just an illusion of control?
FORTUNE Brainstorm Tech 2023 - Photograph by Stuart Isett/Fortune, FLICKR
2 weeks ago

In a thought-provoking essay released on Wednesday, Dario Amodei, CEO of Anthropic, took a stance on the ongoing debate surrounding U.S. export controls on AI chips and their effectiveness in limiting China’s AI development. His conclusion? The success of Chinese AI company DeepSeek does not indicate failure but rather validates the necessity of such restrictions. However, the conversation isn’t as clear-cut as Amodei suggests.

Export controls, particularly those limiting China’s access to advanced AI chips, have been a cornerstone of U.S. policy to maintain technological leadership. The Biden administration’s restrictions on high-performance semiconductors aim to prevent China from gaining a competitive edge in artificial intelligence—a field with profound economic, military, and geopolitical implications.

Amodei, who co-authored an op-ed with former U.S. deputy national security adviser Matt Pottinger advocating stronger controls, argues that existing measures are already slowing Chinese progress. But as DeepSeek’s latest AI models approach the capabilities of their American counterparts, questions arise: Are these controls truly working, or is China finding ways to circumvent them?

DeepSeek recently made headlines with the release of its models DeepSeek-V3 and DeepSeek-R1. According to Amodei, DeepSeek-V3—a pretrained model—showed significant efficiency improvements, while R1 incorporated reinforcement learning to enhance reasoning skills, bringing it closer to the performance of U.S. models. However, he stresses that DeepSeek’s advances are not unprecedented but rather expected within the broader trend of AI development.

Amodei points out that AI follows predictable scaling laws: increasing compute power and refining model architectures lead to steady improvements. If DeepSeek appears to be catching up, it’s not necessarily a sign of a breakthrough but a natural progression along a known trajectory. Still, the fact that a Chinese company is the first to demonstrate these cost reductions is geopolitically significant.

Are U.S. export controls holding?

One of the most critical claims in Amodei’s essay is that export controls remain effective. He suggests that while DeepSeek has acquired a sizable number of AI chips—reportedly around 50,000 Nvidia H-series GPUs—this does not mean that China can easily scale up to the millions of chips required for cutting-edge AI development. Amodei argues that while small-scale smuggling and loopholes may exist, blocking large-scale chip acquisitions remains feasible.

However, skeptics point out that China has historically been adept at bypassing trade restrictions. Reports suggest that Beijing is investing heavily in domestic semiconductor manufacturing, with companies like Huawei and SMIC attempting to develop alternatives to Nvidia’s chips. While Chinese AI chips currently lag behind U.S. counterparts, the gap may narrow over time. If China succeeds in self-sufficiency, will U.S. export controls still serve their intended purpose?

The discussion around export controls is not just about technology—it’s about power. Amodei outlines two possible futures: a bipolar world where both the U.S. and China possess advanced AI, or a unipolar world where the U.S. and its allies maintain dominance. The latter scenario, he suggests, could provide a lasting strategic advantage, as AI systems eventually become capable of designing even smarter AI, creating a self-reinforcing lead.

But is a unipolar AI world realistic? Many experts believe that AI innovation is too widespread and decentralized to be fully controlled by any one nation. The European Union, India, and other regions are ramping up AI investments, and open-source AI models continue to challenge corporate monopolies. In this context, expecting the U.S. to maintain a permanent AI lead may be wishful thinking.

Amodei’s argument that DeepSeek’s rise reinforces the need for export controls rather than undermining them is a compelling one. However, it also highlights a broader issue: the race for AI dominance is intensifying, and restrictive policies alone may not be enough to secure an enduring lead.

Rather than relying solely on export controls, the U.S. might benefit from a multi-faceted strategy—investing more in domestic AI research, fostering public-private partnerships, and working with allies to maintain a competitive edge. AI is not just a battle of chips but of talent, data, and innovation.

As the global AI landscape shifts, the effectiveness of U.S. policies will continue to be tested. One thing remains clear: the stakes have never been higher.

Fabrice Iranzi

Journalist and Project Leader at LionHerald, strong passion in tech and new ideas, serving Digital Company Builders in UK and beyond
E-mail: iranzi@lionherald.com

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