U.S. Chip Export Restrictions Ineffective as China Narrows AI Gap, Says White House Official

David Sacks, the White House official responsible for artificial intelligence (AI) and cryptocurrency policy, stated on June 10 that China is only three to six months behind the United States in AI model development. Speaking at the Amazon Web Services Summit in Washington, Sacks warned that excessive government regulation could undermine U.S. leadership in AI and allow China to dominate the market. He emphasized the need to remove innovation barriers driven by fear, which he believes could hinder ongoing technological progress.

According to Singapore's Lianhe Zaobao, Chinese startup DeepSeek launched a cost-effective, high-performance AI model, "R1", in January, drawing global attention. Subsequently, several major Chinese tech firms introduced proprietary models emphasizing high cost-efficiency, entering direct competition with Western leaders in the field.

While the White House later clarified that Sacks was referring specifically to AI models, it added that China lags the U.S. by one to two years in terms of AI chip performance. The Biden and Trump administrations have both pursued policies aimed at curbing China's chip-making capabilities. In January, during his final week in office, President Biden implemented the “AI Expansion Rule,” categorizing global chip-importing countries into three tiers, a policy that drew international criticism.

On May 12, the Trump administration revoked the rule, which was scheduled to take effect on May 15. The U.S. Department of Commerce's Bureau of Industry and Security stated that the policy would stifle American innovation and impose heavy regulatory burdens. The Bureau also indicated that alternative regulations are being developed. According to Bloomberg, sources revealed that the Trump administration may seek bilateral discussions to replace the rule.

At the same time, the U.S. Commerce Department issued restrictions on AI-related exports to China, warning companies globally that allowing American chips to be used for training Chinese AI models could result in legal consequences. It also warned of the risks associated with advanced Chinese chips, including certain Huawei Ascend models. In response, China has repeatedly voiced its opposition. On May 21, a spokesperson for China’s Ministry of Commerce stated that the U.S. measures constitute discriminatory restrictions against Chinese enterprises. Any entities that implement or assist in these measures may violate China’s Anti-Foreign Sanctions Law and other relevant regulations, and bear legal responsibility.

At the summit, Sacks underscored the strategic implications, stating: “If five years from now the market is filled with Huawei’s AI chips, that means we lost. We must not let that happen.” He also criticized the Biden administration’s export control framework, arguing that the term "diffusion" was inappropriately framed as negative, although technological diffusion should be a positive concept. He noted that Biden’s rules had placed countries such as the UAE on AI chip export restriction lists, adding: “What choices did we give them? We essentially pushed them toward China.”
Sacks’ remarks appeared to resonate with views in the U.S. tech sector. In late May, NVIDIA CEO Jensen Huang stated that China would continue advancing in AI with or without NVIDIA’s chips. On May 8, executives from OpenAI, AMD, and other U.S. tech firms testified before Congress, expressing concerns that excessive export controls could diminish their competitive edge.

Sacks also downplayed the feasibility of smuggling AI chips, stating: “We talk about these chips as if they can be smuggled in a briefcase. That’s not the reality. These systems are eight feet tall and weigh two tons. It’s easy to verify whether they’re where they’re supposed to be.” Reuters reported that Sacks’ comments may signal a policy shift toward promoting broader export of AI chips and models to strengthen U.S. dominance in the global market and counterbalance China’s rapid progress.

On June 11, Liang Huaixin, a researcher at the National Security and Governance Research Institute at the University of International Business and Economics, told the Global Times that Sacks’ statements reflect a deeper dilemma in the U.S. AI strategy. While the U.S. seeks to "weaponize" AI to contain emerging economies such as China—and even its allies—this could impair international cooperation and ultimately isolate the U.S. AI industry.