A central focus for the U.S. government has been to prevent the Chinese military from accessing advanced artificial intelligence (AI) technology to maintain its technological edge and safeguard national security. To achieve this, the Biden administration imposed export controls on high-end semiconductors and AI models. However, recent developments, such as the successes of DeepSeek, have raised doubts about the effectiveness of these export restrictions, suggesting that U.S. companies may end up paying the price unless a shift in strategy occurs.
The U.S. policy on Chinese AI is built on several uncertain assumptions. For example, it assumes that superintelligent AI is just around the corner, that the first nation to develop it will gain an unbeatable military advantage, and that the U.S. government can effectively prevent China from acquiring this advanced AI. Yet, none of these assumptions may prove to be accurate.
Developing AI at a human level or beyond is an enormous challenge. Even the most advanced AI systems today lack essential features like understanding the physical world, long-term memory, complex reasoning, and advanced planning abilities. Additionally, restricting China’s access to American AI technology may only have a real impact if future breakthroughs continue to emerge from the same technological path. Even if the U.S. successfully prevents others from creating transformative AI systems, China’s advanced cyber espionage capabilities mean that it could potentially steal the technology instead.
So, what’s driving concerns over AI export controls? Dario Amodei, CEO of Anthropic, has argued that such controls are essential because “AI systems can eventually help make even smarter AI systems, a temporary lead could be parlayed into a durable advantage.” While it’s true that AI can assist developers in speeding up processes and improving efficiency, the notion that the first country to reach a certain level of advanced AI has won the race and secured a lasting military edge seems increasingly unlikely.
This idea of AI evolving to surpass human intelligence and then self-improve exponentially is known as the “singularity.” While Amodei hasn’t directly endorsed this view, OpenAI’s CEO, Sam Altman, sparked a debate with his reference to “near the singularity” in early 2025. The singularity remains a speculative concept, popular in science fiction, but it shouldn’t be the cornerstone of U.S. national security policy.
The current approach also carries notable economic and strategic risks for the United States. Export controls are unintentionally boosting demand for Chinese chipmakers. Each time a company opts for a Chinese supplier over an American one, the U.S. semiconductor industry loses its footing. As Chinese AI firms grow, they further encourage the development of a domestic chip ecosystem, which lessens dependence on U.S. technology. China is investing in open-source chip designs like RISC-V, and DeepSeek is pursuing optimizations that diverge from current GPU architecture.
If Chinese AI firms gain market dominance and adopt alternative chip designs, U.S. semiconductor companies could be sidelined in the next phase of AI innovation. In other words, the U.S. policy risks sacrificing long-term competitiveness based on the assumption that it will prevent China from developing or stealing superintelligent AI in the near future.
The truth is that the U.S. can’t stop China’s progress in AI. As one of the world’s leading AI adopters, China represents a massive market for chips. The U.S. faces a tough choice: either abandon this market with hopes of temporarily delaying China’s AI advancements, or accept that China’s military will likely find ways to bypass any restrictions.
Though the current export restrictions force Chinese companies to use less advanced chips, well-funded Chinese firms can bear these additional costs. The dual-use nature of AI technology makes it nearly impossible to prevent military access, unlike traditional arms embargoes where restricting certain materials can be effective.
The U.S. should maintain targeted export restrictions on advanced AI technologies, particularly in countries of concern. However, these restrictions should act as barriers rather than obstacles. The priority should shift towards boosting the global market share of American AI companies. Present policies are hindering this goal by limiting the growth of U.S. chipmakers and AI developers instead of fostering it.
An obvious contradiction exists in China’s own restrictions on U.S.-based AI firms. Many services like OpenAI’s ChatGPT, Google’s Gemini, and Meta AI are blocked in China. The U.S. should demand reciprocal market access rather than impose export controls on its own firms while allowing Chinese AI companies to freely compete in the American market. While security concerns over Chinese AI services are valid, they can be managed. The general rule of thumb is to avoid sharing sensitive or confidential data with untrusted providers, whether AI-related or not.
Open-source AI models like DeepSeek offer flexibility, allowing companies to deploy them on private infrastructure to mitigate data security risks. While censorship remains a concern, developers can adjust models to reduce politically motivated restrictions. The central issue isn’t security or censorship but rather fairness in market access.
If China refuses to let U.S. AI firms operate within its market, the U.S. should respond by restricting Chinese AI services. Allowing DeepSeek to operate in the U.S. while China blocks ChatGPT creates an uneven playing field. Instead of doubling down on ineffective export restrictions, the U.S. should adopt policies that ensure American AI companies remain globally competitive.
DeepSeek’s success is a wake-up call: The current U.S. strategy on Chinese AI is flawed, resting on shaky assumptions. Policies that unnecessarily limit U.S. chip exports and restrict American AI firms from accessing legitimate international markets are counterproductive. They help China develop alternatives while weakening the U.S.’s position globally. A more effective approach would prioritize reciprocal market access, support American AI innovation, and ensure the U.S. maintains its leadership in the global AI economy.
Ayush Kumar Jaiswal is a writer and contributor for MakingIndiaAIFirst.com, a platform dedicated to covering the latest developments, trends, and innovations in artificial intelligence (AI) with a specific focus on India’s role in the global AI landscape. His work primarily revolves around delivering insightful and up-to-date news, analysis, and commentary on AI advancements, policies, and their implications for India’s technological future.
As a tech enthusiast and AI advocate, Ayush is passionate about exploring how AI can transform industries, governance, and everyday life. His writing aims to bridge the gap between complex AI concepts and a broader audience, making AI accessible and understandable to readers from diverse backgrounds.
Through his contributions to MakingIndiaAIFirst.com, Ayush strives to highlight India’s progress in AI research, startups, and policy frameworks, positioning the country as a leader in the global AI race. His work reflects a commitment to fostering awareness and dialogue around AI’s potential to drive economic growth, innovation, and societal impact in India.
For more of his work and insights on AI, visit MakingIndiaAIFirst.com.
