The United States, the Netherlands, and Japan have agreed to limit China’s access to high-tech chip manufacturing machinery, which was Beijing’s way of getting around earlier restrictions by using suppliers outside the United States. These export restrictions were imposed to prevent China from developing high-performance chips used in artificial intelligence, supercomputers, and other technologies. As a result, China’s AI growth has been targeted, with the US prohibiting the export of Nvidia A100 and H100 chips. This has resulted in a scarcity of high-performance chips, raising their prices and reducing profit margins, forcing major companies to rethink and possibly discontinue their products. Small and medium-sized businesses will be the hardest hit, as their operations may be forced to close. The founder of a Chinese AI start-up described the sanctions as a “blitz strike” by the US to exploit the Chinese AI sector’s reliance on US-controlled global design and manufacturing systems.

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