There was major news from China in the AI race this week:
1. Huawei introduced a new AI chip to compete with Nvidia.
2. The Chinese government instructed Chinese companies to stop buying certain Nvidia AI chips.
Taken together, the message is clear: China is not desperate for our chips. It is producing its own, and intends to compete globally in the semiconductor market.
Nvidia still has a substantial lead, according to most analysts, but Huawei is using its networking prowess to remain competitive. In particular, Huawei compensates for weaker individual chips by clustering more chips together.
It’s time for Washington to update its assumptions with regard to export controls. American chip companies must be allowed to sell the American technology stack abroad, albeit with security requirements, else we forfeit the AI race to China. If we refuse to do business with a country, we push it into China’s arms.
The question of what we sell China will always be complicated, and there’s room for a wide range of opinions on that. But the question of whether we sell to the rest of the world, especially our friends and allies, should be an easy one.
Excessive bureaucratic delays are a gift for Huawei, which will fill out purchase orders as American companies fill out forms.
The hawkish position with respect to China is to help American companies win the AI race, not to help Huawei create a Digital Silk Road.
There was major news from China in the AI race this week:
1. Huawei introduced a new AI chip to compete with Nvidia.
2. The Chinese government instructed Chinese companies to stop buying certain Nvidia AI chips.Taken together, the message is clear: China is not desperate for… pic.twitter.com/KcrrI7WJCs
— David Sacks (@DavidSacks) September 18, 2025
Nvidia not only reversed all of yesterday’s losses but also gained more. In total, it is up $100B this morning without any news, just acting as a machine to prop up the indices.
Fundamentals lost touch with reality in the U.S. markets a long time ago.
— Kakashii (@kakashiii111) September 18, 2025
