OPINION:
Despite saying in April that it would restrict the sales of Nvidia’s advanced H20 chips to China, Team Trump decided a few days ago to grant export licenses that allow Nvidia and Advanced Micro Devices to sell those very chips to China, provided that the companies cut in the federal government for 15% of the action. Mr. Trump explained the decision in part by describing the chips being sold as “obsolete.”
The communist Chinese obviously don’t agree. They are willing to pay enough for those chips to allow Nvidia and AMD to make a profit, even while having to share the bounty with their new partner, the federal government. Nor, obviously, does Jensen Huang, CEO of Nvidia, who said: “It’s so innovative and dynamic here in China that it’s really important that American companies are able to compete and serve the market here in China.” It is certainly important to the companies and their shareholders.
Mr. Huang has also argued that the sales of American-made artificial intelligence chips into China help ensure that American chips become the default infrastructure of AI and establish de facto American dominance with respect to AI. Of course, most of us cannot determine whether that is plausible or merely the gossamer spun by a salesman.
What most of us can see, however, is that these sorts of deals are good examples of why the slaving, genocidal regime in Beijing is and will be a much tougher adversary than the Soviet Union. The Russians were plodding and poor and had nothing we wanted to buy. In contrast, lots of Americans, especially the tech crowd, are tangled up commercially with our would-be overlords in China and welcome the chance to sell into one of the world’s largest markets.
It is not clear to what extent Team Trump might be different. We are still waiting for it to sell or ban TikTok, which is now almost seven months overdue. Friends of the current regime in Beijing, including Apple CEO Tim Cook and Tesla CEO Elon Musk, have numerous allies within the administration. The president’s inaugural committee took $1 million from Gotion, a Chinese battery maker with a factory in Michigan.
At the moment, the closest thing to someone in charge of the relationship with China is probably White House crypto czar David Sacks, who, perhaps not coincidentally, also holds the AI portfolio. The good news is that his recent action plan on AI is better than expected. The bad news is that it continues to view the contest through the lens of Silicon Valley’s business interests.
Three blocks from the White House is a Polestar automobile showroom that sells electric vehicles made by communist China to unsuspecting Americans, unaware that each of these cars started its life with the help of child labor in Congo and may have been touched by slaves in Xinjiang. The presence of this outpost so close to the White House is intentionally provocative; it is a flag planted by a foreign adversary.
The regime in Beijing knows that the United States’ weak spot is that we are first and foremost a commercial empire. We will do pretty much anything if the price is right, irrespective of the counterparty. In this particular instance, that’s a significant problem.
At a minimum, the administration should get serious about China and put in charge of the issue people who are not in any way impaired or potentially conflicted by commercial interests. Ban TikTok. Don’t make it easy for the communists in Beijing to catch up with us in the crucial AI race by selling them chips, even obsolete ones. Treat the regime in Beijing as the mortal threat that it is.
• Michael McKenna is a contributing editor at The Washington Times.
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