The Biden-Harris administration’s controls on chips used for artificial intelligence (AI) may have allowed China to gain a strategic advantage in the global tech race, according to multiple reports.
Fears that China may have leapfrogged the U.S. in the AI race have been escalating after the Chinese startup DeepSeek made national headlines for rivaling similar models in the U.S., causing American technology stocks to plunge on Monday. During his term, former President Joe Biden introduced several export controls aimed at reducing China’s global AI influence by limiting the export of advanced chips to the nation first in 2022, and again strengthening restrictions in 2023.
The 2022 restrictions primarily focused on chips with a military application, but still allowed China to purchase H800 chips — which were designed to comply with U.S. export controls while maintaining a competitive technological edge for AI development — from major chipmaker Nvidia, before the U.S. introduced additional export controls in 2023, The Wall Street Journal reported. DeepSeek published a research paper in 2024 claiming to have used 2,048 of the advanced chips to train one of its AI models, according to the outlet.
Several AI experts told Newsweek that Biden’s rules may have allowed China’s AI sector to pioneer with fewer resources, as DeepSeek was able to be trained in just two months for a price tag of $6 million, while the U.S.-based OpenAI likely spent upwards of $8.5 billion on AI training and staffing, according to numerous reports.
“They’re gonna clamp down harder on that and make it harder, but it’s going to be almost impossible to completely ringfence China out of high-end chips,” Alexandra Mousavizadeh, CEO of Evident, an intelligence platform that tracks AI adoption, told Newsweek. “The other dynamic is that even if it was successful in containing, what you’re doing is you’re pushing China to develop pretty sophisticated chips.”
On Jan. 23, President Donald Trump signed an executive order aiming to enhance America’s “global AI dominance.” Trump wrote in the order that the U.S. must “act decisively to retain leadership in AI and enhance our economic and national security.”
Nvidia lost nearly $600 billion in market value on Monday — a record single-day stock market loss — amid public concerns over DeepSeek. The growing interest surrounding the Chinese AI platform has also raised national security concerns among U.S. officials, including Michigan Republican Rep. John Moolenaar, who wrote in a statement shared on X that the U.S. “cannot allow CCP models such as DeepSeek to risk our national security [and] leverage our technology to advance their AI ambitions.”
After the Biden-Harris administration announced an additional round of trade regulations prohibiting exports of certain chips and semiconductor equipment to China in December, Beijing swiftly retaliated with its own export bans on materials that can be used to produce semiconductors and ammunition.
Just a week before Biden left office, his administration announced new export controls on AI chips. China’s market size in AI is projected to reach $45.45 billion in 2025, compared to a projected $66.21 billion in the U.S.
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