A New Cold War: the Artificial Intelligence Race

Chloe Duffield, Apr 9, 2023

Artificial Intelligence (AI) is advancing at an unprecedented pace, and with the advent of deep learning, AI systems can now analyze vast amounts of data and perform complex tasks that were once thought impossible. From self-driving cars to intelligent robots, AI is rapidly changing the way we live and work.


It even wrote that entire paragraph. 


The relevance of artificial intelligence continues to increase across the globe, with its applicability to problem-solving and innovation nearly limitless. AI can write your papers, drive your cars, power your robots, and operate countless other forms of machinery. But as the world has seen in the past with other technological advancements like nuclear power, highly-developed countries tend to get possessive over industrial breakthroughs. The rivalry over AI between the United States and China is no exception, despite both countries working together to develop artificial intelligence in the past (1).


On October 7th, 2022, the United States Department of Commerce released a revision on its policy regarding the export of semiconductor manufacturing items, placing a de facto ban on exports to China of certain computer chips that power AI algorithms and supercomputers (2). The chips included in this ban are valuable geopolitically. They generate massive revenues and play an integral role in other types of technology which also facilitate immense economic activity across the globe — the worldwide semiconductor market generated US $580 billion alone in 2022 (3). American companies produce the majority of the chips and parts needed to manufacture semiconductors. Implementing this ban could complicate China’s ability to find an alternative supplier or manufacturer because the United States plays such an essential role in the international supply chain of semiconductor chips and technology (4). In terms of artificial intelligence, these chips power over 95% of China’s AI algorithms; cutting off the country’s access to such important parts could trigger a detrimental decline in its economic and geopolitical power (5). Seeing that the recent semiconductor shortage caused the U.S. GDP to drop by 1%, complete suspension of access to these chips could be catastrophic for China (6).


China’s president, Xi Jinping, has emphasized multiple times that AI is at the top of the country’s technological agenda for the years 2021 to 2026, so the United States’ decision to release the ban following his announcement is calculated (7). The Commerce Department’s Bureau of Industry and Security (BIS) implemented this 139-page revision in order to address issues of U.S. national security and foreign policy concerns (2). One could label this decision as a global reminder of America’s geopolitical and technological power, and its unwillingness to let communist competitors such as China increase their power to a point of concern. 


However, AI’s versatility and competitive rates of development make it very susceptible to abuse. China has already begun using AI for lethal military robots: for example, the Chinese company Ziyan has marketed the Blowfish A3, a helicopter drone that is equipped with a machine gun and capable of targeted precision strikes, reconnaissance, and even combat missions (8). Furthermore, a senior executive at China’s third largest defense company, NORINCO, predicted that there will no longer be people fighting in future conflicts; from a national security and militant defense standpoint, the United States' move to restrict AI technology comes as no surprise (8). As the world saw during the Cold War, nuclear technology was a fascinating development that nations quickly absorbed as a new form of technological warfare. Artificial intelligence could very easily follow suit. 


Whether or not this ban will solidify the United States’ position as a leader in the AI race is heavily dependent on how successful these new restrictions are. So far, the October ban may cut China out of the AI race, but this isolation may serve as motivation for China to look elsewhere for these parts. 


The U.S. is currently leading the tech race, but other nations like Japan, Germany, and South Korea are not far behind with their own developments (9). If the Cold War taught America anything, it’s that unilateral bans or isolated restrictions are not effective: the U.S. suffered massive casualties because the Soviets struck a deal with Britain for their fighter jet technology. Because the AI technology industry is dependent on multiple countries (with their own agendas and alliances) working together under the same global supply chain, the United States' unilateral ban could backfire if other semiconductor technology producers don’t emulate such restrictions. Blocking China’s access to America’s technology will be catastrophic to China’s geopolitical position as a leader in artificial intelligence in the short term, but whether or not this ban is even effective in the long term is largely dependent on how the rest of the semiconductor supply chain responds.


Halting China’s progression in artificial intelligence could prompt the country to start extending offers that key players in the semiconductor supply chain cannot refuse considering China’s wide domestic market and willingness to invest colossal funds into the semiconductor field: their purchases of semiconductor manufacturing equipment made up 29% (roughly $29.6 billion) of the global market in 2021 (10). China could also easily purchase semiconductor parts or less developed technology and develop its own versions that compete with the United States. Since December 2019, China has compiled a support package for its semiconductor industry that is valued at over $143 billion (11). It may even result in the strengthening of China’s position in the global tech market because it will increase its domestic semiconductor production. Beyond the economic playing field, ostracizing China could provoke the country into taking drastic political measures. The growing hostility between China and the U.S. creates an opening for new alliances to emerge between China and countries the United States isn’t currently aligned with.


If the U.S. implements this unilateral ban, such a revision could jeopardize the country’s economic standing — or even worse, national security. The U.S. should anticipate both animosity and aggressive tactics from China. If the U.S. wants the ban to be successful, it would have to persuade its allies to participate in a multilateral ban, thus forcing China to rely on its own technology. 


Whether or not this will present further complications in the future is uncertain, but the U.S. will have a far better chance at retaining its leadership in AI technology and development with a unified bloc on its side. This ban may be advantageous to American progress in the tech race in the near future, but the true consequences of this revision could have a very perverse effect on the country’s national standing and even reignite Cold War-esque tensions. The U.S. needs to decide whether it wants a tech race with China that divides global alliances or a sustainable global tech ecosystem that benefits everyone.


The ban itself symbolizes the significant escalation in the ongoing trade tensions between the two countries, and will likely continue to increase if both countries do not find a way to address their economic and geopolitical differences in a constructive manner. Its long-term effects on both the global economy and the technology industry remain to be seen, but it is clear that the United States-China tech war is not going to be resolved anytime soon. So let’s see what AI has to say about it:


“The U.S. ban on semiconductor chips sales to China has far-reaching implications for both countries and the global economy. The ongoing tensions between the two nations over technology and trade suggest that the ban is unlikely to be lifted anytime soon, and its effects will continue to be felt for years to come. Ultimately, the situation highlights the growing importance of semiconductor technology in the modern world and the need for a more nuanced approach to managing global supply chains and technology transfers.”


Couldn’t have said it better myself.


1. Allen, Gregory C. 2022. “Choking off China’s Access to the Future of AI,” October. https://www.csis.org/analysis/choking-chinas-access-future-ai.

2. “Implementation of Additional Export Controls: Certain Advanced Computing and Semiconductor Manufacturing Items; Supercomputer and Semiconductor End Use; Entity List Modification; Updates to the Controls To Add Macau.” 2023. Federal Register. January 18, 2023. https://www.federalregister.gov/documents/2023/01/18/2023-00888/implementation-of-additional-export-controls-certain-advanced-computing-and-semiconductor.

3. “Recent News Release.” n.d. Accessed February 22, 2023. https://www.wsts.org/76/Recent-News-Release.

4. Allen, Gregory C. 2022. “Choking off China’s Access to the Future of AI,” October. https://www.csis.org/analysis/choking-chinas-access-future-ai.

5. “US Deals Heavy Blow to China Tech Ambitions With Nvidia Chip Ban.” n.d. Accessed March 7, 2023. https://www.yahoo.com/now/us-deals-heavy-blow-china-100727058.html?guccounter=1&guce_referrer=aHR0cHM6Ly90aW1lLmNvbS8&guce_referrer_sig=AQAAAJe3_R-zrqRYnpLRcLQCvcN2vndB2twDc6520f3F1qA_vP_kAWxfFfrEnCOQyr_BDfBIgiYRV8PY9no1zk-aMtdvZlG1peGXFSuRDsOh6B7QVl_SmlTKvcdGdMrOXXmnunVIhMLkiCBmpEdic30TKUXO-Qd-1GugL4_BR4LeekqP.

6. “Analysis for CHIPS Act and BIA Briefing.” 2022. U.S. Department of Commerce. April 6, 2022. https://www.commerce.gov/news/press-releases/2022/04/analysis-chips-act-and-bia-briefing 

7. “Xi Jinping: ‘Strive to Become the World’s Primary Center for Science and High Ground for Innovation.’” n.d. DigiChina (blog). Accessed March 7, 2023. https://digichina.stanford.edu/work/xi-jinping-strive-to-become-the-worlds-primary-center-for-science-and-high-ground-for-innovation/.

8. “SecDef: China Is Exporting Killer Robots to the Mideast.” 2019. Defense One. November 5, 2019. https://www.defenseone.com/technology/2019/11/secdef-china-exporting-killer-robots-mideast/161100/.

9. “The Only Way the U.S. Can Win the Tech War with China.” 2022. Time. November 17, 2022. https://time.com/6234566/how-us-win-the-tech-war-with-china/.

10. “China Sets Up New $29 Billion Semiconductor Fund - WSJ.” n.d. Accessed March 7, 2023. https://www.wsj.com/articles/china-sets-up-new-29-billion-semiconductor-fund-11572034480.

11. “China Readying $143 Billion Package for Its Chip Firms in Face of U.S. Curbs, Sources Say.” 2022. CNBC. December 14, 2022. https://www.cnbc.com/2022/12/14/china-readying-143-billion-package-for-its-chip-firms-reuters.html.