Two dates from 2022 are destined to echo in geopolitical history. The first, Russia's invasion of Ukraine on February 24, hardly needs further elaboration. The second is October 7, 2022, when the United States enacted a new set of export controls designed to cripple China's future progress in AI technology. Rather than target AI software, the export controls choke off China's access to the advanced (and almost exclusively American-designed) computer chip hardware that powers AI. More than a decade of breakthrough after breakthrough in AI technology has convinced policymakers in both Beijing and Washington that leadership in AI technology is foundational to the future of economic and military power.

Whether the topic of the day is Chinese spy balloons or American AI breakthroughs, Washington and Beijing are increasingly seeing world events through the lens of a "tech war." This ever intensifying rivalry is usually framed as "America vs. China," but that misses a key point: America is not alone. America's greatest competitive advantage over China is not wealth or weapons, but the fact that America has a lot of close friends, and China has none. In fact, The only country that has signed a treaty to support China in the event of a war is North Korea, an impoverished pariah state that deliberately schedules nuclear tests and missile launches to embarrass China during high-profile diplomatic summits. Treaty or no, few would describe China and North Korea as friends.

Grand historical inflection points rarely take the form of long bureaucratic documents, but sometimes they do. On October 7th the Department of Commerce issued its revised policy on AI and semiconductor technology exports to China. The 139 pages of new export control regulations placed a de facto ban on exports to China of the advanced computer chips that power AI algorithms. Since more than 95% of such chips used in China are designed by U.S. semiconductor companies and therefore subject to U.S. export controls, loss of access to U.S. chips puts China's entire future as an AI superpower in jeopardy. AI was the top technology priority listed in the Chinese government's five-year economic plan for 2021-2026, so this action makes clear that the U.S. intends to block China from achieving its top technological goal. Ten days after the new policy came out, Secretary of State Antony Blinken gave a major speech in which he said, "We are at an inflection point.

On October 7, 2022, the Biden administration announced a new export controls policy on artificial intelligence (AI) and semiconductor technologies to China. These new controls--a genuine landmark in U.S.-China relations--provide the complete picture after a partial disclosure in early September generated confusion. For weeks the Biden administration has been receiving criticism in many quarters for a new round of semiconductor export control restrictions, first disclosed on September 1. The restrictions block leading U.S. AI computer chip designers, such as Nvidia and AMD, from selling their high-end chips for AI and supercomputing to China. While the reasoning in this criticism is sound, it does not imply that the Biden administration's actions are self-defeating. Rather, it shows how the policy as disclosed in September was incomplete. A policy like this would not make sense if that is the only step the administration planned to take. Clearly something was missing, and industry experts have been waiting for the other shoe to drop ever since.