The United States on Tuesday imposed sweeping export restrictions on dozens of Chinese technology companies in its first such move under the Donald Trump administration, marking an escalation in efforts to curb Beijing’s rapid advancements in artificial intelligence (AI) and advanced computing.
The U.S. Department of Commerce’s Bureau of Industry and Security added 80 organizations to its “entity list,” including more than 50 Chinese firms. The designation bars U.S. companies from supplying these entities with critical technologies without obtaining special government permits, further tightening Beijing’s access to semiconductor and AI-related components.
This latest crackdown reflects growing concerns in Washington that China is outpacing the U.S. in AI development. For years, the U.S. has been at the forefront of AI research, but China’s ability to develop cost-effective, high-performance AI models has rattled American tech firms. One major example is DeepSeek, a fast-rising Chinese AI startup that has embraced open-source, low-cost AI models, making AI more accessible to businesses and developers. The affordability of these models has intensified competition, forcing U.S. companies—such as OpenAI, Google DeepMind, and Anthropic—to rethink their premium, proprietary AI strategies.
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With the cost of training and running large AI models soaring, U.S. companies have been pouring billions into AI research and chip development, yet China has managed to make AI deployment far cheaper and more efficient. This has put pressure on Washington to act, as Chinese AI innovations continue to challenge U.S. dominance in the sector.
The new sanctions are specifically designed to prevent China from accessing exascale computing technologies—critical for processing massive datasets at high speeds—as well as quantum advancements, both of which have significant military and economic applications.
The Commerce Department said many of the newly blacklisted firms were involved in AI research, supercomputers, and high-performance AI chips used for military purposes.
Two Chinese companies were specifically targeted for supplying restricted technologies to Huawei and its semiconductor subsidiary, HiSilicon, which had already been blacklisted by Washington.
In addition, 27 Chinese firms were sanctioned for acquiring U.S.-origin items to support Beijing’s military modernization, while another seven were penalized for aiding China’s progress in quantum computing. Six subsidiaries of Inspur Group, a major Chinese cloud computing firm that had been sanctioned under the Joe Biden administration in 2023, were also added to the list.
China Condemns U.S. Action as “Tech Containment”
China swiftly condemned the move, with its foreign ministry stating that Beijing “strongly opposes” the export restrictions and urging Washington to “stop generalizing national security” as a pretext for curbing China’s technological rise.
The latest restrictions signal another acknowledgment that U.S. leadership in AI is under serious threat. Despite Washington’s efforts to block China’s access to advanced semiconductors and AI chips—most notably through restrictions on Nvidia’s high-end GPUs—Chinese firms have continued to make breakthroughs in AI training and deployment.
“The latest additions cast an ever-widening net aimed at third countries, transit points, and intermediaries,” said Alex Capri, a senior lecturer at the National University of Singapore and author of Techno-Nationalism: How it’s Reshaping Trade, Geopolitics, and Society.
Chinese firms have reportedly continued to gain access to U.S. dual-use technologies—those with both civilian and military applications—through third-party intermediaries, Capri noted.
“U.S. officials will continue to step up tracking and tracing operations aimed at the smuggling of advanced semiconductors made by Nvidia and Advanced Micro Devices (AMD),” he added.
U.S. Struggles to Maintain Control Over AI Innovation
The Biden administration previously implemented a “small yard, high fence” approach—limiting access to a narrow set of advanced technologies with military applications while allowing normal trade in less-sensitive areas. However, this strategy has so far done little to stop China from making leaps in AI innovation.
Jeffrey I. Kessler, Under Secretary of Commerce for Industry and Security, emphasized that the Trump administration is determined to prevent U.S. technologies from being “misused for high-performance computing, hypersonic missiles, military aircraft training, and UAVs (unmanned aerial vehicles) that threaten our national security.”
“The entity list is one of many powerful tools at our disposal to identify and cut off foreign adversaries seeking to exploit American technology for malign purposes,” Kessler added.
China’s AI sector continues to thrive, bolstered by government-backed investments, vast amounts of training data, and a more flexible regulatory environment. With DeepSeek and other Chinese AI firms gaining traction, the battle for AI supremacy is intensifying, putting Washington in a race against time to protect its technological advantage.