Why did the United States impose new limits on Chinese AI technology?

Transportation, energy, and other sectors could all benefit greatly from the improvements that artificial intelligence (AI) could bring forth. Though AI encompasses a wide range of technologies, from big data to machine learning, it will have an equally transformative effect on international trade and national security over the next two decades, as did semiconductors, computers, and the internet during the preceding quarter century.

On October 7th, the Joe Biden administration announced new restrictions on how Chinese businesses can acquire HPC technologies. Reuters reports that these new limits may be the "largest" step taken by the United States to date to limit China's access to cutting-edge technology.

The so-called foreign direct product rule has been expanded to justify these new limits, making it a stringent trade policy against any company that uses American equipment or software to create semiconductors, not just those in the United States. The companies involved will lose customers, many of whom are prominent names in the Chinese technology and electronics industries.

And yet, China will still dominate the AI business worldwide, despite these limitations. Although governments worldwide are encouraging AI innovation, China appears to have the most comprehensive plan and, more importantly, the ability to implement it. This is because the Chinese government has capabilities that Western democracies do not.

In a significant way, China will dominate global artificial intelligence (AI) development and use. The Chinese have a solid strategy in place and a track record of successfully finishing massive endeavours. According to Chinese Premier Li Keqiang, the Belt and Road Initiative and the push for "mass entrepreneurship and innovation" are changing the world.

Also, certain Chinese tech firms, like Tencent and Alibaba, are more valuable than their American counterparts because of the rapid development of China's entrepreneurial culture over the past decade.

Kai-Fu Lee, a prominent player in China's technology sector, has said that the West needs to accept that China is in the lead regarding a wide range of technologies, business methods, products, and features. When contrasting WeChat with Facebook Messenger or WhatsApp, Weibo with Twitter, and Alipay with Apple Pay, China dominates the United States.

China has made artificial intelligence (AI) advancements by combining decades of experience building cutting-edge technology with analysis of national security decision-making. China competes with the United States across all AI commercial and federal security applications. China isn't only trying to figure out AI; they've mastered it.

China's size, data collection capabilities, and national pride have helped it catch up to the United States in this field over the past decade. However, given its current trajectory, it will soon overtake the United States.

In particular, major tech companies like FAANG (Facebook, Amazon, Apple, Netflix, and Google) and BATS (Bank of America, T. Rowe Price, and State Street) will allocate substantial resources to AI research and development (Baidu, Alibaba, and Tencent). A new era of economic prosperity and national security has begun, powered by AI. Regarding technologies like facial recognition and 5G, China isn't merely playing catch-up. It is now the undisputed global leader in several fields, overtaking the United States in many.

President Xi Jinping has called for China to become "a worldwide leader in science and technology," thus, the government has pushed for rapid progress in artificial intelligence development. China is laying the theoretical framework for a future AI superiority that will last a generation. Instead of engaging in a free-for-all AI arms race, the United States should explore other options, which may lead to a new partnership with China.