When Huawei unveiled its Mate 60 Pro with a 7-nanometer chip—despite U.S. sanctions intended to block such advances—it wasn’t just a tech breakthrough. It was a wake-up call. The move proved that innovation doesn’t freeze under pressure. Instead, it adapts. Now, as Huawei’s AI chips reportedly edge closer to Nvidia’s performance, the U.S. is stepping up its semiconductor crackdown—not just at home, but everywhere.
On May 14, 2025, the Trump administration scrapped the Biden-era AI Diffusion Rule without introducing a formal replacement. Instead, the Bureau of Industry and Security (BIS) issued sweeping new guidelines: using Huawei’s Ascend chips anywhere in the world could now violate U.S. export law. This policy shift redefines the very concept of export controls, extending U.S. tech jurisdiction far beyond its borders.
Unlike traditional restrictions, which focus on what can be shipped out of the U.S., these new controls dictate how foreign companies—even in sovereign nations—can use technology that might have U.S. origins. Huawei’s Ascend 910B, 910C, and 910D chips, for example, are targeted because they were allegedly built using tools or code tied to the U.S. semiconductor ecosystem. If that link exists, their global use becomes a legal landmine.
This isn’t just about stifling Huawei. It’s a signal to the world that the U.S. is willing to redraw the map of global technology governance. The catch? That map may not hold.
Pushing the World Toward Fragmentation
The deeper impact lies in how these controls are received. By making it illegal for international companies to use Huawei chips—no matter where they operate—the U.S. is forcing allies and rivals alike into a corner. A Brazilian AI startup using Ascend chips for cost-efficiency or a European research lab collaborating on AI models may now risk penalties, fines, or even criminal charges.
This extraterritorial reach raises difficult questions: How far can U.S. laws extend? And more importantly, should they?
Within the U.S., major chipmakers have voiced frustration. Blanket controls erode trust and complicate global supply chains, making international collaboration harder. Industry insiders argue that forcing companies to choose between U.S. and Chinese hardware pushes the world toward an artificial binary—and fragments the very ecosystem that made semiconductor progress possible.
Ironically, the chip the U.S. wants to block—the Ascend 910B—has shown serious performance. Reports suggest it can achieve 80% of Nvidia A100’s efficiency for training large models and may even outperform it in certain benchmarks. Restricting access to such alternatives could hurt innovation more than it helps competition.
The Innovation Paradox
Nvidia CEO Jensen Huang recently acknowledged Huawei’s growing technical edge, saying China is “not behind” in AI anymore. As restrictions tighten, Huawei has only become more secretive. It no longer publicly discusses specs or launch schedules for its Ascend series, leaving much of the world dependent on teardown reports and speculative analysis.
This secrecy is a direct byproduct of sanctions, and it makes enforcement murkier. Some chips named in BIS documents haven’t even been officially confirmed by Huawei, creating an environment of suspicion and second-guessing. For U.S. authorities, this could mean enforcing vague guidelines against uncertain targets—an approach unlikely to foster global compliance or confidence.
More broadly, the risk is that overreach will do the opposite of what it intends. Instead of slowing China’s tech rise, it could accelerate the development of alternative ecosystems—ones beyond U.S. influence, control, or standards. If major markets decide they no longer want to navigate the complexities of U.S. export rules, they may simply walk away and build their own systems.
A Strategic Crossroads for Global Tech
Geopolitical fallout is already looming. China may retaliate economically or diplomatically, turning the ban into a bargaining chip in broader trade negotiations. Chim Lee from the Economist Intelligence Unit has warned that if enforcement is strict, it could disrupt sensitive diplomatic talks. The result could be a full-blown tech cold war.
And that’s the paradox. In trying to preserve its lead, America may be sowing the seeds of isolation. The semiconductor industry has always thrived on collaboration—across continents, across companies. When barriers rise, that web weakens. Progress slows.
National security must be protected, yes. But not at the cost of dismantling the very foundations of global innovation. A smarter path would focus on outbuilding, outpartnering, and outcompeting—not outlawing competition altogether.
The world is watching how this plays out. Will nations comply with sweeping U.S. mandates? Or will they begin building independent routes to progress? The future of AI—and the shape of tomorrow’s technology landscape—may depend on that answer.
