America and China are fighting for the future of AI — chips are the battlefield

When President Donald Trump sits down with Chinese President Xi Jinping in Washington this week, the agenda will be crowded.

Trade. Tariffs. Rare earth minerals. National security. Supply chains.

But looming over all of it is a technological competition that could shape the balance of economic and military power for decades: artificial intelligence. And increasingly, the battle isn't simply about who builds the best AI model.

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It is about who controls the chips, computing infrastructure and technology ecosystem underneath it.

America remains the global leader in advanced AI technology and semiconductor design. But China is pushing aggressively to reduce its dependence on American technology, and Huawei has emerged as one of the most important companies in that effort. That should have Washington's full attention.

For years, the United States has used export controls to restrict China's access to advanced semiconductors and semiconductor-manufacturing technology, particularly technologies with potential military applications.

Those restrictions had a clear national-security objective: prevent America's most sophisticated technology from strengthening a strategic competitor's military capabilities. But there has also been an unintended consequence worth confronting. China accelerated its effort to build an AI ecosystem that doesn't need America.

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Huawei expanded its Ascend AI-chip roadmap. Chinese developers adapted software and models to domestic hardware. Chinese companies poured resources into computing systems capable of compensating for some of the performance limitations of individual Chinese chips. And Huawei isn't standing still.

The company recently said demand for its AI computing equipment in China is exceeding supply. It is accelerating future generations of its Ascend processors and developing enormous computing systems capable of connecting vast numbers of chips.

That means the strategic question facing Washington has changed.

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The question isn't simply: How do we keep sensitive American technology away from China? It is also: How do we make sure the rest of the world continues choosing American technology instead of China's? Those are related questions, but they aren't identical.

If American technology becomes inaccessible across too much of the global market, China has an enormous incentive to develop substitutes. Huawei has an enormous incentive to sell them. And governments and companies around the world have an enormous incentive to build around whatever technology they can reliably obtain.

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Once developers write software for an ecosystem, companies construct computing infrastructure around it and countries invest billions deploying it, switching becomes much harder. That's why this isn't merely a chip-sales competition. It is an ecosystem competition.

America wants a world running on American chips, American software, American standards and American innovation. China wants to build an alternative. It wants a world in which Huawei and other Chinese companies provide a technology stack that Beijing controls and America cannot easily influence.

President Trump has taken a different approach from the Biden administration. His administration rescinded the Biden-era AI Diffusion Rule while maintaining controls targeting technologies with serious national-security implications.

The administration has also allowed certain advanced chips to be considered for sale to approved Chinese customers under licensing requirements and security conditions. The theory is straightforward: protect the technologies most critical to national security without unnecessarily surrendering commercial markets to Chinese competitors. That distinction matters.

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Nobody serious is arguing that America should simply hand China unrestricted access to technology that could materially enhance advanced weapons, military AI, surveillance or other sensitive capabilities.

National security comes first. But there is a difference between protecting America's crown-jewel technology and adopting restrictions so sweeping that they accelerate China's determination to replace American technology throughout the commercial market. Because Huawei's goal isn't merely to survive American restrictions.

Huawei wants to compete. It wants Chinese chips powering Chinese AI. It wants Chinese computing infrastructure supporting Chinese models. And ultimately, Chinese technology companies want customers outside China using their systems.

That's why the next phase of this competition will be fought over which chips countries buy, which computing systems they install, which software developers learn and which technology stack becomes the default infrastructure for the AI economy.

America has enormous advantages. We have extraordinary semiconductor designers, the world's leading AI companies, deep capital markets, world-class universities, entrepreneurs and an innovation culture China has spent decades trying to replicate.

But technological leadership isn't permanent. It has to be defended. And sometimes the greatest threat to American leadership isn't that China suddenly invents something better. It's that America creates policies that make its own technology harder for the world to use while Beijing aggressively offers an alternative.

There are already calls for the United States to slow AI development or impose broader restrictions in the name of safety and security. Those arguments deserve serious debate.

AI presents real risks. Advanced semiconductor technology has genuine military applications. Export controls can be an important national-security tool. But every restriction also has consequences.

The question should be whether a restriction actually improves American security without unnecessarily strengthening China's competing technology ecosystem. Because China isn't pausing. Huawei isn't pausing. And global demand for AI computing certainly isn't pausing.

Somebody will provide the chips. Somebody will provide the computing infrastructure. Somebody will provide the software. Somebody will establish the standards.

The United States has a direct strategic interest in American companies remaining central to that ecosystem.

The previous generation of American leaders watched too much manufacturing capacity and too many strategically important supply chains migrate overseas. We should not repeat that mistake with the infrastructure of artificial intelligence.

Semiconductors are no longer merely components inside computers. Compute is strategic power.

The nations and companies controlling advanced computing will possess enormous advantages in scientific discovery, medicine, manufacturing, intelligence, cybersecurity and military technology. That is why the Trump-Xi meeting matters far beyond whatever trade agreement or diplomatic communiqué emerges from Washington.

The two presidents represent countries competing over something much larger: Who builds the technological infrastructure of the 21st century?

The United States should protect its most sensitive technology, its intellectual property and technologies with significant military applications. At the same time, American companies will continue competing for commercial markets around the world.

Design the chips here. Build the semiconductor infrastructure here. Develop the software here. Protect the technology that truly must be protected. And keep American technology innovative and competitive enough that countries around the world continue choosing the American ecosystem instead of Huawei's.

The AI Cold War is already underway. And the chips are the battlefield.