The AI panic has arrived. Tech CEOs are practically begging the government to make them slow down. But Donald Trump isn’t buying any of it. On Sunday, he dismissed calls for AI regulation on the grounds that doing so would surrender America’s position in the global AI arms race. “Look, we’re leading China in AI,” the president told reporters. “We’re the most sophisticated country in the world. And frankly, I want to keep it that way, because whoever wins AI wins.” He repeated the sentiment less decorously in a Truth Social post yesterday describing the calls for regulation as “a SICK conspiracy going on against AI,” adding that “the only one that is happy about it is China.”
But if Trump is truly concerned about staying ahead of China in the AI race, he hasn’t been acting like it. Late last year, his administration lifted export controls on advanced chips made by the American company Nvidia. These chips are the most crucial input to AI development. The policy is the equivalent of declaring that the United States must remain ahead of Russia in the nuclear-arms race, while allowing American firms to sell uranium to the Kremlin.
Indeed, America’s monopoly on advanced computer chips might be the biggest reason the U.S. has kept ahead of Chinese AI companies so far. Experts generally agree that China is level with or ahead of America when it comes to engineering talent, training data, and energy supply. But training a top AI model also requires highly advanced computer chips capable of performing trillions of calculations a second. Nvidia is the only company in the world that can produce such chips at scale.
[Read: What really happens if China wins the AI race?]
That’s why, in October 2022, the Biden administration announced that it would ban Nvidia from selling its most advanced semiconductors to China. The aim of the policy was to slow China’s AI development by withholding the one resource that it did not have. When Trump took office in January 2025, the policy seemed to be working. Experts estimated that the leading American AI models were well ahead of the best Chinese models, and Chinese AI companies were citing export controls as one of the biggest obstacles to their growth. “Money has never been the problem for us,” Liang Wenfeng, the CEO of the Chinese AI company DeepSeek, told a Chinese media outlet in 2024. “Bans on shipments of advanced chips are the problem.”
But over the course of 2025, Trump began loosening the restrictions. In May, the administration halted the implementation of a Biden-era rule meant to prevent Nvidia chips from being smuggled into China via third-party countries. Then, in July, it lifted controls on the sale of Nvidia’s H20 chip. Finally, in December, the White House went even further by removing the ban on the far more powerful H200, Nvidia’s second-best chip, which is estimated to be nearly six times more powerful than any chip China had direct access to previously.
Experts immediately warned that lifting the ban was a bad idea. The Institute for Progress, a think tank focused on science and technology policy, estimated that the U.S. would have had access to roughly 20 to 50 times more compute power than China by 2026 if it had kept full chip restrictions in place; unrestricted H200 exports could shrink that gap to almost nothing. “Compute power is the only reason we’ve retained our advantage so far,” Saif Khan, who co-authored that report, told me at the time. “And we’re about to just give it away.”
Chinese companies have indeed begun to catch up since the controls were lifted. Over the first half of this year, multiple Chinese AI firms released models that perform nearly as highly as Anthropic and OpenAI’s top models, most of them at a fraction of the price. Experts now believe that the AI gap between the U.S. and China is about six months and closing fast.
[Rogé Karma: Data centers are a distraction]
Some of this progress seems to be the result of Chinese firms taking advantage of the Trump administration’s loose policies. The most advanced Chinese model to date, Kimi-K3, appears to have been trained by remotely accessing a cluster of Nvidia’s most advanced chips via a data center in Thailand—a loophole that was made possible when Trump rolled back restrictions on chip sales to third-party countries. An analysis by Epoch AI, an AI-focused think tank, found that up to 59 percent of China’s total AI-chip stockpile at the end of 2025 had been smuggled into the country.
Now that China has legal access to Nvidia’s second-best chip, however, Chinese companies won’t need to rely on whatever compute power they can scrape together through the black market. They can simply buy the chips that they need. A few months ago, Liang, the CEO of DeepSeek, lamented that his company had “relatively little” access to chips last year, but that “this year we’re very aggressively expanding this compute” with chips that are “basically all Nvidia.” All of which means that the next generation of Chinese models will likely be even more powerful.
Trump is right that a unilateral AI slowdown would create a serious risk of the U.S. being overtaken by China. But the solution is not a perpetual anything-goes AI arms race. Instead, the U.S. should pursue a nonproliferation agreement with China in which both sides agree to a mutual deceleration of AI progress. Trump wants to use the threat of Chinese AI development as an excuse to keep the U.S. industry accelerating—even as his own policies make that threat worse.
The post Trump’s Position on AI Makes No Sense appeared first on The Atlantic.
