China’s AI Isn’t Slowing Down — So What Are US Chip Bans Really Achieving?

The U.S. continues to throw a wrench into China’s AI machine — or at least, that’s the plan.

Export restrictions have banned Nvidia, AMD, and other chipmakers from sending their most powerful AI chips to China. But here’s the trillion-dollar question: Are those curbs actually working?

Washington Blocked The Chips, But China Kept Building Anyway

When the U.S. imposed sweeping chip export restrictions in 2022 and tightened them further through 2025, the goal was straightforward: limit China’s access to the cutting-edge semiconductors powering the AI revolution.

Nvidia’s A100s and H100s? Banned. AMD’s top-tier MI-series chips? Blocked. Even workarounds like China-specific “compliant” chips (hello, Nvidia H20) were eventually taken off the table.

But in 2025, we’re seeing signs that this strategy may not be working as intended.

Earlier this month, Nvidia CEO Jensen Huang dropped a bombshell. "The goals of the export controls are not being achieved," he told CNN.

"Whatever those goals are that were being discussed initially, (they) are apparently not working. And so I think, with all export controls, the goals have to be well-articulated and tested over time."

That’s an admission from the leader of the very company most impacted by the bans. Nvidia lost an estimated $2.5 billion in revenue in the first quarter alone due to blocked sales to China. It had to cancel shipments of its H20 chips entirely and adjust its forecasts to exclude China altogether.

Still, Huang’s concern isn’t just financial — it’s strategic. If the goal was to slow China’s AI progress, he’s clearly not convinced it’s happening.

Huawei And SMIC Raised The Stakes

Huawei’s most advanced GPU currently in mass production is the Ascend 910B. Reports had indicated that its successor, the Ascend 910C, might enter large-scale shipment starting in May, but there have been no recent developments confirming this.

That was a shock to many in Washington, who assumed China’s chip capabilities were stuck generations behind.

To make matters more serious, Taiwan just added Huawei and SMIC to its export blacklist, lumping them in with terrorist groups like al-Qaeda and the Taliban.

The move reflects growing anxiety over China’s rising chip self-sufficiency and is a clear sign that Taipei is aligning more closely with the U.S. strategy.

But is all this tightening actually slowing China down?

Spoiler: China Is Still Shipping GPT-4 Rivals

Despite the squeeze, Chinese AI labs like Baichuan, Zhipu, and DeepSeek are shipping large language models that benchmark in the same league as OpenAI’s GPT-4.

Chinese platforms like ByteDance’s Doubao and Alibaba’s Qwen are rolling out consumer-facing chatbots, productivity tools, and AI copilots that mirror what we’re seeing in the West.

In fact, some analysts argue the chip bans have only accelerated China’s resolve to build its own AI supply chain — from hardware to model training and deployment.

State-backed funding is pouring into local fabs. Engineers are being pulled from Silicon Valley. And Chinese firms are learning to optimize their models for less powerful chips.

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