China is rapidly closing the AI gap, and the US must rethink chip export controls if they want to stay ahead, said David Sacks of AI at the White House and Crypto Czar.
In a Bloomberg television interview released Wednesday, Sachs said that despite chip export rules, Chinese companies should be careful about how fast they can keep up with AI races.
China is “supply constrained” on the number of chips that can be produced, but Sax said it expects it to change quickly.
“In January, there was a Deepseek moment, where I thought China's AI models were years behind, and I realized that Deepseek was probably three to six months behind when it was released,” Sacks said.
Sacks believes China may be in the US a year and a half or two years from chip design, but added that companies like Huawei are “moving fast” to keep up.
“Even before they catch up completely, I think we'll see them exporting their chips for the global market,” he said.
“If we're overly restricted when it comes to sales to the world, then all of a sudden, when Huawei is everywhere, I think there are times when we're kicking ourselves,” he said. “When we had this whole market for ourselves, we're asking why we didn't use the opportunity to lock us up tech stocks in America.”
Other tech leaders have similarly highlighted concerns about US export control, which often drive business revenue.
At the Computex Taipei Tech Conference in May, Nvidia's Jensen Huang denounced US chip export regulations for encouraging China's technology development.
“Export restrictions gave them the spirit, energy and government support to accelerate their development. So, overall, I think export controls are a failure,” Huang said. He added that Nvidia's market share in China has dropped to 50% from 95% four years ago.
Analysts at Bernstein said in an April memo that banning Nvidia chips is unlikely to halt China's AI advances as Chinese companies look to domestic alternatives like Huawei.
“In the long term, we hope that Huawei will continue to close the gap between performance and China's basic models, and constitute the lack of innovations like Deepseek,” the analyst wrote.
Sacks representatives did not immediately respond to requests for comments sent by Business Insiders outside of normal hours.
