China adept at evading chip curbs, Trump adviser David Sacks says
White House crypto and artificial intelligence czar David Sacks warned that China has grown adept at evading U.S. export controls and is, at most, two years behind American semiconductor design capabilities.
In a Bloomberg Television interview on Wednesday, Sacks said the U.S. should be concerned that Huawei Technologies is moving fast to catch up to its rivals outside China. He said that DeepSeek's breakthrough AI model earlier this year demonstrated how China could still advance even with export controls in place.
"Before DeepSeek, people thought that Chinese AI models were years behind, and we realized that they are only months behind,' Sacks said.
Sacks' comments highlighted the Trump administration's intention to maintain pressure on China over technology as the world's two largest economies vie for an advantage in AI. Export controls have emerged as a point of friction in U.S.-China trade talks, with Beijing objecting to American controls on advanced technology and the U.S. concerned over a crackdown by Beijing on critical minerals sales.
During the interview, Sacks faulted what is known as the Biden administration's AI diffusion rule, which was revoked last month by the Trump administration. He called for a more nuanced approach to chip export controls, arguing that U.S. allies are willing to comply with security requirements while partnering with American technology companies.
"The leading American semiconductor should not go to China, but we have export controls on that,' he said. "I don't think that we need a new globalized regime on every single GPU transaction to achieve the objective.'
Sacks cautioned that needlessly tight U.S. restrictions on sales of AI chips to American allies could unwittingly create an opening globally for Huawei and other companies by driving countries toward technology originating in China.
"If we are overly restrictive in terms of U.S. sales to the world, I think that there will be a time where we kick ourselves and say, 'All of a sudden Huawei is everywhere when we used to have the market to ourselves. Why didn't we take advantage of that and lock it in?'' he said.
Separately, Sacks hailed the Senate passage on Tuesday of stablecoin legislation, saying the move would bring regulatory clarity for the industry and encourage more traditional financial industry players to embrace digital currencies. House lawmakers must now decide whether to take up the Senate bill or negotiate a compromise measure.
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