China Seeks Relaxation of AI Chip Export Controls Ahead of US-China Trade Talks

China is intensifying its push for the United States to ease export restrictions on critical artificial intelligence (AI) components, particularly HBM chips, as both countries prepare for potential high-level trade negotiations. Reports from The Financial Times indicate that Chinese officials have directly raised the issue with US experts, framing access to these chips as essential for the country’s technological progress.

The timing is notable, with a possible summit between US President Donald Trump and Chinese President Xi Jinping on the horizon. For Beijing, HBM chips are a strategic necessity. These high-bandwidth memory components enable the rapid transfer of massive data sets, a key requirement for training large AI models and running advanced analytics at scale. Without them, developing competitive AI hardware becomes an uphill battle.

Since 2022, Washington has been tightening export controls on advanced semiconductor technology, citing national security concerns. The Biden administration’s 2024 ban on exporting HBM chips to China marked a significant escalation, cutting off Chinese firms like Huawei and SMIC from a vital supply line. This has forced these companies to explore domestic alternatives, but replicating the performance and efficiency of imported chips remains a formidable challenge.

The Strategic Importance of HBM Chips

HBM chips are far more than just another semiconductor product. They are designed for ultra-fast communication between processors and memory, making them indispensable for AI, supercomputing, and data-intensive applications. Chinese technology companies have long relied on imported HBM technology to compete in global markets, but US restrictions have disrupted this flow.

Chinese officials argue that the ban is unfair and restricts their ability to participate in the global technology economy. They stress that HBM chips are not only used in defense or security-sensitive applications but are also crucial for everyday technologies like cloud services, smartphones, and AI-enhanced consumer electronics. From Beijing’s perspective, denying access to such components hampers fair competition and slows innovation.

Washington, however, sees things differently. Many US lawmakers and security analysts believe relaxing the restrictions would give Chinese companies a chance to close the technology gap much faster, potentially surpassing American firms such as Nvidia. There are also concerns that these chips could be redirected toward military or surveillance projects, giving China a strategic edge in areas the US considers sensitive.

Geopolitical Tensions and the Global AI Race

The debate over HBM chips is about much more than semiconductor supply chains—it is a microcosm of the broader US-China rivalry in emerging technologies. For the US, controlling access to high-performance chips is a way to slow China’s progress in fields that could alter the balance of power in both civilian and military contexts. For China, gaining access is about reducing dependency on foreign technology and achieving self-sufficiency under its long-term industrial strategies.

There are also fears in Washington about loopholes in the current export control regime. While gaming GPUs are not officially banned, reports suggest Chinese companies have been repurposing them for AI applications. Nvidia, for example, has sold gaming-oriented chips to Chinese buyers, prompting calls from lawmakers like John Moolenaar for stricter monitoring to prevent such components from being diverted to AI projects.

Some policy analysts have floated compromise solutions, such as allowing the sale of older-generation HBM chips while keeping restrictions on the most advanced models. However, the rapid pace of semiconductor innovation means even slightly outdated chips can still be highly effective for AI training, raising questions about whether partial relaxation would genuinely limit China’s capabilities.

The implications extend far beyond US-China relations. South Korean companies like SK Hynix and Samsung, both major suppliers of HBM technology, could see significant benefits if restrictions are lifted, while US chipmakers could face increased competition in the high-performance computing market.

What the Trade Talks Could Mean for the Future

The upcoming trade discussions—and the potential Trump-Xi summit—may prove pivotal in determining whether any changes are made to the current export control framework. If Washington decides to maintain its hardline stance, China will likely intensify investments in domestic semiconductor research and development. This could lead to breakthroughs in homegrown HBM technology, but such efforts could take years to match the performance of established global leaders.

If, on the other hand, the US agrees to even partial concessions, Beijing could gain a valuable window of opportunity to scale its AI hardware capabilities rapidly. This could accelerate its presence in the global AI market, challenge US leadership, and reshape the competitive landscape in ways that extend far beyond semiconductors.

For now, both sides remain entrenched. The US views the restrictions as a necessary measure to protect national security and maintain technological dominance. China sees them as an unjust obstacle to progress in an increasingly AI-driven world.

The outcome of this dispute will influence not just the flow of HBM chips, but also the direction of global AI development for years to come. Control over these components is, in many ways, control over the speed and scale of AI innovation. As trade talks unfold, the world will be watching closely to see whether strategic caution or economic compromise wins the day.