Chipping away at ties: China slams US AI chip curbs, vows retaliation against ‘bullying’

China on Wednesday sharply rebuked the United States over its latest warnings against the use of Chinese-made artificial intelligence chips, calling Washington’s moves “unilateral bullying and protectionism” that threaten global tech supply chains.The condemnation came after the US government issued fresh guidelines cautioning firms that using Chinese high-tech semiconductors, particularly Huawei’s Ascend AI chips, could place them at risk of violating American export controls.In a strongly worded statement, China’s commerce ministry accused the US of abusing its export control regime to suppress Chinese tech development. “These actions seriously harm the legitimate rights and interests of Chinese enterprises and endanger China's development interests,” the ministry said, warning that any party aiding in the enforcement of such measures could be in breach of Chinese law.Beijing also vowed to take “firm steps to safeguard its legitimate rights and interests,” though it did not specify what retaliatory actions might follow.The latest clash comes amid a years-long effort by Washington to restrict China’s access to advanced semiconductors over national security concerns. US officials fear that cutting-edge chips could be used to enhance Beijing’s military capabilities and undermine American dominance in AI and related technologies.Last week, the Biden administration, continuing policies initiated under President Donald Trump, announced it would rescind some export restrictions on advanced computing semiconductors. The move followed pressure from several countries arguing that the controls had cut them off from the critical tools needed for AI development.However, the relaxation was coupled with a renewed crackdown on Chinese access. The US commerce department reiterated that it aims to share American AI technology “with trusted foreign countries” while preventing adversaries from gaining access.Under the previous US policy, countries were grouped into three tiers, with top allies like Japan and South Korea exempt from restrictions. Nations in the second tier, including Mexico and Portugal, faced caps on the number of AI chips they could receive. The new revisions adjust those categories but still prioritise curbing China’s tech ascent.Industry giants like Nvidia and AMD, which had opposed the tiered restrictions, saw their stock prices rise following signs the Biden administration would recalibrate the rules. Yet the renewed focus on blocking Chinese firms from AI technology has rekindled tensions between the world’s two largest economies.As the global race for AI supremacy accelerates, the semiconductor battlefield is becoming increasingly geopolitical, with ramifications for supply chains, international trade, and diplomatic ties.