China is going to do everything it can to win the AI race. Even if that means penalizing Huawei and Alibaba
The Chinese Ministry of Commerce has begun to consult its main technology companies on a package of export restrictions that, paradoxically, points inward: towards the ecosystem of artificial intelligence (AI) that Beijing has been trying for years shield in front of Washington. As advanced Financial Timesthe proposal contemplates prohibiting Chinese chip designers from using foreign semiconductor companies, such as TSMC or Samsung, to manufacture their integrated circuits. This is not an isolated measure. And this same regulatory package would also include limits on the export of advanced AI models, restrictions on the training data that companies can take out of the country and stricter controls on foreign acquisitions of technology companies considered strategic. The Chinese Government ultimately aspires to retain both the hardware and software of the AI race within its borders; as well as the chips, models and data with which they are trained. A blow to their own companies The most impressive part of this proposal is the one that affects the semiconductor manufacturing. Huawei, Alibaba or ByteDance design chips that today depend, to varying degrees, on semiconductor factories such as TSMC (Taiwan) or Samsung (South Korea) for their final production. Prohibiting that access would leave these companies tied to domestic manufacturing capacity, still behind in leading nodes, or would force SMIC and other Chinese IC factories to take on demand for which they are not yet prepared. The regulatory package would also include tightening rules on foreign acquisitions of strategic Chinese technology. The Ministry of Commerce has also conveyed to Alibaba, ByteDance and Zhipu its intention to limit the output of training data outside the country, as well as to restrict the downloading of their model weights by foreign users. This measure would mark a turn regarding the strategy followed until now by companies like DeepSeek, which have opted to openly publish the weights of their models as part of their low-cost offensive against Western AI. Another note: the regulatory package would also include a tightening of the rules on foreign acquisitions of strategic Chinese technology, especially in the field of agentic AI. This review seeks to close what the Chinese government interprets as a legal loophole, the same one that allowed Meta to acquire the emerging company Manus for $2 billion before the Chinese authorities ordered to undo the operation. The restrictions, if confirmed, would foreseeably be incorporated into the next review of the Chinese catalog of prohibited or restricted technologies for export, the same instrument that already regulates rare earths and lithium. For now all the proposals are in the consultation phase and none of the companies mentioned, nor the Ministry of Commerce itself, has confirmed its final scope. The result would be a regulatory paradox: China restricting its own companies’ access to the most advanced chip manufacturing in the name of technological sovereignty that, along the way, could slow them down. Image | TSMC More information | Tom’s Hardware In Xataka | TSMC raises its bet in the US: there are already 265,000 million dollars for 2 nm
