Decoupling — The Technological Sphere Splits in Two

Beneath the surface, as the tug-of-war over rules went on, the United States and China had begun a rougher movement still: a force to pry their technologies apart and split a world that had once been one into two. This is decoupling.

As we saw in earlier episodes, the heart of AI runs atop the most advanced semiconductors. And it was the United States and its allies that held the cutting edge. If, then, you grip that throat, the other side’s AI can no longer advance. Unlike the nuclear weapons and space programs of the Cold War, this time the battlefield lay inside a chip no larger than a fingernail.

Gripping the Throat — The Trading of Export Controls

It was the United States that fired the opening shot. On 7 October 2022, the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce rolled out what is described as the broadest semiconductor export controls in its history. The measures aimed to cut China off, in one stroke, from the high-performance GPUs essential to training AI models and from the manufacturing equipment that makes advanced chips. This net directly caught the high-performance GPUs that were then the leading players in AI development.

China is reported to have countered by placing under control the export of rare metals used as semiconductor materials, fighting back with the resources it holds as its trump card. Strike, and be struck in return — the exchange of regulations and countermeasures took on the look of a war of attrition over technology, no longer contained by a phrase like “trade friction.”

Notable was that the United States did not carry out these controls alone. Manufacturing the most advanced chips requires lithography equipment that only firms in certain countries can make. The United States pressed its allies to fall into step, seeking to build a cordon that drew in the equipment-supplying nations. The phrase “economic security” was pushed out to the front line of diplomacy.

Drawing in the Allies — The Cordon Takes Shape

At the heart of that cordon stood the group of European and Asian firms that command the world of semiconductor manufacturing equipment. In particular, the most advanced lithography machines, known as extreme ultraviolet (EUV), are effectively monopolized by a single Dutch company. Without this equipment, the most advanced chips cannot be mass-produced.

The United States kept pressing the equipment-holding nations to cooperate. In 2023 the Dutch government introduced rules requiring a license for the export of certain lithography equipment to China, putting them into operation from September of that year. Japan, too, in the same year imposed export controls on equipment across several fields tied to semiconductor manufacturing. The United States, the Netherlands, and Japan — a structure in which the three that hold the sources of this equipment fell into line, specialist institutions have analyzed, took shape.

The tighter the cordon drew, the fewer the paths left to China. If you cannot buy it, you must make it yourself — the cornered nation set out, with all its might, onto the steep mountain road of domestic production.

Making It Yourself — The Bet on Home-Grown Production

What showed that resolve to the world was a single smartphone. In September 2023, the Chinese telecommunications giant Huawei launched its new smartphone, the “Mate 60 Pro.” A specialist institution that carried out a teardown analysis reported that inside it had confirmed what appeared to be a 7-nanometer-class chip manufactured by China’s leading semiconductor firm, SMIC.

This was a small but heavy shock. China, supposedly cut off from the most advanced lithography equipment, had shown that it could build an advanced-class chip on its own. It was praised as an achievement carried out entirely at home, from design to manufacture, and the view spread that China’s effort to build a domestic semiconductor ecosystem showed a degree of progress. At the same time, views differ over the yield and cost of mass production and the generational gap with the cutting edge, and it has also been pointed out that it would be premature to declare that this had broken through the cordon.

The drive for domestic production did not stop at semiconductors. In the field of AI models too, Chinese companies and research institutions released their own large language models one after another and came to compete on performance. Moreover, there have been moves to actively put forward open-source models whose source code is made public. A camp that hoards its technology, and a camp that deliberately opens up to gather allies — the difference in strategy over disclosure became another front of decoupling.

Fighting Over People — The Unseen Resource

What was severed was not only chips and code. The most scarce and least mobile resource — talent — also became the object of fierce contention.

There are only a very limited number of top-class AI researchers in the world. A single outstanding mind can even sway the competitiveness of a company or a nation. The United States has continued to hold a magnetism that draws talent from across the world, but China too has prepared favorable conditions and research environments to call back people of its own origin, or invested vast sums in cultivating them. As visa and security screening have grown stricter, the wall of borders is reported to be rising even in the flow of people.

In this way — semiconductors, software, data, and people. Every element that makes AI possible was, little by little, sorted into a sphere centered on the United States and a sphere centered on China. The gears of globalization, which had turned on the premise of a single world market, began to spin in reverse, starting from the most advanced domain of all: technology. Whether it will reach a complete severance, or come to terms somewhere along the way — the course remains hard to foresee, and the verdict is not yet settled.

What is certain is that the contest over AI no longer stops at corporate profit or the economy. The fracturing of the technological spheres will, before long, cut deep into the power of states themselves — into the military, into surveillance, and into the very shape of people’s lives. The contest between the United States and China to seize technology reaches, from here, beyond the economy, into the very shape of war and society.