As the AI wars got heated, the US was caught in a bind. China was progressing very fast in AI. The US was forced to cut off Nvidia AI Chip supplies to China.

This was a very risky move and it is worth considering whether it paid off, or whether it backfired?

Perhaps both.

The hope was that the Nvidia AI Chip ban would severely hamper China’s AI efforts. Surely, if they didn’t have Nvidia Chips (at one time, quite literally the only game in town), China’s AI efforts would stall.

Well, what exactly has happened as a result of the Nvidia AI Chip ban?

1. Nvidia’s market share in China has gone to zero
2. Chinese startups are forced to innovate, including in ways no one had foreseen
3. China has managed to survive in the AI race
   • In fact, you could argue that the fact that China is alive and kicking in AI means the Nvidia AI Chips ban was necessary
   • Perhaps China would have overtaken the US without the Nvidia AI Chips ban
4. Chinese AI chip manufacturers are evolving rapidly
5. Illegal sales to China via countries such as Singapore and territories such as Hong Kong are robust
   • Albeit hard to measure accurately
6. It has shown that taking away Nvidia AI chips from a country does not kill that country’s AI development and AI market evolution
   • This is quite shocking and very scary
   • It also makes one question why Nvidia’s valuation is so sky high
7. The US banning Nvidia AI Chip exports to China has shown that the US is not a dependable country
   • At some level most countries knew this
   • However, the assumption was that the US would not go against capitalism and the free market
   • The Nvidia AI Chips ban shows that there are some areas the US considers so important that it is willing to forsake capitalism

It is really quite fascinating to wonder about the long term implications of forcing China to get by without the latest generation (s) of Nvidia AI Chips

Long Term Implications of Nvidia AI Chips ban + China’s response to it

1. The US might have slowed down China overall in AI and prevented it from surpassing the US
   • At the same time, the US helped accelerate two key aspects of China’s AI evolution
     • Firstly, Chinese startups are now doing the most innovative things in AI. We see this with Deepseek and Manus
     • Secondly, China’s AI hardware efforts have been massively boosted. Necessity is indeed the mother of invention and innovation
   • Basically, the US bought itself 2 to 4 years, and bought China 10 years of development and innovation
     • Without any wars against China, the US will find it hard to compete with China in AI by approximately 2035
2. Countries and Unions like European Union, Saudi Arabia, India, Russia, etc have now become acutely aware that the US will use any means necessary to monopolize the AI revolution (whether it is merely a big technology revolution, or a truly world changing revolution that transforms everything)
   • All countries are becoming more independent
   • This is especially true of the European Union and the Middle Eastern countries
     • They have enough resources and are well developed enough to actually begin to wean themselves off of the American AI Chips supply
3. The US is now left with no option other than War to monopolize AI developments
   • Fundamentally, if you hold back on the latest Nvidia AI chips and hope it will give you a 5 year lead
   • In reality you find out it gave you only a 1 or 2 year lead
   • Then your only path to maintain status as Sole World Super Power is to start wars
     • If China (somewhat likely), or European Union (somewhat unlikely) take the lead in AI
     • They would have the means to become the new sole super power
       • Or joint most powerful super power alongside the US
     • This is an untenable situation for the US which is already facing the struggles of the American Empire in slow decline i.e.
       • The onset of Civil War in the US
       • The start of countries disrespecting Team America World Police
       • The world beginning to fall apart, as the World Police is too busy with internal wars
   • The US absolutely must monopolize AI to remain the Sole Superpower in the World
     • Now, with the failure of the Nvidia AI Chip ban, its only option is out right war
       • Or such a huge AI leap that other countries are unable to keep up
       • By the way, we do not mean financial engineering and circular deals and infinite funding
       • We mean the US needs an actual technological AI advancement
       • Without such a massive, magical, revolutionary technological leap, the US must use its massive Armed Forces to maintain its status as Hegemon
     • Perhaps first with a country such as Venezuela which is easy (while also having massively valuable oil reservces)
     • Then with a weakened Russia. Perhaps that is the reason Ukraine is given just enough resources to keep fighting a never ending war
     • Then, using conquered Russia as a springboard, with China itself
   • If all of this seems crazy, think of all the changes we have seen in the US. They are far crazier than America going to war outside its borders

We are truly living in interesting times

The US is pushing AI as the biggest technological revolution of all time, hoping some magic ‘Killer AI App’ happens and cements the US as the only superpower in the world.

If that does not happen within the next 1 to 3 years, then the US must go to war

No amount of financial engineering and pretending AI is the new Steam Engine or the New Internet will cement the US as Sole Superpower in the World for the next 100 years

Wars might.

China and the EU and the Middle East are all investing heavily in AI and if AI becomes a 100 year race, then the American Empire in Slow Decline is no longer guaranteed to win this 100 year AI race.

Not only are we living in very interesting times, we are also living in very scary times

The US is pulling off the greatest illusion of all time – Pretending there is some super amazing new AI technology that makes it the dominant and only super power in the world for the next 100 to 500 years.

At some point, it needs to Deliver, or go to war

And all of us are in danger of becoming collateral damage.