AI is splitting along US–China lines
AI is the first major technology since semiconductors that the US and China are openly racing to control separately. Chip export controls, sovereign-AI initiatives, and dueling national strategies have made the AI stack a geopolitical fault line. The open question is whether the world ends up with one global AI ecosystem, two parallel ones, or something messier — and how much of the rest of the world has to pick a side.
Timeline
- October 7, 2022
The US Commerce Department imposes the first major chip export controls on China, blocking sales of advanced AI chips. The semiconductor industry calls it the most aggressive export-control action since the Cold War.
- October 1, 2023
The US tightens the chip export controls to close loopholes Nvidia had used to keep selling slightly-below-threshold chips into China. The signal is that this is a long-term policy, not a one-off.
- May 1, 2024
DeepSeek releases V2, a Chinese model that achieves GPT-4-class capability at a fraction of the cost. The launch breaks the assumption that the chip controls would freeze China's AI capability.
- January 10, 2025
DeepSeek releases R1, a reasoning model competitive with OpenAI's o1. By January 27, DeepSeek-R1 surpasses ChatGPT as the most-downloaded freeware app on the iOS App Store in the United States.
- July 23, 2025
House lawmakers introduce highly anticipated legislation aimed at limiting US exports of advanced AI chips to China, hours after President Trump and President Xi meet. The Trump administration doubles down on chip controls as sovereign AI becomes explicit framing.
- November 1, 2025
Saudi Arabia and the UAE emerge as global leaders in sovereign AI adoption, with combined sovereign wealth exceeding $3 trillion and major infrastructure plans. Gulf states position themselves to become global AI powerhouses.
- March 31, 2026
China's updated Export Licensing Catalogue adds controls on rare-earth compounds critical to advanced chip manufacturing. The new export controls mark the first time China has applied foreign direct product rules to critical minerals.
Where things stand right now
The US–China AI split is hardening, not softening. Both sides have now imposed controls on the other; sovereign-AI initiatives in third countries are accelerating; and the rest of the world is increasingly being asked to pick whose stack to build on. A unified global AI ecosystem now looks less likely than it did even six months ago.