Washington's latest guidance shuts down one pathway for China-linked firms to acquire advanced AI chips abroad, but a larger concern remains. Gaps in export-control enforcement may still allow Chinese companies to access leading-edge chip production through overseas intermediaries. Until regulations are clarified, questions about the effectiveness of U.S. technology restrictions will persist.

These export restrictions have already backfired spectacularly. Huawei's Ascend chips are outperforming Nvidia's restricted H20 by up to 150%, and Morgan Stanley projects Huawei could control 62% of China's AI accelerator market by 2026. The U.S. didn't slow China's AI ambitions — it eliminated China's dependency on American chips entirely.