Explain It Like I'm Five: U.S.-China technology restrictions

How are the U.S. and China fighting over technology?

Both countries have been putting limits on the other’s technology, mostly through import and export restrictions that dictate what U.S. tech companies can send to or accept from China (and vice versa). But it’s also starting to play out on the software front, like a U.S. bill to potentially ban TikTok, or China forcing Apple to pull WhatsApp, Threads, and Signal from the App Store.

What are the most recent additions?

This week, the U.S. revoked licences that let Intel and Qualcomm send parts to China’s Huawei, which had been using U.S.-made chips in things like an “AI-enabled” laptop. The U.S. is also reportedly planning to restrict export of AI models, which would open a new front that includes the code and data behind platforms from OpenAI and Google.

How do the companies feel about this?

Not great! Intel warned investors that it would likely take a hit to revenue. We haven’t seen full details of an AI export ban, but it might worry companies like Apple, who see China as a key market for products that will soon have AI models built directly into them.

Why is it happening?

The U.S.’s official line is national security. It is worried that Chinese technology could be exploited by the government, like Huawei networking equipment opening a backdoor to communications infrastructure, or TikTok turning over loads of personal data about users. On the export side, the U.S. doesn’t want chips from its companies winding up in military equipment or systems used for hacking.

Could there be other reasons?

Some can’t help but notice the economic impact. Both countries have an incentive to make sure the trillions of dollars that will be spent on AI flows into their economies. And a government can make that happen by not letting the competition access the hardware and data needed to build AI, or shrinking a company’s customer base by cutting them off from major markets.