President Donald Trump blasts Anthropic CEO Dario Amodei over his call to hit the brakes on artificial intelligence development, the two agree on the need to prevent China from catching up with the U.S. But doing that remains difficult in practice. In his 3,800-word missive titled “We Must Pace the Frontier,” Amodei called on policymakers to avoid selling China advanced AI chips, crack down on chip smuggling and prevent “unauthorized distillation by companies in authoritarian countries,” among other steps.
He urged democracies to maintain a lead “as large as possible,” echoing language from the administration of former President Joe Biden. While Trump maintains export controls on the most advanced chips and chipmaking equipment, he’s also been open to selling China semiconductors such as Nvidia’s H200s, which Beijing has avoided to develop its own sector. So far, his administration has refrained from more punitive measures to crack down on chip smuggling in Southeast Asia, and demurred on sanctions or entity-list designations for Chinese companies found to have carried out systematic distillation from U.S. systems.
The main challenge for the U.S. is keeping China at bay without prompting Beijing to further restrict rare earths used in high-tech products such as precision-guided missiles and drones. Trump and Chinese President Xi Jinping reached a truce last year that saw Beijing guarantee flows of rare earths in return for reduced tariffs, a deal likely to be extended next week when the Chinese leader visits the White House. Thornton China Center at think tank Brookings.
Although China remains behind on chip production, AI models from Chinese companies such as DeepSeek and Moonshot have reduced the gap with U.S. frontier offerings in capability, often at a fraction of the cost — threatening to pull away market share from Silicon Valley giants Anthropic and OpenAI. Trump administration officials, U.S. security agencies and American AI developers alike have accused Chinese firms of distilling from U.S. AI models in the past to build their own products.
The practice, which can be legitimately deployed by an AI developer that uses its state-of-the-art model to effectively teach a more power-efficient version, is seen as an improper shortcut when done without approval. U.S. lawmakers are also considering measures aimed at penalizing Chinese companies found to be copying unfairly from their American counterparts. A harder loophole to close is Beijing’s ability to remotely rent America’s best semiconductors at Southeast Asia cloud data centers — especially after Trump alienated many of those countries with last year’s trade war.
Competition is also expanding throughout the world. Huawei Technologies, China’s biggest competitor to Nvidia, has made a bid to build AI data centers for the Egyptian government, drawing alarm and a scramble from Washington to make a counteroffer. Anthropic last week took those accusations a step further by claiming Moonshot AI had routed nearly 300,000 user requests through Claude and passed the results off as its own.
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