When the US banned Chinese companies from getting domestic AI materials, they started creating it

Ever since Donald Trump took over the Oval Office, there has been unrest between the United States and China. First, it was the trade war and then the blame game on 'who unleashed coronavirus to the world?' But during the trade war, many things happened. Most parts of the trade war were circling domestic AI and its raw material availability, manufacturing, supply, etc. While the US government was busy putting a ban on Chinese companies or stopping the US from supplying them with tech elements, it didn't realize that it was digging its own pit. When the US jeopardized its connections with some Chinese technology companies, China started creating its own products or turned towards other players in different countries making them equally powerful to the United States tech companies.

The Trump administration was not thoughtless when it imposed a ban on Chinese companies. The ban was for the good of the country. The then government wanted AI in United States to stay healthy. They thought banning Chinese companies influence on domestic AI in the country will stop security risks. Even though their part was acceptable, they didn't think about the far future. First thing, security threats come from more countries than China. Think about how Russians have been targeting US government information for many years. There are even records of Russian hackers invading the presidential election. The recent attack on SolarWinds by Russian intelligence has opened the door to many critical data on the US Department of Treasury, Defense, Justice, State, Commerce, and Energy. So banning Chinese technology companies is not enough to stop the US from falling prey for cyberattacks. Secondly, the AI in United States has created its own competitors. While the United States turned its back to Chinese companies, they made themselves ready to either make the raw materials for technological products themselves or approached other companies. Either way, the US paved the path for other big technology companies to compete with its monopolies.

Big Chinese companies banned in the United States

Huawei

The beginning of a remorse side of the story dates back to 2018 when the US arrested Huawei CFO Meng Wanzhou. Later, the US government charged Huawei and two of its subsidiaries with federal racketeering and conspiracy to steal trade secrets from six American companies. Former President Donald Trump further intensified the ban by barring the company from buying American components. While tech companies found a way around the initial Huawei ban, the administration was planning to pose a severe restriction. In 220, the US administration has announced that it is further limiting Huawei from accessing US chips.

Xiaomi

Xiaomi Corporation has been named the 'Communist military company in the United States. The technology company is blacklisted in the country under Donald Trump's presidential period. Even though the company doesn't sell smartphones in the US, it was making a profit by trading internet-connected air purifiers, security cameras, plugs, TV streaming sticks, bulbs, and more. Xiaomi doesn't get raw materials for domestic AI products from the US. But the company receives large investments from US-based tech giants like Qualcomm Inc which will be stopped now.

SMIC

Chinese top chipmaker Semiconductor Manufacturing International Corporation (SMIC) was slammed with stricter restrictions by the Trump administration. The company was added to the list of entities that effectively prevents them from accessing US suppliers and technology. SMIC has been heavily relying on American software, hardware, and other equipment for the complete design and manufacture of its semiconductors.

So, what happened next?

When Chinese domestic AI makers realized that they have no way to go back to the American market or acquire products from there, they started creating their own products or relied on other flourishing raw material makers. For example, Huawei chose to rely on its own products and raw materials from companies in China. But Huawei was not the only one. Other Chinese companies facing a crisis in the US followed suit. As a result, Chinese chip-makers have raised about US$38 billion through public offerings, private placements, and asset sales as of November 2020. Besides, they also started buying products from companies in small countries like Taiwan and South Korea. Even though these countries are small and are less noticed in the technology sector, they have great potential to make it big. Now, the US has paved the way for small countries to compete against them. Not long from now, geographically small countries like Taiwan have chances to stand equal to the US.