Export control

So, okay, so I asked Claude and Chad GPT the percentage chance that by the New York Times saying, quote, close relationship that they had a, you know, intimate relationship uh chatty would you refuse to answer claude said 10 so i guess that's how much dario can't stand jensen that he's willing to answer that question for me um look it's not surprising right um that you'd have chinese spies uh trying to make their way to have uh connections with uh the most strategic executives america has um it's pretty embarrassing that someone would leak this uh i don't know what was your what was your all reads on the story

I mean, my first read was that if it is true that the federal government, the CIA, NSA, whatever it is, the collective intelligence agencies believe that Ms. Wong, no relation I don't think to Jensen, is a plant or a PRC operative who is attempting to exploit their relationship, um i i definitely think that that signals that somebody in either the ic or the administration is trying to pry distance from they've seen something that's making them want to push distance between the administration and jensen wong something is so i i would imagine that there's more there and that they're trying to create space and light because i you know if it comes down that there has been like significant violations of export controls If there have been significant violations of intellectual property controls that have allowed the PRC to kind of further along both their

AI and their chip manufacturing capability and design capability,

I think you're going to start to see very quickly

Well, and Jensen's whole thing, right, has been like it's patriotic to sell chips to China.

Right.

And, you know, I think he as far as I know, he did make a lot of enemies within the administration, within the export controls regime, maybe perhaps not at the principal level.

but certainly at the staffer level.

I'm Chris Kirkbride.

In this episode on sanctions and export controls, the UK government has designated 15 Sudanese military commanders, proposed updates to strategic technology export control frameworks, refreshed off-seas legal services general license, and updated the ISIL al-Qaeda designations.

While in the US, Xtreme Networks has resolved enforcement action over Russian defense exports and the Israeli Prime Minister Netanyahu, at least his Prime Minister for now, has attracted criticism over a proposal to use cryptocurrency to bypass sanctions.

On major fraud and corruption enforcement, We feature federal indictments in a $135 million Medicaid fraud, a $9.1 million licensing fraud, pandemic loan fraud prosecutions in the US and UK, and a guilty plea in a $3 million NCAA point shaving ring.

The United States decided that China shouldn't have extreme ultraviolet tools, and since 2019, ASML hasn't sold one there.

Then, the Dutch government added their own export controls in 2023.

Then, Washington started pressing the Netherlands to stop servicing the older machines that China already has.

ASML is unfortunately caught in the middle.

As you might have guessed, ASML is the Netherlands' most valuable company, and its biggest market for the older equipment is China.

I mean, roughly a third of its sales in recent years have gone there, and all of it is the less advanced machines because the advanced ones are banned, but still.

And then here's the thing about export controls.

They only work when there's a choke point.

So in a lot of the semiconductor export controls, when they were first rolled out in 2022, it definitely caused a lot of headaches for China's tech sector.

But I think if we now look back over the long run, I would say it has forced Chinese tech firms to now give local chip makers and local chip equipment makers a new business opportunity.

So now they have access to top Chinese tech clients that demand the best and most innovative chips.

Even some advanced chips are being restricted.

Has that actually materially delayed the upgrading of China's industrial base? How effective are these technology restrictions?

I think when a lot of the semiconductor export controls, when they were first rolled out in 2022, it definitely caused a lot of headaches for China's tech sector, because all of a sudden now it was much harder for them to access leading edge foreign chips that they had access to before.

But I think if we now look back over the long run, I would say it's almost like it has forced Chinese tech firms to now give local chip makers and local chip equipment makers a new chance, a new business opportunity.

So now they have access to the top Chinese tech clients that demand the best and most innovative chips.

So AI model distillation isn't universally illegal.

It's highly frowned upon, and it is, um, y-you know, um, sparking some backlash politically, um, and economically with export controls.

I think we're gonna continue to see those ramped up now here for the rest of 2026.

But, you know, these alleged Chinese practices do violate contracts and have led to major US national security actions.

But these published open weights cannot be recalled, so businesses can still adapt them anyways, right? So when models go open source or open weight, it's kind of like the cat's out of the bag at that point.

So the US can try to restrict access, but that could potentially backfire because Washington can...

Yeah, they can pressure, uh, y-you know, via export controls or otherwise the chips, the cloud access, procurement, sanctions, and all these other things, but the restrictions may just protect the technology while raising the cost for American companies.

Uh, like I said, if you, um, are restricting these models but companies already have the weights, you may just be keeping money ultimately, um, from other ecosystems that could power the American, um, enterprise, right? So I think the writing, though, is kind of on the wall.

And so for me personally, that was doing a lot of work on semiconductor supply chain policy and the like.

And then later served in the executive branch for four years, first at the National Security Council covering semiconductor policy, export controls, the CHIPS Act.

And then later as the Commerce Secretary's technology advisor covering all aspects of AI policy.

And I think having that think tank experience for a couple of years before that was, I think, really helpful to develop a worldview.

So that was a considerably less sleepy era, although potentially still sleepy compared to the current era.

But then after that, I also served in government.

I was in BIS, which is, of course, the part of the Commerce Department that works on export controls and actually develops them and enacts them.

So, you know, a lot of times, you know, the high level policy ideas then get translated into specifics.

Um, export control specifically, I, that has been the lead tool, the main action arm of a lot of this US policy, um, with varying results, I, I think you would say, and I think this is something I gathered from your book.

Um, I wanna ask you about Russia in a minute.

With China, there's been a lot of debate about whether the US export controls on chips and chip-making equipment going to China have been effective.

My sense is most people now think that they have been effective in some sense.

Um, so if you go with the mainstream view on that, check the box.

That's a win for the American control strategy in what some people think is the master technology, the master competition.

Um, but then you look at a country like Russia, where we have intensely thrown export controls at them because of the Ukraine war.

Uh, what kind of results have we got there?