Deirdre Bosa on how Trump's previous tariffs supercharged China's AI efforts

Not only have those previous tariffs not worked, but they actually supercharged China's AI efforts in some very unexpected ways...  Necessity is the mother of invention...  The previous tariffs, they laid the groundwork for DeepSeek's breakthrough.  Additional restrictions could supercharge at another much larger, definitely state-backed, Chinese company, Huawei.  And it could supercharge them in chips, the very foundation of the race.  Now without access to Nvidia's highest GPUs, DeepSeek built a model on less performance chips, H20s, which according to Reuters has led other Chinese companies to ramp up their own orders for those cheaper chips.  Now, as additional tariffs threaten to cut off access to them, Chinese AI companies may be forced to turn to Huawei's alternative.  Now again, they're not the best and they're not the preferred hardware, but they may be good enough and getting better.  This morning, the FT [Financial Times] reports that the company has significantly improved the yield, or amount of advanced AI chips that it can produce, a near doubling from about a year ago.

~ Deirdre Bosa, "How stricter chip restrictions could backfire to benefit Huawei," CNBC, 0:25 mark, February 25, 2025