I'm doubtful of this hypothesis. Maybe for a few years, sure. But China has proven time and again that they do not need foreign supply constraints to incentivize the growth of their own competing domestic industry.

The fundamental contradiction of the AI maximalists like Huang is claiming that AI does not need regulated while simultaneously supporting chip exports to China. The supporting claim for the former is that we need to compete on AI with China and move as fast as possible and every day matters, while the latter implies that slowing down their compute is inconsequential.

You shouldn’t be doubtful. China executes the exact same strategy with manufactured goods exported to the US.

Exporting their extremely cheap and relatively good quality products to the US destroys any incentive to invest in domestic manufacturing and production.

If the Chinese were to stop exporting those goods to us, there would be massive incentives to make those products domestically. Given a few years we would be producing everything we previously bought from China after a painful adjustment period.

The incentive effects are identical for chip producers in China. Give it a few years and they’ll be at parity with any western producer.

“Show me the incentive and I’ll show you the outcome.” -Charlie Munger