> Before the US "sanctions", China did not make any serious efforts to develop EUV lithography, because the government did not believe that this is a priority

Possibly true, but it’s hard to disentangle this issue specifically from the broader trade war / decoupling started in the Trump I admin. Which itself predated AI as a major geopolitical issue.

I think that China was inevitably going to work their way up the stack to DUV / EUV. I agree as you say it’s plausible that the trade war accelerated their prioritization here.