Big changes are coming to the technology world due to artificial intelligence, and this situation increases my income on the global stage. The US is preparing to announce new measures to limit China's access to advanced technology chips. So what do these measures mean for global trade in artificial intelligence and the balance of power in technology? What does it mean for investments? Let's examine the details together.

According to Wired magazine, the Biden administration is expected to announce comprehensive measures on Monday aimed at slowing down the pace of China's development of advanced artificial intelligence technologies. At the center of these measures are chips. In other words, the small but powerful components that fuel AI innovations, the components that give us chat gpt. The restrictions will include sanctions especially against Chinese companies that produce equipment used in semiconductor manufacturing and chip manufacturing facilities that have ties to technology giants such as Huawei. A particular area of ​​focus is high-bandwidth memories. In other words, HBMs, High Bandwidth Memory, Micron is among the largest manufacturers of HBMs. HBMs are critical for high-performance GPUs and customized AI chips. The US aims to slow down China’s ability to build large and powerful AI systems by controlling the sale of HBMs. This is currently one of the most important parts of America’s defense doctrine. Because it is thought that America could also have problems on the defense side if China advances in AI and reaches AI.

As part of the measures, the US Commerce Department is considering adding up to 200 Chinese companies to a blacklist. This move would require US companies to obtain special licenses to sell software or products to these companies. This is not easy. It is a very bureaucratic process and would add another layer of restrictions. So who controls which companies enter and exit the list? There is one institution at the center of the US strategy to control semiconductor technology; the Bureau of Industry and Security. They are the ones who manage this list. On the other hand, the US and the Biden administration are not taking these steps alone. US officials have been meeting with allies and industry representatives for months to shape the new measures. The aim here is to limit China’s technological advances while minimizing disruptions to the global supply process. So of course a major collapse is not desired.

As expected, these upcoming measures have drawn harsh criticism from China. Chinese Foreign Minister spokesman Mao Ning accused the US of abusing export control measures and trying to suppress China's development, and rightly so. On the other hand, if you don't suppress China, you don't know what will happen to you. In the meantime, of course, there are objections in the US as well. The Chamber of Commerce, which is a very strong advocate of American companies, warned its members about the broad impact of these restrictions and called on the US government to act responsibly. Of course, artificial intelligence is at the center of these measures. By restricting access to chips like HBM, the US aims to slow down China's ability to develop domestic chips needed to train large AI models. Because these models are the backbone of technologies that will shape the future, from autonomous vehicles to military systems.

Whether the restrictions the US is planning to impose will have the desired effect is a highly debatable issue, by the way. Some experts are wondering whether the controls are encouraging China to make faster progress in chipmaking. As you know, the saying goes, a bad landlord makes a tenant a landlord. Critics also question whether these measures will reduce the Chinese’s dependence on US companies. For example, in late 2023, Huawei introduced its Mate 60 smartphone, which features an advanced chip from Chinese chipmaker SMIC. This announcement caused concern in Washington. Because it showed that SMIC had made significant progress in developing its own production techniques. However, some later research showed that both Huawei and SMIC still need foreign suppliers. China’s technology seems to still need European and American suppliers in this regard, and the US may be too late anyway.

The Center for Strategic and International Studies, a Washington DC-based think tank, published a study. This study says that the Chinese government had not even started to seriously invest in domestic chip production and provide incentives long before the US government started to impose these sanctions. On the other hand, something interesting happened on Thursday. As you know, American markets were closed, but a news story appeared on Bloomberg screens and this breaking news confused people a little more about the upcoming restrictions. This is news that the US is considering less stringent restrictions on sales to China. As a result, the shares of many global chip-related companies rose in European markets, Chinese markets and Far Eastern markets on Thursday. Unfortunately, America was closed.

For example, ASML Holding's shares climbed over 4% in Europe. ASML Holding makes the most important devices in chip production. They produce lithography printing machines and they were heavily restricted. Therefore, ASML's shares were also very badly affected. They showed a serious climb on Thursday. Kokusai Electric Corp. in Japan It rose 12%, while Tokyo Electron Limited and Screen Holdings rose 6% each. The report said that negotiations are ongoing between authorities in the US, Japan and the Netherlands regarding the restrictions. These negotiations have been ongoing for months. US chip equipment makers such as Lam Research and Applied Materials argue that they will be at a disadvantage against Dutch and Japanese giants whose governments have not yet signed up to the tougher Chinese measures. After all, this is where trade comes into play and the US says you have imposed a lot of restrictions on us, there are no such things in Japan or the Netherlands, we are very badly affected by this. Shares of these companies were down 1% on Wednesday. We could not see the impact of the new news because it was closed on Thursday.

Sources say that high-bandwidth memory chip makers such as Micron Technology, or HPM makers, could be hit hard by the new measures. In this area, Samsung, Micron's Korean rival, lost 1% in stock on Thursday. Over the past few years, the Biden administration has tried hard to block China's access to artificial intelligence. I don't think the new Donald Trump and his team will act any differently. Republicans and Democrats seem to agree on this issue. They don't want China to take over AI. Of course, Elon Musk may play a different role there.

So what's next? These restrictions are not only reshaping US-China relations, but also the global technology landscape. While the US wants to maintain its AI leadership, the world is watching how China responds. Time will tell whether this will really slow down China's AI developments or encourage the Chinese to innovate even more. But there is one thing we know about the Chinese. They are very hard-working, very ambitious, very patriotic, and it is certain that they will try to take precautions against these restrictions.

Meanwhile, another interesting piece of news dropped this week. Huawei has developed its own operating system for mobile phones. It is now releasing new devices with its own operating system. Here, we see that Chinese companies are trying to get rid of their dependence on Android, that is, Google. The world is rapidly moving from globalization to separation. Friday American markets will be open for half a day. But I think microchip stocks will be affected by these developments. It is also thought that Biden will make statements on new chip restrictions on Monday. This was originally supposed to happen before Thanksgiving, but from what I understand, they postponed the decision a bit because of the negotiations I mentioned earlier.

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