US Chip Controls Were Meant to Slow China's AI. Chinese Chipmakers Just Posted Record Revenue.
SMIC hit $9.3 billion in revenue for 2025, up 16%, with analysts projecting over $11 billion for 2026. One analyst credited US export restrictions as "rocket fuel" for domestic demand. Meanwhile Zhipu, a Chinese AI startup, doubled revenue and surged 35% on its first earnings report. The containment logic is running into a familiar problem: restricting access to components does not restrict access to the underlying capability.
Read full story →We Tried This With Encryption. It Didn't Work Then Either.
In the 1990s the US classified strong encryption as a munition, restricted its export, and spent a decade trying to keep it from adversaries. The result: US companies were hobbled, open research was chilled, and the technology proliferated anyway because the mathematics was public. The AI chip export control strategy has the same structure, and SMIC's record revenue suggests it is tracking the same outcome.
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