H20s to China + 15% with Chris Miller and Lennart Heim

26:45Versus here, we just sell the underlying component that can build whatever they want on top of it. And I think that's just missing the debate. You've made it 30 minutes into a podcast about age 20s. Do you want to do this full time? Do I have the opportunity for you? The Horizon Fellowship provides a direct path into the world of emerging tech policy, a fully funded placement at a federal agency Congressional Office, or Think Tank in DC for up to two years. For its 2026 cohort, Horizon is actively seeking candidates with expertise on China's technology ecosystem, its policy landscape, and broader strategic goals.

27:17prior technical or policy experience is not required. Join a community of over 80 fellows working on some of today's most pressing issues that I can personally vouch for having met a good chunk of them are some of the smartest minds working on these topics in DC. The application deadline is August 28th. Check the show notes for a link to learn more and apply. I think this is a key aspect to the export control debate, which is fascinating a lot of people don't get. It's that if you restrict sales of tools, then you hurt the tool makers, but you help the users of those tools. And so in the chip industry, if you sell fewer lithography tools, it's bad news for ASMR, but it's actually probably good in the long run for DSMC and other companies that face less Chinese competition.

27:58Similarly, if you sell GPUs to China, it's bad news for GPU sellers, or it's good news for GPU sellers, but bad news for USAI firms who face stronger competition. And so one of the kind of strategic questions is, which level do you try to cut off? And the US, as I guess, decided until recently cut off at multiple levels and is now shifting, we'll see where we're next week, but this week it seems like it shifted towards a policy of self -adduced GPUs, but keep the controls under the chip -making tools. Which makes sense, right? Like, if we would be vera's selling them extremely ultra -wide and photography machines on my SNL, it would be way more than a rem -pitch than selling them AI chips, right?

28:38And I would still complain more or if you start selling them black wells, over eights, 20s. Right, so I think that's a fair debate to be should be having you. People can fall on different types of positions here. And again, we can disagree on some arguments here and like again, yeah. And then you have like these different types of control to check if we've each other and the eye chips are the first ones to fall, I think that makes sense. So yeah, so one of the arguments is that if you make China addicted to AI chips, you gain long -term leverage. And I think like the mental model that people think of here as well, if you get them using UV lithography tools, they don't have their own ecosystem, and it takes a decade to try to replicate your own tools.

29:17So maybe this is going for a letter. Does the same dynamic hold here or is not why? What are the differences? Yeah, I guess they're many different facets being addicted to something, right? I mean, in the ideal case, it just means all Chinese firms are like really reluctant to adopt Chinese chips, right? And therefore, they have like less revenue, You smickers wondering nobody wants to buy their chips and then set all the chaniers them just buy US chips. I already talked upon how just like, smick and smick and nut that gets anyways independent of AI, right? But it's a fair thing to say, like the less people use like Huawei's AI software ecosystem, the worse it is.

29:53I think that's a fair argument to be ate. I just think they know they want to produce it anyways. They just know we need our own AI chips at some point. They're not full steam on this. I think they could go strong if they wanted to. Maybe they're full steam on it, but they're just don't do better for many reasons. So like them using the US tech right now, I think like maybe delays it to some of you even subsidize it. Let's just think about, I don't know, Volkswagen, you know, my German heritage. They're left to surpass the China. How's this going right now? Did this stop BID? Not really, right?

30:23And I expect like the share of Volkswagen has been short to China, right? The future will be low. The argument to be made here, they made a ton of money in the meantime. And I think that's a fair argument to be made. The reason why I just feel nervous about AI chips is, will you supplement, you'd increase the total compute, deployment, training capacity in the time? If, again, let's just say, AGI is a singular point, AIs, just not gonna meta the nice five years, then all we discuss here doesn't meta that much, right? Because the good thing about AI chips is they get exponentially better. We're not gonna talk about H20s in five, six years from now, because we have exponentially better chips already here, right?

30:57So I think that's an argument, we can just say, like, don't worry, man, we just sell them, we make some money, they get a little bit better AI, but AI is not going to be decisive in the next four to five years, but then later, ideally then later we stop it, right? And we don't sell them, we have like better chips, which are like exponentially better. Again, it goes back, where do we draw the threshold? And when and how does AI matter, which is a diffuse question, right? And I'm pretty uncertain view here. I was like, man, AI could be really big deal in the next three to four years. It seems likely it's going to be a big deal, bigger or less big, depending on how it goes, from just like, like, transformative economic growth, being like, determined the future of the military up to, just gonna fizzle out, right?

31:39And I think we should address this uncertainty here. I'll just work on national security risk and I'm trying to minimize downside risks, right? And I don't see the benefits here in the long run that why we should sell them. So fair argument, I think there's some good arguments here, but overall, I think it doesn't cut it at least for me. When you look at some companies, it's a really big deal, having Chinese market access. In video, it is, excuse me, until 35 % of their revenue is selling CPUs into China. This was a big deal for the tool manufacturers. In some years, it was 30%, 40 % over the past few years.

32:15In videos of $4 trillion company, they will be just fine. And still be able to deliver you that exponential curve of rapidly improving AI chips, even without the extra $10 billion of sales. I guess there's the maximalist version of this question of like, okay, you are 100 % sure that AI is not matter, does not matter, and is not a sort of strategic technology. Then yeah, sell it, go crazy, do whatever you want with it. But it is a, it's like a, it's a tricky line of thought. We're like, A, you know, we're writing an AI action plan where we wanna make AI dominance. We think this is gonna usher in a new golden age.

33:00But we're willing to like take some of this downside risk that we're making it easier on a China which we've identified as a like, like major strategic threat in order to, I don't know what, I mean, we're still, yeah. Well, it's like, okay, so if we do think this is a big chip, like there is a broader context of the relationship that you can try to trade things in, right? And to say, we wanted them to scuttle some submarines or, you know, stop messing with the Philippines. Or, I don't know, there's just, there are lots of other asks you can make from a sort of like balance of power, regional dynamics perspective that you could have put on this.

33:59And it's kind of wild that it didn't even seem to be in the context of the debate, of this sort of discussion between the US, trying to trade deal, but was just like a decision that Trump made independently because Jensen got to him and we wanted to have like good vibes in the relationship. And the 15 % tax we're putting on it, I mean, is it just going to like pay off the national debt? I mean, what if it went to like buy drones for Taiwan or to sort of shore up, you know, go into funding BIS so they could do a better job of tracking down all the chips that are getting leaked out into China. You know, there are some sort of lines of this where if you really are going to follow the like, okay, like we're all right with the premise that like China is a strategic threat and we got to kind of watch and hopefully shape just how much they're going to gain on the US from a sort of relative technological competition perspective.

35:00Like there are other moves you can do to make it more, to sort of like use this card more in your favor than just like letting the other side pocket it. I think, I think John, that's an excellent point, right? And we would just have like more insight here. Because what we've seen so far is they trained to get sold again, then postdocs somebody said it was part of the trade talks are just denied it. Then the Chinese came out denying it was part of the trade talks, right? And eventually, what I don't like about it, X -Pong Road was a national security thing. When the diffusion frame where I came out, and there were certain kinds of like Poland, Switzerland, in this tier two, many were complaining, like you're dividing European trade union.

35:44But it's a national security thing. It's not a trade deal we're doing here. This was at least where X -Pong Road originally came from. And now we're mixing them with this trade things, and now we get 50 % of the revenue share. And amazing, let's pay off the debt, let's do other great things. I don't think National Security for sale here. If we would get other national security consultations here in return, that'd be amazing. It would just be nice to hear more and communicate about this. There's definitely things where people like me and Arvus are willing to walk back hell yeah. Let's sell in the age 20 because we got a beautiful deal out of it.

36:16I just don't think 15 % of the sales is makes the cut here. Just money. Money doesn't help you. They get the computing power. You make money. You might even make more money because there is and video making money and maybe Microsoft or your favorite hyperscaler in between, why you still have more control and more leverage. So I still generally think, I think many just miss the point. You don't need chips like in your basement to run them. You just access them remotely. And so they could literally dial in. They could dial in our beautiful new UAE 5 gigabot cluster or dial in in the US and like existing cloud providers.

36:48And then in the future, a case they go rogue or you really want to make sure it doesn't go to certain military linked entities. You just have way more leverage. And I think that if we do the concessions, we talked about the different things you want to walk back. Before you sell chips, just tell them you can use the cloud, which is by the way perfectly legal as we're speaking right now. So if they really want to the computing power, use our cloud. It's totally legal. You can go for it. We still make money. So I just can put an economy dynamic here, which let me think you're referencing, which is getting back to if you sell the tools, you enable the chip maker, if you enable chip makers, that type of competitive dynamic.

37:25And what we've seen is GPU sellers in video, I think most prominent, be very vocal on this issue. We haven't seen hyperscalers be vocal at all, even though I think one should conclude this implies more competition for them. And then we've seen mixed responses from AI model companies. I think Anthropic has been pretty vocal opposed. I haven't seen OpenAI. And so it strikes me that companies that have a lot of stake have been taking very different strategies, some being vocal, some not. I don't know what exactly explains that. More observations. I got an explanation. Go for it. You know what GPUs they are using and videos.

38:03And if you speak out against them, Jensen is going to get you. Right. So if you look at an infrotec who's like slowly migrating to like more Google GPUs and Amazon training, you can see the deals. They can't be got against it where everybody else is like I'm relying on Jensen and I can at least confirm for many Conversations with many people in his companies the only competitor here is AMD right and I think it's only gonna be the market Jeff on the videos only gonna go downhill from here Right the total market will go up. I said big deal But AMD is getting better Google GPU is getting better Microsoft chips getting better Amazon chips getting better We have more and more startups getting better, right?

38:40We just have way way more AI chip competition I think like Nvidia, so to like slightly nervous on all of these issues. And I think I would love to live in a world where Nvidia had a smaller market chance to see what the hyperscalers in the eye companies would say. And I think many of them would actually come out and open the eye, at least came out in favor of ex -pokontrolls historically when they talked about energy dominance and more. And I think right now they're all just all quiet because somebody else might have knocked on the door. It's fascinating in the context of I've got lots of questions of what does industry think.

39:08And of course, you know what you're saying is, well, which part of industry are you looking at? which segment, which is the company's, yeah, fascinating political economy there. Sure, in fact, yeah. Why don't you do the HBM political economy? This has apparently been reported that the Chinese government is asking for a bandwidth memory as part of a concession number two. Maybe like, what would that, what does that tell you, Hunter? That asks. If I'd be running China, I would ask for a high bandwidth memory all the asking for H20s personally, right? because I've got my sovereign drive anyways. I want to build better and better AI chips.

39:45And if I look at my current AI chip industry, I would like to want EUV, but maybe this is too much to ask for, because we did this early on, Trump did it back in the days. But what is the thing we've only recently done is banning high bandwidth memory units. So we got our chip, and next to the chip, we put the memory and these memory units being produced by Samsung and SK Hynix and mycron, they're not allowed to go to China anymore. And we've seen reporting that at least the Chinese, Again, the Chinese put forward could be trade. HBM is still like something we can do here. I hope the US government will draw like a clear red line here.

40:17Right? We talked about how you would walk back things. There are arguments in favor of setting in chips. We talked about them. What we do here is not setting them on chips. What we do here is enabling them building better chips. The best way how the 910c or the 910d, whatever the next chip is, they produce will get better as by having higher bandwidth memory. And right now, China does not have the capacity to use even HBM3, there's reporting about first trial production of HBM3. In contrast, Nvidia and Arras are starting to equip HBM4 and using HBM3E right now. So again, don't get wrong, China will get better, they will eventually use high bandwidth memory.

40:53There's a lot more to be done, we could stop them from producing better memory. But in the meantime, while they're scaling up production and trying to get better at least, we should probably not sell them our high bandwidth memory to make their chips more competitive. because we might regret this in many years when we're then competing of course emerging markets and Huawei has a better chip which can better compete with our chip. And the interesting dynamic, the memory space is that the two of the three producers are not US but Korean. So, again, it's a problem with that. It's also why we see probably tons of smuggling here because it's pretty close by and there's like certain tricks to get more HBM.

41:26So it don't get me wrong, I think China smuggling HBM right now, which is for a cent in a year's. but again, I'm in favor for extent in the gears, and ideally we get better enforcement. So yeah, they get less HPM eventually. Should we switch to the portal to go to me this in China? So July 15th, we get the news that the Trump administration is letting in video start to sell H20s. A week later, MSS publishes a notice to the public saying to be aware of digital spying via foreign produced chips. 10 days later, the CAC, the Cyberspace Administration of China, some of them video representatives, over risks of being able to control a Chinese remotely and accuses them of having.

42:10A kill switch in them, then we have a private leading cybersecurity research firm in China. Tianxian, they publish a report which goes viral talking about all the ways that there could be backdoors. and 10 days after that. So just three days ago, August 9th, we have a state television doing a whole big report talking about how there might be backdoors already in these H 20s. And they cite former China talk guest Tim Fist, CNAS reported on this topic, which he came on to talk about on China talk a few years ago. So you're welcome. I don't know. Chris, what's your, what's your read on this lake?

42:54kind of interesting brushback pitch we've gotten from the central organs about H20s in China. So I think there are three potential explanations, not mutually exclusive. One is that the Chinese security services are paranoid and the discussion in Washington of the CHIP security act, which would mandate geolocation verification, which has been happening simultaneously to the H20 debate. has intensified those concerns. That's explanation one. Explanation two is that it's part of an effort to discourage the private Chinese tech firms from using age 20s and that there are people around Huawei or in the government who are afraid that age 20s will actually take into the market share.

43:42And so this is a way to say buy more Huawei chips as well. And then I think the third explanation is that this is actually pressure on US firms like to say, actually, we need you to do more, or else we're not gonna let you back in the market. We've seen this in other segments of the tech sector, where China will ramp up pressure on a private US firm with the aim of having that firm then try to use its resources to shift the debate in Washington. You could maybe envision the HBM debate being part of what China is looking for, the broader trade negotiations that are underway, but it certainly wouldn't be a very attractive endpoint for Nvidia if they got approval from the US side, then didn't get approval from the Chinese side to sell.

44:25So perhaps China thinks it has some leverage there. How exactly do you attribute these three causes? I'm not exactly sure what the shares I would put on each of them, but they both seem, or all three of them seem potentially relevant. Do we need to be talked about also put out guidance a while ago on energy efficiency? This was actually shortly in April or May when they age 20 was so no sorry even before so when the age 20 was so solved before it got banned initially they put out guidance that the age 20 is famously pretty energy inefficient if you look at flops right because of the x -pok control bandwidths and basically I don't know exactly what this guidance means but basically this courageous companies from using it I guess nobody's been following it because not they're buying it and they're all up in the single millions the ship but I think it feeds into the same never to fear, right?

45:13Just like you're trying to push certain companies or you create artificial demand for like some Huawei chips, like slowly tell them like, hey guys, at some point we want to do all the way and own AI chips, right? And I think that's crystal saying I think all of these stories are simultaneously, too, right? I think it all just makes sense and there's like no big downside for them to do these kinds of things, only benefits. But actually there was a steam media source, I don't know if it's going to be a rough seem Jordan, but one of its criticisms of the age 20 was that it was environmentally and fluently, unfriendly.

45:39Yeah, no, they cite this exact NDRC line that Leonard talked about how the goal is five tariff flops, or half a tariff flop per watt, and the H20 can only give you 0 .3 seven. So it's pretty bad. Pretty environment unfriendly for training, but pretty damn environment friendly for deployment of AI chips, way better than any Huawei chip, I can tell you that. I mean, I think like here's a moment where some mirroring might be in order. we've just had an hour -long conversation about how messy and convoluted and sort of like how many conflicting priorities we have in American policy towards artificial intelligence.

46:18And like, the same thing is happening in all these different ministries in China. And you know, this is big news. This is like a change in the landscape and people want to, you know, people want to have they're saying make their stamp on it. So you don't necessarily need to sort of like attribute some like forgy chassis like, oh, now's the time to squeeze them. But like, I'm sure the people in the MSS red Tim's thing and are like, oh, this would be really stupid if we bought all these chips only for them to turn into, you know, bricks or like spy on us or like have bombs in them that are going to blow up like beepers and Lebanon or something.

46:59I'm sure folks in CAC feel the same way. And then the same debate that we've been having for the past hour of, oh, is it sort of net positive or net negative for domestic self -sufficiency to have a sort of competitor to Huawei potentially take a big chunk of the market domestically is something that's being played out in China. So I agree with you that like at a broad level, now is the bright time to ask for more stuff from Nvidia. Now that they've gotten the green light and there is this kind of, you know, $10, $15 billion of demand and these chips sitting on a lot somewhere in Taiwan that they're really excited to ship out to say, hey, you know, you better step it up or cut the price or, you know, do an extra screen to make sure there aren't any guilt switches on it or whatever you know, the way this is playing out on Twitter is, oh, trying to say they don't want them.

48:01That means we should definitely sell them. I don't think it is necessarily dispositive just reading that Chinese state media or state organs are saying something means it is true. I mean, there is, it's not that hard to play the, what's not even give this credit for 40s, chess. This is just 2d chess, I was saying, oh, no, we're worried about the chips. We don't even want them chips. that changes the political economy of the debate in Washington where it makes selling these chips potentially easier to go down. So that's also something to watch out for as we see the Chinese government saying, ah, no, we didn't really want these all that much.

48:37This isn't actually a big concession. We're kind of worried about the knock, the second order effects of this. But the fact is people like the demand is not going anywhere. Like it's not like And Alibaba is not going to buy these chips because of these sort of warnings. I think Alibaba would be pretty sad if they suddenly only need to rely on other inferior chips where they can't produce enough of them. Ideally, if I were on the Chinese government, I would put out so many relations that I can sell all of the Huawei chips I can produce and then fill the rest with some nice Nvidia chips here. But I think also it's interesting, I think there's just some misunderstanding about the chip security act is supposed to do in location verification.

49:20The idea is not to check if a chip is, well, the idea is to check if a chip is in China and then we have a problem, right? So the idea is like we put this tracker on a chip in Malaysia, Singapore, wherever you think there be Smuggling, then check they don't end up in China, right? So this was never supposed to be going chips which go to China because ideally we don't have any chips going to China, at least not to advance ones, right? So this is an interesting confusion, right? Like this holy bait of this hardware and it will make a nice location verification was big in the UAE and Saudi Arabia and Singapore and Malaysia, fall of these smuggling hotspots, which people were worried about.

49:53And again, I think some people have been pushing, and I think if you think about, if you know, stop selling chips, I'm arguing we should sell them cloud. That's one line before. People go out and say, we can't sell them chips, but put something on the chip, right? But like, just knowing a chip is now in China, and we know it's in dislocation, and the city of it, how does this help us again here? Again, everybody can dial in remotely even if it sits at 10 cent who says that the PLA is not using it. You can just dial in remotely. So I don't know what's going on there after some misinterpretation of documents, just some vibes.

50:25It's a confusing status. You've previously made a point about Intel, which I think is an interesting one. We were saying Intel made a lot of money in China. And Intel is still allowed to sell their CPUs and Intel's CPUs share in China is only going down. And I think we will see the same with them video on the i chips, basically, even if you allow to sell, your share will potentially go down. Why is this a case? There is similar guidance, for example, for all government computers, to go to a homegrown domestic produced chips. We can't trust Intel any more on this, right? We will see the same on AI chips.

50:57So yes, Intel made a lot of money in China, but the share is going down over time, and they're pushing on the self -reliance, basically, to produce their own AI chips. And they also name security concerns here, right? That's why the government is coming first. I don't know the exact numbers of Intel's sales right now in China and how much money they're making there, but I'm pretty confident it's been going down and the government is not buying any more Intel chips because they just put out the Skyldens here. So we've seen this playbook playing out before, right? The only difference is now we have this confusion with which chips are allowed to be sold, which ones are not to be sold and how good are they actually, right?

51:30But the story's nothing new. Can we talk about all we know in terms of the big buyers of AI chips in China and their relationship with the state. So you got the private, you know, quote unquote private tech firms, Bob and Tencent. You've got the AI labs, deep seek most prominently. I don't know what Leonard Jordan was you have a view here, but one of the key questions seems to be how, what is their relationship with the state today and how is it changing? And to what extent should we see them as, you know, our model of the state is certainly not accurate. Totally independent and certainly not accurate.

52:04there's a spectrum. And so to what extent are these political priorities shaping their procurement decisions? Look, there was reporting which was clearly sourced by the intelligence community over the past few years that after the MSS hack of the SF86. So that's the form you submit to the US government when you want a security clearance which like talks about you which basically like you try to It's your like confession of sorts to the Catholic Church, where you talk about all your divorces and all your debt and everything that a foreign intelligence community might want to know about you. That data was actually that the MSS tapped Alibaba and by dance engineers to sort of like put into a more useful format.

52:57So like we've just seen over the past few weeks reporting from business insider about a public tender from some corner of the PLA that wanted H20 to do whatever they wanted to do with it. I used to be more sanguine on this type of thing, but I think there's, again, this is the due and the US technology to beat out other dual -use technology. So it just seems to me to be a little preposterous that in so far as this is a strategic resource that the Chinese government would not be able to leverage data centers that are living in China that the US did not have any sort of kill switches or on ship governance on in order to do whatever they want to do with it, whether that's build a surveillance system or help with weapons manufacturing.

53:54And to be clear, the Pentagon has now signed a $200 million contract with OpenAI, and this is just the beginning. So clearly, this stuff is useful that we're willing to pay a lot of money to get it into the Pentagon in one form or another. So if what we're sort of convinced with, if what you find what Leonard says is convincing is that you're selling a lot of H20s, like materially raises the amount of sort of like usable functional compute that can be put into anything in China, it would be really surprising for me if you didn't have the Chinese government wants to take out these new toys for it.

54:45If you didn't have this sort of Chinese military police complex, want to take these new tools out for a spin. So I think there's kind of two points you get out of my eyes. So one is if AI tools exist, will the military use them? And I think the obvious answer is yes there. But if you're a data center procurement official or executive at Alibaba Cloud, To what extent is your decision making there shaped by what you read in state media versus what your boss tells you to build an effective cloud which case maybe a 20s or your best option versus the sense yeah, how do we think about The those are the people who are gonna decide how many attempts to buy right unless they're getting addicted We may be are from the top now I guess like the the sort of counter example I'm thinking myself is you know There was a time when parts and maybe still don't know parts of the US military were using Chinese drones not because there was a policy in Chinese drones because they didn't have any U .S.

55:45drones. And so is there a scenario in which like your procurement executive at Alibaba is just gonna ignore the sense because they're told to build a good day center? Yeah, I think at some level, yes. I mean, these are companies that report quarterly earnings that pay their employees based on how well the company reforms, right? And people get stock options. So I think by and large, the incentives of the people who are buying these chips is to, drive the most revenue for the money you're spending on your cat -backs. But it only goes so far. And I do think that there is this sort of broader strategic realization, which you don't need Beijing to tell you, right?

56:38is that this is like a, this is, you know, this door can be closed at any time. And it's even more Beijing. It's closed to the already. Yeah, yeah, yeah. So, you know, yeah. I mean, I think maybe now is a interesting moment to sort of talk about this sorts of things that could change the dynamic. We're on now, on chips and sort of on the broader US -China relationship. I mean, we have Congress as a variable. There have been a number of senators and congresspeople who have been like, wait, what are we doing selling these ships to China? I thought we banned and said we're, you know, our golden ticket to the 21st century.

57:21And then I think just because Trump is doing this at such a personal level, like we've seen him turn on Putin, right? And I mean, we've seen him gone from gone from like all Putin to like, we're gonna have some questions about this guy And you know, we'll see what the hell happens in Alaska, but I do think that there is like Jensen saying the wrong thing taking too much of a victory lap or you know, she doing something really obnoxious I mean, there's there are a lot of sort of like personal interpersonal dynamics that could change what the um what the Trump administration ends up doing, which is probably the more relevant variable than whether or not Leonard can convince you that how I can only make ex -evalent gifts.

58:11I agree on that. Yep, yep. It's an interesting moment of time because we just have all of the trade negotiations. So everything is volatile and it's just like certain things are just on the table and they'd be willing to discuss them. And we see the Chinese bringing forward the least of quality reporting, did the of HBM. And it will just be interesting to see that the government is going to say it's going to draw a red line. We had statements before that trade negotiations in London that H20 is above the red line. So they wouldn't negotiate it. And again, we can all try to put together a story what happened to you, what not, if it's part of it.

58:45We won't know for sure. But there will be more discussions about these kinds of things. The Chinese can bring it up. But I am also more interested in the semiconductor manufacturing equipment companies. If Nvidia got this beautiful deal, I know what we're doing. They're all trying to give the president elsewhere a ring. It seems like it's a handful of people are making these decisions. I just hope they're well informed of which things are more important. If I see any news about EUV machines being so -called China, I'm probably going to get a heart attack and I just really don't want to say that.

59:15I think just from a personal transaction perspective, there isn't someone in the semi -capitum equipment ecosystem that Trump's gonna give the time of day, like he felt like he had to with Jensen because this is like America's most important CEO. I don't think any of those folks have this sort of like panache and skill to make it work. And even Ben Thompson, who I gave a hard time for earlier in this podcast understands very clearly that there's a lot of downside risk in sailing, more tools to try and then we already have. I would go even so far. It wouldn't be good for Yensen if Huawei is not good at producing your chips.

1:00:00So it wouldn't be at any interest to say like, hey, yeah, let's make sure we set them all up chips. Really, let's make sure to hit them on every single dimension we can to make sure Huawei is just less competitive. I would love to see that. This would be at least a good part of the story here. I think we're going to Congress. I think Congress will be interesting to watch on this issue. because the trending Congress has been, Congress has vocally pushed for tougher controls, both in the first administration and under Biden, not universally, but I think that's been the predominant push. And so now I think we'll, we're just going to watch Senator Cotton, for example, and what he does, it does not say publicly on this issue.

1:00:43Chris, do you want to sort of tie the, you know, he's out the Russia comparison a little bit? I mean, Congress like really not happy. They ended up putting some sanctions on the table. What was the, what, what are the dynamics been there over the past six months? Well, I guess the last six months in Russia have seen Congress officially not play much role at all. They put sanctions legislation on the table and pulled a back action if you're Trump requested it. But I, I think I would say there's been a number of Republican senators who have been influential in shaping Trump's thinking. Lindsey Graham, for example, seems to have played a role in shaping Trump's thinking on Putin or the last six months and the way that Putin is stringing along.

1:01:24Now, we're going to Alaska later this week and maybe all that will prove irrelevant if Trump changes his mind, but it does seem like you could argue that even though Congress has done nothing on Russia, in fact, it has helped change thinking in the White House. I wonder if this is going to be true here, but this seems like a place where Trump's going to make more of his own decisions, especially as far as it intersects with the China trade negotiations, which seems like it pay well. Yeah, and it's kind of a less salient thing than a land war. There's no domestic... Land -revested constituency.

1:01:58Just weirdo's tech, national security podcasts.

1:02:04Other stuff we should get to. Leonard, do you have anything to say about the... But before this week, it was reported that in videos coming out with a downgraded version of some new downgraded chip, post -H20. But I guess that's not relevant. Oh, yeah, the B40 or B30, I think. Yeah, yeah, yeah. That's not relevant because of the H20. It's unclear, right? If people, we flip flopped a decision on the H20, but, notably, there is still a license requirement, right? So, and VD got the license granted. So, if they wanted to go all the way back, they could have removed the license requirement, right?

1:02:38So from October 2023 to April 2025, there was no license requirement. Then they introduced the license requirement, which is still intact. The only thing which happened as of speaking last Friday is they granted the licenses, according to reporting. So if they still want to sell a chip which is not subject to expo controls, they would produce a new chip called B30 before B40. It needs to be loaded computational power threshold, so the same as the H20. and also a lower memory bandwidth. And according to the reporting, I think FT leak, what is in this, and form later, it needs to be less than 1 .4 terabyte per second memory bandwidth.

1:03:16Again, the H20Z4 terabyte per second, right? So the B40 would then probably not use HBM anymore, but probably in use to like an inferior memory technology, but significantly cheaper, because why use HBM if you can't have that many memory bandwidth? Anyways, a SoCoGGR technology, which we usually use for a graphic GPUs. And again, if people talk about this is only the fourth best chip, I don't think they had 20s to fourth best chip. I think to be 30, be 40, that's a more fair description of a fourth best chip. And I would still not call it an obsolete chip, but it's definitely a worst chip. It's not like, you know, with a chip like again, the US government at least decided, here's where we draw the new lines, this chip is fine to be exported before the license.

1:03:59So it could still be coming. I have not heard this stopping the production there yet. I guess in videos making it calculus right now, on how much demand there is, but it's clear the case dates 20 is better to question us, but all the licenses be granted going forward, right? And Crump has said, or he said at the press conference a couple days ago, that he'll consider a downgraded blackwell. Are there ways we should think about what that might look like if, in fact, the material materializes, of course, with huge questions over whether or not that's actually real. One thing which is out, he said like 30 or 15 to 50 % less performance.

1:04:38And I think what many people are just missing on AI chips and computing, chips get exponentially better. If your chip is 15 % less, that's nothing. That's still the same generation, right? So if you really want to sell worse chips, you need to go back a few generations and then the chip needs to be like seven times worse, not only 50 % or 15%. So there's an argument to be made that you want to sell worse chips, but it's not a little bit of a downgrade. We really need to take the exponential into account. If we trim down a blackwell chip, for example, a B200 by 15 to 50%, still twice or three times as good as the Huawei chip.

1:05:15And again, we can produce millions of them while Huawei has struggled, according to reporting producing 200 ,000 this year. So again, that's just a key thing to get right here. And yeah, people keep in mind the exponentials here. Like chips get exponentially better. 15 to 50 % trim is nothing. And the grand scheme of things. And I would at least, yeah, make my voice heard to say, this is probably not a good idea of what you'll be doing here. The government two lines before and the lines are way lower. And I think that's where it should be. All right, well, been a long road since October of 2022.

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