Top US and Chinese officials met in New York to discuss a new notification mechanism for AI incidents that could affect national security, Treasury Secretary Scott Bessent told reporters on Sunday. Bessent described the talks with Chinese Vice Premier He Lifeng as successful. The meeting came ahead of a summit between President Donald Trump and Chinese counterpart Xi Jinping, scheduled for Washington later this week. In May, when Xi hosted Trump in Beijing, ways to collaborate on AI was one of the issues the two leaders discussed. Those talks ended with an agreement that China would buy Boeing jets and US agricultural goods in exchange for lower tariffs.
The two sides discussed AI safety alongside plans to operationalise a process for identifying potential tariff cuts on goods, known as the Board of Trade. A truce in the tariffs war between the world’s two biggest economies is due to expire on 10 November. Chinese state news agency Xinhua reported that the two sides had candid, in-depth and constructive exchanges on key economic and trade issues, noting that they had discussed AI.
Bessent told reporters after the talks: “We think that, just like with any cross-border activity, that moving from opaque to more transparency between the number one and the number two AI powers in the world is very important.” He wrote on X that the talks help lay the groundwork for President Trump to advance America’s economic interests and deliver results for the American people.
Trump dismisses calls to slow AI development
AI has faced intense scrutiny in recent days after researchers warned of potential risks posed by the technology and some of the industry’s most high-profile figures called for developers to take a more cautious approach. Trump has largely dismissed those concerns. He argues that sufficient policies exist around AI and that the US cannot lose its edge to China. Earlier this month, he said “whoever wins in AI, wins.”
Export controls face growing skepticism
Washington has imposed various restrictions on the sale of chips to China, and last year launched the Pax Silica initiative to secure AI supply chains that exclude Beijing, with 23 states and the European Union joining. China’s frontier AI models remain heavily dependent on imports, chiefly chips, chip-designing software, and chipmaking equipment, according to an analysis published by Al Jazeera. US export controls hinder China’s ability to keep pace. They drive up costs and undermine investor confidence.
The analysis argues, however, that export controls will not hold China’s AI development back forever, noting that China is investing in domestic alternatives, improving AI model architecture, and optimising training and inference efficiency to squeeze more from existing chips. Advanced chips are not made in a single country, the analysis notes. Their supply chain spans multiple political entities, bringing together US design, Dutch and Japanese equipment, and Taiwanese manufacturing. US allies, unhappy that Washington keeps offloading steep commercial costs onto them for the sake of its own national security, could develop policy fatigue and begin investing in alternative supply chains to bypass US technology and regulations altogether.
In June, the US government curbed the ability of Chinese companies to buy advanced US chips via overseas subsidiaries. That loophole was closed. New ones will emerge. Doubts about the current strategy have surfaced within the US AI industry itself. Nvidia CEO Jensen Huang has called export controls a “failure” that has cost US companies billions. China is a major market. Christophe Fouquet, CEO of Dutch chipmaking equipment giant ASML, has questioned whether restricting sales of the most advanced equipment to China would work or only push it to redouble its efforts to develop its own.
Nearly 200 US startups sent letters to the Trump administration this year arguing that banning access to advanced Chinese AI models, which tend to be open-source, would cripple US startups and leave the market in the hands of a few AI giants. The Al Jazeera analysis also highlights China’s dominance in rare earths, which are key to chipmaking, noting that China accounts for 91 percent of global rare earths separation and refining production. Last year, Beijing banned the export of heavy rare earths to the US, dealing a heavy blow to US manufacturing. A truce saw Beijing suspend the ban for a year.
Rare earths are also used in weapons ranging from F-35 fighter jets to anti-ballistic missile defense systems. The US has redoubled its efforts to wean itself off Chinese rare earths, to no avail. China has tens of thousands of experienced engineers working on rare earths processing. In the West, there are just a handful of such experts.