Transcript | Paul Triolo on Nvidia H200s, Chinese EUV Breakthroughs, and the Collapse of the Sullivan Doctrine

Happy holidays from Sinica! This week, I speak with Paul Triolo, Senior Vice President for China and Technology Policy Lead at DGA Albright Stonebridge Group and nonresident honorary senior fellow on technology at the Asia Society Policy Institute’s Center for China Analysis.

On December 8th, Donald Trump announced via Truth Social that he would approve Nvidia H200 sales to vetted Chinese customers — a decision that immediately sparked fierce debate. Paul and I unpack why this decision was made, why it’s provoked such strong reactions, and what it tells us about the future of technology export controls on China. We discuss the evolution of U.S. chip controls from the Entity List expansions under Trump’s first term through the October 2022 rules and the Sullivan Doctrine, the role of David Sacks and Jensen Huang in advocating for this policy shift, whether Chinese firms will actually want to buy H200s given their heterogeneous hardware stacks and Beijing’s autarky ambitions, what the Reuters report about China cracking ASML’s EUV lithography code tells us about the choke point strategy, and whether selective engagement actually strengthens Taiwan’s Silicon Shield or undermines it.

This conversation is essential listening for understanding the strategic, technical, and political dimensions of the semiconductor competition.

6:44 – What the H200 decision actually changes in the real world

9:23 – The evolution of U.S. chip controls: from Entity Lists to the Sullivan Doctrine

18:28 – How Jensen Huang and David Sacks convinced Trump

25:21 – The good-faith case for why export control advocates see H200 approval as a strategic mistake

32:12 – What H200s practically enable: training, inference, or stabilizing existing clusters

38:49 – Will Chinese companies actually buy H200s? The heterogeneous hardware reality

46:06 – The strategic contradiction: exporting 5nm GPUs while freezing tool controls at 16/14nm

51:01 – The Reuters EUV report and what it reveals about choke point technologies

58:43 – How Taiwan fits into this: does selective engagement strengthen the Silicon Shield?

1:07:26 – Looking ahead: broader rethinking of export controls or patchwork exceptions?

1:12:49 – What would have to be true in 2-3 years for critics to have been right about H200?

Paying it forward:

Poe Zhao and his Substack Hello China Tech

Recommendations:

Paul: Zbig: The Life of Zbigniew Brzezinski, Amerca’s Great Power Propheti by Ed Luce; Hyperdimensional Substack by Dean Ball

Kaiser: Everything Is Tuberculosis by John Green; The Anthropocene Reviewed by John Green; So Very Small by Thomas Levenson

Transcript:

Kaiser Kuo: Welcome to the Sinica Podcast, a weekly discussion of current affairs in China. In this program, we look at books, ideas, new research, intellectual currents, and cultural trends that can help us better understand what’s happening in China’s politics, foreign relations, economics, and society. Join me each week for in-depth conversations that shed more light and bring less heat to how we think and talk about China.

I’m Kaiser Kuo, coming to you this week from my home in Chapel Hill, North Carolina.

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For the last three years, U.S. export controls on advanced AI chips have been treated as a cornerstone, really, of America’s China strategy. Export controls actually date back further than that to 2018, in most tellings, when the first Trump administration forbade the sale of equipment used in the manufacture of advanced semiconductors to China, and took actions against companies, ZTE and Huawei.

The Biden administration, of course, as all listeners are doubtless well aware, tightened the screws, imposing bans of sales of what it deemed to be more advanced semiconductors, as well as the machinery used to manufacture those and forbade U.S. persons from working on advanced semiconductors in China. The following year, it expanded the restrictions to include even more classes of semiconductors.

And so, things stood when just weeks after the Busan Summit in South Korea with Chinese leader Xi Jinping, Donald Trump took to Truth Social on Monday, December 8th, to announce that he would approve Nvidia’s H200 sales to vetted Chinese customers. Many observers were quite surprised, though perhaps less so by the fact that he would be taxing the chips at 25%, and that would, of course, go directly to the U.S. Treasury — the lifting of the ban, though, cut directly against the logic of export controls, though Trump had previously lifted such controls on other Nvidia chips or had talked about it, namely the H20 chips — Immediately a heated debate broke out, making for what might look at first like strange bedfellows across Partizan lines.

You had democratic China hawks decrying the decision, and actually, many Republicans, whose party has traditionally leaned much more hawkish when it comes to China, actually defending Trump’s decision. The policy shift on chip exports raised many, many questions. Did this come out of the Busan Summit somehow, even if it wasn’t explicitly discussed there? Does this herald the beginning of the end of all the major export controls on tech? Would Chinese firms even want to buy the H200 hundreds? Would Beijing allow them to import the H200 hundreds in significant quantities if they want them, given that it’s trying to achieve a kind of technology autarky? It struck me quickly that how one came down over Trump’s decision depended very much on one’s assessment of how far Chinese companies had come toward closing the gap since the export controls began.

How far are they still from achieving genuine independence from U.S.-controlled supply chains? How they assess China’s homegrown generative AI models. How much importance an observer accords to AI in this whole winning the future business. And even more fundamental questions about the bilateral relationship itself, about China’s actual ambitions and intentions, about their explicit or implicit visions for America’s place in the world for American grand strategy. I realized, I was thinking about just so far, I have not seen a single person change their minds after Trump’s announcement. That is if they were pro export controls before, or they were still against what Trump did. And if they were against export controls, then they were still against these export controls and applauded what Trump did.

So today, just a couple of days after Reuters has reported that China has now cracked ASML’s EUV lithography code, I am joined by my good friend, Paul Triolo, to unpack why this decision on the Nvidia H200s was made, why it’s provoked such strong reactions, and what it tells us about the future of technology export controls for China. Paul is Senior Vice President for China and Technology Policy Lead at DGA Albright Stonebridge Group. He’s a nonresident honorary senior fellow on technology at the Asia Society Policy Institute’s Center for China Analysis. Paul spent 25 years or more in the U.S. government, and he’s got some good, strong opinions, well-informed opinions, I should hasten to add. But, like me, he’s made no secret about how he felt about Trump One and Biden policies to try and limit tech exports to China, especially in semiconductors and related technologies.

Anyone who reads his excellent Substack, which I will link to with the show notes here, or who’s heard him on any of his many appearances on this program, will already know that. Paul Triolo, man, welcome back to Sinica.

Paul Triolo: Hey, great to be back, Kaiser. And you’ve laid out quite a table here for us to discuss here. The timing couldn’t be better, after the Reuters story on the EUV. But it struck me, in your intro, that December 8^th may be a day that will live in infamy because of the Trump Truth Social post. So, great summary of where we are.

Kaiser: Infamy is probably not a word either you or I would use, though, if I read you correctly. But before we get into arguments and reactions, let’s sort of set the stakes for us. In concrete terms, what does this decision actually change in the real world, and what do you think it mostly doesn’t change?

Paul: Well, it’s a great question. In the real world, what it changes is, in the short term, the ability of some number of Chinese AI developers to continue to use U.S. technology to train their models and run inference on those models at some scale in China, and potentially outside China, at data centers outside China. What it doesn’t do, though, is give China, as many have asserted, some strategic advantage in AI writ large, or give China the most advanced U.S. technology in AI as some have asserted. It gives them a generation of GPUs that is still widely used and is widely capable, and is certainly better than what most companies in China have access to. But it’s not giving them the Blackwell architecture GPUs or beyond. So, it’s an important development, but I think some of the hyperbole around it, which we should discuss, is really hyperbole, right? And that’s something we need to unpack a little bit.