American export controls on advanced semiconductors have been in effect for four years. That’s long enough to actually evaluate what they’ve accomplished. Looking back, the goal was to deny China the hardware it needed to compete at the frontier of artificial intelligence.

But four years later, Chinese chipmakers that once struggled to find domestic buyers are running at capacity, Chinese AI models are winning enterprise customers, and Chinese executives are stating publicly that Washington’s restrictions helped them. It’s clear that while D.C.’s export control policy started with the best of intentions, the end result has been highly beneficial to China’s long term AI ambitions and disproportionately impacted U.S. firms.

In fact, one can argue the U.S. economy has become a “highly leveraged bet” focused on winning the AI race. And right now, that bet appears to be increasingly uncertain. Chinese AI models, running 60 to 90 percent cheaper than American alternatives, are quietly capturing the customers U.S. companies built their valuations on. Coinbase and DoorDash, for example, are already routing workloads to Chinese models. We are witnessing a market-by-market migration to cheaper Chinese infrastructure.

Recent reports highlight just how quickly China has closed the gap with the U.S. on........

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