As geopolitical tensions escalate between the US and China, the global AI and semiconductor industries are entering a new era of innovation and uncertainty. Brian Sathianathan, co-founder and CTO of Iterate.ai, shares his insights into the impact of US trade restrictions, the rise of Chinese alternatives like Huawei’s Ascend chips, and how American startups can stay competitive amid tightening regulations and shifting global power dynamics.

You’ve said that trade restrictions may protect IP in the short term but ultimately hurt US competitiveness. Can you expand on what risks you see for American tech firms if these restrictions continue?

While trade restrictions pose challenges for American tech firms, such as supply chain disruptions and increased costs, they also present an opportunity for the industry to adapt and innovate. By driving domestic production and R&D, these restrictions could spur the development of new technologies, products, and processes that ultimately make US tech firms more competitive in the long run. However, navigating these restrictions will require careful planning and strategic decision-making to mitigate risks and capitalise on potential benefits.

How do you assess China’s progress in AI hardware development, especially with Huawei’s upcoming Ascend 910C chips? Should US firms be worried?

The progress China has made in AI hardware development is really interesting. Huawei’s Ascend 910C chip looks like a game-changer, and it’s surprising to see them giving Nvidia a run for its money. Even Nvidia CEO Jensen Huang acknowledges that China is closing the gap in AI capabilities. The Ascend 910C chip has already generated a lot of interest, with major Chinese companies like Baidu, ByteDance, and China Mobile taking notice. This growing competition is going to drive innovation and push the industry forward, which is a win-win for everyone. We need more countries to participate in such innovations.

Do you believe Nvidia’s position in the AI hardware market is under serious threat due to these export bans and rising Chinese alternatives?

Nvidia’s market dominance might face some challenges due to export bans and rising Chinese alternatives. However, Nvidia’s strong brand reputation, extensive software ecosystem, and continued innovation will likely help maintain its market share. The export bans might slow China’s adoption of Nvidia’s high-end chips, allowing Chinese alternatives like Huawei’s Ascend to gain traction domestically. Even so, Nvidia’s leadership in AI hardware is well-established, and it’s likely to adapt and evolve in response to emerging competition. The AI hardware market will likely become increasingly competitive, driving innovation and benefiting users globally.

How do you see these geopolitical tensions influencing the global supply chain for AI technology over the next 3–5 years?

Geopolitical tensions are likely to reshape the global AI technology supply chain, prompting diversification and regionalisation as companies aim to mitigate risks. We can expect increased investment in domestic innovation, emergence of new supply chain hubs, and a shift towards secure and trusted supply chains. While this may pose challenges for global collaboration and standardisation, it will also fuel innovation and adaptation in the AI sector. After all, geopolitics is dynamic, and new hurdles will arise, but the industry’s resilience and adaptability will continue to shape its trajectory.

You mentioned innovation isn’t slowing—it’s just shifting location. Are there specific examples of countries or companies that are gaining ground because of US restrictions?

Countries such as China, South Korea, Israel, and France are making progress in specific areas due to various restrictions and shifting global technology dynamics. China’s Huawei and Alibaba are making strides in AI chips, quantum computing, and semiconductor research. South Korea’s Samsung and SK Hynix are advancing in semiconductor technology, while Israel’s tech industry is thriving with companies like Intel and Tower Semiconductor investing in local R&D. Meanwhile, France’s Atos and Bull Group are making progress in high-performance computing and AI. These countries are investing heavily in their tech ecosystems, driving innovation and growth, and reshaping the global tech landscape.

From a technology strategy perspective, what should US-based AI startups or semiconductor firms be doing right now to remain competitive in this changing landscape?

To remain competitive in the evolving global landscape, US-based AI startups should strategically focus on differentiation through niche markets and proprietary data, prioritize algorithmic innovation and efficient architectures, embrace open source while protecting core IP, emphasize explainable and trustworthy AI, build strong partnerships, and proactively navigate the regulatory environment.

US semiconductor firms must also maintain leadership in advanced process technology, concentrate on specialized and high-value chips, invest in advanced packaging, strengthen supply chain resilience, drive innovation in materials and architectures, foster ecosystem collaboration, address the talent gap, and strategically leverage government incentives.

Overarching strategies for both sectors include cultivating a culture of innovation, robustly protecting intellectual property, adapting to the changing geopolitical landscape, and prioritizing cybersecurity to ensure continued success in the face of increasing global competition.

Do you think it’s possible to strike a balance between protecting national security interests and maintaining a truly competitive global AI ecosystem? What would that look like in practice?

The key question is whether we can maintain national security while competing in the global AI landscape. I believe we can, but it requires careful balancing. Instead of shutting down all cross-border AI activities, we should focus on real security risks, particularly advanced technologies with military applications. This would allow less sensitive AI innovations to thrive. We must also invest significantly in domestic AI research and talent development to reduce reliance on foreign technology. Securing our AI systems from hackers and data breaches is essential for both security and the stability of the AI ecosystem. Engaging with global partners to establish ethical AI practices is important. We need to create regulations that prevent real risks without stifling innovation. Ensuring our AI is trustworthy, fair, and transparent will build confidence and benefit everyone. Ultimately, it’s about finding the right balance to protect ourselves while embracing the advancements in global AI.

Given Iterate.ai’s work with AI innovation, are you seeing increased interest or pressure from clients in light of these recent developments between the US and China?

While US-China developments in AI and semiconductors are important, we at Iterate.ai are experiencing strong engagement from clients focused on AI innovation. They are keen to use our platform to rapidly build AI applications that drive business growth and create new opportunities. This focus on innovation showcases the resilience of our client base. We are inspired by their commitment to leveraging AI for competitive advantage and are dedicated to providing them with the tools and expertise needed to achieve their goals. Their momentum in pursuing AI innovation reflects both their strategic vision and our platform’s capability to deliver real impact.

What’s your perspective on how AI regulations—both at home and abroad—will affect long-term innovation pipelines?

AI regulations can have a dual impact on innovation pipelines. On one hand, clear and thoughtful regulations can foster trust, ensure safety, and promote responsible AI development, which can encourage long-term investment and innovation. On the other hand, overly restrictive or fragmented regulations might stifle creativity, limit access to global talent and resources, and hinder the pace of innovation. Again, striking the right balance between regulation and innovation will be crucial to ensure that AI development is both beneficial and sustainable.

If you had one policy recommendation for US regulators to support American AI leadership without stifling innovation, what would it be?

It would be to invest massively in AI education and literacy for everyone, not just engineers. By leveraging individuals and communities to understand the basics of AI, its benefits, and its limitations, we can create a more informed public that can demand transparency and accountability from AI developers and users. This approach would focus on building a society equipped to navigate the AI age intelligently, rather than relying solely on top-down regulations. By funding independent research, public awareness campaigns, and AI literacy programs, we can foster a culture of informed decision-making and responsible AI development, ultimately driving innovation that aligns with societal values and needs.