David Sacks, the White House’s AI and crypto czar, has warned that the United States’ overly strict chip export rules could weaken its long-term tech dominance, potentially boosting Chinese rivals. He pointed to January’s “DeepSeek moment” where the launch of the AI model revealed China was perhaps only “three to six months behind” in AI capabilities, a much smaller gap than previously believed.In a Bloomberg Television interview (via Business Insider), Sacks emphasised that China is rapidly closing the AI gap, urging the US to rethink its chip export controls if it intends to maintain its leading edge. He pointed to a “DeepSeek moment” in January, where the launch of the Chinese AI model revealed China was perhaps only “three to six months behind” in AI capabilities, a much smaller gap than previously believed.Sacks says Chinese companies moving fast in AI chip-makingDespite current “supply-constrained” conditions for chip production in China, Sacks predicts this will change quickly. While he estimates China might be one and a half to two years behind the US in chip design, companies like Huawei are “moving fast” to catch up.“Even before they fully caught up, I think you will see them exporting their chips for the global market,” Sacks cautioned. He warned that if the US becomes “overly restrictive in terms of US sales to the world,” it risks a future where “Huawei is everywhere.”Sacks’ concerns echo sentiments from other prominent tech leaders. At the Computex Taipei tech conference in May, Nvidia CEO Jensen Huang stated that US chip export rules were a “failure” because they spurred Chinese tech development. Huang noted that Nvidia’s market share in China has plummeted from 95% four years ago to 50%, attributing this decline directly to the export controls.