August 11, 2025 - The Biden administration has reportedly offered NVIDIA and AMD a controversial “pay-to-play” arrangement that would relax U.S. export controls on advanced AI chips for China in exchange for corporate contributions to domestic semiconductor manufacturing. This development carries immense geopolitical weight as it tests America’s resolve in curbing China’s military AI ambitions while balancing corporate interests. Evidence confirms Chinese firms and the People’s Liberation Army remain critically dependent on American chips for developing “intelligentised warfare” systems, from autonomous drones to battlefield command networks.
According to Foundation for Defense of Democracies analysis, the proposal would permit resumed sales to Chinese AI developers but tie market access to concessions like funding U.S. chip fabrication plants. Jack Burnham, a research analyst at FDD, issued a stark warning: “The decision to allow NVIDIA and AMD to resume sales within the Chinese market will irrevocably assist China’s burgeoning AI industry while harming U.S. national security,” FDD analysis cautioned. The PLA’s continued procurement of U.S. chips for military applications intensifies concerns about dual-use technology proliferation.
This policy dilemma epitomises the growing tension between economic interests and AI governance in the global technology race. As China accelerates its AI capabilities through commercial infrastructure, the U.S. faces difficult choices about export control enforcement – particularly regarding software tools for chip design that could further erode America’s technological edge. The situation underscores how responsible AI frameworks must evolve to address military-civil fusion strategies employed by strategic competitors.
Our view: Trading export control waivers for corporate donations sets a dangerous precedent that commodifies national security. Rather than bilateral deals, Washington should prioritise multilateral coordination with allies to enforce consistent restrictions – recognising that in the AI arms race, short-term corporate gains could forfeit long-term strategic advantages that no payment can restore.
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