A lot seemed to be on the table for A.I. The talks, which concluded on Friday, took place against the backdrop of a global A.I. race that has been dominated by the two superpowers. Democratic lawmakers have raised the alarm on allowing Chinese firms to buy A.I. chips from the U.S., and the White House has in recent days accused China of mass A.I. theft. At the same time, Nvidia CEO Jensen Huang, who joined Trump on the trip at the last minute, was hoping to secure a deal to sell China Nvidia’s H200 chip, which has not been delivered to China despite U.S. approval for its sale. Chinese firms have dragged their feet in purchasing the chips after the Chinese government encouraged them to turn to domestic chipmakers like Huawei.
Several observers had also hoped that the talks would produce a broader framework on A.I. governance or U.S.-China technological cooperation.
Still, A.I. likely remained on the leaders’ minds, including as an undercurrent in broader geopolitical talks, which centered on Taiwan and Iran.
“He said he’s not going to give military equipment, that’s a big statement,” Trump said “But at the same time, he said you know they buy a lot of their oil there and they’d like to keep doing that.”
Trump also reportedly pressed Xi to place more pressure on Iran to reopen the Strait of Hormuz, a global shipping corridor that Iran effectively closed after the U.S.-Israel attacks on Feb. 28. The U.S. President told reporters that Xi would “like to see Hormuz Strait opened. I said, ‘Well, we didn’t stop it, they did, and then we stopped them.’”
Many of the materials needed for producing chips are byproducts of crude oil and natural gas processing, such as helium, bromine, and sulfur. After Iran retaliated against the U.S. and Israel by attacking Gulf states, several energy facilities were forced to halt production. The pause in operations at Qatar’s Raas Laffan and Mesaieed LNG facilities in early March affected nearly a third of global helium supply.
Chipmaking is also an energy-intensive process, and the sudden disruption to global energy supplies meant rising costs for the industry. That’s especially true for Taiwan’s TSMC, the world’s biggest producer of chips and the supplier to Nvidia, AMD, and Apple. Taiwan imports more than 90% of its energy needs, with 40% of its liquefied natural gas supplies coming from the Middle East last year, according to Bloomberg.
“The Strait of Hormuz matters to the entire world, and China has also stated that it hopes the strait will reopen soon,” says Liu Jia, a research fellow at the Middle East Institute at the National University of Singapore.
China also has a longstanding friendship with Iran, Liu says, and it has shown unwillingness to become directly involved in the war.
That can be seen from China’s readout of the Trump-Xi summit, Liu says. The Chinese Foreign Ministry emphasized political issues, including stabilizing U.S.-China relations and underscoring the Taiwan issue. It did not mention Iran or the Strait of Hormuz.
Taiwan issue goes beyond security
Xi warned Trump that overstepping on the issue of Taiwan could lead to “clashes and even conflicts.” Beijing has sought for the U.S. to draw down its support for the self-governing island, which China claims sovereignty over.
But analysts say Taiwan’s strategic importance in semiconductor manufacturing could act as a deterrent while also raising the stakes for both the U.S. and China.
“The fact that Taiwan is valuable also means there is less incentive to destroy it,” Chong adds.
Still, Rubio added that the rapid growth of the Chinese military demonstrates the country’s “ambitions to ultimately be able to project power globally the way the U.S. does now.”
U.S.-China competition heats up
While Trump and Xi were all smiles this week, the Trump Administration has recently levied accusations of A.I. theft and spying by Chinese firms. An internal White House memo said the Administration had new information suggesting that “foreign entities, principally based in China,” were exploiting U.S. firms by “distilling” or copying U.S.-developed A.I. technologies. A spokesperson for China’s U.S. embassy said China’s A.I. development was “the result of its own dedication and effort as well as international cooperation.”
On China’s side, Beijing reportedly moved last month to block Meta from acquiring Manus, a Singapore-based, Chinese-founded A.I. startup, even though Xi told the U.S. delegation of business executives at the summit that China was open for business.
Ultimately, the Trump-Xi talks were more about stabilizing U.S.-China relations than about forging something new, says Stephen Olson, a senior visiting fellow at the Singapore-based ISEAS-Yusof Ishak Institute and a former U.S. trade negotiator.
But the two countries are still “navigating an awkward transition phase as they both pursue strategic decoupling while trying to maintain mutually beneficial trade in non-sensitive sectors,” Olson adds. In that environment, any discussion of A.I. was likely to be more about self-preservation.
“China is doubling down on its domestic chip capabilities in order to break the U.S. chokepoint on AI related technologies, while the U.S. is scrambling to offset China’s chokepoint on critical minerals,” Olson says. “Neither side is comfortable being dependent on the other for anything that matters.”
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