So, let's take as a hypothesis that there is no bailout for chips, especially on a large enough scale to really matter. (EDIT: Note for hostile future readers: please learn what a hypothetical is and whether a December 2022 chip bailout would happen before or after a November 2022 comment was written.) Why this neglect?

Let's take further as a hypothesis that the reason for the neglect is not simply Xi deciding to invade Taiwan & therefore writing off the domestic chip industry, as this is an extreme course of action and one that most people claim to find even more improbable than, say, the idea that a Xi-like dictator like Putin would do something as absurdly self-destructive as actually invade Ukraine this year instead of just saber-rattling his massed troops along the border to intimidate them into concessions.

The remaining conclusion would seem to be that Xi has chosen to take the L: he is neither going to massively bail out the domestic chip industry nor take out their competitor, and is just going to let it take its lumps and whatever happens happens, China will just have to get along with whatever chips it can make and the gimped chips TSMC will deign to manufacture for it. (At least, I can't think of any additional meaningful choice outside the trilemma of 'bailout, accept defeat, or invasion'.) OK, but why? I struggled to see how that could make sense. Let's go even further into the hinterlands of geopolitical & psychological amateur speculation and ask what Xi is thinking...

From the scaling-pilled perspective, or even just centrist AI perspective, this is an insane position: it is taking a L on one of, if not the most, important future technological capabilities, which in the long run may win or lose wars. If China wants to dominate Asia, much less surpass the obsolete American empire, or create AGI, or lead in aerospace, or create '5G' or whatever, it's hard to see how it's going to do that while paying more for chips which are half a decade or worse out of date.

But Xi is not scaling-pilled (after all, few people are, even in the most cutting-edge AI R&D labs). So maybe we should ask: is he centrist on AI? Er... Oh - does he care about AI at all? What evidence is there that he does? There doesn't seem to be much. Going further: what evidence is there that he even regards chips in toto as being all that important? From Xi's perspective, what has 'chipolitics' looked like thus far?

1. Huawei: the US embargo of chips to the national champion Huawei, and Huawei's near-death experience, is where chiplomacy started getting ugly. This involved ordinary bulk consumer chips for smartphones and equipment like 5G base stations. It did not involve high-end GPUs or future chips at all. Huawei simply needed millions of chips to sell for export of hundreds of millions of smartphones to the entire world like Africa, and couldn't get them. But, they survived, and they may now struggle to get the chips that they would like and rely on alternate suppliers of lower-end chips (any dreams of challenging Apple on its high-end home turf are long gone), but Huawei as a whole does still sell a ton.

2. Russia: another embargo post-Ukraine, cutting off supply of all sorts of chips, almost all antiquated chips designed decades ago for specialized equipment: again, nothing like a H100 GPU or in any way connected to stuff like '4nm nodes'. Even for drones, you can usually get by with pretty old parts or improvising; it's more important to have lots of cheap drones than geewhiz. Here too the problem is Russia needs (1) millions upon millions of specific chips to feed into existing manufacturing lines to feed the meatgrinder of its 'eastern front' (if you will), (2) needs them very soon, preferably a few months ago, as the Ukrainian assault will not stop and they have burned through much of their reserves, and (3) cannot get millions of those specific chips whether a few months ago or a few months from now.

3. The current US/TSMC chip ban: little of the damage reported thus far has much to do with failing to develop new nodes or not getting access to A100/H100s. Nvidia canceled a lot of orders of them, but I haven't seen anything report about big corporations going out of business etc, and Chinese AI research seems more or less to be carrying on as before with its current stock. The damage is coming from losing big bulk orders like dumping memory to Apple and from catchup designs not being fabbed and suppliers of existing stuff being knocked out. As time passes, these 'seen' damages will be replaced by much larger 'unseen' damages cascading out.

   Even from an AI research perspective, the damage will be subtle. You can keep on using existing clusters indefinitely; they will just put a ceiling on what you can do with reasonably trained or sized models before the communications delays kill performance, and they will hamstring your budget by costing several times more over the next few years, increasingly so. You can assemble clusters 1 GPU at a time, buying them on the gray market, eventually, years later, reaching a respectable size. You can keep doing AI research which looks like almost all AI research in 2021*, and which will look respectable, and use hand-me-down public models from the West, and do lots of small-scale optimization work (which will be, or has already been, Bitter-Lessoned but that is cold comfort to those who can't afford the bigger irons). You can keep pumping out CS conference proceedings with low-grade small-budget research that would barely make a decent blog post. (I read a lot of IEEE papers relating to anime research, typically GANs, typically terrible, typically East Asian, and typically a few GPUs max.)

   A chip ban doesn't doom Chinese DL (or Chinese AI in general) research to becoming a cargo cult field, but it does render it increasingly prone to irrelevancy, brain drain of everyone who wants to work on the future of DL and not the past, involution / l'art pour l'art, and organizational/intellectual sunk costs and Galapagos syndrome. Considering that Chinese R&D and science are not particularly healthy or fraud-free in the best of times... But how would an outsider, such as a political leader, notice that the cargo is no longer landing?

* I realize people like to portray AI scaling as some overwhelmingly dominant paradigm. This isn't true. You can go look at a page of NIPS abstracts and see that that is not the case, or look at the NLP survey the other month and note how few people will endorse scaling propositions on a mere anonymous survey, or note how few Arxiv submissions a day merit a /r/MLscaling submission despite spreading a broad net. AI scaling is far from the majority of AI research; scaling research is merely the majority of research that will matter.

We could add a few other points:

• the senior CCP leadership is semi-famous for being 'technical' (typically engineering degrees like hydrology or mechanics or aerospace) but little to do with anything computer. Xi Jinping has a degree in chemical engineering from a low-rigor period 43 years ago, and then a degree in BS, both of which might just be mostly fake (pretty common). Propaganda aside, his major intellectual interest is literature, particularly Goethe. He has not overseen any major technical projects, or made any major intellectual contributions I'm aware of; indeed, reading about him, he's always struck me as being mediocre in every aspect besides Comunist Party infighting, bureaucracy, and consolidating power.

• Techlash: Xi's reign has been marked by constant hostility towards and suppression of 'big tech' ie. the very people who would benefit and use cutting-edge chips the most and who would be explaining to Party officials the long-term prospects. There are innumerable angles here (for example, yesterday, it sounds like the CCP may deign to graciously allow a few video game developers to, after a year or two of it simply not being allowed, 'release video games'), and suppression of individuals like Jack Ma come off as very personal. The rhetoric of the regime emphasizes redistribution, only thinly veiled as 'voluntary donations', and the Party defending the public and the 'China Dream' from rapacious corporations.

• Conversely, his reign has been marked by an emphasis on legible atom-heavy scientific projects, and a general downplaying of everything related to bits or information, unless it has a national security angle (leading to 'Dutch disease' where an ultra-niche like facial recognition gets lavishly funded, crowding out more generalizable research). For all the talk of 'data is the new oil' or 'China as a data superpower' or the advantages from 'Chinese lack of privacy', China still drastically underperforms in making good use of it. There are large GPU clusters; but all the really important DL research still comes from the West - I've noted that it seems like you could trade all of Chinese DL research impact for 1 or 2 Western labs like DeepMind's impact and still have enough change left over for coffee. There are large numbers of genetic datasets fragmented over many Chinese groups; but global genetics research remains driven by UK Biobank from 2014 etc.

  • Attempts at scientific reform and quality control are on uneven ground. Fraud in Chinese science seems to still be endemic, and impact low; past efforts like paying per publication merely made the problem worse. In ML, when fraudulent rings of peer review are discovered, they often involve Chinese conferences or reviewers. Publication in prestigious foreign journals like Science or Nature (rather than Chinese journals) remains a major goal, as a matter of quality control, because domestic Chinese journals cannot be trusted.

• There seems to be considerable contempt for the USA and American capabilities in China among 'wolf warriors', taking cues from the top, and with considerable historical precendent for authoritarian countries to mistakenly gauge the USA as 'decadent' and 'weak'. This may have been trimmed a bit after Ukraine and seeing what things like HIMARSs can do, but it runs deep and inside the Chinese bubble, there is little correction. (When was the last time Xi Jinping was in the USA and saw more than political flunkies? Or any Chinese, for that matter, given their multi-year near-shutdown of international travel?) The thinness of the air at the heights Emperor Xi inhabits is prone to induce altitude sickness and hallucinations. (But at least, thanks to "Zero COVID", among his many problems, personally getting COVID is not one of them.) If the Americans are decadent because of their emphasis on software and compute, and China & Xi are superior because they aren't decadent...

• The many stimuli the CCP has used repeatedly over the past decade, and since the chip embargo was put in place, shows that they can and will and have had enough time to do so, yes, but the flip side is that the more you stimulate, the less ammunition you have left for the next stimulus, and the less credibility you have to the populace or markets. At some point your macroeconomics start looking bad. There may not be as much money left as one would assume.

So, in past chip incidents, the primary problem has been a complete absence of any chips, and not so much the advancement of the chips themselves. He has never seen anyone lose a war due to lack of AI or GPUs; he's only seen disasters caused by lacking perfectly ordinary chips that his domestic manufacturers probably could've made 10 years ago. And in learning lessons from past chip incidents, what Xi brings to the table is: zero technical competence or expertise in the relevant area, a hatred of software and everything to do with it, and long-standing prioritization of heavy-industry-like stuff (which is clearly visible to the naked eye and 'conventional' and 'prestigious' and applauded by old credentialed foreigners).

Further, mistakes in this regard may be hard to see. 'The seen and the unseen' is a dangerous trap because it is so much easier to see the seen than it is to see the unseen. If Xi makes a mistake on chips, a military mistake, then by the nature of things military, he may never realize it. If the engineers of, say, hypersonic missiles can't get enough high-end GPUs, their complaints will be ignored by the next layer of management and never punted all the way up to Beijing, and they will simply run their simulations at a lower resolution or take other shortcuts; and if the hypersonic missile in question turns out to be a lemon, inadequate to hit NATO units or US aircraft carriers, how will anyone ever find out short of a war over Taiwan---at which point it is far too late? Naturally, of course, given a supply of at least basic chips to work with, the establishment will assure him everything is fine, just like the Russian military assured Putin it was not a paper tiger or hopelessly undermined by corruption, and almost all the time they will be right.

That is, from Xi's perspective, all in all, maybe it looks fairly reasonable to neglect chips right now. They aren't that important, and don't seem in that much worse trouble than anything else, while bailing them out to the degree where they can potentially gain, or at least near, the cutting-edge would use up a ton of an increasingly skint government's money. Plus, as master of the currents of history piloting China to a glorious Chinese Century avenging the Century of Humiliations, he has much bigger fish to fry, like the house of cards which is real estate, and Zero COVID. There will be side effects, yes, but if gaming GPUs becoming expensive helps turn little Aiguo away from a career as a useless game programmer into a respectable hardworking fusion physicist, perhaps that's even a feature rather than a bug?

Well, I could be wrong about all this. But now I can see at least one perspective from which the chip embargo is a big deal but also Xi's rational response is to indeed just take it on the chin, and perhaps tone down the rhetoric and engage in a bit more biding one's time & hiding one's strength. (I doubt that the long-term aims have changed meaningfully just because Beijing is calibrating its rhetoric a little down from recent peaks of aggression, but in the short term, things will be superficially more peaceful.)

BGI Genomics, like the mothership in mainland China proper? I'm less familiar with the corporate structure and revenue and dependency on overseas supply chains than I would hope you are, but my understanding was that BGI didn't have much business overseas (having failed to compete with Illumina), and was reliant on domestic demand mostly from agriculture & medicine, and didn't depend on Illumina having spent the past decade+ trying and mostly failing to surpass Illumina (but at least it does have its own decent sequencers). So, having failed in those ways and forced into autarky, it doesn't seem like sanctions/embargos can hurt BGI much more than it already has been? And macroeconomics-wise, sequencing seems like it would be reasonably robust a business because farmers won't stop needing genetics-related services nor will patients stop getting sick. And politics-wise, I see no particular Xi-techlash angle for him doing things like overnight outlawing the industry or censors just refusing to approve any video game release for a year. So overall, doesn't seem too bad.

Honestly, UAV seems like it'd be a worse place to go simply because that sounds to me like it'll be more disrupted by random chip problems and export issues due to being extremely military-linked dual-use tech. Drones are stuffed full of all sorts of random weird little chips (see: Russian problems getting UAVs and resorts like getting them from Iran), and how much domestic Chinese demand for UAVs could there possibly be to make up for exports?

The vast majority of the claims I have seen as to the probable eclipsing of the US by China either makes no argument in support of the claim or the included argument is very unimpressive.

The main argument for increased strength is that China manages to keep a high growth rate. Last year they managed to get back to 8 percent. Increased money also means increased foreign investments and thus more ways to project power.

And maybe Russia will continue its decline with the result that regardless of the wishes and the ambitions of its government, it becomes unable to contribute significantly to the AI danger (which of course its government does not perceive as particularly dangerous).

The whole rationality community in Sanct Petersburg left Russia. Between braindrain, embargos to import chips, and corrupt corporate governance I don't expect Russia to be able to do much in the field of AI.

I would expect more risk from a country like Argentina that currently leads in zero-day exploit generation than from Russia. 

trained on Chinese hardware

It used Huawei Ascend 910 AI Processors, which was fabbed by TSMC, which will no longer be allowed to make such chips for China.

Wow - if those stats are correct, the training of CodeGeeX used up to 1e24 nominal flops (2.56e14 flops/chip * 1536 chips * 2.6e6 seconds), which would put it a bit ahead of Chinchilla, although its seemingly lite on param count. But it is somewhat easier to tile a chip with fp16 units then it is to utilize them effectively, so the true useful flops may be lower.

Nonetheless, that's quite surprising, impressive, and perhaps concerning.

I’m open to the idea that this is good from an x-risk perspective but definitely not 100% sold on it. I agree with you that China knows this is directly aiming to cripple their advanced industry and related military capabilities. We’re entering an era of open hostilities and that’s not news to anyone on either side. I don’t think that necessarily means this is bad from an x-risk perspective.

A few claims relevant to analyzing x-risk in the context of US-China policy:

1. AGI alignment is more likely if AGI is developed by US groups rather than Chinese groups, because some influential people in the US take alignment seriously while almost nobody in China does.

2. Slowing Chinese AI progress is good because it makes the US more likely to be the first to AGI, or gives more time for the necessary alignment work to happen and spread to China.

3. US policy can actually slow Chinese AI development with export bans on compute.

I currently believe these three claims. CodeGeeX is pretty good evidence against 3, showing that Chinese compute and tooling is catching up to that of the US. But building high performance compute is a complicated supply chain with a lot of choke points, and it seems plausible that the US can slow Chinese progress by a few years. See e.g. this CSET article: https://cset.georgetown.edu/wp-content/uploads/Preserving-the-Chokepoints.pdf

IMO the strongest argument against this policy from an x-risk perspective is that this reduces future influence over Chinese AI development by using a one-time slowdown right now. If the most critical time for slowing AI progress is in the future, this bullet will no longer be in the chamber. But I also haven’t spent much time thinking about this and would welcome better arguments.