The US-China decoupling in the tech sector is hurting both countries
Subscribe to enjoy similar stories. A messy tech breakup between the US and China is forcing a rethink about what the industry might look like for consumers in a decoupled world. Last week, the Pentagon blacklisted internet and gaming giant Tencent Holdings Ltd for alleged links to China’s People’s Liberation Army.
TikTok faces a ban on national security concerns that it’s fighting at the US Supreme Court. Despite tensions, more than 1,200 Chinese firms at the Consumer Electronics Show in Las Vegas were vying to enter the US market, the largest foreign representation and more than a quarter of the about 4,500 exhibitors. Nvidia CEO Jensen Huang headlined the show’s opening night with an impassioned speech and a range of product updates.
Last month, China’s market regulators opened a probe into the US chipmaker. I wondered which companies might get caught in the middle next as Huang laid out his vision for robots and autonomous vehicles—or how these would be built without supply chains and materials from China. Washington’s latest move to include Shenzhen-based Tencent on its blacklist of Chinese military companies doesn’t carry any sanctions or penalties.
But it still sent shares falling and dealt a reputational blow to the world’s largest game publisher that has invested in US startups from Reddit to Epic Games. The decision will draw further ire and it would be a surprise if Beijing doesn’t retaliate against more consumer-facing American tech firms. Another unintended consequence is that China could end up rolling out more support for its own companies that it feels are being unjustly attacked, doubling down on closing the lead America is trying to maintain.
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