In the 1960s, the United States found itself in the middle of a technological race to the moon against the Soviet Union.[1] The Soviet Union punched first with the successful launch of Sputnik 1, the first Earth-orbiting satellite.[2] The Soviet Union was dominating the United States until the death of Sergei Korolev, the Soviet Union’s lead rocket engineer.[3] After Korolev’s death, it left a gap in the Soviet Union’s space program, ultimately leading to the United States winning the race with the first men to ever walk on the moon in 1969.[4] This marked the end of the Space Race, which sparked great technological innovation in space exploration such as surrounding the Earth in satellites for weather, GPS, and communication systems.[5]  Although the Space Race ended in 1969, the United States has chosen a new moon to explore, Artificial Intelligence (“AI”), with a new opponent, China.  Just like the race to the moon, the race for AI dominance has fractured into many different races. Thus, this article will focus on the race for chip supply and its materials between the United States and China and both countries’ tariff response to gain an advantage.

First, to understand the race for AI chip dominance, one must first understand the importance of AI chips. In its simplistic form, AI Chips function as the brain of AI by delivering the computational power to the transistors, which act as small arms that represent the binary code that basically run AI models.[6] In other words, the better the AI chip, the better the AI system. These AI chips are essential for “cost-effectively implementing AI at scale” and are “thousands of times faster and more efficient than CPUs”[7] Thus, the country who has the better AI chip has the better AI system. And as of now, the United States dominates the AI chip market due to companies such as NVIDIA and AMD.[8] Furthermore, the United States’s close friend, Taiwan, produces nearly 90% of advanced AI chips.[9] Thus, it seems clear that the United States dominates the AI chip market, however, you need the materials to develop AI chips.

To develop AI chips, raw material is needed such as Silicon, Gallium, Copper, Zinc and Germanium.[10] These materials are mined worldwide, but those materials need to be refined into semiconductor-grade material. However, there is one country that dominates the processing system: China.[11] China controls processing over materials Gallium, Germanium, which are essential for semi-conductors, sensors, and advanced AI chips.[12] China recognized this importance and decided to act. The realization of refinery dominance coupled with the United States’s lead in the AI chip market caused China to make a strategic move by restricting exports in an attempt to gain an advantage over the United States.[13]

In December of 2024, China banned exports of materials critical for AI chip production such as Gallium and Germanium, declining exports by around 97% to the United States[14] This caused the United States to go elsewhere to get these essential materials, but cost them a 150% price increase for Gallium and 26% for Germanium, “leading to a $3.4 billion decrease” to the United States’s GDP.[15] In response, as President Trump assumed office, the United States imposed a 10% tariff on all Chinses goods effective February 4, 2025, and then escalated that percentage to 20% in March 2025.[16] These tariffs escalated tensions between the United States and China, especially in the AI market. However, both countries recognize each country holds important pieces to foster continued innovation and production of AI chips. Thus, in October of 2025, China and the United States stick a deal to ease tariffs which included critical minerals such as Germanium and Gallium.[17]

Although this deal eased tensions, China continued to pass laws to foster their own AI Chips by favoring domestic firms such as Huawei and SMIC. These laws show China’s fear of rising tariff tensions and their recognition of their gap in the AI chip market by their continued push for AI chip self-sufficiency. However, this push caught the attention of United States’s lawmakers. Rep. Michael Baumgartner, Republican from Washington, introduced the bipartisan “Multilateral Alignment of Technology Controls on Hardware (MATCH) Act” in the House of Representatives.[18] This act would tightly control the tools for AI chips—the tools needed for China to become self-sufficient.[19] Another piece moved in this chess match.

Both countries continue to make economic moves to restrict the other country’s ability to foster AI growth in this race for AI chip dominance. This competition, despite the tariffs, has skyrocketed AI chip innovation in both countries. Both the United States and China have seen heavy private investments in their AI chip infrastructure, fostering new innovation and major breakthroughs.[20] Yet, this competition has created two separate ecosystems causing reinvention and fragmentation of standards and hardware—something the United States has seen before in the race to the moon in the 1960s.[21]

As China and the United States continue to race to AI chip dominance, it has sparked increased tensions, fractured ecosystems, but also major innovation, breakthroughs, and new partnerships in the AI chip market. As of right now, AI seems to be the future, and both countries want to dominate that future. Thus, the importance of AI chips is elevated to an all-time high and the United States must continue to win this race. As President John F. Kennedy stated in his speech at Rice University regarding the race to the moon “The exploration…will go ahead, whether we join in it or not, and it is one of the great adventures of all time, and no nation which expects to be the leader of other nations can expect to stay behind in the race.”[22]

[1]Space race timeline, Royal Museums Greenwich,  https://www.rmg.co.uk/stories/space-astronomy/space-race-timeline (last visited Apr. 3, 2026).

[2] Id.

[3] Ethan Siegel, This Is Why The Soviet Union Lost ‘The Space Race’ To The USA https://www.forbes.com/sites/startswithabang/2019/07/11/this-is-why-the-soviet-union-lost-the-space-race-to-the-usa/.

[4] Space race timeline, supra note 1.

[5] Id.

[6] See Saif M. Khan & Alexander Mann, AI Chips: Why They Are and Why They Matter (Center for Security and Emerging Technology, Apr. 2020).

[7] Id.

[8] Ellen Zentner, Who Is Leading the Global AI Race?, Morgan Stanley (Jan. 2026), https://www.morganstanley.com/insights/articles/global-ai-race-us-vs-china-investment-opportunities#:~:text=The%20U.S.%20leads%20the%20world,Chinese%20models%20gain%20global%20traction.

[9] Id.

[10] Saif M. Khan & Alexander Mann, supra note 6.

[11] Erich Grunewald, How AI Chips Are Made, Institute for AI Policy and Strategy (Sep. 4, 2025), https://www.iaps.ai/research/how-ai-chips-are-made; Hannah Ritchie & Pablo Rosado, Which countries have the critical minerals needed for the energy transition?, Our World in Data (Mar. 2026), https://ourworldindata.org/countries-critical-minerals-needed-energy-transition#:~:text=the%20chart%20below.-,Reserves,the%20chart%20and%20map%20below.

[12] Heidi E. Crebo-Rediker & Mahnaz Khan, Leapfrogging China’s Critical Minerals Dominance: How Innovation Can Secure U.S. Supply Chains (Council on Foreign Relations, Feb. 2026).

[13] Sarah Godek, China’s Germanium and Gallium Export Restrictions: Consequences for the United States, Stimson (Mar. 19, 2025), https://www.stimson.org/2025/chinas-germanium-and-gallium-export-restrictions-consequences-for-the-united-states/.

[14] Id.

[15] Id.

[16]William F. Burkhart & Keigh E. Hammond, Cong. Rsch. Serv., R48549, Presidential 2025 Tariff Actions: Timeline and Status (2026).

[17] Dylan Butts, China suspends some critical mineral export curbs to the U.S. as trade truce takes hold, CNBC (Nov. 9, 2025), https://www.cnbc.com/2025/11/10/china-suspends-some-critical-mineral-export-curbs-to-the-us-as-trade-truce-takes-hold.html.

[18]Jared Perlo, Bill to ban sale of key AI chipmaking equipment to China introduced in House, NBC News (Apr. 2, 2026), https://www.nbcnews.com/tech/tech-news/senate-bill-ban-sale-key-ai-chipmaking-machines-china-rcna265186.

[19] Id.

[20] See Junhua Zhu, Elina Sinkkonen & Mikael Mattlin, Strategic technology competition revisited: A National Innovation System rationale for China’s artificial intelligence standardization strategy, 50 Telecommunications Policy 2–5 (2026).

[21] Id.

[22] John F. Kennedy, We Choose to go to the Moon, Rice University, https://www.rice.edu/jfk-speech (last visited Apr. 3, 2026).