What the hell is going on with H200 chip sales to China? A bizarre confluence of internal fights within the U.S. and Chinese governments has led to an extremely confusing situation—whereby China may graciously “agree” to import the Nvidia chips its AI labs desperately need, while also framing this as some sort of “concession” the United States should be thankful for. Here’s what’s actually going on: Chinese AI labs desperately need American compute, which is why they’ve been renting or outright smuggling huge numbers of Nvidia-designed chips from third countries. A lack of computational power continues to materially constrain Chinese AI labs’ ability to train frontier models and serve them to global publics. But not every part of the Chinese Communist Party cares equally about the plight of the country’s AI labs. In fact, different segments of the CCP are optimizing for different security and development objectives: While economy-promoting organs like the Ministry of Commerce (MOFCOM) and the National Development and Reform Commission (NDRC) generally want labs like DeepSeek and Alibaba to succeed in building and selling more capable AI services, cadres in the Cyberspace Affairs Commission (CAC) and across the Chinese security services are deeply wary of importing U.S.-designed hardware, fearing U.S. chips might contain back-doors or location-tracking features that could jeopardize China’s national security. Still some other offices—and, I believe, Xi Jinping personally—worry primarily about accelerating China’s indigenization of every part of the semiconductor supply chain—and would rather see Chinese AI labs eat the bitter medicine (吃苦) of temporary chip scarcity, so long as it helps to create a captive market for Chinese chipmakers in the medium-term. The U.S. government, for its part, has had its own disagreements about the wisdom of export control. While it would seem truly idiotic to sell Chinese AI labs the single resource they need to build AI systems that threaten the United States or compete with U.S. companies like @OpenAI, @Anthropic, and @Google in international markets, some parts of the Trump administration are—like parts of the CCP—optimizing for a different objective: A prevailing faction within the Trump administration believes it can disrupt Huawei’s position within the Chinese chip market by keeping China “dependent” on American hardware. Under this worldview, successfully persuading the Chinese government to approve the import of Nvidia’s H200s would be a “win” for American industry. This has led to a bizarre situation where different sets of officials across both governments simultaneously view the sale of H200s to China as a “concession” to be fought for and/or guarded against. USTR Greer’s comment that the import of H200s would be China’s own “sovereign decision” suggests to me that the United States probably asked China to approve their import, CCP security services refused, and the United States opted not to press the issue further. At the end of the day, China’s AI labs remain compute-constrained and will continue desperately trying to gain access to American chips, regardless of whether they may be imported legally—and this will be broadly tolerated by the CCP. Though it probably did not mean to, China has managed to accidentally achieve the best of both worlds: a captive hardware market protected from competitive U.S. exports, and a software industry quietly empowered to rent or smuggle whatever resources it needs to chase the American frontier.

PREDICTION: Anthropic will surpass Alphabet in revenue by mid-2028. This is not a bull case or an acceleration scenario — it is a continuation of the curve already in evidence. Anthropic’s ARR went from $1B (Jan 2025) to $9B (Dec 2025) to $30B (Apr 2026) — a 3.3x step in a single four-month window, and the curve has been steepening, not flattening. My projection actually assumes deceleration from here: $100B by end of 2026, $340B in 2027, $850B in 2028, $1.4T in 2029, $2T by 2030. Crossover with Alphabet happens at ~$575B in mid-2028, not because Anthropic accelerates beyond today’s pace, but because Alphabet — locked at ~15% YoY in a mature ads-and-cloud business — cannot match enterprise AI’s adoption physics. As @rodriscoll intelligently observed recently, Gemini tokens served grew by only 60% in the last quarter … while Anthropic grew by 10X. Three drivers make the continuation structural, not speculative: customers spending >$1M/year with Anthropic doubled from 500 to 1,000 in under two months post-Series G (these are multi-year expanding contracts with near-zero churn — switching a deployed agent stack mid-flight is operationally untenable); Claude Code is the wedge, not the product, dragging the rest of the platform — agents, MCP, healthcare, biotech — into every Fortune 2000 deployment as an attach point; and compute supply is finally non-binding with the 3.5GW Google + Broadcom deal (2027+), this weeks SpaceX partnership, and 1GW of standing Google capacity for 2026. For most of 2024–2025 the bottleneck was supply, not demand. That constraint is releasing exactly when the demand curve is steepest. The standard objection — “no company has ever sustained this at scale” — applies a software-era frame to a labor-era business. AWS, Azure, and Meta decelerated at $50–100B because they sold tools to the economy. Anthropic is selling cognitive capacity into the economy. The TAM isn’t enterprise software ($800B). It’s labor ($50T+). When the denominator is two orders of magnitude larger, “deceleration at $100B ARR” stops being a law and starts being an assumption. The crossover isn’t a maybe. It’s a function of timing. Mid-2028 is when I think Anthropic surpasses Google.