Sadly, they aren’t that dumb. In Amodei’s essay, he writes:

Do not sell powerful AI chips or semiconductor manufacturing equipment to China, and crack down on chip smuggling operations and remote access to data centers outside China. Chips will be the main determinant of China’s AI strength.

Crack down on unauthorized by companies in authoritarian countries. Distillation of frontier models allows lagging companies to narrow the gap using a fraction of the cost it would take to develop their own AI independently.

Of course, this is a naked attempt to defend what remains of US technological hegemony, but there is still much the west can do to hurt China’s progress. For example, the recent DUV machines China developed require western components such as mirrors from Zeiss.

Being able to produce HBM3E so soon is very impressive. I believe it is only a step below SOTA, and is still highly effective in most applications.