Donald Trump’s willingness to offer concessions to Russia risks forcing Ukraine into an unreasonable peace. It would prove that European borders can still be redrawn by force, with all that means for security on the Continent.

But another concession by the US president to an autocratic power could have just as profound an impact on geopolitics and the course of the 21st century.

On Monday, Trump overturned a policy he had pioneered in his first term and announced that Nvidia would be allowed to sell its H200 chip to China. This is not the tech giant’s most advanced chip — the Blackwell is still subject to an export ban — but it is six times more powerful than the best chip that could previously be exported to Beijing. It is also better than any chip a Chinese company is expected to produce in the next two years.

The significance of this decision should not be underestimated. It substantially increases the chance of China catching up with the West in the AI race, and then swiftly overtaking it. As Dario Amodei, the CEO of Anthropic—where I am a senior adviser—has argued, whether the West or China wins the AI race is a matter of profound geopolitical, as well as economic, importance. The US’s principal advantage is its superior hardware — these chips — and Trump has just narrowed that gap. DeepSeek, China’s leading AI company, has been clear that the biggest thing holding it back is a lack of Nvidia chips.

Export controls are not perfect, but they are the only real tool the West has to impede China’s AI development. They were working, too. Since their introduction, the US’s share of global computing power has increased by close to 50 per cent, while China’s has pretty much halved. This matters because compute power is perhaps the single most important, and limiting, factor in developing advanced AI.

Why should we care? Because this decision makes it more likely that the world ends up running on Chinese technology — with all that means for security, privacy and our values.

If you doubt that, just ask DeepSeek what happened at Tiananmen Square. It will refuse to answer. If you ask it what is happening in Xinjiang, where millions of Uighur muslims are being persecuted, it will tell you that “Xinjiang is a beautiful region of China where people of all ethnic groups live in harmony”.

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When I worked in finance, I took a relaxed view of China’s rise. It was surely good that one of the world’s most populous countries was becoming richer and part of the global economy. But my time in government changed my views.

Beijing’s doctrine of civil-military fusion means it is naive to distinguish between Chinese companies and the Chinese state, and to imagine that chips sent to companies would not end up in military applications.

It should be impossible to ignore what the head of MI5, Sir Ken McCallum, calls the “epic scale” of Chinese espionage in the UK. It is also clear that China’s strategy is to make advanced economies dependent on it, as it has with rare earths, and then use that as leverage, while ensuring that the Chinese themselves are totally self-sufficient.

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So, why has Trump handed China such an opportunity to catch up in the AI race? The official logic is that selling Beijing these Nvidia chips will get China hooked on US technology and stymie its domestic chip industry. But this won’t happen. The Chinese are acutely aware of the danger of relying on US technology.

Back in 2016, President Xi Jinping warned that being dependent on foreign components was akin to “building a house on somebody else’s foundation” and would leave China “vulnerable to a single blow”. Instead, the country will use these chips to try to bridge the gap while continuing to develop its own domestic suppliers.

The unstated reason for Trump’s reversal is that he needs a trade deal. He barrelled into a trade war with China, hiking tariffs well over 100 per cent, but didn’t know what to do when Beijing retaliated with its own export controls on rare earths, which threatened to paralyse US industries, and stopped buying soybeans from US farmers, hitting a key Trump constituency. On Monday, he announced a $12 billion (£9 billion) agricultural bailout.

When Trump and Xi met in South Korea this autumn, they agreed a truce in this trade war. But it will last only 12 months, and the last thing that Trump needs just before the midterm elections is a resumption of hostilities. The White House is acutely conscious that if it loses control of either chamber, the last two years of Trump’s presidency would be one long congressional investigation.

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So, Trump is keen for a deal— and export restrictions are being loosened to try to make this happen.

But perhaps most worrying for US allies — already reeling from a new US national security strategy that spends more time criticising them than China — is the prospect that Trump might be happy to carve up the world with Xi. He repeatedly, and warmly, referred to his meeting with Xi as a G2, implying that China and the US were the two superpowers who would run the world together.

By contrast, he nearly always leaves G7 meetings early.

Ironically, Trump’s initial instinct that Beijing was attempting to gain global dominance over manufacturing, and then exploit that leverage, was right. But the only way to address this was in conjunction with allies.

Yet instead of doing that, he sprayed tariffs around with little regard to who was friend or foe. As one Asian leader observed to me, on “liberation day, you couldn’t tell who were the US’s allies and who were its enemies”.

Having blundered into this trade war without preparation or allies, Trump is now giving away the shop as he chases a deal. The consequence could be enabling China to establish technological dominance in the same way that the West allowed it into the World Trade Organisation and then failed to enforce the rules, allowing China to take over global manufacturing.

A world where Beijing dominates both tech and manufacturing would be a worryingly inhospitable place for an open, trading democracy such as Britain.

The Sunday Times supports the Richmond Project (richmondproject.org) and the work it undertakes. Rishi Sunak has donated the fee for this column to it