> Long term consequences: China outperforms Nvidia, by producing cheaper, faster chips at a large scale, by getting inspired by the IP but using their own production lines.

Unlike your typical free market fanboy, the Chinese leadership isn't stupid. They were always planning to do that, sanctions or no.

Realistically, all sanctions can do is mess with their timelines for some temporary strategic advantage, slowing some things down and forcing reallocation of investment away from other areas into the sanctioned areas.

The US refraining from sanctions is likely the stupid move, because that lever of control will expire at some point. To not use it is to squander it.

But if there's one thing the US government and its business elite is good at, it's squandering things.