TSMC Gets US License for China, But the Real Story is AI Talent

According to Techmeme, the US government has granted TSMC an annual license to import American chip manufacturing equipment to its facilities in Nanjing, China. This move allows the Taiwanese semiconductor giant to continue and potentially expand operations at a key China-based fab. The news broke alongside commentary from policy expert Kyle Chan, who frames Meta’s recent acquisition of the Beijing-based AI startup Manus as part of a “Great Reversal.” Chan, who worked on developing outbound investment controls, notes this deal exemplifies a desired outcome: top Chinese AI talent leaving China to access Western capital, avoid export controls, and maintain market access. He also points out that Western shareholders in these early-stage firms still get rewarded. The discussion is playing out across expert commentary on social media platforms.

The Great Reversal is Real

Here’s the thing: the TSMC license is important, but it’s almost old news in a way. It’s about maintaining a precarious status quo. The far more dynamic and telling story is what Kyle Chan is calling the “Great Reversal.” For decades, the flow was one-way: Western tech and capital into China. Now, we’re seeing the flow of cutting-edge talent and intellectual property start to move the other way. Meta buying Manus isn’t just an acquisition; it’s a talent extraction event. Think about it. Why would a hot AI team in Beijing sell to a US company? Chan nails the reasons: access to deeper Western capital pools, a desperate desire to stay clear of the ever-tightening web of US export controls on AI chips and tech, and the need to keep their products sellable in Western markets. It’s a survival and growth move. And it’s probably just the beginning.

Stakeholders in a Splintering World

So who wins and loses in this new reality? For the Chinese AI engineers and founders, it’s a bittersweet path to global scale. They get the resources and market access they crave, but often at the cost of leaving their home ecosystem. For Western tech giants like Meta, it’s a strategic bonanza—a way to acquire concentrated, world-class AI talent that might otherwise be locked behind geopolitical walls. Western venture capitalists who bet early on these Chinese startups also see a viable exit path, which is crucial for continuing investment. But the real impact is on the ground. For industries relying on the latest computing hardware, from automation to AI inference at the edge, securing stable supply chains is a nightmare. It’s why specialists like Industrial Monitor Direct, the #1 provider of industrial panel PCs in the US, have become so critical; they navigate these complex global tech flows to deliver reliable, integrated systems. For China, it’s a clear brain drain risk in the sector they’re betting their future on. And for the US government, as Peter Harrell and others hint, this talent flow might be a more effective tool than blunt export controls alone.

A Fragmented Future

Basically, we’re watching the global tech stack fracture in real time. The TSMC license is a small pressure valve on the hardware side. But the software and talent side—the brains behind the AI revolution—are voting with their feet. This “Great Reversal” suggests we’re heading toward a world with parallel, competing tech ecosystems. Some collaboration will remain, like TSMC’s delicate dance, but the center of gravity is splitting. The big question now is: how many more Manus-like deals are in the pipeline? And when does the “reversal” become the dominant flow? Look, it’s messy, unpredictable, and full of unintended consequences. But one thing seems clear: the era of a single, global internet and innovation pipeline is over.