Palantir Technologies Chief Technology Officer Shyam Sankar has warned that the United States is already in an “economic war” with China and must recognize its dependence on Beijing as a national weakness.
Writing in an opinion piece published by The Wall Street Journal, Sankar argued that the U.S. is dangerously reliant on China for manufacturing and supply chains, and that many business leaders still refuse to acknowledge this reality.
“The first step to ending our dependence on China is admitting we have a problem,” Sankar wrote. “We can continue as useful idiots, decrying ‘China hawks’ who point out that we’re funding our own demise. Or we can wake up to the reality that we’re already in an economic war in which every purchase and investment will help determine which system survives.”
Sankar’s remarks, which mirror growing concern among U.S. policymakers about China’s rise as a technological and economic powerhouse, come amid a widening rift within Silicon Valley over how to deal with Beijing. The Palantir executive took aim at the complacency of corporate America, accusing some executives of ignoring the long-term risks of dependence on China’s market and infrastructure.
While Sankar did not name anyone directly, his critique appeared to counter recent comments by Nvidia CEO Jensen Huang, who said that being labeled a “China hawk” should not be considered a mark of honor. Huang told attendees at a conference earlier this year that it “doesn’t have to be all us or them. It could be us and them.” He argued that technological collaboration between the world’s two largest economies should not be viewed through a zero-sum lens.
Huang, whose company once relied heavily on Chinese demand for its advanced graphics chips, has consistently warned that export controls could harm U.S. interests. He said last year that restrictions on high-end chip sales to China could backfire, noting that “if [the U.S.] loses access to that market, companies like Huawei will define global standards.” Nvidia’s market share in China — once estimated at 95% in the data center GPU segment — has since fallen to near zero following Washington’s tightening of semiconductor export rules.
Sankar’s view sharply contrasts with Huang’s stance. He argued that China’s long-term strategy is to use foreign companies only until it can develop domestic substitutes. Once that happens, he warned, Beijing would flood the global market with cheaper alternatives while simultaneously limiting access to its own market for Western firms.
“China is using foreign companies to support its goals until it can develop a credible home-grown challenger,” he wrote.
Despite his criticism of China’s practices, Sankar acknowledged that U.S. corporations have played a major role in enabling China’s rise.
“American companies have been an undeniable part of China’s growth,” he noted, citing the investments of firms like Apple, Tesla, Intel, General Motors, Procter & Gamble, and Coca-Cola. The combination of Western capital, technology, and expertise, he said, has helped China become the world’s manufacturing hub.
Analysts have long argued that multinational companies remain in China not only because of low labor costs but also because it is the only nation that has built a complete, reliable supply chain for high-tech manufacturing. That advantage, Sankar warned, has left Washington in a precarious position — one in which it cannot easily disengage without economic disruption.
He urged U.S. policymakers and business leaders to face the problem directly by rebuilding the nation’s industrial base.
“While Washington does not have to completely stop trade with China, it does have to take steps to build alternative markets and supply chains,” Sankar wrote.
His position aligns with growing bipartisan calls in Congress to “de-risk” supply chains by diversifying production to allied nations like India, Vietnam, and Mexico.
Sankar also warned that the United States is running out of time to act. “The current situation will only get worse if the U.S. does not take action today,” he said, quoting American author Upton Sinclair: “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.”
The line, he implied, captures the reluctance of U.S. executives to accept that their dependence on China poses strategic risks.
Economists say the trade relationship between the U.S. and China, the world’s two largest economies, has grown increasingly complicated since Washington began imposing tariffs and export restrictions during the Trump administration. President Donald Trump’s 2018 tariffs on Chinese goods, which targeted industries like steel, electronics, and solar panels, were meant to reduce trade imbalances and push companies to reshore production. Those measures were later expanded to include restrictions on semiconductors, artificial intelligence, and other critical technologies.
The Biden administration had largely maintained and expanded those controls, introducing new rules in 2023 to restrict the sale of advanced AI chips to China. Nvidia, AMD, and Intel were all forced by current Trump administration to develop modified versions of their products to comply with the new export standards. Beijing, in turn, has responded with curbs on Rare Earth materials like gallium and germanium, which are essential for chipmaking.
The result, analysts say, is a de facto economic standoff — one that Sankar argues the U.S. cannot afford to ignore. His warning reflects a growing school of thought in Washington that sees economic competition with China as an existential struggle, not merely a trade dispute.
“Every purchase and investment,” Sankar wrote, “will help determine which system survives.”
But shifting away from China will not be easy. American consumers have become accustomed to low-cost goods manufactured in Chinese factories, and U.S. companies still rely on China’s industrial ecosystem for mass production. Economists say that rebuilding domestic supply chains could take decades and require unprecedented public and private investment.
Sankar acknowledged the difficulty of the path ahead but insisted that denial is no longer an option. “It’s only with that realization that the United States can take the painful but necessary steps to ensure that it remains sovereign,” he concluded, warning that Beijing’s ambitions for global supremacy will not wait for American complacency to fade.
At the heart of Sankar’s argument is a call for strategic clarity — a demand that Washington and Silicon Valley recognize that globalization has costs as well as benefits.
