The US-China tech break-up has set off a race to the bottom

America's whack-a-mole approach is too clumsy for its own good

- Catherine Thorbecke

A messy tech breakup between the US and China is forcing a rethink about what the industry might look like for consumers in a decoupled world.

Last week, the Pentagon blacklisted internet and gaming giant Tencent Holdings Ltd for alleged links to China's People's Liberation Army. TikTok faces a ban on national security concerns that it's fighting at the US Supreme Court.

Despite tensions, more than 1,200 Chinese firms at the Consumer Electronics Show in Las Vegas were vying to enter the US market, the largest foreign representation and more than a quarter of the about 4,500 exhibitors.

Nvidia CEO Jensen Huang headlined the show's opening night with an impassioned speech and a range of product updates.

Last month, China's market regulators opened a probe into the US chipmaker. I wondered which companies might get caught in the middle next as Huang laid out his vision for robots and autonomous vehicles—or how these would be built without supply chains and materials from China.

Washington's latest move to include Shenzhen-based Tencent on its blacklist of Chinese military companies doesn't carry any sanctions or penalties. But it still sent shares falling and dealt a reputational blow to the world's largest game publisher that has invested in US startups from Reddit to Epic Games.