Quick Take: The Dutch company caught up in the A.I.-driven stock market tailspin
ASML fell 12% after the launch of DeepSeek
In the massive sell off of A.I.-related stocks following the launch of DeepSeek, a Chinese A.I. company, the stock of ASML, the most valuable Dutch company and Europe’s largest tech company, fell twelve percent. And while this blow to the Dutch economy is not totally former US President Joe Biden’s fault, he helped.
ASML manufactures the advanced lithography machines necessary to produce the chips that power A.I. Over the last couple of years, the Dutch government repeatedly folded under pressure from the Biden administration and restricted the export of some ASML products to China. The Americans hoped that these trade restrictions would somehow slow down or inhibit Chinese A.I. development.
This was a dumb idea. Trade restrictions were never going to slow China down. Maybe they were politically a little sexy—Americans love when presidents are “tough on China”—but they were always going to be fundamentally useless. There’s nothing special about American A.I. technology, as much as the tech leaders want us to believe they’re very special geniuses in order to justify their multi-billion dollar paydays. On the contrary, part of the reason DeepSeek has thrown the markets into such chaos is that it proved that AI can be much cheaper and require much less infrastructure than American dweebs, politicians, and venture capitalists pretend it does.
In 2023, the Chinese stockpiled ASML equipment before trade restrictions went into effect. I have no idea if ASML technology helped DeepSeek or not, but my point here is that the trade restrictions were pointless. This was obvious to me a year ago when I wrote about it here, and it must have also been obvious to ASML. And to the Dutch government, too. Still, they folded.
They folded because they had no choice, even though this useless move would obviously damage the bottom line of the most valuable company in the Netherlands, both short and long term. This is because the Dutch have been relying on the Americans for their national security for the last... eighty years, and when the Americans want something in return, the Dutch kinda have to do what they say. Imagine the look on the face of an American diplomat when a Dutch diplomat says she’d actually rather not force ASML to reduce sales to China by an estimated ten percent. And rather not get caught up in the largest rout in US stock market history, dankjewel.
ASML would likely have been caught up in the current market free fall even if they didn’t bend to American pressure for trade restrictions. But it probably would have felt a little better, a little more like we were in charge of our own industries.
Which is why Trump threatening to abandon NATO is probably a good thing for us in the long run. And former Dutch Prime Minister and current NATO head Mark Rutte was right (for once in his life) for saying that NATO countries like the Netherlands need to increase their defense spending. The “peace dividend”—the amount of money saved by not being at war, and in the case of Europe, relying on America for security—comes at a cost.
*all typos in this post are on purpose