What if the US banned all advanced AI chips from China?
Full US decoupling on advanced chips/tools is a two-sided hit: it caps Nvidia/AMD's China TAM while stranding SMIC and China megacaps, so the yuan and Alibaba carry the pain and the Nasdaq high-beta sleeve leads the index down. Rhymes with the Oct-2022 BIS rule and the Apr-2025 100%+ tariff peak, both of which gapped semis lower then partially retraced. Transmission: China retaliates via rare-earths/gallium (it dominates refining), so the second-order risk is to US/EU equipment names, not just the yuan.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 6–18 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. The US bans all advanced AI-chip and tool exports to China (full decoupling). The trigger decomposes into signed root‑shocks — Semiconductor supply risk ▲ · Trade tension ▲ — which propagate through our causal graph to the markets below.