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China's AI chip industry: A race to compete with Nvidia

October 06, 2025 / 9:27 AM
China's AI Chip Industry A Race to Compete with Nvidia
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Sharjah24-AFP: China is increasing efforts to develop advanced AI microchips, but analysts warn that matching the capabilities of US leader Nvidia may require several years, or even extend into the next decade. With the US implementing restrictions on the export of sophisticated chips, Beijing's strategy serves as both a response to these geopolitical tensions and a move to strengthen its domestic chip industry.

Challenges to matching Nvidia

Stephen Wu, founder of Carthage Capital, notes that while China aims to develop chips resilient to policy shifts, reaching full parity with Nvidia's technology may not be achievable by 2030 or later. Significant hurdles remain, especially in advancing high-bandwidth memory and chip packaging—two vital aspects of chip development.

Technology gap timeline

Industry experts agree that China may need another five to ten years to bridge the technology gap. Despite this, the demand for AI services is increasing rapidly domestically, driven by government support for semiconductor innovation. Companies like Alibaba are making significant investments in AI, while Huawei aims to double the production of its Ascend 910C chips.

Nvidia’s dominant position

Meanwhile, Nvidia maintains its dominant position as the preferred choice for training large AI models, despite facing restrictions on sales to China. CEO Jensen Huang warns that restricting exports could merely speed up China’s development in the semiconductor sector.

Future of China’s semiconductor innovation

As China seeks to innovate in semiconductors, the coming years will be vital in establishing whether it can effectively compete with Nvidia and maintain its position in the global technology landscape.

October 06, 2025 / 9:27 AM

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