China Gets Closer to Finding Its Own Nvidia

Cambricon has become a stock market darling.

- Shuli Ren

A new China-buys-China narrative is taking shape as Beijing steps up its tech rivalry with the US. The world's second-largest economy wants to not only build generative artificial intelligence (AI) models, but also power them with its own hardware, redrawing a supply chain dominated by Nvidia.

There certainly is an opening after Nvidia reportedly halted production related to its H20 AI chip tailor-made for the Chinese market. Beijing had told technology companies to stop buying them due to national security concerns. Last week, DeepSeek released an upgrade to its flagship V3 model to accommodate the next generation of home-grown chips.

Nvidia still dominates the supply chain with chips essential for the complicated work of training AI models. But as the industry evolves, a bigger market is in selling chips used for inference, which creates responses from pre-trained models and produces texts as well as images for people who use generative AI tools.