Beijing Bytes Back

Blacklisted by Washington, Chinese tech firms have worked their way around U.S. curbs and are now ditching American chips for their own

- BY MATTHEW TOSTEVIN

CHINESE AI DEVELOPER IFLYTEK WOULD have been happy to use American Nvidia chips to train a large language model that rivals ChatGPT, but says it's now doing just fine without them.

Work on alternatives started when iFLYTEK was blacklisted by the U.S. Department of Commerce in 2019 during President Donald Trump's first term—and before broader restrictions on the export of the most advanced AI chips to China imposed three years ago— amid fears for U.S. national security over technological advances by America’s biggest strategic rival.

“We overcame that difficulty,” iFLY-TEK’s Chen Cheng told Newsweek and other foreign reporters on a Chinese Foreign Ministry-organized visit to Hefei, in the eastern province of Anhui, and other businesses in the Yangtze River Delta industrial hub.

The way that Chinese companies have developed their own advanced chipmaking industry, and domestic alternatives to Nvidia's AI chips, underlines the challenge facing U.S. attempts to contain China’s business and technological advances in the race for world-beating artificial intelligence, as well as in everything from electric vehicles and batteries to solar power generation and drones—with inevitable implications for the strategic balance as well as for global business competition between the United States and China.

“There are lots of areas where you could say that the containment policy has actually just given China a new lease of life to prove that it can continue to aspire to all the things it aspires to, but not relying on foreign imports and foreign technology,” said George Magnus, research associate at Oxford University’s China Centre.

“It may be that it satisfies American conscience to say: ‘Well, we're not selling them our best stuff, our best kit.’ But I don’t think it necessarily means that the Chinese can’t compete,” he told Newsweek.

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