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The fight over market share among Silicon Valley titans is still only a small battle in the real AI war: the US vs China.
China already put its ability to play catchup on full display with the launch of its own large language model from DeepSeek earlier this year—which underscored how Chinese AI startups can compete with American chatbots even with far less money, and without access to the most advanced AI hardware.
Today, China has once again proven that it doesn’t need Silicon Valley to pave the way for its success: Chinese e-commerce giant Alibaba just developed its own advanced AI chip, the Wall Street Journal reported.
Chip wars heat up
Alibaba was previously a customer of Nvidia before the US installed export restrictions that prohibited Nvidia from selling chips to China, forcing Alibaba to refocus on creating its own chips. This latest model is built in China, and can handle a broad range of AI tasks, according to the WSJ.
Alibaba isn’t the only company trying to be a Chinese Nvidia. Cambricon, another Chinese chipmaker, just reported a 4,000% increase in revenue during the first half of the year, a sign of strong domestic demand from AI companies, including its key customer DeepSeek.
Then there’s MetaX, a chipmaker based in Shanghai, which rolled out its own version of Nvidia’s H20 chip in July, but with even better memory. Just this week, the company announced it was going to start mass-producing those chips, the WSJ reported.
China’s determination to stop relying on a semiconductor trade with the US that can be throttled at a moment’s notice is fueling a surge in homegrown chipmakers. But most analysts still don’t think Chinese chips are comparable to Silicon Valley’s (at least not yet), and many expect Nvidia will soon start selling its H20 chips in China again, undercutting China’s need for local chipmakers.
So it looks like China’s Nvidia might end up being…Nvidia.—LB