A new China-buys-China narrative is taking shape as Beijing steps up its tech rivalry with the U.S. The world’s second-largest economy not only wants to build generative AI models, but 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 tech companies to stop buying them due to national security concerns. Last month, DeepSeek released an upgrade to its flagship V3 model to accommodate the next generation of homegrown 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.
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