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other americans players like ati & via have been trying to catch up to nvidia in the gpu sector for decades and could never make headway; i wonder what secret these new players have to let them catch up to nvidia in a market with significantly fewer consumers.
Huge investment from the government basically. China sees this as strategic technology, so they will pour unlimited resources into making it happen at state level. This is way beyond what any individual company could achieve.
that sounds like it could turn into another space race like the one that bankrupted the soviets and especially considering that nvidia has an almost 50 year head start.
Nvidia absolutely does not have a 50 year head start on China. By all accounts, China is roughly a generation behind bleeding edge chips right now. Furthermore, China can just hire top engineers from any company including Nvidia by just paying them whatever salary they want.
It’s also worth noting that Huawei clusters already beat Nvidia ones even though chips are slower. The reason being is that Huawei figured out how to connect the chips more efficiently using optical connections. So, even though each individual chip is a bit slower, the system as a whole is faster.
Another huge advantage China has lies in cheap and abundant electricity. AI data centers require a huge amount of power, and US electric grid doesn’t have the capacity for this. It’s almost certain that the energy costs in the US will keep going up as a result.
- https://www.newsweek.com/ai-data-centers-why-electric-bill-so-high-2109965
- https://www.americanexperiment.org/eia-electricity-prices-to-rise-faster-than-inflation-through-2026/
- https://www.morningstar.com/news/marketwatch/20250821256/this-is-the-critical-detail-that-could-unravel-the-ai-trade-nobody-is-paying-for-it
By contrast, electricity prices in China are falling due to massive renewable installations
- https://www.all-about-industries.com/falling-electricity-prices-china-global-competitiveness-a-678fbe59c8e3bc41253d03df59f66263/
- https://www.caixinglobal.com/2025-08-01/in-depth-despite-the-summer-heat-chinas-power-prices-keep-dropping-102347887.html
- https://electrek.co/2025/09/02/h1-2025-china-installs-more-solar-than-rest-of-the-world-combined/
The reality is that it’s Nvidia that’s in trouble here. Making new chips is a very low margin business, and with Chinese market being cut off, Nvidia now has much lower revenue which translates into lower R&D spending. https://www.cnn.com/2025/04/16/tech/nvidia-plunge-h20-chip-china-export-intl-hnk
This is a really good read on the dynamics of the whole thing https://compactmag.com/article/fighting-a-chip-war-on-the-cheap
Finally, China may end up leapfrogging the entire industry if they manage to get one of the alternative substrates, like graphene, to work at scale. Even a naive chip on a new substrate could make silicon look like vacuum tubes overnight.
China can just hire top engineers from any company including Nvidia by just paying them whatever salary they want.
from the first paragraph of that article:
The Biden measures also forbid American citizens or residents from working in China’s chip industry.
so they’re going to have to higher people who either refused or were never accepted to work at the highest levels of microelectronics industry in the united states; suggesting an inexperienced workforce with precious few experienced workers like the russian military personnel that they’ve employed in ukraine.
one of the reasons why ukraine has lasted this long was by successfully targeting the experienced russian fighters and i would expect that the american gov’t would be watching the whereabouts of all microelectronic industry leaders/engineers closely considering how much AI is propping up the current american economy and their animus to a potential chinese hegemony.
and graphene would be a game changer, but only if it makes it to scale or else it become too little too late like the jet & rockets engines and nuclear weapons were for the nazi’s.
There’s been a whole exodus of scientists leaving US for China already. The US citizenship isn’t worth all that much nowadays. Not only that, but most of the scientists working on advanced chips aren’t in the US in the first place. They’re in China, Taiwan, and Korea. Mainland China alone already has surpassed the US both in quantity and quality of semiconductor research. The thing to understand is that China is a nation of 1.4 billion people, this is more people than all of the west combined. On top of that, China has excellent education system that’s not structured on pay to play basis. Chinese universities are now ahead of the US.
I’m also not sure what you’re referring to regarding Ukraine to be honest. If anything, Ukraine clearly showed that Russian military is far ahead of NATO in pretty much every regard. I have no idea where you got the notion that Ukraine is successfully targeting anything. The reason Ukraine war is lasting this long is because Russia is focusing on systematically destroying the AFU and their will to fight. Russian method of warfare is fundamentally different from the west.
i would expect that the american gov’t would be watching the whereabouts of all microelectronic industry leaders/engineers closely
yeah about that https://archive.ph/1OaRH
and graphene would be a game changer, but only if it makes it to scale or else it become too little too late like the jet & rockets engines and nuclear weapons were for the nazi’s.
Too late for what exactly, I have no idea what you mean here? China is already ahead of the US in practical uses of AI, and China is positioned to scale AI tech unlike the US because it has the resources to do so. The US has already lost, and now it’s going to be sucked into a race that’s going to strained the remaining resources it has.
The US citizenship isn’t worth all that much nowadays.
I’m making significantly less than I did when I lived in the US, yet financially more comfortable to the point I can splurge and get the equivalent of a $1700 smartphone (Honor Magic V5).
Shame getting rid of the citizenship isn’t as easy as leaving. Luckily though I make less than half the Foreign Earned Income Exclusion limit that I don’t owe any taxes.
