Adapted by:
Javier Lacort
Senior WriterI write long-form content at Xataka about the intersection between technology, business and society. I also host the daily Spanish podcast Loop infinito (Infinite Loop), where we analyze Apple news and put it into perspective.
Alba Mora
WriterAn established tech journalist, I entered the world of consumer tech by chance in 2018. In my writing and translating career, I've also covered a diverse range of topics, including entertainment, travel, science, and the economy.
Nvidia isn’t just another supplier in the Chinese market. It has developed a special chip explicitly tailored for China. The company invested significantly in adapting its Blackwell technology to navigate U.S. restrictions.
The tech company created a GPU that’s cheaper than the H20. It was designed to satisfy Washington’s demands while still retaining access to the $17 billion in annual revenue from China. The GPU sold very well.
China’s latest strategic decision sends a clear message. The Asian nation no longer wants to rely on U.S. chips, even the adapted versions.
This decision is virtually unprecedented. It forces China to adopt a less advanced, albeit temporary, technological position by relying on its own semiconductor production. The alternative would’ve been to access world leadership while relying on American chips.
China’s move is profoundly rooted in Chinese philosophy: enduring present humiliation to take on greater responsibility. This embodies the concept of “忍辱负重” (ren ru fu zhong) in a technological context. Whoever controls the technological foundation controls the future, even if that foundation is initially inferior.
The strategy isn’t new. China has been implementing this approach for the past two decades. When Google dominated the search engine market, China invested in Baidu. When Facebook became globally popular, China developed WeChat. When Instagram attracted widespread attention, China introduced TikTok. This consistent pattern features initially less competitive offerings, but they’re Chinese-made.
As a result, China has created a fully independent digital ecosystem that serves a market four times the size of the U.S. market without relying on Silicon Valley.
Semiconductors represent the next frontier. Unlike software, chip manufacturing requires decades of investment, complex supply chains, and highly specialized knowledge. However, China has demonstrated its willingness to make that investment by developing a parallel technology ecosystem. Companies like Huawei are focused on semiconductors and consumer electronics. Others, such as MetaX and Biren, are advancing in the GPU sector, and Moore Threads is tackling the gaming industry.
The ultimate goal is to replace Nvidia completely within the next decade.
This transformation highlights the evolution of post-pandemic China. For years, the country was known as the world’s factory, mass-producing Western designs with an abundant and inexpensive workforce. That era has come to an end. The new China is now a technological innovator rather than just an efficient manufacturer.
- TikTok is getting closer and closer to Instagram.
- BYD has surpassed Tesla.
- Xiaomi is launching cars that compare to Porsche.
The pandemic, along with the challenges posed by the trade war that nearly crippled Huawei, has accelerated this transition. China recognized its overreliance on foreign technology and took strategic steps to address this issue.
China’s AI strategy showcases the evolution in its technological landscape. It’s not just that Chinese companies such as Baidu, Alibaba, and Tencent have developed models that rival OpenAI. Rather, every aspect of their technology is Chinese. This includes the servers, chips, and the data used for training. Everything is sovereign, and the AI is distinctly Chinese.
The early results of this strategy are more than promising. Alipay and WeChat Pay have effectively replaced both cash and credit card giants such as Visa and MasterCard. Companies like Alibaba and JD have outperformed Amazon in their market. They’ve built their infrastructure from the ground up, avoiding reliance on foreign technology. In some instances, they’ve even surpassed the original companies, even within their own markets.
This shift indicates a definitive end to technological globalization. Two distinct “Silicon Valleys” are emerging. One caters to the West, and the other is a Chinese ecosystem designed for the rest of the world. This digital bifurcation is becoming increasingly clear. China has chosen to construct its own technological environment, accepting an initial stage of inferiority in order to avoid perpetual subordination. A civilization with a long-term vision is willing to sacrifice present advantages for future gains.
China’s decision has redefined what it means to “win” in technology.
- For decades, winning meant having the best and most advanced products that the market preferred.
- However, China introduces a different metric: winning means having control over your technological destiny, even if that entails temporarily inferior products.
China values imperfect sovereignty over borrowed excellence.
Companies such as Nvidia, Intel, and Qualcomm may attempt to persuade Chinese President Xi Jinping that a partnership would be beneficial. They could offer enticing deals and concessions to continue doing business in China, much like Apple has done. They might promise unbeatable conditions and unprecedented technology transfers. However, the president has already made his choice: China will pursue independence, or it won’t become a global power.
This decision is poised to change the world order for the next fifty years.
Image | Harry Naibaho
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