On April 25, China’s top leaders met to discuss creating technology that is fully developed and owned domestically, the meeting, held by President Xi Jinping, was intended to have China become more ‘self-reliant’ in AI and other technological fields a clear move in the ongoing China US tech rivalry.
Xi emphasized China’s technological advancements, using key terms in the party communication like “self-sufficiency,” “independence,” and “control.” The push follows US sanctions on China tech companies under President Trump’s administration, especially targeting AI development and Nvidia chips.
While Washington sought to restrain China, those actions may have had the opposite effect as China is now investing tens of billions to reduce its dependence on foreign technology.
US-China Tech War: Beijing’s Secret Chipmaking Champions
One huge focus area for China is semiconductors, with tens of billions invested to reduce reliance due to US tech sanctions on China. The US has cut off Beijing’s access to leading edge chips, specifically Taiwan made chips. Chinese companies, however, are starting to catch up.
Huawei the telecom giant, formerly hit hard by China US tech sanctions during Trumps first term, has returned with powerful semiconductor innovations. It has now unveiled CloudMatrix 384, a powerful 384-chip system to compete against tech giants in this case Nvidia.
Another Chinese company, DeepSeek, surprised experts by releasing an affordable ChatGPT alternative. Following DeepSeek’s 2025 model launch, the world’s AI race became more heated. Though the public eye is still on chip speed and performance, most of the competition centers on more intense infrastructure such as energy, resources, and talent.
US-China tech decoupling, where AI development places stress on decentralized and deregulated power grids, China’s AI sector is positively supported by centralized planning. Through initiatives like the Eastern Data, Western Computing plan, China connects hydro and win power centers, allowing high scalability and dismissal. Guizhou and Sichuan, the Tianfu Intelligent Computing Center hosts massive computing centers powered by massive hydro and wind power.
The coordination at the state level gives China’s advantage in powering large scale AI models something that US markets are bound to fall short of, as seen in 60 data centers in Northern Virginia in July 2024.
The US-China Chip War Is Reshaping Tech Supply Chains
After being cut off from Android, Huawei developed its own mobile operating system, HarmonyOS. Now, alongside Apple’s iOS and Android, a third option is surfacing, attracting attention in regions outside the Western world.
All this is part of a bigger pattern towards a widening gap in the global tech industry a digital “Cold War” between China US tech rivalry and the West. Developing world countries might eventually decide which side wins.
China is dealing with increasing cybersecurity threats. Last year, China’s National Computer Network Emergency Response Center (CNCERT) reported in a recent report that several cyberattacks on Chinese systems were all traced to the US, Sweden, and India. The attacks included botnet attacks, backdoor infiltration, and theft of data regularly associated with IPs based in US states such as California, Iowa, and Virginia.
The updates on the US-China tech rivalry proves Beijing’s argument that the safe, homegrown technologies are not just innovation, it’s about national security.
China and US Tech War
The US wants to protect its tech edge by cutting off China from advanced tools and global supply chains, but it underestimated China’s resilience. What was intended as an obstacle became a catalyst for innovation.
China’s rapid evolution in AI, semiconductors, and telecom is a signal that it’s not waiting on Western collaboration. Instead, it’s building a new tech landscape from scratch, powered by its own resources, infrastructure, and online capabilities.
Sanctions may have slowed down, but they’ve also highlighted on China’s focus. With clear state guidance and vast resources, China US tech rivalry is turning pressure into an advantage in the market economies. This shift would be able to reshape the global tech markets, with more and more countries opting for Chinese made systems.
If US tech sanctions on China continue, this may be the consequence that the future of innovation is not about who’s ahead in power or speed but whoever can maintain it.
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