One year after DeepSeek upended the U.S. markets, investors are bracing for what could be the next moment of reckoning out of China: A rapid and coordinated push to scale home-grown Nvidia rivals for artificial intelligence chips.
In just the past two months, four startups, dubbed China’s “four dragons,” have already gone public or filed to: Moore Threads, MetaX, Biren, and Enflame.
All four help advance Beijing’s broader strategy to beef up its domestic hardware stack and reduce reliance on the U.S.
Meanwhile, established chip firms like Huawei and Cambricon are scaling quickly.
At its annual Connect conference in September, Huawei outlined a three-year plan to overtake Nvidia.
The tech giant has the experience to make it happen, having built up its global telecoms business, taking smartphone share from Apple inside China, and risen to the top tier of China’s cloud market in just a few years.
But advanced chips are one of the hardest pieces of the AI stack to crack.
Naveen Rao, CEO of the AI computing startup Unconventional AI, said that Chinese chips are still behind American companies, but that performance gap is closing.
“It’s getting better every generation. I think they’re ramping their ability to produce chips and their ability to have each chip be almost similar performance now to Nvidia chips,” Rao said.
The pressure is being driven by Beijing itself, with hundreds of billions of Dollars to bankroll its chip industry, according to Bloomberg, paired with the creation of demand, telling its own tech giants to use domestic chips.
The other major advantage for China is in energy generation, one of the biggest bottlenecks in the AI race. The country’s electricity generation has expanded sharply over the past few years, while the U.S. has flatlined.
“It’s clear that very soon, maybe even later this year, we’ll be producing more chips than we can turn on — except for China. China’s growth in electricity is tremendous,” Tesla and xAI CEO Elon Musk said at the Davos World Economic Forum last week.
Watch the video to learn more.
