China is doing what many thought export controls would prevent： building a domestic AI-chip stack that can start replacing Nvidia.
Vis WSJ
In 2021， around 90% of China's AI chips came from abroad. By 2025， that figure had fallen below 60%. Morgan Stanley estimates it could drop to 25% by 2030.
Without access to cutting-edge EUV machines， Huawei is combining older production tools with advanced packaging， chip stacking and massive clusters. Its Ascend chips can already replace Nvidia hardware for some AI tasks.
China is still behind： Nvidia's best chip offers roughly four times the compute of Huawei's strongest chip. China also remains dependent on foreign equipment. But complete chip sovereignty no longer looks impossible. And that is a development almost nobody saw coming this quickly.
To be perfectly clear： the biggest moat for the US right now remains chips and the embargoes. ASML is not allowed to sell EUV chips to China. Despite this， China is increasingly managing to develop its own chips， which are constantly improving.