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The US has long dominated the worldwide tech industry for decades. However, China wants to transform that landscape.

This economic powerhouse is allocating huge amounts of capital into artificial intelligence (AI) and robotics. Importantly, Beijing is also directing considerable investment toward creating the advanced semiconductors that drive these state-of-the-art technologies.

Last month, Jensen Huang highlighted that China was just "close behind" the American tech sector in chip development.

So, will Beijing match US innovations and reduce its reliance on foreign advanced processors?

After DeepSeek

China's DeepSeek created a stir through the global technology community in 2024 when it unveiled a competitor to the widely-used AI chatbot.

The announcement by a relatively unknown startup was remarkable for multiple factors, including because the company stated it cost much less to develop than leading AI models.

Reports indicated to have been developed using a smaller number of high-end chips than its rivals, and its launch temporarily sank the chip giant's stock price.

And, progress in China's tech sector has grown. This year, some of the country's leading technology companies have declared that they intend to challenge the AI chip leader and emerge as the primary advanced chip suppliers for domestic firms.

Earlier this year, Chinese state media reported that a recently unveiled processor introduced by the tech giant Alibaba can rival the capabilities of Nvidia's H20 chips while using less energy. H20s are scaled-down processors made for the Chinese market under American trade restrictions.

Huawei also revealed what it called its most powerful chips ever, along with a three-year plan to contest Nvidia's leading position of the artificial intelligence sector.

This major firm also announced it would release its designs and software available to the public in the country in an attempt to attract firms away from their reliance on American technology.

Other Chinese chip developers have also landed major contracts with big businesses in the nation. One such company is providing high-end processors for organizations like state-owned telecoms operator China Unicom.

A further highly anticipated potential challenger to the chip giant is headquartered in Beijing Cambricon Technologies.

The company's stock have surged in price over the last three months as market participants speculate that it will benefit from Beijing's push for domestic companies to use domestically made advanced semiconductors.

Tencent, which operates the super app WeChat, is an additional prominent tech giant that has heeded the official directive to use Chinese chips.

Additionally, there has been no shortage of government-supported exhibitions, promoting domestic tech firms in a effort to attract investors.

"The competition has clearly arrived," a spokesperson for Nvidia stated in response to queries about the recent progress made by Chinese chip firms.

"Customers will choose the most effective solutions for operating the globally dominant business software and publicly available AI systems. We will continue to work to gain the confidence and backing of mainstream developers worldwide."

Yet, some experts have warned that assertions made by China's semiconductor producers should be viewed skeptically due to a lack of open information and consistent testing benchmarks.

Chinese processors are comparable to the American chips in predictive AI but lag behind in advanced data processing, said computer scientist Jawad Haj-Yahya, who has evaluated both processors from the US and China.

"The difference is evident and it is certainly narrowing. However, it is unlikely they will close it in the near future."

Where China Leads - and Lags

On a technology and business podcast in last month, the CEO of Nvidia emphasized the advantages of China's tech sector, attributing its dedicated and vast talent pool, fierce domestic competition and progress in chipmaking.

"It represents a dynamic innovative, high-tech, contemporary sector," he remarked, urging the United States to vie "for its survival."

This evaluation is likely to be welcomed by officials in Beijing.

China has long vied to become a global leader in tech, partly to reduce its reliance on the West.

Over time, China has poured significant resources into what the country's leader calls "advanced growth", which includes sectors from renewables to AI.

Prior to the reappearance of Donald Trump to the White House, the Chinese government had allocated tens of billions of USD as part of its initiatives to transform its large economic system from the "world's factory" for standard goods to a home of advanced sectors.

A continuing trade dispute with the United States under Trump has only made that mission more pressing.

Xi has pledged to make his nation more self-reliant and not depend on "external assistance."

The Nvidia CEO has also cautioned that the US should trade freely with China or risk giving it the advantage in the artificial intelligence competition.

This occurs against a backdrop of Beijing applying more scrutiny on the chip maker as it initiated an anti-monopoly probe into the company last month.

But, China's state-led approach can also be an obstacle to innovation if everyone in the sector only concentrates on a "shared goal", said computing professor a technology scholar from National Taiwan University.

This may make it harder for disruptive ideas to challenge conventions, she commented.

China's chip industry has also yet to overcome criticism that its offerings can be less user-friendly than those of Western rivals like the industry leader.

Prof Yang thinks these challenges can soon be solved by China's huge number of talented tech industry workers.

"One should not downplay the capability of China to catch up."

'Bargaining Chip' for China

She characterized the latest reports from China about the semiconductor industry as a "negotiating tool" in its extended trade discussions with the United States.

Beijing seeks to compel US authorities into providing its advanced equipment or lose its position in such a large market, stated Dr Jawad.

Such reports demonstrate strength on China's part, even though it is {