The Shift to Domestic Chips
In 2025, Chinese companies are accelerating their departure from foreign AI chip suppliers. Geopolitical tensions, trade restrictions, and a growing desire for technological self-reliance have driven a massive shift toward domestic alternatives.
US Sanctions Spark Innovation
Years of US sanctions targeting firms like Huawei and SMIC have forced China to develop its own AI hardware capabilities. While initially lagging behind industry leaders like NVIDIA and AMD, companies like Huawei with its Ascend series and SMIC’s advanced semiconductor nodes have closed much of the gap.
Huawei’s Ascend: The Flagship Chip
Huawei’s Ascend 910B, built entirely with domestically sourced technologies, now powers many large AI training clusters in China. It offers high performance while circumventing US export controls, making it a cornerstone of China’s AI ambitions.
SMIC and Loongson: Expanding the Ecosystem
Semiconductor Manufacturing International Corp (SMIC) continues to develop cutting-edge fabrication processes, while Loongson focuses on general-purpose processors that integrate into AI data centers. Combined, these companies build a comprehensive domestic supply chain.
Global Regulatory Pressure Fuels National Push
Simultaneously, global AI regulations are tightening. Recent warnings from regulators about “AI washing” — falsely marketing products as AI-powered — create additional pressures. China responds with stricter national guidelines to ensure compliance and boost confidence in local solutions.
Private Investment Booms
Venture capital and state-backed investment funds are pouring billions into domestic AI chip startups, mirroring India’s rapid AI foundation model development. Chinese regulators are also streamlining licensing to expedite hardware deployment.
Strategic Independence from NVIDIA and AMD
By relying on domestic chips, Chinese companies reduce exposure to volatile foreign supply chains. With geopolitical uncertainty on the rise, securing homegrown hardware ensures stable long-term AI development.
Broader Geopolitical Implications
China’s push for AI self-sufficiency threatens to fragment global supply chains further, forcing multinational companies to rethink partnerships and manufacturing strategies, while the West watches with growing concern.
Conclusion: The New Silicon Great Wall
China is building its own Silicon Great Wall — a fully sovereign AI hardware ecosystem that challenges Western technological dominance and redefines the global AI race.