Every US tech leader now acknowledges that China is catching up with the US when it comes to AI. Some even feel China is now ahead in some areas. DeepSeek brought that realisation home to everyone, but in the realm of policy and its alignment with technology, the US has been trying to keep the latest building blocks—like GPUs—out of China’s hands for a while now. As it turns out, without much success.
Nvidia CEO Jensen Huang has been upset about the US curbs ever since they were imposed. It's naive to think this is only because these curbs have left Nvidia unable to sell most AI GPUs in China and the company has lost billions in revenues as a result. As Huang puts it, all the curbs have done is encouraged Chinese companies to build their own AI building blocks. And these aren't mere band-aids but extremely powerful solutions that are increasingly getting closer and closer to Nvidia's best. Huang has pointed out the obvious fact too—China is home to the world's largest population of AI researchers. When you combine that with years of experience in cutting-edge tech, it's not exactly surprising that China is closing in on the US in the AI race, which is giving many Americans sleepless nights.
Huang says Chinese companies have effectively filled the void left by the departure of the US companies but is that merely it? China has focused heavily on building a world-class technology education ecosystem—ergo, the world’s largest population of AI researchers. That’s obvious, but a book I’ve been reading revealed what may not be as obvious. The technology manufacturing ecosystem may not be a Chinese achievement alone but may have been inadvertently funded and supported by Apple as it built a legendary supply chain operation in China, at a scale that may be one of the largest such exercises in history. And which today, China may be using to compete with the West, and Apple itself.
Apple in China: The Capture of the World's Greatest Company by Patrick McGee is a riveting read, and it reveals the scale at which Apple worked to train Chinese suppliers in cutting-edge, high-tech manufacturing and upskill millions of factory workers. While this created an extremely reliable and capable network of suppliers for Apple, it also contributed to improving China's prowess in high tech.
And one of the areas where this may be currently hurting the US is in the manufacturing of processors/GPUs used for AI workloads. It’s fascinating how the mind-boggling technology supply chain that Apple built may now be coming back to haunt the company. Although, it would be stupid to blame Apple for US woes over China catching up in AI. Export curbs rarely work—ask Russia or North Korea which have continued to find the chips and electronics needed for missiles and drones despite sanctions. One thing I learnt in B-school was that case studies of success always come with an expiry date.
In the realm of tech (and AI), a company you admire today for its business strategy could be roadkill within a few years. This is also an opportunity for countries like India. Just because China is far ahead of us today in AI doesn’t mean we wallow around in pessimism. There were many naysayers when the Indian government started focusing on mobile manufacturing and exports, with some saying this was only low-level assembly and the like. But in hindsight, these projects have not just brought jobs and export revenues but are helping India build the blocks it needs to grow its technology ecosystem. We need to make the most of the opportunities we will get—the current global focus on de-risking the China supply chain is definitely one such opportunity, and luck will also play a role, but this is the best way forward.
Meanwhile, a lot more is happening in the world of AI and here are some of the top headlines from recent days:
Traditional Banks Threatened By Fintech, Non-Bank Challengers — AI Can Help: BCG Report
Amid AI Boom, Big Tech Slashed College Graduate Hiring By 50% Since 2022, Shows Research
AI Integration In Apps Major Challenge For Engineering Leaders: Gartner Survey
Explained: What Anthropic’s Claude 4 Models Mean For AI On Amazon Bedrock
Kore.ai Announces Collaboration With Amazon Web Services To Accelerate Enterprise AI Adoption
Telegram Inks Pact With Elon Musk's xAI To Enable Grok Access For Its Billion-Plus Users
India's Data Centre Sector May Attract $20-25 Billion In Six Years To Expand Capacity: Colliers
Opera's New AI Browser Can Code, Develop Games, Book Tickets And Shop Online On Its Own
Google Faces US Antitrust Investigation Over Deal For AI-Fueled Chatbots
Meta Study Shows Open-Source AI Models Like Llama Catalyst For Economic Growth
Till next week,
Ivor Soans
Nvidia CEO Jensen Huang has been upset about the US curbs ever since they were imposed. It's naive to think this is only because these curbs have left Nvidia unable to sell most AI GPUs in China and the company has lost billions in revenues as a result. As Huang puts it, all the curbs have done is encouraged Chinese companies to build their own AI building blocks. And these aren't mere band-aids but extremely powerful solutions that are increasingly getting closer and closer to Nvidia's best. Huang has pointed out the obvious fact too—China is home to the world's largest population of AI researchers. When you combine that with years of experience in cutting-edge tech, it's not exactly surprising that China is closing in on the US in the AI race, which is giving many Americans sleepless nights.
Huang says Chinese companies have effectively filled the void left by the departure of the US companies but is that merely it? China has focused heavily on building a world-class technology education ecosystem—ergo, the world’s largest population of AI researchers. That’s obvious, but a book I’ve been reading revealed what may not be as obvious. The technology manufacturing ecosystem may not be a Chinese achievement alone but may have been inadvertently funded and supported by Apple as it built a legendary supply chain operation in China, at a scale that may be one of the largest such exercises in history. And which today, China may be using to compete with the West, and Apple itself.
Apple in China: The Capture of the World's Greatest Company by Patrick McGee is a riveting read, and it reveals the scale at which Apple worked to train Chinese suppliers in cutting-edge, high-tech manufacturing and upskill millions of factory workers. While this created an extremely reliable and capable network of suppliers for Apple, it also contributed to improving China's prowess in high tech.
And one of the areas where this may be currently hurting the US is in the manufacturing of processors/GPUs used for AI workloads. It’s fascinating how the mind-boggling technology supply chain that Apple built may now be coming back to haunt the company. Although, it would be stupid to blame Apple for US woes over China catching up in AI. Export curbs rarely work—ask Russia or North Korea which have continued to find the chips and electronics needed for missiles and drones despite sanctions. One thing I learnt in B-school was that case studies of success always come with an expiry date.
In the realm of tech (and AI), a company you admire today for its business strategy could be roadkill within a few years. This is also an opportunity for countries like India. Just because China is far ahead of us today in AI doesn’t mean we wallow around in pessimism. There were many naysayers when the Indian government started focusing on mobile manufacturing and exports, with some saying this was only low-level assembly and the like. But in hindsight, these projects have not just brought jobs and export revenues but are helping India build the blocks it needs to grow its technology ecosystem. We need to make the most of the opportunities we will get—the current global focus on de-risking the China supply chain is definitely one such opportunity, and luck will also play a role, but this is the best way forward.
Meanwhile, a lot more is happening in the world of AI and here are some of the top headlines from recent days:
Till next week,
Ivor Soans
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