Chinese Internet Giants are Doubling Down in AI Chip War. 2 Names to Watch

"The Chinese internet giants are definitely worth keeping on your radar, even if you're content with sticking with America's biggest and brightest tech stars. The Magnificent Seven are stellar, and they could pick up the pace again in the new year, especially if we are in for an AI monetization boom of sorts. That said, the AI race is a global one, and it's worth checking in every once in a while on the competition to check in on where the rivals stand."

"If he thinks Chinese AI innovators are just "nanoseconds" behind, I think it's an absolute mistake to write off the Chinese internet giants, especially given the unique advantages they may possess. In many ways, it seems like the big tech in China is more than willing to hit the gas pedal to advance its position in the global AI race. And it's not just about AI models, either. The big Chinese internet giants are investing increasing sums in AI chips."

"Even if Nvidia ( NASDAQ:NVDA) gets the green light to sell its top-performing AI chips (think the H200) in China, I don't think China's titans are going to pull the brakes on their efforts, especially since there is always the risk that the federal government has second thoughts and decides to prevent Nvidia from selling its best to their Chinese rivals. Just look at the hyperscalers, all of which are investing in their own silicon projects to lessen dependence on third-party GPU makers."

Chinese internet giants are accelerating AI development and increasing investment in AI chips. The largest U.S. tech firms remain powerful and could resume rapid gains if AI monetization accelerates. The AI race is global, raising concern that Chinese companies could catch up or surpass U.S. rivals. Some believe Chinese innovators are only "nanoseconds" behind. Chinese tech companies possess unique advantages and show willingness to rapidly expand their AI efforts. Hyperscalers and big tech players are pursuing proprietary silicon and ASIC projects to reduce third-party GPU dependence. The move toward ASICs could produce a new class of semiconductor winners in the long term.

Read at 24/7 Wall St.