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America has long dominated the global technology market for decades. But, China wants to change that dynamic.

The nation is investing substantial sums of capital into artificial intelligence (AI) and robotics. Crucially, Beijing is also channeling significant funding toward creating the high-end chips that drive these innovative technologies.

Last month, Nvidia's CEO highlighted that China was only "slightly trailing" the American tech sector in chip development.

So, can China rival US innovations and reduce its reliance on imported advanced processors?

Following the DeepSeek Launch

China's DeepSeek made headlines through the global technology community in last year when it introduced a rival to the widely-used AI chatbot.

This revelation by a relatively unknown startup was impressive for multiple factors, including because the company reported it cost much less to train than leading AI models.

It was said to have been created using far fewer advanced processors than its competitors, and its release caused a drop in the chip giant's stock price.

Moreover, progress in the Chinese technology industry has continued. Recently, some of the nation's leading technology companies have made it clear that they intend to take on Nvidia and emerge as the primary high-end semiconductor providers for local companies.

Earlier this year, Chinese state media reported that a new chip developed by Alibaba can match the capabilities of Nvidia's H20 chips while consuming less power. These processors are adjusted processors designed for the China under US export rules.

Huawei also revealed what it called its strongest processors to date, along with a multi-year strategy to dispute Nvidia's dominance of the artificial intelligence sector.

This major firm also declared it would make its blueprints and software available to the general audience in China in an effort to pull firms away from their dependence on American technology.

Additional semiconductor firms in China have also secured significant deals with large corporations in the country. One such company is supplying advanced chips for entities like government-run telecommunications firm a major Chinese carrier.

Another hotly-tipped possible competitor to the chip giant is headquartered in Beijing a rising semiconductor firm.

Its Shanghai-listed shares have significantly increased in price over the last three months as market participants speculate that it will benefit from Beijing's push for domestic companies to use locally produced high-end chips.

Tencent, which owns the super app WeChat, is an additional notable technology leader that has heeded the official directive to use domestic processors.

Additionally, there has been no lack of state-backed events, promoting domestic tech firms in a effort to attract investors.

"The competition has clearly emerged," a spokesperson for Nvidia stated in response to queries about the recent progress made by China's semiconductor companies.

"Users will select the best technology stack for operating the world's most popular commercial applications and publicly available AI systems. We will continue to work to gain the trust and backing of leading programmers worldwide."

However, some experts have cautioned that assertions made by Chinese chipmakers should be taken with a pinch of salt due to a lack of open information and standardized performance measures.

China's semiconductors are comparable to the American chips in predictive AI but fall short in complex analytics, noted computer scientist a researcher, who has evaluated both processors from the US and China.

"The gap is evident and it is certainly shrinking. But, I don't think they will close it in the near future."

Where China Leads - and Lags

During a industry discussion in September, the CEO of Nvidia highlighted the advantages of China's tech sector, attributing its dedicated and vast workforce, fierce local rivalry and advancements in chipmaking.

"It represents a vibrant innovative, advanced, modern industry," he remarked, urging the United States to vie "for its survival."

This evaluation is likely to be received positively by officials in the Chinese capital.

China has consistently aimed to become a worldwide frontrunner in technology, in part to lessen its reliance on the West.

For years, the nation has invested heavily into what President Xi Jinping calls "advanced growth", which covers sectors from clean energy to artificial intelligence.

Prior to the reappearance of Donald Trump to the US presidency, China had spent billions of USD as part of its efforts to shift its vast economy from the "global manufacturing hub" for basic products to a home of advanced sectors.

An ongoing tariffs war with Trump's America has only rendered this goal more urgent.

Xi has vowed to make his country more self-reliant and not rely on "external assistance."

The Nvidia CEO has also warned that the US should trade freely with China or risk handing it the advantage in the AI race.

This comes against a backdrop of Chinese authorities applying more scrutiny on the chip maker as it initiated an investigation into market dominance into the firm recently.

But, the government-directed strategy can also be an barrier to innovation if all participants in the sector only focuses on a "shared goal", noted academic expert Chia-Lin Yang from a leading educational institution.

This may make it more difficult for innovative concepts to challenge conventions, she added.

China's chip industry has also yet to overcome criticism that its offerings can be more challenging to use than those of Western rivals like the industry leader.

Prof Yang thinks these issues can soon be resolved by China's huge number of talented technology professionals.

"You cannot underestimate the capability of China to close the gap."

'Bargaining Chip' for China

The expert characterized China's recent announcements about the semiconductor industry as a "negotiating tool" in its months-long trade discussions with the United States.

Beijing seeks to pressure Washington into providing its high-tech tools or risk its position in such a large market, stated Dr Jawad.

Such reports demonstrate capability on behalf of China, even though it is {