Xi confidant leads coercive push for homegrown AI chips

Last summer, Huawei Technologies held a closed-door briefing for China's technology chief, Vice Premier Ding Xuexiang, to present its latest artificial intelligence chips and lay out a plan for rivaling Nvidia ↘ 1.47% — claiming China could become self-sufficient in some critical areas of AI within three years, according to a Wall Street Journal News Corp ↘ 3.58% investigation published Thursday.thecurrency+1

The briefing was exactly what Ding, a confidant of Chinese leader Xi Jinping, wanted to hear. Three years after Washington restricted China's access to cutting-edge AI chips and the tools needed to manufacture them, Ding launched a sweeping national campaign — with Xi's blessing — to forge domestic alternatives, according to the Journal's Josh Chin and Raffaele Huang.linkedin+1

A Campaign Modeled on Cold War Weapons Programs

The effort, modeled on China's Cold War-era weapons programs, has carried an unusually coercive tone. Chinese AI companies were warned that anyone who resisted using locally made chips would be considered a "traitor," the Journal reported. The campaign has accelerated procurement away from foreign chips and toward homegrown alternatives, with Beijing reportedly directing state-funded data centers to favor domestic suppliers.supercomputing+2

Huawei's Ascend chip line has emerged at the center of the push. The company planned to produce 100,000 Ascend 910C chips and 300,000 Ascend 910B chips in 2025, with ByteDance, Alibaba ↘ 4.74%, and Tencent as anchor buyers. IDC-attributed data cited by analysts put Huawei at an estimated 812,000 Ascend accelerator shipments in 2025, accounting for nearly half of all domestic AI accelerator volume.digitimes+1

A Wave of GPU IPOs

The campaign has also fueled a fundraising frenzy among Chinese GPU startups. Between December 2025 and January 2026, four Chinese GPU companies — Moore Threads, MetaX, Biren Technology, and Iluvatar CoreX — went public in five weeks, raising billions of dollars. Moore Threads raised approximately 8 billion yuan ($1.1 billion) on Shanghai's STAR Market, surging 468% on its debut, while MetaX opened up 693%.finance.yahoo+3

MetaX, founded by former AMD Advanced Micro Devices, Inc. ↘ 1.47% executives, announced in June that it plans to pursue a Hong Kong listing less than half a year after its Shanghai debut, with proceeds earmarked for next-generation GPU research, supply-chain investments, and global expansion. Iluvatar CoreX, meanwhile, raised a further $902 million after its stock rose 428% by early July.supercomputing+2

The Scale Gap Remains

Despite the momentum, the gap with Nvidia remains stark. Moore Threads and MetaX together booked roughly 3.1 billion yuan ($435 million) in 2025 revenue — an amount Nvidia earned from China data-center sales in a single quarter before export controls tightened. The physical constraints are equally daunting: China's advanced chip production relies on DUV multi-patterning at SMIC Semiconductor Manufacturing International Corporation, with analyst estimates putting yields in the 20-to-40 percent range, and domestic high-bandwidth memory production at CXMT has reportedly faced delays.digitimes+1

"The buildout the West was not watching has started publishing its own numbers, on a filing schedule rather than a news cycle," noted an analysis by Supercomputing News of the four companies' prospectuses.supercomputing