By UBS Global Wealth Management’s latest count, China is within striking distance of becoming AI self-sufficient. We truly hope they can achieve this ambitious goal in the coming five years. This ambitious trajectory comes amidst increasing hostility between Beijing and the American tech research company, TechInsights. The firm first attracted national attention for its detailed examination of Chinese-made chips.
TechInsights has established itself as a significant player in the tech industry, known for its comprehensive reports on advancements in semiconductor technology. The firm was one of the first to announce major breakthroughs by the big Chinese state-owned names, such as Huawei Technologies. Just last month, TechInsights disclosed that a Huawei product had TSMC chip components in it. This unexpected result triggered alarm bells about the success of U.S. export controls.
In reaction to these determinations, China’s Commerce Ministry officially labeled TechInsights as an “unreliable entity” for endangering national security. This designation triggers export control restrictions, barring any Chinese person or entity from providing any information to the firm. Such steps are illustrative of Beijing’s increasing concern about what it perceives as foreign interference with its technological progress.
Just as important, Huawei is almost entirely dependent on non-Chinese tech. Importantly, it relies on large-memory chipmakers, such as Samsung Electronics and contract semiconductor maker TSMC. Analysts point out that Chinese chipmakers have successfully taken advantage of gaps in U.S. export controls. They’ve benefitted from the use of stockpiles of imported chips and components prior to the regulations taking effect. Recent U.S. export controls on technology transfers are intended to limit the sale of advanced technology to Chinese end-users. As recent events make clear, these restrictions have proven unable to do the job completely.
Less than a week after TechInsights released its analysis on Huawei’s latest “Ascend” AI chips, a blacklisting was implemented on the company. Their report did expose that the chips had components using supply chains outside of mainland China. Even other industry research firms, such as SemiAnalysis, corroborated the conclusions. This announcement supercharged anxieties already brewing in U.S. policy circles about the rapid rise of Chinese technological prowess.
China has been pouring money and effort into achieving AI self-sufficiency. This dispute with TechInsights may have bigger consequences that extend far beyond corporate R&D labs and independent research firms. Beijing’s vision to defend its technological castle is apparent. The increasing list of jurisdictions identified as “high-risk” is a testament to their efforts to combat international criticism and competitiveness.