The return of Donald Trump to the White House predicts a worsening of the trade war between the United States and China, a struggle that finds one of the main theaters of operations in technological rivalry. Within this area, the main concern of both powers is the race for global dominance of AI, a cutting-edge technology that requires the use of powerful chips. Last year, to hinder Beijing’s development in this area, the Biden Administration increased restrictions on the export of Nvidia’s advanced chips, the most powerful on the market, to China. A hard blow that has forced China to avoid Washington’s sanctions and boost local production of these materials. This is how a semiconductor firm has emerged from the shadows cast by the US tariff wallembodying Xi Jinping’s hopes to replace Nvidia on Chinese soil and beat Donald Trump in the AI arena.
The Chinese promise of AI is called Cambricon Technology. This company was ranked first in the latest list of the 50 best Chinese AI companies by Hurunone of the leading research and investment firms in China. Cambricon, founded in 2016 and registered on the Shanghai Stock Exchange in 2020, has posted losses since its birth. However, at the end of 2024 it reported its first quarterly profits, ending with good news a year in which it managed to achieve a 383% rise in the stock market, raising its market capitalization to $37 billion.
Such an increase in the stock markets was linked to the rise in their commercial activity in the heat of restrictions on the purchase of advanced Nvidia chips following Washington’s veto on the marketing of high-power processors. The drought in the Chinese pipeline of chips that the White House expected was counteracted by an unexpected stream of processors with 7 nanometer nodes produced by Cambricon, a type of technology that, theoretically, no Chinese company is capable of developing due to sanctions Westerners.
Important firms from the Asian giant such as Huawei have integrated the latest models of processors developed by Huawei into their products. Cambricon. In fact, this company’s hardware has spread in the Chinese market, which increased Cambricon’s revenue by almost 70% in 2024 to $163 million. Although this figure pales in comparison to the $60 billion earned by Nvidia last year, it represents a significant increase for the firm.
In this sense, the gap that separates Cambricon from Nvidia is very difficult to close in the short term. Thus, the MLU290-M5 accelerator, the most advanced processor of the Chinese firm currently, has the same performance as that offered by the A100 chip of the American brand in 2020. That is, Cambricon is 4 or 5 years away. away from Nvidia yet. Chen Tianshi, founder of the firm and former child prodigy who managed to enter the University of Science and Technology of China in Anhui at the age of 16, will have to wait to face Jensen Huang face to face.
This difference, however, may decrease if Cambricon takes advantage of China’s effort to develop AI as quickly as possible, simultaneously reinforcing its technological sovereignty. The project is framed hereData from the East and Computing from the West‘, launched in 2022. Its objective is to expand the computing and data center network nationwide, for which the construction of eight hubs computational. The idea is that this network will power most of the domestic computing capacity in 2025, for which organizations such as the Chinese Cyberspace Administration, the Ministry of Industry and Huawei are working together.
However, there are experts who consider Cambricon to be overrated. Dickie Wong, CEO of Kingston Securities, recently said in conversations with Forbes that it was a “big bubble“, indicating that its valuation seemed “speculative and risky.” According to Wong, investors have so many expectations placed on AI that they have chosen to buy Cambricon securities, taking advantage of the fact that this firm is listed on the stock exchange, unlike Huawei. In this sense Paul Triolo, an analyst at DGA-Albrght Stonebridge Group, pointed out that Huawei, and not Cambricon, was Beijing’s real hope to replace Nvidia in its territory.
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