“China’s Race to Cut US Chip Reliance Led by Huawei”

When Chinese artificial intelligence start-up DeepSeek unveiled an updated foundational model late in August, investors in Nvidia were stunned. Shares of the US chip giant slid, as market watchers grappled with news that the two-year-old start-up, which has developed models rivalling the world’s best, was shifting towards supporting domestically produced chips.

Adding to their concerns, DeepSeek was not alone in its endeavour to empower China’s AI ambitions without relying on US technology.

Last week, Huawei Technologies – the Chinese firm at the forefront of the nation’s tech self-sufficiency drive – showcased the latest offerings from its Ascend chip series and unveiled hardware designed to deliver world-class computing power without using Nvidia’s processors.

It marked the first time that the company had divulged details of its chip road map since it was blacklisted by the US in 2019 over national security concerns. As confidence in home-grown technology mounts, Beijing has urged the country’s tech giants to cease buying chips that Nvidia tailored for China, which were designed to comply with US export restrictions.

Together, Huawei and DeepSeek have emerged as symbols of China’s resilience, showing how US trade curbs have sparked a wave of innovation in the domestic AI industry that allowed Beijing to gain ground in its tech rivalry with Washington.

With US restrictions acting as a push factor and China’s pursuit of self-sufficiency serving as a pull factor, “DeepSeek will look for alternatives for chips”, said Gary Ng, director and senior economist for Asia Pacific at Natixis Corporate and Investment Bank. “As the national champion, Huawei will play a major part.”

For decades, China’s technological rise has been shadowed by its reliance on U.S.-made semiconductors. Chips are the backbone of modern computing, powering everything from smartphones to artificial intelligence (AI). But as Washington tightens export controls on advanced semiconductors, Beijing has doubled down on developing home-grown solutions. At the heart of this effort stand two giants: Huawei and DeepSeek.

Huawei’s comeback in chips

Once crippled by U.S. sanctions that cut off its access to advanced processors, Huawei has mounted an unlikely comeback. In 2023, the company unveiled the Mate 60 Pro, powered by its domestically produced Kirin 9000s chip. Manufactured using China’s Semiconductor Manufacturing International Corporation (SMIC), the processor symbolized a breakthrough: China could still produce high-end chips despite restrictions.

Huawei has since expanded its R&D, pouring billions into semiconductor design and chip-making technology. Its focus on 5G infrastructure, AI processors, and networking hardware is strengthening China’s digital independence.

DeepSeek’s AI push

While Huawei secures the hardware front, DeepSeek, an emerging Chinese AI company, is making strides in software and algorithms. Known for its large language models (LLMs) and generative AI capabilities, DeepSeek has become a national champion in AI development.

Instead of relying on Nvidia’s GPUs — restricted under U.S. export bans — DeepSeek is optimizing its models to run efficiently on China’s domestic chips. This not only reduces dependence on foreign hardware but also accelerates innovation in AI applications across industries.

Why this matters globally

The collaboration of Huawei and DeepSeek represents a strategic alignment of hardware and software innovation. Huawei provides the chips and infrastructure, while DeepSeek pushes the boundaries of AI. Together, they are creating a self-sustaining ecosystem that could challenge U.S. dominance in both semiconductors and artificial intelligence.

This development also has geopolitical implications. As China reduces its reliance on U.S. technology, global supply chains may fragment further, forcing other nations to choose sides in the ongoing tech rivalry.

The road ahead

Despite progress, challenges remain. China still lags behind in producing cutting-edge chips below 5nm, and advanced lithography tools are difficult to acquire due to export bans. But Huawei and DeepSeek’s efforts demonstrate resilience — and the determination to achieve technological sovereignty.

In the coming years, these home-grown heroes could redefine China’s role in the global chip race, proving that innovation thrives under pressure.