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America has held sway over the global technology market for decades. However, the World's Second Largest Economy seeks to change that situation.

This economic powerhouse is investing huge sums of funds into AI technologies and automated systems. Importantly, Chinese authorities is also directing considerable funding toward producing the high-end chips that drive these cutting-edge technologies.

Last month, Jensen Huang highlighted that China was only "slightly trailing" the American tech sector in chip development.

Therefore, can China match US innovations and reduce its reliance on foreign high-end chips?

Following the DeepSeek Launch

China's DeepSeek created a stir through the global technology community in last year when it launched a alternative to the widely-used AI chatbot.

The announcement by a little-known company was impressive for multiple factors, not least because the company reported it required less funding to develop than top artificial intelligence systems.

Reports indicated to have been developed using significantly less advanced processors than its rivals, and its release briefly reduced the chip giant's stock price.

Moreover, advancement in China's tech sector has grown. Recently, some of the nation's leading technology companies have stated that they plan to take on the AI chip leader and emerge as the primary advanced chip suppliers for local companies.

Earlier this year, Chinese state media announced that a new chip developed by the tech giant Alibaba can match the capabilities of Nvidia's H20 chips while being more efficient. These processors are modified processors made for the China under US export rules.

Huawei also introduced what it called its most powerful chips ever, along with a three-year plan to dispute Nvidia's dominance of the AI market.

The Chinese tech giant also announced it would make its blueprints and computer programs available to the public in the country in an initiative to draw companies away from their reliance on US products.

Other Chinese chip developers have also landed significant deals with large corporations in the nation. One such company is providing advanced chips for organizations like government-run telecommunications firm China Unicom.

Another hotly-tipped potential challenger to Nvidia is Beijing-based a rising semiconductor firm.

Its Shanghai-listed shares have significantly increased in price over the recent quarter as market participants bet that it will benefit from Beijing's push for Chinese firms to use locally produced high-end chips.

The Tech Conglomerate Tencent, which owns the all-in-one platform its popular messaging service, is another notable tech giant that has responded to the official directive to use Chinese chips.

There has also been no lack of government-supported exhibitions, promoting Chinese technology companies in a effort to draw in investors.

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

"Users will choose the best technology stack for running the world's most popular commercial applications and open-source models. We will continue to work to earn the trust and backing of leading programmers worldwide."

However, certain analysts have warned that assertions made by China's semiconductor producers should be taken with a pinch of salt due to a lack of publicly available data and consistent testing benchmarks.

Chinese processors perform similarly to the American chips in predictive AI but fall short in advanced data processing, noted tech expert a researcher, who has evaluated both American and Chinese chips.

"The gap is evident and it is certainly shrinking. But, I don't think it's something they will catch up on in the near future."

China's Strengths and Weaknesses

On a industry discussion in September, the CEO of Nvidia highlighted the advantages of China's tech sector, attributing its dedicated and large workforce, intense domestic competition and progress in semiconductor production.

"This is a vibrant innovative, high-tech, contemporary sector," he said, encouraging the United States to compete "to maintain its position."

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

China has long vied to become a global leader in technology, in part to lessen its reliance on the West.

For years, the nation has invested heavily into what President Xi Jinping calls "high-quality development", which covers sectors from renewables to AI.

Prior to US President Donald Trump's return to the US presidency, China had allocated tens of billions of dollars as part of its efforts to transform its vast economy from the "world's factory" for standard goods to a center of advanced industries.

A continuing trade dispute with the United States under Trump has only made that mission more pressing.

The Chinese President has pledged to make his country more independent and not rely on "external assistance."

Mr Huang has also warned that the United States should trade freely with China or face the possibility of handing it the edge in the AI race.

This comes against a backdrop of Chinese authorities applying more pressure on the chip maker as it launched an investigation into market dominance into the company recently.

But, China's state-led approach can also be an barrier to innovation if everyone in the sector only concentrates on a "shared goal", said computing professor a technology scholar from a leading educational institution.

This may make it harder for disruptive ideas to break the mould, she added.

China's chip industry has also not fully addressed concerns that its products can be more challenging to use than those of competitors from the West like the industry leader.

Prof Yang believes these issues can quickly be resolved by the large quantity of skilled tech industry workers.

"One should not underestimate China's ability to catch up."

'China's Negotiating Tool

She characterized the latest reports from China about the semiconductor industry as a "negotiating tool" in its extended tariffs negotiations with the United States.

Beijing seeks to compel US authorities into selling its advanced equipment or risk its position in such a large market, said Dr Jawad.

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