China is a latecomer, but it has conquered the global car industry with electric vehicles and green tech with solar panels and energy-storage batteries. Why should the outcome be any different with the AI supply chain? This is the question global investors must ask themselves.
In quick succession, China has thrown a powerful 1-2-3 punch at the global AI trade. On July 16, Beijing-based startup Moonshot AI released the Kimi K3 model with performance that rivals top-tier offerings from OpenAI and Anthropic. Then memory chip giant CXMT Corp. was listed in Shanghai on Monday, gaining 466% on the first day after raising $9.8 billion. Last and perhaps most striking, China has reportedly begun mass production of immersion deep ultraviolet, or DUV, lithography tools, the biggest stranglehold that the West has over the country’s AI ambition.
The global chip selloff has been brutal. The Philadelphia Semiconductor Index is in bear territory, while South Korea’s chip-heavy Kospi Index has lost a third of value from late June. Credit markets are also feeling skittish, questioning the soundness of trillion-dollar AI investments and circular financing led by Nvidia Corp.
