Overview
- In his New Year’s address, Xi Jinping said many large AI models are “racing to the top” and touted breakthroughs in homegrown chip R&D.
- Chinese advances in 2025, highlighted by DeepSeek’s V3 and R1 models, matched leading benchmarks at lower cost and triggered a sharp market sell-off, including a drop of more than 17% in Nvidia shares on January 27.
- Reporting indicates U.S. export curbs propelled domestic Chinese chipmaking, even as President Trump later approved limited H200 shipments to vetted Chinese customers with a 25% fee on sales.
- Investor interest has shifted toward Chinese tech, with UBS calling the sector “most attractive” and fund managers increasing exposure on expectations of rapid AI monetization.
- Opinion writers urged policymakers to move beyond a zero-sum “AI race” frame toward cooperative governance that reduces shared risks and supports broad economic gains.