This is a good piece on the hardware war. But there’s a layer beneath chips that’s missing from the analysis.
Noah’s right that China can’t match US chip production. The IFP data on compute advantage is solid. But compute is the foundation, not the building.
What runs on those chips matters more than who makes them.
I’ve spent the last month reading Chinese IPO filings and securities disclosures. Documents with legal liability. Here’s what they say:
Moore Threads (China’s most advanced GPU company) admits in their filing that NVIDIA’s CUDA ecosystem is “not easily surpassable” (不易逾越). So they stopped trying to beat it. They built a migration tool instead. They conceded the codebase.
But Huawei isn’t trying to win the chip war. They’re building a world where CUDA doesn’t reach. 50,000 engineers trained in Malaysia. 27,000 in Egypt. 79 Huawei ICT academies across Africa and Southeast Asia. Zero NVIDIA equivalents.
Noah mentions “Galapagos syndrome” as a risk for China. But what if that’s the strategy? Not isolation. Bifurcation. A parallel ecosystem serving three billion people who will never use American software.
The hardware controls are working on hardware. But we’re not watching the software layer. And software is what locks in advantage for decades.
Exactly. Consumer apps were the proof of concept. AI infrastructure is the next layer. TikTok showed them they can export, not just contain. Now they’re doing the same with developer ecosystems.
Good post. The bifurcation strategy is already happening in the commercial realm. They have their own Google, YouTube, Twitter equivalent etc. they work fine within the great firewall, some even thrive outside it (see Tik tok). If I am Xi I can definitely see this as a viable model.
Stalling China's AI progress when AGI seemed at least possible was sensible enough. Now that a growing consensus of people think AGI is not happening this decade and maybe not ever (under the current architecture) I'm not so sure.
I'm frankly more worried about the AI researchers being pushed to China by bad Trump policies than chips. They could make the next breakthrough in architecture, ie by figuring out how to build world-models or so on. That seems much more impactful than marginal improvements in a technology that will always hallucinate, does not generalize well, etc.
Are China really threatening World War III? Given their size, the size of their army and their ideological differences, I'm not saying we shouldn't be prepared for it. But, strictly entre nous, are they seriously threatening it?
I don’t think China want world domination. But they do want domination in their world (east Asia), and assurance that their access to resources remain unhindered (ie investment in South America & Africa on resource rich countries).
Part of me wonders if China will ever invade Taiwan though, less due to the US and more due to the inherent tactical limits of attacking an island like Taiwan. The cost would be great, and even if the US does not intervene: would the juice be worth the squeeze? I am simply not sure.
If we're stressed about affordability, maybe some cutting edge Chinese imports made with the help of the latest chips are just what we need!
Trying to hold China back technologically forever because they claim Taiwan is unappealing from a humanitarian perspective, and also seems geopolitically myopic. Aren't they more likely to behave like an enemy if we treat them like an enemy?
This argument seems very under-theorized. By contrast, the theory of comparative advantage is extremely lucid.
I remember Trump voicing tough rhetoric against China back in 2016. At the time, I personally felt less hawkish and considered Trump's rhetoric to be part of the general xenophobia of his campaign. Now that I realize the danger China poses, of course Trump has flip-flopped and threatens to give enormous concessions to the CCP on various fronts. TikTok is yet another example of a Trump flip-flop in favor of Beijing. Trump's unhinged vanity and limitless corruption truly do make him one of the worst characters in US history.
This is a good piece on the hardware war. But there’s a layer beneath chips that’s missing from the analysis.
Noah’s right that China can’t match US chip production. The IFP data on compute advantage is solid. But compute is the foundation, not the building.
What runs on those chips matters more than who makes them.
I’ve spent the last month reading Chinese IPO filings and securities disclosures. Documents with legal liability. Here’s what they say:
Moore Threads (China’s most advanced GPU company) admits in their filing that NVIDIA’s CUDA ecosystem is “not easily surpassable” (不易逾越). So they stopped trying to beat it. They built a migration tool instead. They conceded the codebase.
But Huawei isn’t trying to win the chip war. They’re building a world where CUDA doesn’t reach. 50,000 engineers trained in Malaysia. 27,000 in Egypt. 79 Huawei ICT academies across Africa and Southeast Asia. Zero NVIDIA equivalents.
Noah mentions “Galapagos syndrome” as a risk for China. But what if that’s the strategy? Not isolation. Bifurcation. A parallel ecosystem serving three billion people who will never use American software.
The hardware controls are working on hardware. But we’re not watching the software layer. And software is what locks in advantage for decades.
I wrote about this today: https://open.substack.com/pub/russwilcoxdata/p/warren-thinks-shes-winning-the-chip?r=2o1c82&utm_medium=ios&shareImageVariant=overlay
Exactly. Consumer apps were the proof of concept. AI infrastructure is the next layer. TikTok showed them they can export, not just contain. Now they’re doing the same with developer ecosystems.
Good post. The bifurcation strategy is already happening in the commercial realm. They have their own Google, YouTube, Twitter equivalent etc. they work fine within the great firewall, some even thrive outside it (see Tik tok). If I am Xi I can definitely see this as a viable model.
Hey, Noah, keep putting it a little more bluntly.
Or maybe if we all yelled at once, "Hey, STOOPID!" these American Firsters would wake up.
Did Aaron Burr Buy the gun and ammo at Hamilton Weapons, Inc?
Stalling China's AI progress when AGI seemed at least possible was sensible enough. Now that a growing consensus of people think AGI is not happening this decade and maybe not ever (under the current architecture) I'm not so sure.
I'm frankly more worried about the AI researchers being pushed to China by bad Trump policies than chips. They could make the next breakthrough in architecture, ie by figuring out how to build world-models or so on. That seems much more impactful than marginal improvements in a technology that will always hallucinate, does not generalize well, etc.
Are China really threatening World War III? Given their size, the size of their army and their ideological differences, I'm not saying we shouldn't be prepared for it. But, strictly entre nous, are they seriously threatening it?
I don’t think China want world domination. But they do want domination in their world (east Asia), and assurance that their access to resources remain unhindered (ie investment in South America & Africa on resource rich countries).
Never doubt Trump's ability to muck things up.
Part of me wonders if China will ever invade Taiwan though, less due to the US and more due to the inherent tactical limits of attacking an island like Taiwan. The cost would be great, and even if the US does not intervene: would the juice be worth the squeeze? I am simply not sure.
If we're stressed about affordability, maybe some cutting edge Chinese imports made with the help of the latest chips are just what we need!
Trying to hold China back technologically forever because they claim Taiwan is unappealing from a humanitarian perspective, and also seems geopolitically myopic. Aren't they more likely to behave like an enemy if we treat them like an enemy?
This argument seems very under-theorized. By contrast, the theory of comparative advantage is extremely lucid.
This Council on Foreign Relations overview of the topic is also instructive. https://www.cfr.org/article/chinas-ai-chip-deficit-why-huawei-cant-catch-nvidia-and-us-export-controls-should-remain
I remember Trump voicing tough rhetoric against China back in 2016. At the time, I personally felt less hawkish and considered Trump's rhetoric to be part of the general xenophobia of his campaign. Now that I realize the danger China poses, of course Trump has flip-flopped and threatens to give enormous concessions to the CCP on various fronts. TikTok is yet another example of a Trump flip-flop in favor of Beijing. Trump's unhinged vanity and limitless corruption truly do make him one of the worst characters in US history.