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America has long dominated the global technology market for many years. But, the World's Second Largest Economy aims to alter that landscape.

This economic powerhouse is allocating substantial sums of funds into artificial intelligence (AI) and robotics. Significantly, Chinese authorities is also directing considerable funding toward creating the advanced semiconductors that drive these innovative systems.

Recently, Nvidia's CEO highlighted that the Chinese semiconductor industry was only "slightly trailing" the US in processor advancement.

Therefore, can Beijing equal American technology and break its dependence on imported high-end chips?

After DeepSeek

The Chinese AI Company DeepSeek created a stir through the tech world in last year when it unveiled a alternative to the widely-used AI chatbot.

The announcement by a relatively unknown startup was impressive for multiple factors, not least because the company claimed it cost much less to train than top artificial intelligence systems.

Reports indicated to have been developed using a smaller number of advanced processors than its rivals, and its release temporarily sank the chip giant's stock price.

And, advancement in China's tech sector has continued. Recently, some of the nation's major tech firms have declared that they intend to compete with Nvidia and become the main advanced chip suppliers for local companies.

In September, Chinese state media announced that a recently unveiled processor introduced by Alibaba can equal the capabilities of Nvidia's H20 semiconductors while being more efficient. H20s are adjusted processors made for the China under US export rules.

Another Chinese Tech Giant also revealed what it called its most powerful chips ever, along with a three-year plan to challenge Nvidia's dominance of the AI market.

This major firm also announced it would make its blueprints and computer programs accessible to the public in the country in an effort to pull companies away from their reliance on American technology.

Other Chinese chip developers have also landed major contracts with large corporations in the country. One such company is supplying high-end processors for organizations like government-run telecommunications firm a major Chinese carrier.

A further hotly-tipped potential challenger to Nvidia is headquartered in Beijing Cambricon Technologies.

Its Shanghai-listed shares have surged in value over the last three months as investors bet that it will benefit from Beijing's push for Chinese firms to use locally produced high-end chips.

Tencent, which owns the all-in-one platform WeChat, is an additional notable tech giant that has responded to the government’s call to use domestic processors.

Additionally, there has been no lack of government-supported exhibitions, promoting Chinese technology companies in a bid to draw in funding sources.

"Rivalry has clearly arrived," an official from the chip maker commented in reply to queries about the recent progress made by China's semiconductor companies.

"Users will choose the most effective solutions for running the globally dominant commercial applications and open-source models. We will persist in our efforts to earn the confidence and support of leading programmers everywhere."

Yet, certain analysts have cautioned that claims made by China's semiconductor producers should be viewed skeptically due to a lack of publicly available data and consistent testing benchmarks.

Chinese processors perform similarly to the US in forecasting applications but lag behind in complex analytics, said tech expert Jawad Haj-Yahya, who has evaluated both American and Chinese chips.

"The gap is evident and it is surely shrinking. But, I don't think they will close it in the short-term."

Where China Leads - and Lags

During a technology and business podcast in September, the CEO of Nvidia emphasized the strengths of the Chinese technology industry, crediting its hardworking and vast workforce, fierce local rivalry and advancements in chipmaking.

"It represents a dynamic entrepreneurial, high-tech, contemporary sector," he said, urging the United States to vie "for its survival."

His assessment is likely to be welcomed by authorities in the Chinese capital.

The country has long vied to become a worldwide frontrunner in technology, in part to reduce its reliance on the Western nations.

Over time, China has poured significant resources into what President Xi Jinping calls "advanced growth", which includes industries from renewables to artificial intelligence.

Even before US President Donald Trump's return to the White House, China had allocated tens of billions of USD as part of its efforts to shift its vast economy from the "world's factory" for standard goods to a home of advanced industries.

An ongoing tariffs war with Trump's America has only rendered this goal more pressing.

The Chinese President has pledged to make his country more self-reliant and not depend on "external assistance."

The Nvidia CEO has also warned that the US should engage in open commerce with the Asian nation or face the possibility of giving it the edge in the artificial intelligence competition.

This comes against a context of Beijing applying more pressure on Nvidia as it launched an investigation into market dominance into the company last month.

But, the government-directed strategy can also be an barrier to creativity if everyone in the industry only concentrates on a "shared goal", noted computing professor Chia-Lin Yang from a leading educational institution.

It can make it harder for disruptive ideas to break the mould, she commented.

China's chip industry has also yet to overcome concerns that its offerings can be more challenging to use than those of Western rivals like the industry leader.

The Professor thinks these issues can quickly be resolved by the large quantity of skilled technology professionals.

"You cannot underestimate China's ability to close the gap."

'China's Negotiating Tool

She characterized the latest reports from China about the semiconductor industry as a "bargaining chip" in its months-long trade discussions with the United States.

Beijing aims to compel Washington into selling its advanced equipment or risk its position in such a significant economy, stated the analyst.

Such reports demonstrate strength on China's part, even though it is {