China's AI race: Chip shortages stall progress amid US restrictions
China's top AI models—like DeepSeek v3 and Moonshot AI's Kimi K2—are holding their own against Western tech, but there's a catch: US restrictions on NVIDIA chips have made it tough for them to keep up since April.
To stay in the game, Chinese firms are focusing on open-source releases and squeezing more performance out of what hardware they have.
Slower services and less powerful apps
Even with loads of talent, data, and government support, China's AI progress is being slowed by limited access to advanced chips.
These chip shortages mean slower services and less powerful apps for users—something that could last until at least the end of the year due to ongoing US export controls and NVIDIA's supply constraints.
China's growing expertise and strong infrastructure
Big players like Alibaba are getting creative by building smaller, more efficient models that can run on less powerful hardware and be shared globally through the cloud.
While they're still dependent on some foreign tech, China's growing expertise and strong infrastructure could help its AI industry bounce back once chip supplies improve.