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Gavekal Technologies: Chips
China AI Finds The Money In Hardware
Tilly Zhang
2 Oct 2025
Chinese AI developers are doing well at keeping pace with the performance of US models, but less well at monetizing them. With Chinese consumers and businesses unwilling to pay much for AI software services, developers are turning to applications embedded in hardware: watches, glasses, earbuds and "education machines" for at-home tutoring. Unlike their US rivals, which can focus on selling chatbot subscriptions, Chinese AI firms need to follow a two-track revenue strategy: hardware applications in their home market, and software services abroad.
Gavekal Technologies: Chips
Inside China’s AI Chip Hype
Laila Khawaja
26 Sep 2025
Huawei unveils ambitious AI roadmap. China’s AI star Cambricon faces skepticism. National IC Fund III makes first investment
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The Contours Of Competition
In this edition of Gavekal Technologies Briefing, we examine several facets of the US-China tech competition: the elusive TikTok deal, the threats to biotech, the different profit models for AI developers, and China’s massive advantage in battery chemistry.
The Signal From TikTok
Topics: A TikTok deal could open space for more deals. China probes American-made analog chips. Beijing’s symbolic ban of an Nvidia chip
Webinar: Nvidia, TikTok And The US-China Tech Competition
Laila Khawaja joins Arthur Kroeber in a conversation about the many facets of the growing US-China technology rivalry. Topics include the question of who is winning the AI race, the politics of Nvidia's chip sales in China, the significance of the deal apparently struck this week to sell TikTok to US owners, and whether Trump and Xi can forge a bigger trade and tech agreement later this fall.
Internal Tensions In China’s Chip Industry
Internal tensions in Beijing’s response to foreign chip sanctions are resurfacing. Huawei is celebrated as a national success, yet its growing dominance risks undermining suppliers and competitors. SiCarrier, a young government-backed equipment maker closely tied to Huawei, has reportedly won over US$1.4bn in orders, drawing skepticism from industry executives and criticism of unfair practices from industry leader AMD.
Economies Of Scale
China’s core industrial competence is scaling up production of pretty much anything you can name and reducing its cost. The question is not whether it can keep doing this but which sectors will be next. In this issue of Gavekal Technologies Briefing we look at a few candidates.
China’s Plan For Closing The AI Chip Gap
China aims to become a global AI innovation hub by 2030 and an intelligent economy by 2035, with massive compute buildouts central to this push despite near-term overcapacity concerns. With US restricting both the export of advanced chips and Chinese AI firms’ access to Taiwan Semiconductor Manufacturing, Beijing will need to rely on a mix of grey-channel imports and domestic production, unless Washington relaxes chip controls.