China has been working hard for years to achieve technological independence, we are going to stop depending on American companies. Over the last decade they have invested billions in developing their own processors and graphics cards, among others. Cambricona chinese company manufacturing AI chips has presented some losses of 69 million euros, thus showing reality.
The artificial intelligence segment moves billions and will move even more money in the future. Obviously, everyone is investing to get a piece of the pie, which is currently mostly green. And it is that NVIDIA has been silently preparing for this moment for decades.
If this were a 50 kilometer marathon, we could say that the test started 10 minutes ago and NVIDIA is 10 kilometers ahead of its competitors. Come on, there is a brutal difference.
China burns bags of money for its technological independence
About a decade ago China proposed compete technologically with the United States. The objective was to manufacture their own processors, graphics, SSDs and any other electronic component. The idea was good and they were doing well, until Donald Trump came to power and began to impose sanctions.
Back in 2020, its processors were about two generations behind those of Intel and AMD. But, the latest chips presented in 2023 are 4-5 generations away from Intel. The reason? They can’t use the more advanced crafting nodes and have regressed a lot.
This can be clearly seen from the hand of the Chinese company Cambricon specialized in chips for AI. The data from the financial report for the first half of 2023 is very clear: revenues are falling, although losses are smoothing out.
Cambricon wants to compete in a segment dominated by NVIDIA and in which there are many enemies. We talk that AI moves hundreds of millions and this capital movement is expected to increase exponentially in the coming years.
The financial data of Cambricon with terrible register some revenue of 14.4 million of euros, which is a 33% less than the previous semester. In addition, they record losses only in this semester €69 million. These losses are added to the previous ones and it is that, since its inception, the company has palready lost almost 590 million euros.
There is another fact that shows the problems of Cambricon, whose large part of the financing is from the Chinese government (like most technology companies). According to the financial report, they have fired in the first semester of the year 225 workers, only from its R&D division. Come on, the thing looks like an imminent closure because it is unsustainable.
Reality check for Chinese ambition
Lately, the data coming from the Asian giant is quite discouraging in terms of development. The United States has taken it upon itself to curb its aspirations for technological leadership. The situation is at a cold war point with a significant threat from the Chinese.
Taiwan is in China’s crosshairs for being the home of TSMC, the largest foundry in the world today. Not only do they have one of the most advanced nodes, they also build for NVIDIA, AMD, Intel and so many other companies. Invading this island off the Chinese coast would mean seizing priceless intellectual property.
