Pacific Tech Tension – The US and China Battle for AI and Tech Control
It seems the brief positive environment from Sunday’s meeting came to a halting end later this week as remarks by President Biden and tech competition stand in the way of peace between the United States and China. On Tuesday, Biden likened the political control and strategy of Xi Jinping to a dictator, which the CCP did not take lightly. China claimed the remark to be a “provocation”, signaling that any assessments that may have been fixed may really have been left unaltered. Aside from the politics between the rivaling superpowers, Wall Street has continued to stress the underlying premise behind the years of contention: Tech. Through the advancements on the internet, mobile phones, social media, and more, the US and China have provided their own stellar innovations one after another. In the current age, the sphere to dominate is, of course, generative AI.
With generative AI and the current stage of tech, one of the most powerful aspects of the hardware underneath is semiconductors. In the past decade, China and the US have made their territorial semiconductor production exclusive, ensuring the survival of their tech-hierarchy positions. One current way the US aims to hinder China’s mobility in the AI market is by cutting off their access to Nvidia’s chips, which are some of the market-leading hardware in the industry. Although an AI-specific battle has been kept under the scenes, several lawmakers in Washington believe the conflict may come into the public eye later this year. As the tension continues to unfold, investors should keep an eye on pieces of restrictive litigation set to release, as they may affect some of the top-line figures for AI companies abroad and in the States.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.