China: Chips’ quality & beating America

Huh? What was the person who captioned this smoking?

More like reality this. Chinese chips are in the cheap and cheerful basket.

Whatever quality of chips should improve because

The flow of Chinese students to America is dwindling. Their number has dropped by nearly 30% since 2019. Almost 20,000 Chinese scientists left America for China between 2010 and 2021. The Trump administration’s hostility towards China is partly to blame.

Economist newsletter

Oh

China’s quantum leap will eclipse US aircraft carriers, analysts say

The next great arms race won’t be won with aircraft carriers or stealth jets — instead the victor will be the first to master quantum computing.

Experts warn that “Q-Day,” the moment quantum machines can break all classical encryption, could arrive as early the next decade. When that day comes, whoever controls quantum power will hold the keys to global security, able to disrupt financial systems, military networks and critical infrastructure without firing a shot.

China is betting big, mobilizing $140 billion for “hard tech” including quantum computing, while quietly stockpiling stolen data for future decryption. The U.S. and allies are scrambling to migrate to quantum-resistant algorithms before Beijing gains an asymmetric edge.

Analysts say the winner of this race could unlock every secret — from battlefield communications to satellite links — in an instant.

Nikkei Asia

And

Overseas training

Top Chinese companies are training their artificial intelligence models overseas to access Nvidia’s chips and bypass U.S. efforts to prevent their development of the powerful technology, write the Financial Times’ Zijing Wu and Ryan McMorrow. Alibaba and ByteDance are among the tech groups training their latest large language models in data centers across Southeast Asia. Two persons familiar with the matter stated that training in offshore locations has steadily increased. This came after the U.S. move in April to restrict sales of the H20, Nvidia’s China-only semiconductors. “It’s an obvious choice to come here,” said one Singapore-based data center operator. “You need the best chips to train the most cutting-edge models and it’s all legally compliant.” (HUH?) One exception is DeepSeek. People familiar with the matter said it is a maker of high-quality and low-cost AI models. DeepSeek is being trained domestically. Data center clusters have boomed in Singapore and Malaysia, fueled by Chinese demand. Many of these data centers are equipped with high-end Nvidia products, similar to those used by U.S. Big Tech groups to train LLMs.

Above is edited version of Nikkei Asia’s tech newsletter.

Market last night

Dow off 0.07%, S&P up 0.11%, Nasdaq up 0.22%: little change on Thursday. The dollar and Treasury yields rose. Yields rose after a surprisingly strong U.S. labor market indicator called into question how much lower the Fed will cut interest rates next year.