China learns how to build without Nvidia

Hello, I’m Evelyn. I am writing to you from Beijing. Welcome to the latest edition of The China Connection. This is a concise summary of what I have seen and heard from local companies.

China’s push for high-tech self-sufficiency is rapidly becoming a reality as companies focus on deeper business issues than geopolitics. What does that mean for Nvidia?

Robovan startup Zelostech plans to tap multiple chip suppliers from China and other regions over the next year or two. Nvidia The company spoke to CNBC about its self-driving system.

Finance and Investment Director Shi Yunjian said the main factor was cost. For example, he said, using chips made in China would cost much less than the two Nvidia Orin chipsets currently used in each vehicle.

This is a big problem because scale is becoming a competitive advantage. The more self-driving cars are deployed, the more operational data can be collected and the easier it will be to convince regulators that the technology can be used more widely.

Zelostech claims it already operates more than 25,000 vehicles in more than 20 countries and plans to expand rapidly. These do not carry people and are often smaller than mail trucks. Most operate in mainland China and are primarily targeted at logistics companies that deliver packages.

In comparison, alphabetWaymo, backed by , has just under 4,000 vehicles on the road, while Chinese rivals Baidu, Willide and Pony.ai have yet to deploy a similar fleet.

Zelostech isn’t the only company pursuing an Nvidia alternative.

Waymo uses custom chips, but Chinese electric car giant BYD I participated last week Nioh and Spen The company revealed its own semiconductors for use in driving support systems.

Nio said it plans to increase spending on computing power fivefold this year. When I asked if that included Nvidia, CEO William Li said the company is no longer buying chips, but renting computing power with a variety of processors.

The German automaker is partnering with a Chinese automaker, although the vehicles Xpeng co-developed with Volkswagen also use the Chinese company’s “Turing chips.” horizon robotics Developing driver assistance systems in China without Nvidia.

Nvidia’s driver assistance chips are not subject to the same U.S. export regulations that apply to more advanced semiconductors used to train and run AI models.

But even after NVIDIA CEO Jensen Huang accompanied US President Donald Trump on his visit to Beijing in May, it’s clear China doesn’t want to deploy more NVIDIA chips.

This change extends beyond automobiles. Chinese AI developers are increasingly optimizing their models to run on domestic hardware rather than Nvidia’s widely used CUDA ecosystem.

The latest MiniMax and Kim models, along with DeepSeek’s V4, are compatible with local semiconductors in China.

Analysts at Goldman Sachs said in a May 5 report, “We believe the shift toward domestically produced chips will accelerate from 2026E to 2028E.” They pointed out that DeepSeek V4 works with eight Chinese chips, including one from Huawei. alibabaT-head chip unit.

Huawei also said last week that it is taking a new scientific approach to chip development and plans to incorporate it into future products. It’s the latest sign of a comeback for the Chinese telecom giant after years of U.S. restrictions.

Kevin Xu, founder of hedge fund Interconnected Capital, expects Chinese companies to continue to need Nvidia chips for the next three to five years.

But he argues that China has an incentive to limit that dependence sooner or later. Chinese chips will only improve if companies use them in real-world scenarios and generate the necessary feedback to make the technology useful for business.

“The more Nvidia chips get into the ecosystem, the more tenuous that relationship becomes,” he said.

Nvidia plans to spend as much as $150 billion a year in Taiwan, doubling its investment there, but its revenue from mainland China and Hong Kong is shrinking anyway.

Chris Cottrone, president of TriOrient Investments and co-chair of AmCham Taiwan’s Alternative Assets Committee, said the investment is likely to reverse Taiwan’s original plans to limit AI data centers and nuclear power generation. He also expects more local companies to adopt AI.

Nvidia’s growing presence in Asia rather than mainland China has led the chipmaker to look for other ways to maintain its technological leadership.

The company is partnering with Chinese humanoid startup Unitree to step into China’s world of “physical AI” with research robots sold around the world. Huang is also reportedly set to serve on the board of Tsinghua University and is keeping an eye on talent, but the company and the school have not yet responded to requests for comment.

That’s a sign that the tide is turning. China’s technological ambitions are no longer defined by its access to Nvidia, but by the companies it can build without Nvidia.

China is “losing an opportunity” by not participating in the Shangri-La Dialogue: German Defense Secretary

German Defense Secretary Carsten Breuer’s comments came after China’s Eastern Military Defense Minister was absent from the meeting for the second year in a row, and Beijing sent a lower-level delegation.

China’s industrial profits rise 24.7% in April, fastest rise in more than two years despite headwinds

In the first four months of this year, industrial profits rose 18.2%, up from 15.5% growth in the first quarter. Computing and electronics manufacturing, the largest sector by profit, more than doubled its profits from a year earlier.

European companies double their investment in manufacturing in China despite EU push to avoid risk

More European companies are maintaining or expanding their supply chains in mainland China to maintain global competitiveness, according to a survey released Wednesday by China’s European Union Chamber of Commerce.

May 31st – June 2nd: Brazilian Foreign Minister Mauro Vieira visits China

June 1-3: British Foreign Secretary Yvette Cooper visits China for the 11th Bilateral Strategic Dialogue

June 3: RatingDog China Service PMI (May)

June 9: May trade data