US export controls have created a bifurcated GPU market. Two systems, one chokepoint.
US AI Ecosystem
- 2024 AI Investment: $52B
- GPU Compute Share: ~70%
Key Advantages: NVIDIA/AMD dominance, TSMC access priority, OpenAI/Anthropic/Google/Meta labs, hyperscaler infrastructure, global talent
Strategic Priority: Maintain technological lead through export controls
China AI Ecosystem
- 2024 AI Investment: $150B
- GPU Compute Share: ~15%
Key Challenges: Export controls block advanced chips, Huawei 910C 2-3 generations behind, SMIC 7nm limits, memory constraints
Strategic Response: Massive domestic investment + efficiency innovation (DeepSeek)
Investment Asymmetry
China outspending US 3x ($150B vs $52B)
US Export Control Regime
- October 2022: Advanced GPU ban (A100/H100 blocked)
- October 2023: Expanded controls (closed A800/H800 loophole)
- January 2025: AI Diffusion Rule (global GPU caps by tier)
Huawei Response: Ascend 910C
- vs H20 (China): 2.7x faster
- Benchmark: Beats H20
- Reality Check: Still 2-3 gens behind H100/B100
- Significance: Geopolitical alternative exists
The Taiwan Concentration Risk
- TSMC Share: 90%+ of advanced chips
- Advanced Nodes: 100% concentration
- If Disrupted: Global AI development halts immediately
DeepSeek: Efficiency as Strategy
- Training Cost: $5.6M vs $100M+
- Hardware Used: 2,048 H800 GPUs
- Implication: Constraints → Innovation
Cascade Effect: Parallel AI Universes
Export controls → China self-sufficiency push → Two separate AI ecosystems → Different standards, models, chips
This is part of a comprehensive analysis. Read the full analysis on The Business Engineer.
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