Connexion
Additional to Michael Hudson and Richard Wolff on this interview with Nima: https://sovereignista.com/2025/11/13/richard-d-wolff-michael-hudson-trump-is-blowing-it-up-dollar-is-on-the-edge-of-total-collapse/
My friend Balihar Sanghera has just sent me an interesting background article that provides important insights on President Trump’s announcement of U.S. intention to work with Kazakhstan’ on developing its rare earth and mineral deposits. He and his wife Elmira Satybnaldieva,wrote an important background book, Rentier Capitalism and its Discontents: Power, Morality and Resistance in Central Asia (Palgrave McMillan, 2021), that I recommend to readers.
This article was very useful for my recent Nima discussion. Here is a note from Balihar’s co-author Elmira Satybnaldieva:
We are witnessing a neo-imperial competition for rare earth minerals. The new US ambassador to Kazakhstan, Julie Stufft, stated that Kazakhstan is capable of meeting 50% of the US demand for rare earth resources. She called for rapid extraction of resources and suggested the export of extracted resources via the Trans-Caspian route.
The US is particularly interested in tungsten mining. The US based Cove Kaz Capital is planning developing large deposits of this strategically important metal in Kazakhstan (Verkhne-Kairatinskoye and North Katpar.)
The US views tungsten as a key resource for the defense industry, used in the production of shells, armor, and special equipment. The American side’s goal is to reduce dependence on China for this metal.
The negotiations are being led by US Secretary of Commerce Howard Lutnick, who previously participated in a successful deal between the American company Wabtec and Kazakhstan Railways.
A joint venture is proposed between Cove Kaz Capital and Kazakhstan’s Samruk-Kazyna Fund. The American company plans to not only mine but also process tungsten in Kazakhstan and then supply it to the US. Kazakhstan will receive a share of the profits, but control over the project will likely remain with the American side.
The United States is considering financial support for the project through government agencies, but does not plan to directly participate in the company’s capital.
This project is part of a broader U.S. strategy to reduce dependence on China for critical resource supplies. China is also showing interest in developing Kazakhstan’s deposits, offering more favorable terms.
A week ago, Kazakhstan’s Minister of Economy Serik Zhumangarin met with American businessmen in Washington, where he presented Kazakhstan’s investment potential. It appears that the United States has now seized another strategic mineral in Kazakhstan.
l’AntiDiplomatico
Professor Parenti’s new editorial video – short and concise
China says “enough” to economic warfare. After years of sanctions and technological encirclement by the US, Beijing is responding blow for blow. Professor Fabio Massimo Parenti’s video analyzes China’s new strategy, which strikes the West at its most vulnerable point: rare earth supply chains.
It’s a clash between two worldviews: domination versus harmony. Discover how this war is redefining global balances.
Rare Earth Export Controls, Port Fees on Chinese vessels, Tariffs, Grabbing Nexperia – summary
We have to note that none of this comes out of the blue. China has faced only unwillingness from U.S. trade negotiators and a series of what we can only call unfriendly actions, designed to coerce. The time is over. What is happening here is a slew of actions by China that confirms what I’ve intuited since the beginning of the tariff onslaught. If it gets too difficult to trade, there will not be trade. At this time China seems to be at that point. They don’t care any longer about trade with the U.S.
The Chinese MOFCOM spokesperson remarked:
Rare Earth Export Controls: Directly aimed at military activity and weapons manufacturing, to better defend world peace and regional stability.
These export controls are directly aimed at weapons manufacturing and are intended to reduce military conflicts and support non-proliferation.
They are not export bans. Licenses for eligible applications will be granted.
China announced these controls before implementing them.
These export controls will support the security and stability of global industrial and supply chains-
China’s national security is mentioned and this is easy to see. They won’t sell products to those that manufacture weapons intended to threaten China.
Port Fees on Chinese Vessels: This is a confusing conglomeration of payment for tonnage on Chinese-built vessels, partially Chinese-built vessels, and generally a game of confusion.
MOFCOM states:
Particularly since the China-U.S. economic and trade talks in Madrid in September, the U.S., in just 20 days, has introduced a string of new restrictive measures targeting China. It has put multiple Chinese entities on the Entity List and Special Designated National List; arbitrarily expanded the scope of control over businesses with the Affiliates Rule that affects thousands of Chinese companies; and persisted with the implementation of Section 301 measures targeting China’s maritime, logistics and shipbuilding industries in disregard of China’s concerns and goodwill. The U.S. actions have severely harmed China’s interests and undermined the atmosphere of bilateral economic and trade talks, and China is resolutely opposed to them.
The Spokesperson notes that the U.S. has shown a negative attitude and willfully persists in implementing those measures, issuing a notice on October 3 setting out the specific requirements for imposing fees on Chinese vessels.
In response to U.S. actions, China took countermeasures and decided to charge special port fees on U.S.-linked vessels. China describes these countermeasures as necessary acts of passive defense.
Tariffs: Willful threats of high tariffs are not the right way to get along with China. … If the U.S. insists on going the wrong way, China will surely take resolute measures to protect its legitimate rights and interests.
The MOFCOM Statement: http://english.mofcom.gov.cn/News/SpokesmansRemarks/art/2025/art_c202dcc0433d476db52b1e7f7fe53926.html
Dutch Grab of Nexperia: The Dutch government said on Sunday that it has made a “highly exceptional” decision to intervene in Nexperia, a subsidiary of Chinese company Wingtech, citing concerns that it could “pose a risk to Dutch and European economic security.” On September 30, the Dutch Ministry of Economic Affairs issued an administrative order restricting the business decisions of Nexperia and its affiliated entities, effectively depriving Chinese shareholders of their standard control. Wingtech subsequently issued a statement, expressing a strong protest against such discriminatory treatment targeting Chinese-funded enterprises. It is evident to anyone with clear judgment that the Dutch government is seriously harassing a chip company controlled by Chinese enterprises under the pretext of a fabricated “national security” concern.
In the early stages of capitalism, some countries relied on violence and colonial plunder to accumulate primitive capital, even fostering within their own cultures the misguided historical notion that “plunder brings wealth.” In today’s geopolitical context, the Dutch government, under the pretext of “supply chain security,” has imposed excessive interference on Chinese enterprises and then cloaked its asset seizure under a façade of legality – a seamless sequence of actions that inevitably evokes memories of certain dark chapters in this country’s history. It is no wonder that some have wryly observed that
a few Western countries now treat “national security” as a privateering license, a reflection of “colonial genes” awakening in the 21st century.
Global Times editorial: https://www.globaltimes.cn/page/202510/1345566.shtml
It is clear from trade numbers that China’s trade is increasing with the rest of the world, while trade with the US is decreasing. Professor Wolff aptly describes the situation, stating that the trade environment in the US does not encourage trade but rather discourages it.
The decrease is not only in trade numbers.
US treasuries held by China are reducing.
De-dollarization is increasing.
So it is a 3 front wall of pressure, epitomized by footage of U.S. soldiers standing in food distribution lines.
China has chosen an optimum moment to rebalance power.
The tweets and twitters are interesting. One person says .. Do Your Chrismas Shopping Now, and here is another illustrating the real effect on U.S. Business.
For those of you who think this tradewar is not serious…. pic.twitter.com/Bz0mhnCw5i
— The key to success is documentation. (@VietVantage) October 13, 2025
I must hold to my point that if trade is made too complicated, it will not happen. As Russia is fighting NATO, China has entered the arena with a view to an economic decapitation strike to put the U.S and the collective West in the place of normal countries without exorbitant privilege. China clearly feels strong enough now, as evidenced by its actions at the WTO, where, for trade advantages, they are no longer insisting that it is a developing country.
Even trade numbers and reported statistics are difficult these days, as the effect of de-dollarization is not easy to measure. How do the IMF and World Bank count that which is not there? Even Africa has now floated its own ratings organization, and Russia and India are doing their business in Yuan. It is not only ‘that which is not there’, it is also new business being done, and the values are not flowing through the usual channels for statistical reporting. For myself, I am watching trends and not specifically numbers. The change in the world is growing massive, and one of those trends is that China is creating its own certification system for commercial aircraft, for example. This period is truly historical, with comprador countries lacking agency, madly spinning between the new large poles being formed. One example is that we are seeing more and more media that Turkey is wavering between west and mulitpolarity.
There are some numbers which on the face of it and standing alone, tells the story. In September alone, China’s exports grew by 8.3%, the fastest pace in months.
Shipments to the US fell by 27%. Exports to the EU rose more than 14%, exports to ASEAN nations were up by almost 16%, and exports to Africa rose by 56%.
Direct shipments to the US now make up barely 10% of China’s total exports. The US is learning a harsh, obvious truth that it should have learned a long time ago. The world is bigger than the United States, and the United States is no longer essential.
Hold onto your hats!
Shocking U.S. Defeat: China’s Rare Earth Checkmate Is NOT What Media Pretends.
While western media pretends the latest Chinese announcement about export licensing restrictions is all about the trade war with the US, the real story is all about weapons. After the US emptied its stockpiles in Ukraine and West Asia, Beijing now strikes the USA where it seriously hurts: the ability to replenish their armaments. The US is now in a serious pickle, and the fact that they deflect from this, tells a lot.
A brief, amusing update..
From Godfree Roberts
 |
For years, China warned Washington that weaponising the global technology supply chain would have serious consequences. Quietly, consistently, and with remarkable restraint, Beijing issued statements, offered backchannel admonitions, and gently signaled that Washington’s escalation would not go unanswered. But Washington didn’t listen. Perhaps it couldn’t. The problem is not that the signs weren’t there, but because hubris and a racialised worldview rendered U.S. policymakers deaf to non-Western strategic reasoning and the subtle language of diplomatise. When Beijing spoke in the calm and coded language of diplomacy, without resort to hyperbole, it was interpreted not as resolve, but as retreat. As usual, restraint was mistaken for weakness. Warwick Powell
Officials in the Biden administration were so concerned about the U.S. military’s lack of a domestic samarium supply that they issued large contracts for the construction of two samarium production facilities. Neither was built because of commercial concerns, leaving the United States entirely dependent on China. NYT.
Premier Li
Worldwide, annual sales of rare earths total just $5 billion, minuscule compared with $300 billion for copper or iron ore mining. Even worse, extracting rare earth minerals is a dirty, tiresome, environmentally fraught process, but turning the ore (dirt) into laboratory grade, high-purity metals and alloys entails intellectual property that only China possesses. And there’s something else China possesses: manpower.
Rare earth chemistry programs are offered in 39 universities across the country, while the United States has no similar programs. China graduates 30,000 geologists each year, 3,000 of whom are PhDs, giving it a total of 500,000 active geologists¹ and 60,000 PhDs². The China University of Geosciences alone graduates 10,000 geologists annually.
State-Owned Enterprises (SOEs): ~200,000 (e.g., Sinopec, CNPC, China Minmetals).
Academic/Research Institutions: ~150,000 (e.g., Chinese Academy of Geological Sciences, universities).
Private Sector: ~150,000 (mining, environmental consulting, etc.).
PhD Holders: ~50,000–60,000 (~10–12% of total geologists).
Breakdown:
Petroleum/Energy: ~15,000 (e.g., China National Petroleum Corporation).
Mining/REEs: ~12,000 (key for rare earth and lithium extraction).
Academia/Government: ~20,000 (research institutes, policy roles).
Environmental Geology: ~3,000–5,000.
Annual Geology Graduates: ~30,000 (BSc/MSc) and ~3,000 PhDs.
Top Programs:
China University of Geosciences (Wuhan/Beijing).
Peking University, Nanjing University.
Focus Areas:
Critical Minerals: Rare earths, lithium, cobalt.
Oil/Gas: Shale exploration, deep-sea drilling.
Geotechnical Engineering: Belt and Road infrastructure projects.
United States: ~80,000 geologists (~25,000 PhDs).
EU: ~120,000 geologists (~30,000 PhDs).
China’s Edge: 5x more geologists than the U.S., with heavy state investment in strategic minerals.
Resource Dominance: China controls 60% of global REE production and 80% of processing—geologists enable this.
Belt and Road: Thousands of Chinese geologists work overseas (Africa, Latin America) to secure mineral supplies.
Innovation:
Broader Implications for U.S. Factories
China’s extensive REE IP, combined with its export restrictions, creates significant challenges for U.S. factories:
Efforts to Mitigate Impact
U.S. factories are responding by:
Conclusion
China’s significant IP in solvent extraction, magnet production, green recycling, and integrated supply chain technologies underpins its 90% control of global REE processing and 94% of magnet production. This IP advantage exacerbates the impact of its export restrictions on U.S. factories, particularly in defense, automotive, tech, and healthcare sectors, which face supply shortages and rising costs. While the U.S. is investing in domestic capabilities, the lack of comparable IP means it will take 5–10 years to close the gap, leaving factories vulnerable in the interim. Diversifying supply chains and accelerating R&D are critical to reducing dependence on China’s IP and mitigating ongoing disruptions
What U.S. investors will finance production of factories in an industry that will never produce profits in competition with China? State-managed Socialism outperforms Capitalism when long-term investments are required.
1
Including field geologists, researchers, and industry professionals
2
Of America’s 80,000 geologists, 25,000 have PhDs.
In May this year, China held an emergency meeting to officially launch the “Thunder Operation” against key strategic minerals such as rare earths, gallium, and germanium.
This is not a simple smuggling crackdown, but a deep cleanup, targeting the entire rare earth laundering chain hidden behind the “third country” and carefully disguised.
Since China has strengthened its restrictions on rare earth exports, many countries have faced resource shortages, especially the United States, which is highly dependent on rare earths.
In order to circumvent the restrictions, they “import in a roundabout way” through third-party countries in large quantities – on the surface, they purchase rare earths from these countries, but in fact, they obtain Chinese resources through transshipment. The whole process is secretive and complicated.
So, who is secretly reselling Chinese rare earths to the United States? And what impact will China’s further crackdown on the resale of rare earths have on the United States?
Welcome to “Ruler of the World” does Wonderland – to the sound of that hypnotic ‘Kashmir’ riff.
By Pepe Escobar at Strategic Culture Foundation.
Two overarching taboos reign on the – now shattered – collective West:
The taboos happen to be inextricably linked to the Forever Wars deployed non-stop by the Empire of Chaos/Zionist axis.
Lesser Hybrid Wars though – even carrying the horrifying prospect of turning nuclear – are allowed to come and go. Especially if they are part of the current war on BRICS, a sub-section of the war of factions of the West against the Global Majority.
So let’s go to Kashmir – to the sound of Jimmy Page’s hypnotic riff. Both India and Pakistan are escalating the war of decibels. Turkey is offering weapons – to Pakistan. Iran offered a mediator role: no takers.
The motive for the war is as dodgy as they come. An all-male tourist bus packing a bunch of merry tourists is roaming around Indian-held Kashmir. Passengers include a just married 26-year-old lieutenant of the Indian Navy – but without his wife (what kind of honeymoon is that?) Another passenger is Nepalese. The bus is attacked by shady splinter goons loosely affiliated with the Salafi-jihadi Lashkar-e-Taiba outfit.
The Empire has been all over the Indian front. The current US Director of National Intelligence (DNI) Tulsi Gabbard was previously fully funded by Prime Minister Modi’s circles. Eyeliner-loaded VP J.D. Vance recently visited India – complete with family Taj Mahal photo op. Then Modi went to visit Saudi Arabia – invited by MbS. After the Kashmir bus terror attack, Hindutva fanatics went on a cyber-attack spree.
The crude tactics spell out classic Divide and Rule. Double whammy: revamped weaponization of India, and destabilization of a key Belt and Road Initiative (BRI) China front: the China-Pakistan Economic Corridor (CPEC). A thing of beauty: splitting BRICS from the inside.
None of that, of course, legitimizes the ghastly Pakistani military, which have thrown in jail, on spurious charges, the man who was trying to bring Pakistan to respectability: Imran Khan.
It’s up, once again, to the adults in the room, any room – Russia – to de-escalate. This could be ideally performed inside the SCO – where both India and Pakistan are members, side by side with Iran. Moscow chose to take the initiative, by itself.
Deputy Foreign Minister Andrey Rudenko met with both India’s Ambassador to Russia, Vinay Kumar, and Pakistan’s Ambassador to Russia, Muhammad Khalid Jamali.
Russian terminology is essential: not only there was a call for both parties to “engage in constructive dialogue”. Moscow stressed, “we are ready to counter the global terrorist threat together.” The operative word is “global”. Delhi and Islamabad don’t seem to be getting the message – yet.
Kashmir as a volatile war lab
An infernal machine is predictably on. It’s as if the Anglo-Zionist axis is using Kashmir as a volatile lab for a series of live tests – including pushing nuclear powers to the brink of confrontation. And all that dealt with casual insouciance – practically as a sideshow.
Nothing coming from Sültan Erdogan and his intel apparatus could possibly be seen as trustworthy. In Syria, the MIT’s assets – the Headchopper Inc. congregated in Greater Idlibistan – ended up being installed in power in Damascus with their Zionist-friendly gang leader now posing as President.
The comprador Yankee junta in Islamabad, for its part, may be facing the abyss – which in itself qualifies as auspicious news. In parallel, suspense accrues on whether Modi will show up for the Victory Day parade on May 9 in Moscow – and what he will tell his Russian hosts.
BRICS members Russia and Iran want the International North South Transportation Corridor (INSTC) running smoothly to India sooner rather than later. The game gets even more complex when we see that the Iranian investigation is finally starting to consider that the horrendous explosion at the Shahid Rajaee port may have been an act of sabotage or an FPV strike.
Extra pressure on China is a real motivator for setting up this war lab. Now Beijing not only needs to start worrying about an explosively renewed India-Pakistan front but also extra CIA/MI6 mischief pushing the Pak connection to Uighur Salafi-jihadis.
There’s no chance in hell Delhi will really understand Beijing’s geopolitical predicaments. A perfect scenario for the Hybrid War gang.
Meanwhile, at the BRICS front, at least there are some signs of rationality – coming, once again, from Grandmaster Lavrov.
Even before the BRICS Foreign Ministers meeting early this week in Rio, Lavrov cut to the chase on the financial and geoeconomic front. He stressed that BRICS are working hard on the 2024 Kazan summit-approved “Trans-Border Payment Initiative”; a “payment and clearing infrastructure”; “a re-insurance company”; and a new investment platform.
He had to once again explain to Western media – from the US to Brazil – that “it would be premature to discuss a transition to a single currency for BRICS. We are working together to create a payment and settlement infrastructure for carrying out cross-border settlements among BRICS countries. In particular, as I have already said, this includes increasing the share of national currencies in our transactions.”
A BRICS common currency – a specter hovering over Trump 2.0 – will only come back to the table “once the necessary financial and economic conditions are in place.” Until then, the war on BRICS, hybrid and otherwise, will be relentless.
Trumpty Dumpty
Switching from reality to fantasy, it was such a blast to find the connection between Kashmir and Alice in Wonderland… in a Chinese essay.
It takes supreme Chinese finesse – quite like subverting Taoist wisdom with a touch of post-modernism – to identify the “ruler of the world” (his own terminology) throwing everyone, virtually the whole planet, into the rabbit hole.
So in this wilderness of narrative mirrors, Trump should be perceived as all characters combined: the White Rabbit, Humpty Dumpty (“When I use a word, it means what I choose to mean, no more and no less”), the Mad Hatter, the Queen of Hearts (“Off with their heads!”)
That certainly illustrates the intersection of the trade war (launched by the “ruler of the world”) and the genocide war (fully legitimized by the “ruler of the world”). With an extra twist: reality has a knack to out-Carroll even Lewis Carroll himself.
Enter the curious case of the USS Truman, a giant aircraft carrier, being possessed by the spirit of Ayrton Senna and deciding to pull out an ultra-sharp curve as if it was a Maserati Gran Turismo Stradale in the middle of the Red Sea – just for a F-18E Super Hornet to protest about the maneuver plunging head on to the bottom of the ocean.
At least that was the narrative CENTCOM sold to global public opinion. Blame that damned Houthi missile fire!
Well, CENTCOM has been relentlessly humiliated by the Yemeni Armed Forces – 21 MQ9-Reapers smashed, and counting – as it has accomplished zero military objectives; the Pentagon has not subdued the Houthis; and has not secured “freedom of navigation” in the Red Sea for Israeli-bound ships. Their revenge: to bomb Yemeni civilian targets non-stop.
All that because the “ruler of the world” launched an illegal war – against people guided by moral and spiritual clarity – to protect the genocide perpetrated by his psychopathological regime buddies. Welcome to “Ruler of the World” does Wonderland – to the sound of that hypnotic ‘Kashmir’ riff.
Huawei chips are already the real deal for every Chinese company which is following the new Beijing-defined direction to reduce any reliance on American technology
By Pepe Escobar at Sputnik.
Late next month, Huawei will be testing its new powerful AI processor, the Ascend 910 D, even as by early May the previous 910C will start to be mass-delivered to scores of Chinese tech companies.
These serious breakthroughs are the next chapter of Huawei’s drive to counter Nvidia’s global monopoly in graphics processing units [GPUs]. The Ascend 910D is supposed to be more powerful than Nvidia’s extremely popular H100.
Huawei is pulling no punches in its race to manufacture a new generation of processors. Huawei has collaborated with SMIC – China’s largest semiconductor foundry – to apply Deep Ultraviolet Lithography (DUV) on what was previously only possible on EUV (Extreme Ultra-Violet technology). Once again, Huawei and SMIC defied the proverbial American “experts” with creative engineering solutions.
Huawei arrived at fabricating 5nm chips with DUV even as the process is more expensive than with EUV. If Huawei had access to EUV they would be already manufacturing 2-3nm chips. That will come, in short time, as both China and Russia, under permanent US high-tech blockade, must by all means develop their own EUV technology.
Shanghai geeks are convinced that Huawei will switch on 6G networks before the end of the decade. Their current breathless drive is not just aimed at the smartphone front – where Huawei is peerless; the new Huawei Mate 70 Pro + is by far the absolute top smartphone in the world, running on Harmony OS. Huawei is looking at cloud computing, AI and enterprise servers – and to become no less than the core player in the AI infrastructure race.
Ditching Any Reliance on American Technology
Earlier this month, Huawei introduced the CloudMatrix 384, a system connecting 384 Ascend 910C chips. The tech word in Shanghai is that this configuration, under certain conditions, and of course consuming much more power, already outperforms Nvidia’s flagship rack system – which is powered by 72 Blackwell chips.
Meanwhile, Huawei’s Kirin X chip is targeting the PC market, offering stiff competition to Apple, AMD, Intel and Qualcom while Harmony OS plus removes the necessity of using US software such as Microsoft and Android.
Shanghai geeks swear that China essentially doesn’t need to beat Nvidia or other US chips developers. After all, China already has the largest consumer market in the world – by volume and by value. If a parallel tech universe is the likely result of the Trump Tariff Tizzy (TTT), so be it. China already controls over 60% of the global gadget consumer market.
Kirin X may not – yet – match the power of Nvidia’s H100 GPUs. But Huawei chips are already the real deal for every Chinese company which is following the new Beijing-defined direction to reduce any reliance on American technology.
All of the above naturally brings us to the enormous AI elephant in the (digital) room: Nvidia.
A recent book, The Thinking Machine: Jensen Huang, Nvidia, and The World’s Most Coveted Microchip, is quite helpful to track not only the personal story of CEO superstar Huang, a Taiwanese who played the American Dream to the hilt and became a tech multi-billionaire, but Nvidia’s enviable tech accomplishments.
Huang does not interpret AI as emergent machine superintelligence, and firmly dismisses any direct analogy to biology. For this all-round pragmatist, AI is merely software – running on hardware that his company sells for a fortune.
Still, Nvidia has ventured into virgin territory way beyond the American biz-tech Valhalla, complete with holding the most valuable stock on the planet: arguably, when it comes to AI, Nvidia unveiled a new phase of evolution.
It’s crucial to understand how Huang sees China. It is indeed a key market for his AI chips – and he wants to keep selling them in droves. Trump’s tariffs though make sure that won’t happen.
And that’s what moved Huang to ditch his proverbial leather jackets and don a crisp business suit for a strategic visit to Beijing, where he affirmed the sacred importance of the Chinese market, whatever the new Trump-dictated gimmicks.
By 2022, the China market represented 26% of Nvidia’s business; this year, it has fallen to 13%, because of euphemistic “technology export controls”.
The problem is the US government, already by 2022, under the previous automatic pen administration, had blocked sales to China of advanced A100 and H100 chips. Nvidia started selling modified versions – and even after the ban chips continued to arrive in China. By June 2023, it was easy to find A100s for double their price in the black market in Shenzhen.
Huang is convinced that “no AI should be able to learn without a human in the loop” – even as he admitted, two years ago, that “reasoning capability is two or three years out”. Translation: according to Huang AI will start thinking for itself within the next few months.
Even as Nvidia prepares to invest billions of dollars to build AI supercomputers in Texas, the Chinese essentially are not losing any sleep on “thinking AI”: their focus is extremely practical, to conquer not only the Chinese market but also the supply chains of most of Eurasia.
The US National Security Council has concluded that it’s too dangerous for China to buy Nvidia’s high-end chips, even the H20 – designed for the Chinese market. Huawei, anyway, already produces chips somewhat comparable to the H20.
Huang is losing his sleep because, essentially, Nvidia is losing the immense Chinese market to Huawei – with Trump’s direct input. Nvidia has tens of thousands of H20s specially designed for China which they simply cannot sell. Each chip cost between $12,000 to $20,000.
How China Is Opening a Digital “Pandora’s Box”
Huawei’s new drive is yet another example of Chinese will capable of staring down any challenge – based on indigenous talent, tech expertise and national pride. The record, even before Trump 1.0 sanctions, shows that Huawei does eat massive uphill battles for breakfast. In fact Ascend in many aspects was ahead of Nvidia as early as in 2019 – and that’s why two different US administrations banned it.
China is already light years ahead of the US on chip research. Chinese universities amass most places in the global Top Ten for published papers on semiconductors and on citations – a distinction shared, among others, by the Chinese Academy of Sciences (number one), Tsinghua University (one of China’s top two universities), the University of Electronic Science and Technology of China (number four), and Nanjing, Zhejiang and Pekin Universities.
Two weeks ago in Shanghai I first heard that Huawei would catch up with US semiconductor giants in maximum two years. Now, after the announcement of the Ascend 910D, the buzz shifted to only one year for China to overtake Nvidia and develop better lithography machines than the ones currently produced by ASML.
And the debate is fast switching to how far Huawei will be able to go within the next 2 to 3 years.
In several aspects we are already in the early stages of a US-China tech decoupling. For years Nvidia has dominated the AI hardware space. Their GPUs are the brains behind most contemporary advanced AI. The H100 chip is the gold/platinum standard for AI infrastructure worldwide. Nvidia’s chips had huge demand from Chinese tech giants – Alibaba, Tencent, Baidu, Bytedance.
Soon that may not be the case – and that goes way beyond Nvidia’s certified loss of market share in China. China is now all out focused on building a successful, self-sufficient AI hardware ecosystem. The coup de grace will be to restrict the export of all rare earth minerals to the US. Huaweii then will pull up in no time.
Everyone remembers how DeepSeek R1 wiped out over $1 trillion from Wall Street only three months ago. DeepSeek R2 will be released soon; training was a whopping 97% cheaper than OpenAI.
And training happened on Huawei’s Ascend. No Nvidia.
Quantum Bird, a world-class physicist formerly with the CERN in Geneva, puts everything in much needed context. He stresses how indigenous chip development by China – and in a near future, Russia and probably India – is “multi-faceted; what we are observing are the initial stages of a redefinition of the notion of recognizing patterns and machine learning, technologies that are popularly referred to as ‘AI’ by the media.”
Nvidia chips, Qantum Bird remarks, are indeed “computational beasts”, but they work better around “processing models and workloads typical of ‘AI’ models developed by Western scientists.” DeepSeek’s development, on the other hand, showed a transgression of established models: “The possibilities opened for performance leaps are huge, even using relatively modest hardware, with alternative approaches based on advanced math and different calculus flows.”
In a nutshell: “This is the Pandora’s box that Nvidia now fears the Chinese may have opened”. And that totally ties in with Huang’s red alert, prompting his visit to Beijing.
We may be heading indeed towards a serious tech decoupling. Or as Quantum Bird frames it: “A technological and scientific divergence medium and long-term. If the architectures that emerge from these developments are incompatible when it comes to their usage on specific ‘AI’ models, Nvidia will lose its global monopoly and will become just a company reduced to a corporate/scientific Western niche.”
Even as Huawei, from its privileged base in the Chinese market, will go on to win most markets across the Global Majority – from BRICS to BRI.
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